Confessions of an Economic Hit Man - John Perkins by kruntil

Confessions of an Economic Hit Man John Perkins

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Perkins, J o h n , 1945 Confessions o f an economic hit man / by John Perkins, p. cm. Includes bibliographical references and index. ISBN-10:1-57675-301-8: ISBN-13: 978-1-57675-301-9 I. Perkins, J o h n . 1945-

2. U n i t e d States. National Security Agency—Biography.

3. Economists—United States—Biography. 4. Energy consultants—United S t a t e s Biography. 5. Intelligence agents—United States—Biography. 6. Chas. T. M a i n , Inc. 7. W o r l d Bank—Developing countries. 8. Corporations, American—Foreign countries. 9. Corporations, American—Corrupt practices. 10. Imperialism—History—20th century. II. Imperialism—History—21st century UB271.U52P47 2 0 0 4 332'.042'092-dc22

I. Title.

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2004045,353

First E d i t i o n

09 08 07 06 05

2 0 19 18 17 16 15 14 13 12 11

Cover design by M a r k van Bronkhorst. Interior design by Valerie Brewster. Copyediting by Todd M a n z a . Indexing by Rachel Rice.

To m y m o t h e r a n d f a t h e r , R u t h M o o d y a n d J a s o n P e r k i n s , w h o t a u g h t m e a b o u t love a n d l i v i n g a n d instilled i /

i n m e the courage t h a t enabled m e to write this book.

CONTENTS

Preface Prologue

P A R T I: 1

ix xvi

1963-1971 A n E c o n o m i c H i t M a n Is B o r n "In for Life"

Indonesia: Lessons for a n E H M

Saving a C o u n t r y from C o m m u n i s m

Selling M y Soul

P A R T II:

20 23

1971-1975

M y Role as Inquisitor

Civilization o n T r i a l

Jesus, Seen Differently

Opportunity of a Lifetime 5 2

37 42 47

Panama's President a n d H e r o

Pirates i n the Canal Zone 6 3

Soldiers a n d Prostitutes

Conversations w i t h the General

E n t e r i n g a N e w a n d Sinister Period i n Economic History

67 71

The Saudi A r a b i a n M o n e y - l a u n d e r i n g Affair

Pimping, and Financing Osama bin Laden vii

PART M i : 1975-T981 17

Iran's K i n g of Kings

Confessions of a Tortured A l a n

T h e Fall of a K i n g

C o l o m b i a : Keystone o f L a t i n A m e r i c a

A m e r i c a n Republic versus G l o b a l E m p i r e

T h e Deceptive Resume

Ecuador's President Battles B i g O i l

I Quit

P A R T IV:

C a n a l Negotiations and G r a h a m Greene 108 113

117 120 124

131 141

146

1981-PRESENT

Ecuador's Presidential Death

P a n a m a : A n o t h e r Presidential Death

M y Energy Company, E n r o n , and George W. B u s h

I Take a Bribe

The U n i t e d States Invades Panama

A n E H M Failure i n Iraq

September 11 and its Aftermath for M e , Personally

Venezuela: Saved by S a d d a m

Ecuador Revisited

Piercing the Veneer

Epilogue

153

Notes Index

158 162

167

196

203 211

221

230 240

A b o u t the A u t h o r

248

Confessions of an Economic Hit Man

173

182

John Perkins Personal History 2 2 6

viii

101

189

PREFACE

Economic h i t m e n { E H M s ) are highly p a i d

professionals

w h o c h e a t c o u n t r i e s a r o u n d t h e g l o b e o u t of t r i l l i o n s of dollars. They f u n n e l m o n e y f r o m the W o r l d B a n k , U.S. A g e n c y f o r I n t e r n a t i o n a l D e v e l o p m e n t

the

(USAID),

a n d o t h e r f o r e i g n " a i d " o r g a n i z a t i o n s i n t o t h e coffers

h u g e c o r p o r a t i o n s a n d t h e p o c k e t s of a f e w w e a l t h y f a m i lies w h o c o n t r o l the p l a n e t ' s n a t u r a l resources. T h e i r tools i n c l u d e f r a u d u l e n t f i n a n c i a l reports, rigged elections, payoffs,

e x t o r t i o n , sex, a n d m u r d e r . T h e y p l a y a g a m e a s

o l d as e m p i r e , b u t one t h a t has t a k e n o n n e w a n d

terrify-

i n g d i m e n s i o n s d u r i n g t h i s t i m e of g l o b a l i z a t i o n . I should know; I was an E H M . I wrote that i n 1982, as the beginning of a book w i t h the w o r k i n g title, C o n s c i e n c e of a n E c o n o m i c H i t M a n . T h e book was dedicated to the presidents of two countries, men w h o h a d been m y clients, w h o m I respected and thought of as k i n d r e d spirits â&#x20AC;&#x201D; Jaime Roldos, president o f Ecuador, and O m a r Torrijos, president of Panama. B o t h had just died i n fiery crashes. T h e i r deaths were not accidental. They were assassinated because they opposed that fraternity of corporate, government, a n d b a n k i n g heads whose goal is global empire. W e E H M s failed to b r i n g Roldos and Torrijos around, and the other type of hit men, the CIA-sanctioned jackals w h o were always right behind us, stepped i n . I was persuaded to stop w r i t i n g that book. I started it four more times d u r i n g the next twenty years. O n each occasion, m y decision to begin again was influenced by current w o r l d events: the U.S. invasion of Panama i n 1989, the first G u l f War,

Somalia, the rise of O s a m a b i n

L a d e n . However, threats or bribes always convinced me to stop. In 2 0 0 3 , the president of a major publishing house that is owned by a powerful international corporation read a draft of what h a d now become C o n f e s s i o n s of a n E c o n o m i c H i t M a n . H e described it

as "a riveting story that needs to be told." T h e n he smiled sadly, shook his head, a n d t o l d me that since the executives at w o r l d h e a d quarters m i g h t object, he could not afford to risk p u b l i s h i n g it. H e advised me to fictionalize it. "We could market you i n the m o l d of a novelist like J o h n Le Carre or G r a h a m Greene." But this is not fiction. It is the true story of my life. A more courageous publisher, one not owned by an international corporation, has agreed to help me tell it. This story m u s t be told. W e live i n a time of terrible crisis â&#x20AC;&#x201D; and tremendous opportunity. The story of this particular economic h i t m a n is the story of h o w we got to where we are a n d why we currently face crises that seem insurmountable. T h i s story must be t o l d because only by understanding our past mistakes w i l l we be able to take advantage of future opportunities; because 9/11 happened and so d i d the second war i n Iraq; because i n addition to the three t h o u sand people w h o died o n September 11, 2001, at the hands of terrorists, another twenty-four thousand died from hunger a n d related causes. In fact, twenty-four thousand people die every single day because they are unable to obtain life-sustaining food. M o s t i m portantly, this story must be t o l d because today, for the first time i n history, one nation has the ability, the money, and the power to change all this. It is the nation where I was b o r n a n d the one I served as an E H M : the U n i t e d States of A m e r i c a . 1

W h a t finally convinced me to ignore the threats a n d bribes? The short answer is that m y only child, Jessica, graduated from college a n d went out into the w o r l d on her own. W h e n I recently t o l d her that I was considering p u b l i s h i n g this book a n d shared my fears w i t h her, she said, "Don't worry, dad. If they get you, I ' l l take over where y o u left off. W e need to do this for the grandchildren I hope to give y o u someday!" T h a t is the short answer. The longer version relates to m y dedication to the country where I was raised, to my love of the ideals expressed by our F o u n d i n g F a thers, to m y deep c o m m i t m e n t to the A m e r i c a n republic that today promises "life, liberty, a n d the pursuit o f happiness" for a l l people, everywhere, and to my determination after 9/11 not to sit idly by any longer w h i l e E H M s t u r n that republic into a global empire. T h a t is the skeleton version of the l o n g answer; the flesh a n d b l o o d are added i n the chapters that follow. This is a true story. I lived every minute of it. The sights, the people,

Confessions of an Economic Hit Man

the conversations, a n d the feelings I describe were a l l a part o f m y life. It is m y personal story, a n d yet it happened w i t h i n the larger context of w o r l d events that have shaped our history, have brought us to where we are today, a n d form the foundation of our children's futures. I have made every effort to present these experiences, people, and conversations accurately. Whenever I discuss historical events or re-create conversations w i t h other people, I do so w i t h the help of several tools: published documents; personal records a n d notes; recollections â&#x20AC;&#x201D; m y own a n d those of others w h o participated; the five manuscripts I began previously; a n d historical accounts by other authors, most notably recently published ones that disclose i n f o r m a t i o n that formerly was classified or otherwise unavailable. References are provided i n the endnotes, to allow interested readers to pursue these subjects i n more depth. In some cases, I combine several dialogues I had w i t h a person into one conversation to facilitate the flow of the narrative. M y publisher asked whether we actually referred to ourselves as economic h i t men. I assured h i m that we d i d , although usually only by the initials. In fact, on the day i n 1971 w h e n I began w o r k i n g w i t h m y teacher Claudine, she informed me, " M y assignment is to m o l d you into an economic h i t m a n . N o one can k n o w about your i n volvement â&#x20AC;&#x201D; not even your wife." T h e n she t u r n e d serious. "Once you're i n , you're i n for life." T

Claudine's role is a fascinating example of the m a n i p u l a t i o n that underlies the business I h a d entered. Beautiful a n d intelligent, she was h i g h l y effective; she understood m y weaknesses a n d used them to her greatest advantage. H e r job a n d the way she executed it exemplify the subtlety of the people b e h i n d this system. Claudine p u l l e d no punches w h e n describing what I w o u l d be called u p o n to do. M y j o b , she said, was "to encourage w o r l d leaders to become part of a vast network that promotes U.S. commercial i n terests. In the end, those leaders become ensnared i n a web of debt that ensures their loyalty. W e can draw o n them whenever we desire â&#x20AC;&#x201D; to satisfy our political, economic, or military needs. In t u r n , they bolster their political positions by b r i n g i n g industrial parks, power plants, a n d airports to their people. T h e owTiers of U.S. engineering/construction companies become fabulously wealthy." Today we see the results of this system r u n amok. Executives at our most respected companies hire people at near-slave wages to

Preface

sei

t o i l under i n h u m a n conditions i n A s i a n sweatshops. O i l companies wantonly p u m p toxins into rain forest rivers, consciously k i l l i n g people, animals, and plants, and committing genocide among ancient cultures. T h e pharmaceutical industry denies lifesaving medicines to m i l l i o n s of H I V - i n f e c t e d Africans. Twelve m i l l i o n families i n our o w n U n i t e d States worry about their next m e a l . The energy i n d u s try creates an E n r o n . T h e accounting industry creates an Andersen. T h e income ratio of the one-rifth of the world's population i n the wealthiest countries to the one-fifth i n the poorest went from 3 0 to 1 i n I 9 6 0 to 74 to 1 i n 1995. The U n i t e d States spends over $87 b i l l i o n conducting a war i n Iraq while the U n i t e d Nations estimates that for less t h a n half that amount we could provide clean water, a d equate diets, sanitation services, a n d basic education to every person on the p l a n e t . A n d we wonder w h y terrorists attack us? Some w o u l d blame our current problems on an organized conspiracy. I wish it were so simple. M e m b e r s of a conspiracy can be rooted out a n d brought to justice. This system, however, is fueled by something far more dangerous than conspiracy. It is driven not by a small b a n d of m e n but by a concept that has become accepted as gospel: the idea that all economic growth benefits h u m a n k i n d a n d that the greater the growth, the more widespread the benefits. T h i s belief also has a corollary: that those people who excel at stoking the fires of economic growth should be exalted a n d rewarded, while those b o r n at the fringes are available for exploitation. 2

The concept is, of course, erroneous. We k n o w that i n many countries economic growth benefits only a small portion of the p o p u l a tion a n d may i n fact result i n increasingly desperate circumstances for the majority. This effect is reinforced by the corollary belief that the captains of industry who drive this system should enjoy a special status, a belief that is the root of many of our current problems and is perhaps also the reason w h y conspiracy theories abound. W h e n m e n a n d w o m e n are rewarded for greed, greed becomes a corrupti n g motivator. W h e n we equate the gluttonous consumption of the earth's resources with a status approaching sainthood, when we teach our children to emulate people who live unbalanced lives, and when we define huge sections of the population as subservient to an elite minority, we ask for trouble. A n d we get it. In their drive to advance the global empire, corporations, banks,

Confessions of an Economic Hit Man

and governments (collectively the c o r p o r a t o c r a c y ) use their financial and political muscle to ensure that our schools, businesses, and media support both the fallacious concept a n d its corollary. They have brought us to a point where our global culture is a monstrous m a chine that requires exponentially increasing amounts of fuel a n d maintenance, so m u c h so that i n the end it w i l l have consumed everything i n sight and w i l l be left with no choice but to devour itself. The corporatocracy is not a conspiracy, but its members do endorse c o m m o n values a n d goals. One o f corporatocracy's most i m portant functions is to perpetuate a n d continually expand a n d strengthen the system. T h e lives of those who "make it," a n d their accoutrements â&#x20AC;&#x201D; their mansions, yachts, a n d private jets â&#x20AC;&#x201D; are p r e sented as models to inspire us a l l to consume, consume, consume. Every opportunity is taken to convince us that purchasing things is our civic duty, that p i l l a g i n g the earth is good for the economy a n d therefore serves our higher interests. People like me are paid outrageously high salaries to do the system's bidding. If we falter, a more malicious f o r m of h i t m a n , the j a c k a l , steps to the plate. A n d i f the jackal fails, then the job falls to the military. This book is the confession of a m a n who, back w h e n I was an E H M , was part of a relatively small group. People w h o play similar roles are more abundant now. They have more euphemistic titles, and they walk the corridors of M o n s a n t o , General Electric, N i k e , General M o t o r s , W a l - M a r t , a n d nearly every other major corporation i n the w o r l d . In a very real sense, C o n f e s s i o n s of a n E c o n o m i c H i t M a n is their story as well as mine. It is your story too, the story of your w o r l d a n d mine, of the first truly global empire. H i s t o r y tells us that unless we modify this story, it is guaranteed to end tragically. Empires never last. Every one of them has failed terribly. They destroy many cultures as they race toward greater domination, and then they themselves fall. N o country or combination of countries can thrive i n the long term by exploiting others. This book was w r i t t e n so that we may take heed a n d r e m o l d our story. I am certain that w h e n enough of us become aware o f h o w we are being exploited by the economic engine that creates an insatiable appetite for the world's resources, a n d results i n systems that foster slavery, we w i l l no longer tolerate it. W e w i l l reassess our role i n a world where a few swim i n riches and the majority drown i n poverty, pollution, a n d violence. W e w i l l c o m m i t ourselves to navigating a

Preface

xiii

course toward compassion, democracy, and social justice for all. A d m i t t i n g to a problem is the first step toward finding a solution. Confessing a sin is the beginning of redemption. Let this book, then, be the start of our salvation. Let it inspire us to new levels of d e d i cation and drive us to realize our dream o f balanced a n d honorable societies.

W i t h o u t the many people whose lives I shared and who are described i n the following pages, this book would not have been written. I am grateful for the experiences and the lessons. Beyond t h e m , I thank the people who encouraged me to go out on a l i m b and tell my story: Stephan Rechtschaffen. B i l l and Lynne Twist, A n n K e m p , A r t Roffey, so many of the people who p a r t i c i pated i n D r e a m Change trips and workshops, especially m y cofacilitators, Eve Bruce, L y n Roberts-Herrick, and Mary Tendall, and my incredible wife and partner of twenty-five years, W i n i f r e d , and our daughter Jessica. I a m grateful to the m a n y m e n and w o m e n who provided personal insights and information about the m u l t i n a t i o n a l banks, international corporations, and political innuendos of various c o u n tries, w i t h special thanks to M i c h a e l B e n - E l i , Sabrina Bologni, J u a n Gabriel Carrasco, Jamie Grant, Paul Shaw, and several others, who w i s h to remain anonymous but who k n o w who you are. Once the manuscript was \vritten, Berrett-Koehler founder Steven Piersanti not only had the courage to take me i n but also devoted endless hours as a brilliant editor, helping me to frame and reframe the book. M y deepest thanks go to Steven, to R i c h a r d Perl, who i n troduced me to h i m , and also to N o v a Brown, R a n d i Fiat, A l l e n Jones, Chris Lee, Jennifer Liss, L a u r i e Pellouchoud, and Jenny W i l l i a m s , who read and critiqued the manuscript; to D a v i d K o r t e n , who not only read and critiqued it but also made me j u m p through hoops to satisfy his h i g h and excellent standards; to Paul Fedorko, m y agent; to Valerie Brewster for crafting the book design; and to Todd M a n z a , m y copy editor, a w o r d s m i t h and philosopher extraordinaire. A special w o r d of gratitude to Jeevan Sivasubramanian, BerrettKoehler's managing editor, and to K e n Lupoff, R i c k W i l s o n , M a r i a

xiv

Confessions of an Economic Hit Man

Jesus A g u i l o , Pat A n d e r s o n , M a r i n a Cook, M i c h a e l Crowley, R o b i n Donovan, K r i s t e n Frantz, Tiffany Lee, Catherine Lengronne, Dianne Platner â&#x20AC;&#x201D; a l l the B K staff wiio recognize the need to raise consciousness and who work tirelessly to make this world a better place. I must thank all those men and w o m e n who worked w i t h me at M A I N and were unaware of the roles they played i n helping E H M shape the global empire; I especially thank the ones who worked for me and w i t h w h o m I traveled to distant lands and shared so m a n y precious moments. A l s o E h u d Sperling and his staff at Inner T r a d i tions International, publisher of m y earlier books on indigenous c u l tures and shamanism, and good friends who set me on this path as an author. I am eternally grateful to the m e n and w o m e n who took me into their homes i n the jungles, deserts, and mountains, i n the cardboard shacks along the canals of Jakarta, and i n the slums of countless cities around the w o r l d , who shared their food and their lives w i t h me and who have been m y greatest source of inspiration. J o h n Perkins August 2 0 0 4

Preface

seo

PROLOGUE

Quito, Ecuador's capital, stretches across a volcanic valley h i g h i n the Andes, at an altitude of nine thousand feet. Residents of this city, w h i c h was founded long before Columbus arrived i n the Americas, are accustomed to seeing snow o n the surrounding peaks, despite the fact that they live just a tew miles south of the equator. The city of Shell, a frontier outpost a n d military base hacked out of Ecuador's A m a z o n jungle to service the oil company whose name it bears, is nearly eight thousand feet lower t h a n Quito. A steaming city, it is inhabited mostly by soldiers, oil workers, and the indigenous people from the Shuar a n d K i c h w a tribes who work for t h e m as prostitutes a n d laborers. To journey from one city to the other, you must travel a road that is both tortuous a n d breathtaking. L o c a l people w i l l tell you that d u r i n g the trip you experience a l l four seasons i n a single day. A l t h o u g h I have driven this road many times, I never tire of the spectacular scenery. Sheer cliffs, punctuated by cascading waterfalls and brilliant bromeliads, rise up one side. O n the other side, the earth drops abruptly into a deep abyss where the Pastaza River, a headwater of the A m a z o n , snakes its way d o w n the Andes. T h e Pastaza carries water from the glaciers of Cotopaxi, one of the world's highest active volcanoes and a deity i n the time of the Incas, to the A t l a n t i c Ocean over three thousand miles away. In 2 0 0 3 , 1 departed Quito i n a Subaru Outback a n d headed for Shell on a mission that was like no other I h a d ever accepted. I was h o p i n g to end a war I h a d helped create. A s is the case w i t h so many things we E H M s must take responsibility for, it is a war that is v i r tually u n k n o w n anywhere outside the country where it is fought. I was on m y way to meet w i t h the Shuars, the K i c h w a s , a n d their neighbors the A c h u a r s , the Zaparos, a n d the Shiwiars â&#x20AC;&#x201D; tribes determined to prevent our oil companies from destroying their homes, families, and lands, even if it means they must die i n the process. For them, this is a war about the survival of their c h i l d r e n a n d cultures, while for us it is about power, money, and natural resources. It is one

sevi

part of the struggle for w o r l d d o m i n a t i o n and the dream of a few greedy m e n , global e m p i r e . That is what we E H M s do best: we b u i l d a global empire. We are an elite group of m e n and w o m e n who utilize international financial organizations to foment conditions that make other nations subservient to the corporatocracy r u n n i n g our biggest corporations, our government, a n d our banks. L i k e our counterparts i n the M a f i a , E H M s provide favors. These take the f o r m of loans to develop i n frastructure â&#x20AC;&#x201D; electric generating plants, highways, ports, airports, or industrial parks. A condition of such loans is that engineering a n d construction companies from our o w n country must b u i l d all these projects. I n essence, most of the money never leaves the U n i t e d States; it is simply transferred from b a n k i n g offices i n Washington to engineering offices i n N e w York, H o u s t o n , or San Francisco. 1

Despite the fact that the money is returned almost immediately to corporations that are members of the corporatocracy (the creditor), the recipient country is required to pay it all back, principal plus interest. I f an E H M is completely successful, the loans are so large that the debtor is forced to default on its payments after a few years. W h e n this happens, then like the M a f i a we d e m a n d our pound of flesh. T h i s often includes one or more of the following: control over U n i t e d Nations votes, the installation of military bases, or access to precious resources such as oil or the Panama Canal. O f course, the debtor still owes us the m o n e y â&#x20AC;&#x201D; a n d another country is added to our global empire. D r i v i n g f r o m Q u i t o t o w a r d Shell o n this sunny day i n 2 0 0 3 , I thought back thirty-five years to the first time I arrived i n this part of the w o r l d . I h a d read that although E c u a d o r is only about the size of Nevada, it has more t h a n thirty active volcanoes, over 15 percent of the world's b i r d species, a n d thousands of as-yet-unclassified plants, a n d that it is a l a n d of diverse cultures where nearly as m a n y people speak ancient indigenous languages as speak Spanish. I found it fascinating a n d certainly exotic; yet, the words that kept c o m i n g to m i n d back then were p u r e , u n t o u c h e d , a n d i n n o c e n t . M u c h has changed i n thirty-five years. A t the time of my first visit i n 1968, Texaco h a d only just discovered petroleum i n Ecuador's A m a z o n region. Today, oil accounts for nearly h a l f the country's exports. A t r a n s - A n d e a n pipeline b u i l t shortly after m y first visit has since leaked over a h a l f m i l l i o n barrels

Prologue

xvii

of oil into the fragile rain forest â&#x20AC;&#x201D; more than twice the amount spilled by the E x x o n V a l d c z . ' Today, a new $1.3 b i l l i o n , three h u n d r e d - m i l e pipeline constructed by an E H M - o r g a n i z e d consortium promises to make Ecuador one of the world's top ten suppliers of oil to the United States. Vast areas of rain forest have fallen, macaws a n d jaguars have all but vanished, three E c u a d o r i a n indigenous cultures have been driven to the verge of collapse, a n d pristine rivers have been transformed into flaming cesspools. D u r i n g this same period, the indigenous cultures began fighting back. F o r instance, on M a y 7, 2 0 0 3 , a group of A m e r i c a n lawyers representing more t h a n thirty thousand indigenous E c u a d o r i a n people filed a $1 b i l l i o n lawsuit against ChevronTexaco C o r p . The suit asserts that between 1971 a n d 1992 the o i l giant d u m p e d into open holes a n d rivers over four m i l l i o n gallons per day of toxic wastewater contaminated w i t h o i l , heavy metals, a n d carcinogens, and that the company left b e h i n d nearly 350 uncovered waste pits that continue to k i l l b o t h people and a n i m a l s . Outside the w i n d o w of my Outback, great clouds of mist rolled i n from the forests and up the Pastaza's canyons. Sweat soaked m y shirt, and m y stomach began to c h u r n , but not just f r o m the intense t r o p ical heat a n d the serpentine twists i n the road. K n o w i n g the part I h a d played i n destroying this beautiful country was once again taking its toll. Because of my fellow E H M s a n d me, Ecuador is i n far worse shape today than she was before we introduced her to the miracles of modern economics, banking, a n d engineering. Since 1970, d u r i n g this period k n o w n euphemistically as the O i l B o o m , the official poverty level grew from 50 to 70 percent, under- or unemployment increased from 15 to 70 percent, a n d public debt increased f r o m $240 million to $16 billion. Meanwhile, the share of national resources allocated to the poorest segments of the population declined f r o m 20 to 6 percent. 2

Unfortunately, Ecuador is not the exception. Nearly every country we E H M s have brought under the global empire's u m b r e l l a has suffered a similar fate. T h i r d w o r l d debt has grown to more t h a n S2.5 t r i l l i o n , and the cost of servicing it â&#x20AC;&#x201D; over $375 b i l l i o n per year as of 2 0 0 4 â&#x20AC;&#x201D; is more t h a n all t h i r d w o r l d spending o n health and education, a n d twenty times what developing countries receive annually i n foreign aid. Over half the people i n the w o r l d survive on less than two dollars per day, w h i c h is roughly the same amount they received 6

scviii

Confessions of an Economic Hit Man

i n the early 1970s. M e a n w h i l e , the top 1 percent of t h i r d w o r l d households accounts for 70 to 9 0 percent of a l l private financial wealth a n d real estate ownership i n their country; the actual percentage depends o n the specific country. The Subaru slowed as it meandered through the streets of the beautiful resort t o w n o f Banos, famous for the hot baths created by underground volcanic rivers that flow from the highly active M o u n t Tungurahgua. C h i l d r e n ran along beside us, waving a n d t r y i n g to sell us g u m a n d cookies. T h e n we left Banos b e h i n d . T h e spectacular scenery ended abruptly as the Subaru sped out o f paradise a n d into a modern vision of Dante's I n f e r n o . A gigantic monster reared up from the river, a m a m m o t h gray wall. Its d r i p p i n g concrete was totally out of place, completely u n natural a n d incompatible w i t h the landscape. O f course, seeing it there stiould not have surprised me. I k n e w all along that it w o u l d be waiting i n ambush. I h a d encountered it many times before a n d i n the past h a d praised i t as a symbol of E H M accomplishments. Even so, i t made m y s k i n crawl. 7

That hideous, incongruous w a l l is a d a m that blocks the rushing Pastaza River, diverts its waters through huge tunnels bored into the m o u n t a i n , a n d converts the energy to electricity. T h i s is the 156megawatt A g o y a n hydroelectric project. It fuels the industries that make a h a n d f u l of E c u a d o r i a n families wealthy, a n d i t has been the source of u n t o l d suffering for the farmers a n d indigenous people who live along the river. T h i s hydroelectric plant is just one of many projects developed t h r o u g h my efforts a n d those of other E H M s . Such projects are the reason Ecuador is now a member of the global empire, a n d the reason w h y the Shuars a n d K i c h w a s a n d their neighbors threaten w a r against our oil companies. Because of E H M projects, E c u a d o r is awash i n foreign debt a n d must devote an inordinate share of its national budget to paying this off, instead of using its capital to help the millions of its citizens officially classified as dangerously impoverished. T h e only way E c u a dor can buy down its foreign obligations is by selling its rain forests to the oil companies. Indeed, one of the reasons the E H M s set their sights o n E c u a d o r i n the first place was because the sea of oil beneath its A m a z o n region is believed to rival the oil fields of the M i d d l e E a s t . The global empire demands its p o u n d of flesh i n the form of oil concessions. 8

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These demands became especially urgent after September 11, 2001, w h e n Washington feared that M i d d l e Eastern supplies might cease. O n top of that, Venezuela, our third-largest oil supplier, h a d recently elected a populist president, H u g o Chavez, w h o took a strong stand against what he referred to as U . S . i m p e r i a l i s m ; he threatened to cut off o i l sales to the U n i t e d States. T h e E H M s h a d failed i n Iraq and Venezuela, but we h a d succeeded i n Ecuador; now we w o u l d m i l k it for a l l it is w o r t h . Ecuador is typical of countries around the w o r l d that E H M s have brought into the economic-political fold. For every $100 of crude taken out of the E c u a d o r i a n rain forests, the o i l companies receive $75. O f the r e m a i n i n g S25, three-quarters must go to paying off the foreign debt. M o s t of the remainder covers military a n d other government expenses — w h i c h leaves about $2.50 for health, education, a n d programs a i m e d at h e l p i n g the poor. T h u s , out of every $100 w o r t h of oil t o r n f r o m the A m a z o n , less t h a n $3 goes to the people w h o need the money most, those whose lives have been so adversely impacted by the dams, the d r i l l i n g , a n d the pipelines, a n d w h o are dying from lack of edible food a n d potable water. 9

A l l of those people — m i l l i o n s i n Ecuador, billions a r o u n d the planet —are potential terrorists. N o t because they believe i n c o m m u n i s m or anarchism or are intrinsically evil, but simply because they are desperate. L o o k i n g at this d a m , I wondered — as I have so often i n so m a n y places around the w o r l d — w h e n these people w o u l d take action, like the A m e r i c a n s against E n g l a n d i n the 1770s or L a t i n A m e r i c a n s against S p a i n i n the early 1800s. The subtlety of this m o d e r n empire b u i l d i n g puts the R o m a n centurions, the Spanish conquistadors, a n d the eighteenth- a n d nineteenth-century European colonial powers to shame. W e E H M s are crafty; we learned f r o m history. Today we do not carry swords. W e do not wear armor or clothes that set us apart. In countries like Ecuador, Nigeria, a n d Indonesia, we dress like local schoolteachers and shop owners. In Washington and Paris, we look like government bureaucrats and bankers. W e appear humble, normal. We visit project sites a n d stroll through impoverished villages. We profess altruism, talk w i t h local papers about the wonderful h u m a n i t a r i a n things we are doing. We cover the conference tables of government committees w i t h our spreadsheets a n d financial projections, a n d we lecture at the H a r v a r d Business School about the miracles of macroeconomics.

Confessions of an Economic Hit Man

We are on the record, i n the open. O r so we portray ourselves a n d so are we accepted. It is how the system works. We seldom resort to anything illegal because the system itself is built on subterfuge, a n d the system is by definition legitimate. However â&#x20AC;&#x201D; a n d this is a very large caveat â&#x20AC;&#x201D;- i f we fail, an even more sinister breed steps i n , ones we E H M s refer to as the jackals, men w h o trace their heritage directly to those earlier empires. The jackals are always there, l u r k i n g i n the shadows. W h e n they emerge, heads of state are overthrown or die i n violent "accidents." A n d i f by chance the jackals fail, as they failed i n Afghanistan a n d Iraq, then the o l d models resurface. W h e n the jackals fail, young A m e r i cans are sent i n to k i l l a n d to die. 10

As I passed the monster, that h u l k i n g m a m m o t h wall of gray concrete rising f r o m the river, I was very conscious of the sweat that soaked m y c l o t h e s a n d of the tightening i n m y intestines. I headed on d o w n intcNhe jungle to meet w i t h the indigenous people who are determined to fight to the last m a n i n order to stop this empire I helped create, a n d I was overwhelmed w i t h feelings of guilt. H o w , I asked myself, d i d a nice k i d f r o m rural N e w H a m p s h i r e ever get into such a dirty business?

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PART 1:1963-1971

CHAPTER 1

An Economic Hit Man Is Born

It began innocently enough. I was an only c h i l d , b o r n into the m i d d l e class i n 1945. B o t h m y parents came f r o m three centuries of N e w E n g l a n d Yankee stock; their strict, moralistic, staunchly Republican attitudes reflected generations of puritanical ancestors. They were the first i n their families to attend college — on scholarships. M y mother became a h i g h school L a t i n teacher. M y father j o i n e d W o r l d W a r II as a Navy l i e u tenant a n d was i n charge o f the armed guard gun crew on a highly flammable merchant marine tanker i n the Atlantic. W h e n I was born, i n Hanover, N e w H a m p s h i r e , he was recuperating from a b r o ken h i p i n a Texas hospital. I d i d not see h i m u n t i l I was a year old. H e took a job teaching languages at T i l t o n School, a boys' b o a r d ing school i n rural N e w H a m p s h i r e . T h e campus stood h i g h on a h i l l , proudly — some w o u l d say arrogantly—towering over the town of the same name. This exclusive institution limited its enrollment to about fifty students i n each grade level, nine t h r o u g h twelve. T h e students were mostly the scions of wealthy families f r o m Buenos Aires, Caracas, Boston, a n d New York. T

M y family was cash starved; however, we most certainly d i d not see ourselves as poor. A l t h o u g h the schools teachers received very little salary, a l l our needs were provided free: food, housing, heat, water, a n d the workers who mowed our l a w n a n d shoveled our snow. Beginning on my fourth birthday, I ate i n the prep school d i n i n g

room, shagged balls for the soccer teams m y d a d coached, a n d handed out towels i n the locker room. It is a n understatement to say that the teachers a n d their wives felt superior to the locals. I used to hear m y parents j o k i n g about being the lords of the manor, ruling over the lowly peasants — the townies. I k n e w it was more than a joke. M y elementan' and middle school friends belonged to that peasant class; they were very poor. Their parents were dirt farmers, lumberjacks, a n d m i l l workers. T h e y resented "the preppies on the hill," and in t u r n , m y father and mother discouraged me f r o m socializing w i t h the townie girls, w h o they called "tarts" a n d "sluts." I h a d shared schoolbooks a n d crayons w i t h these girls since first grade, a n d over the years, I fell i n love w i t h three of t h e m : A n n , Priscilla, a n d Judy. I h a d a h a r d time understanding m y parents' perspective; however, I deferred to their wishes. Every year we spent the three months of my dad's summer vacation at a lake cottage b u i l t by m y grandfather i n 1921. It was surrounded by forests, a n d at night we could hear owls a n d m o u n t a i n lions. W e had no neighbors; I was the only c h i l d w i t h i n w a l k i n g distance. I n the early years, I passed the days by pretending that the trees were knights o f the R o u n d Table a n d damsels i n distress n a m e d A n n , Priscilla, or J u d y (depending o n the year). M y passion was, I h a d no doubt, as strong as that of Lancelot for Guinevere — and even more secretive. A t fourteen, I received free tuition to T i l t o n School. W i t h m y p a r ents' p r o d d i n g , I rejected everything to do w i t h the t o w n a n d never saw m y o l d friends again. W h e n m y new classmates went home to their mansions and penthouses for vacation, I remained alone o n the hill. Their girlfriends were debutantes; I had no girlfriends. A l l the girls I knew were "sluts"; I h a d cast t h e m off, a n d they h a d forgotten me. I was alone — a n d terribly frustrated. M y parents were masters at m a n i p u l a t i o n : they assured me that I was privileged to have such a n opportunity a n d that some day I w o u l d be grateful. I w o u l d f i n d the perfect wife, one suited to our high moral standards. Inside, though, I seethed. I craved female companionship — sex; the idea of a slut was most alluring. However, rather than rebelling, I repressed m y rage and expressed m y frustration by excelling. I was an honor student, captain of two varsity teams, editor of the school newspaper. I was determined to

Part 1:1963-1971

show up my rich classmates a n d to leave T i l t o n behind forever. D u r ing m y senior year, I was awarded a full athletic scholarship to B r o w n and an academic scholarship to M i d d l e b u r y . I chose B r o w n , m a i n l y because I preferred being an athlete — a n d because it was located i n a city. M y mother h a d graduated from M i d d l e b u r y a n d m y father h a d received his master's degree there, so even though B r o w n was i n the Ivy League, they preferred M i d d l e b u r y . " W h a t i f you break your leg?" my father asked. "Better to take the academic scholarship." I buckled. M i d d l e b u r y was, i n my perception, merely an inflated version of T i l t o n — albeit i n rural V e r m o n t instead of r u r a l N e w H a m p s h i r e . True, it was coed, but I was poor a n d most everyone else was wealthy, and I h a d not attended school w i t h a female i n four years. I lacked confidence, felt outclassed, was miserable. I pleaded w i t h m y d a d to let me drop out or take a year off. I wanted to move to Boston a n d learn about life a n d women. H e w o u l d not hear of it. " H o w can I pretend to prepare other parents' kids for college i f m y o w n won't stay i n one?" he asked. I have come to understand that life is composed of a series of coincidences. H o w we react to these — h o w we exercise what some refer to as free w i l l — is everything; the choices we make w i t h i n the boundaries of the twists of fate determine w h o we are. Two major coincidences that shaped m y life occurred at Middlebury. One came i n the form of an Iranian, the son of a general who was a personal advisor to the shah; the other was a beautiful young w o m a n named A n n , like my childhood sweetheart. T h e first, w h o m I w i l l call Farhad, h a d played professional soccer i n Rome. H e was endowed w i t h an athletic physique, curly black hair, soft walnut eyes, a n d a background a n d charisma that made h i m irresistible to w o m e n . H e was m y opposite i n m a n y ways. I w o r k e d h a r d to w i n his friendship, a n d he taught me m a n y things that w o u l d serve me w e l l i n the years to come. I also met A n n . A l though she was seriously dating a young m a n who attended another college, she took me under her w i n g . O u r platonic relationship was the first t r u l y loving one I h a d ever experienced. Farhad encouraged me to d r i n k , party, a n d ignore m y parents. I consciously chose to stop studying. I decided I w o u l d break m y academic leg to get even w i t h m y father. M y grades p l u m m e t e d ; I lost m y scholarship. Halfway t h r o u g h m y sophomore year, I elected to

A n Economic H i t M a n Is B o m

drop out. M y father threatened to disown me; Farhad egged me on. I stormed into the dean's office and quit school. It was a pivotal m o ment i n m y life. Farhad and I celebrated m y last night i n t o w n together at a local bar. A d r u n k e n farmer, a giant of a m a n , accused me of flirting w i t h his wife, picked me up off my feet, a n d h u r l e d me against a wall. Farhad stepped between us, drew a knife, a n d slashed the farmer open at the cheek. T h e n he dragged me across the room and shoved me through a window, out onto a ledge high above Otter Creek. W e j u m p e d and made our way along the river and back to our d o r m . The next morning, w hen interrogated by the campus police, I lied and refused to admit any knowledge of the incident. Nevertheless, Farhad was expelled. W e both moved to Boston and shared an apartment there. I landed a job at Hearst's R e c o r d A m e r i c a n j S u n d a y A d v e r t i s e r newspapers, as a personal assistant to the editor i n chief o f the S u n d a y A d v e r t i s e r . Later that year, 1965, several of my friends at the newspaper were drafted. To avoid a similar fate, I entered Boston University's College of Business A d m i n i s t r a t i o n . B y then, A n n h a d broken u p w i t h her old boyfriend, and she often traveled down from M i d d l e b u r y to visit. I welcomed her attention. She graduated i n 1967, while I still h a d another year to complete at B U . She adamantly refused to move i n w i t h me u n t i l we were married. A l t h o u g h I joked about being blackmailed, a n d i n fact d i d resent what I saw as a continuation of m y parents' archaic a n d prudish set of m o r a l standards, I enjoyed our times together a n d I wanted more. W e married. r

Ann's father, a brilliant engineer, h a d masterminded the navigational system for an important class o f missile a n d was rewarded w i t h a high-level position i n the Department o f the Navy. H i s best friend, a m a n A n n called Uncle F r a n k (not his real name), was e m ployed as a n executive at the highest echelons of the N a t i o n a l Security Agency ( N S A ) , the country's least-known — and by most accounts largest — spy organization. Shortly after o u r marriage, the m i l i t a r y s u m m o n e d me for m y physical. I passed and therefore faced the prospect of V i e t n a m upon graduation. T h e idea of fighting i n Southeast A s i a tore me apart emotionally, though war has always fascinated me. I was raised on tales about m y colonial ancestors — who include Thomas Paine and E t h a n A l l e n — and I h a d visited a l l the N e w E n g l a n d a n d upstate

Part 1:1963-1971

N e w Y o r k battle sites of both the French a n d I n d i a n a n d the Revolutionary wars. I read every historical novel I could find. I n fact, when A r m y Special Forces units first entered Southeast A s i a . I was eager to sign up. But as the m e d i a exposed the atrocities and the i n consistencies of U.S. policy, I experienced a change of heart. I found myself w o n d e r i n g whose side Paine w o u l d have taken. I was sure he w o u l d have j o i n e d our Vietcong enemies. Uncle Frank came to m y rescue. He informed me that an N S A job made one eligible for draft deferment, a n d he arranged for a series of meetings at his agency, i n c l u d i n g a day of grueling polygraphmonitored interviews. I was told that these tests w o u l d determine whether I was suitable material for N S A recruitment a n d training, and i f I was, w o u l d provide a profile of m y strengths and weaknesses, w h i c h w o u l d be used to m a p out m y career. Given my attitude t o w a r d the V i e t n a m War, I was convinced I w o u l d fail the tests. U n d e r examination, I admitted that as a loyal A m e r i c a n I opposed the war, a n d I was surprised when the interviewers d i d not pursue this subject. Instead, they focused on my upbringing, my attitudes toward my parents, the emotions generated by the fact I grew up as a poor p u r i t a n among so many wealthy, hedonistic preppies. They also explored m y frustration about the lack of women, sex, and money i n my life, a n d the fantasy w o r l d that h a d evolved as a result. I was amazed by the attention they gave to m y relationship w i t h Farhad and by their interest i n m y willingness to lie to the campus police to protect h i m . A t first I assumed a l l these things that seemed so negative to me m a r k e d me as an N S A reject, but the interviews continued, suggesti n g otherwise. It was not u n t i l several years later that I realized that from an N S A viewpoint these negatives actually are positive. T h e i r assessment h a d less to do w i t h issues of loyalty to m y country than w i t h the frustrations of my life. A n g e r at m y p a r e n t , an obsession w i t h w o m e n , a n d m y a m b i t i o n to live the good life gave them a hook; I was seducible. M y determination to excel i n school a n d i n sports, my ultimate rebellion against m y father, m y ability to get along w i t h foreigners, a n d m y willingness to lie to the police were exactly the types of attributes they sought. I also discovered, later, that Farhad's father w o r k e d for the U.S. intelligence c o m m u n i t y i n Iran; my friendship w i t h F a r h a d was therefore a definite plus. A few weeks after the N S A testing, I was offered a job to start

A n Economic Hit M a n Is B o r n

training i n the art of spying, to begin after I received m y degree from B U several months later. However, before I h a d officially accepted this offer, I impulsively attended a seminar given at B U by a Peace Corps recruiter. A major selling point was that, like the N S A , Peace Corps jobs made one eligible for draft deferments. The decision to sit i n on that seminar was one of those coincidences that seemed insignificant at the time but turned out to have lifechanging implications. T h e recruiter described several places i n the w o r l d that especially needed volunteers. O n e o f these was the A m a z o n rain forest where, he pointed out, indigenous people lived very m u c h as natives of N o r t h A m e r i c a h a d u n t i l the arrival of Europeans. I h a d always dreamed of living like the A b n a k i s w h o inhabited N e w H a m p s h i r e when m y ancestors first settled there. I knew I h a d A b n a k i blood i n m y veins, a n d I wanted to learn the type of forest lore they understood so well. I approached the recruiter after his talk and asked about the possibility of being assigned to the A m a z o n . H e assured me there was a great need for volunteers i n that region a n d that m y chances w o u l d be excellent. I called U n c l e Frank. To m y surprise, Uncle Frank encouraged me to consider the Peace Corps. H e confided that after the fall of H a n o i â&#x20AC;&#x201D; w h i c h i n those days was deemed a certainty by m e n i n his position â&#x20AC;&#x201D;the A m a z o n w o u l d become a hot spot. "Loaded w i t h oil," he said. "We'll need good agents there â&#x20AC;&#x201D; people who understand the natives." H e assured me that the Peace Corps w o u l d be a n excellent training ground, and he urged me to become proficient i n Spanish as well as i n local indigenous dialects. "You might," he chuckled, "end u p w o r k i n g for a private company instead of the government." I d i d not understand what he meant by that at the time. I was bei n g upgraded from spy to E H M , although I h a d never heard the t e r m and w o u l d not for a few more years. I h a d no idea that there were hundreds o f m e n a n d w o m e n scattered around the world, w o r k i n g for consulting firms a n d other private companies, people who never received a penny o f salary f r o m any government agency and yet were serving the interests of empire. N o r could I have guessed that a new type, w i t h more euphemistic titles, w o u l d n u m ber i n the thousands by the end of the m i l l e n n i u m , and that I w o u l d play a significant role i n shaping this growing army.

Part 1:1963-1971

A n n and I applied to the Peace Corps and requested an assignment i n the A m a z o n . W h e n our acceptance notification arrived, m y first reaction was one of extreme disappointment. The letter stated that we w o u l d be sent to Ecuador. O h no, I thought. I requested the A m a z o n , not A f r i c a . I went to an atlas and looked up Ecuador. I was dismayed w h e n I could not find it anywhere on the A f r i c a n continent. I n the index, though, I discovered that it is indeed located i n L a t i n A m e r i c a , and I saw on the m a p that the river systems flowing off its A n d e a n g l a ciers f o r m the headwaters to the mighty A m a z o n . Further reading assured me that Ecuador's jungles were some of the world's most d i verse and formidable, a n d that the indigenous people still lived m u c h as they had for m i l l e n n i a . W e accepted. A n n and I completed Peace Corps t r a i n i n g i n Southern California and headed for Ecuador i n September 1968. We lived i n the A m a z o n w i t h the Shuar whose lifestyle d i d indeed resemble that of precolonial N o r t h A m e r i c a n natives; we also worked i n the A n d e s w i t h descendants of the Incas. It was a side of the w o r l d I never dreamed still existed. U n t i l then, the only L a t i n Americans I had met were the wealthy preppies at the school where m y father taught. I f o u n d m y self sympathizing w i t h these indigenous people who subsisted o n h u n t i n g and f a r m i n g . I felt an odd sort of k i n s h i p w i t h them. Somehow, they r e m i n d e d me of the townies I h a d left b e h i n d . One day a m a n i n a business suit, E i n a r Greve, l a n d e d at the airstrip i n our community. H e was a vice president at Chas. T. M a i n , Inc. ( M A I N ) , an international consulting firm that kept a very l o w profile and that was i n charge o f studies to determine whether the W o r l d B a n k should l e n d E c u a d o r and its neighboring countries b i l lions of dollars to b u i l d hydroelectric dams and other infrastructure projects. E i n a r also was a colonel i n the U.S. A r m y Reserve. H e started talking w i t h me about the benefits of w o r k i n g for a company like M A I N . W h e n I mentioned that I had been accepted by the N S A before j o i n i n g the Peace Corps, and that I was considering going back to them, he informed me that he sometimes acted as an N S A liaison; he gave me a look that made me suspect that part of his assignment was to evaluate m y capabilities. I now believe that he was updating m y profile, and especially sizing up my abilities to survive i n environments most N o r t h A m e r i c a n s w o u l d find hostile. W e spent a couple of days together i n Ecuador, and afterward

A n Economic H i t M a n Is B o r n

communicated by m a i l . H e asked me to send h i m reports assessing Ecuador's economic prospects. I h a d a small portable typewriter, loved to write, a n d was quite happy to comply w i t h this request. Over a period of about a year, I sent E i n a r at least fifteen long letters. In these letters, I speculated o n Ecuador's economic a n d political future, and I appraised the growing frustration among the indigenous communities as they struggled to confront o i l companies, i n t e r n a tional development agencies, a n d other attempts to draw t h e m into the modern w o r l d . W h e n m y Peace Corps tour was over, E i n a r invited me to a job interview at M A I N headquarters i n Boston. D u r i n g our private meeting, he emphasized that M A I N ' S p r i m a r y business was engineering but that his biggest client, the W o r l d Bank, recently h a d begun i n sisting that he keep economists o n staff to produce the critical economic forecasts used to determine the feasibility a n d magnitude o f engineering projects. H e confided that he h a d previously hired three highly qualified economists w i t h impeccable credentials â&#x20AC;&#x201D; two w i t h master's degrees a n d one w i t h a P h D . They h a d failed miserably. "None of them," E i n a r said, "can handle the idea o f producing economic forecasts i n countries where reliable statistics aren't available." H e went o n to tell me that, i n addition, all of t h e m h a d found it impossible to fulfill the terms of their contracts, w h i c h required t h e m to travel to remote places i n countries like Ecuador, Indonesia, Iran, a n d Egypt, to interview local leaders, and to provide personal assessments about the prospects for economic development i n those regions. One h a d suffered a nervous breakdown i n a n isolated Panamanian village; he was escorted by P a n a m a n i a n police to the airport a n d put o n a plane back to the U n i t e d States. "The letters you sent me indicate that y o u don't m i n d sticking your neck out, even w h e n h a r d data isn't available. A n d given your living conditions i n Ecuador, I'm confident y o u can survive almost anywhere." H e t o l d me that he already h a d fired one of those economists a n d was prepared to do the same w i t h the other two, i f I accepted the job. So it was that i n January 19711 was offered a position as an economist w i t h M A I N . I h a d t u r n e d twenty-six â&#x20AC;&#x201D; the magical age when the draft b o a r d no longer wanted me. I consulted w i t h Ann's family; they encouraged me to take the job, and I assumed this reflected U n cle Frank's attitude as well. I recalled h i m mentioning the possibility

Part 1:1963-1971

I w o u l d end up w o r k i n g for a private firm. N o t h i n g was ever stated openly, but I h a d no doubt that my employment at M A I N was a consequence of the arrangements U n c l e Frank h a d made three years earlier, i n addition to m y experiences i n Ecuador a n d my willingness to write about that country's economic and political situation. M y head reeled for several weeks, a n d I h a d a very swollen ego. I had earned only a bachelor's degree f r o m B U , w h i c h d i d not seem to warrant a position as an economist w i t h such a lofty consulting company. I k n e w that many of m y B U classmates w h o h a d been rejected by the draft a n d h a d gone o n to earn M B A s a n d other graduate degrees w o u l d be overcome w i t h jealousy. I visualized myself as a dashing secret agent, heading off to exotic lands, lounging beside hotel s w i m m i n g pools, surrounded by gorgeous b i k i n i - c l a d w o m e n , m a r tini i n h a n d . A l t h o u g h this was merely fantasy, I w o u l d discover that it held e l ements of truth. Einar h a d h i r e d me as an economist, but I was soon to learn that my real job went far beyond that, and that it was i n fact closer to James Bond's t h a n I ever could have guessed.

A n Economic H i t M a n Is B o r n

CHAPTER

"In for Life"

In legal parlance, M A I N w o u l d be called a closely h e l d corporation; roughly 5 percent of its two thousand employees owned the company. These were referred to as partners or associates, a n d their position was coveted. N o t only d i d the partners have power over everyone else, but also they made the b i g bucks. Discretion was their hallmark; they dealt w i t h heads o f state a n d other chief executive officers who expect their consultants, like their attorneys a n d psychotherapists, to honor a strict code of absolute confidentiality. Talking w i t h the press was taboo. It simply was not tolerated. A s a consequence, hardly anyone outside M A I N h a d ever heard of us, although many w ere f a m i l iar w i t h our competitors, such as A r t h u r D . Little, Stone & Webster, B r o w n & Root, H a l l i b u r t o n , and Bechtel. r

I use the t e r m c o m p e t i t o r s loosely, because i n fact M A I N was i n a league by itself. T h e majority of our professional staff was engineers, yet we owned no equipment a n d never constructed so m u c h as a storage shed. M a n y M A I N e r s were ex-military; however, we d i d not contract w i t h the Department of Defense or w i t h any of the military services. O u r stock-in-trade was something so different f r o m the n o r m that d u r i n g m y first months there even I could not figure out what we d i d . I k n e w only that m y first real assignment w o u l d be i n Indonesia, a n d that I w o u l d be part of an eleven-man team sent to create a master energy plan for the island of Java. I also k n e w that E i n a r a n d others w h o discussed the job w i t h me were eager to convince me that Java's economy w o u l d b o o m , a n d

that i f I wanted to distinguish myself as a good forecaster (and to therefore be offered promotions), I w o u l d produce projections that demonstrated as m u c h . "Right off the chart," E i n a r l i k e d to say. H e w o u l d glide his fingers through the air a n d up over his head. " A n economy that w i l l soar like a bird!" E i n a r took frequent trips that usually lasted only two to three days. N o one talked m u c h about t h e m or seemed to k n o w where he had gone. W h e n he was i n the office, he often invited me to sit w i t h h i m for a few minutes over coffee. H e asked about A n n , our new apartment, and the cat we h a d brought w i t h us from Ecuador. I grew bolder as I came to k n o w h i m better, a n d I tried to learn more about h i m and w h a t I w o u l d be expected to do i n m y job. B u t I never received answers that satisfied me; he was a master at t u r n i n g c o n versations around. O n one such occasion, he gave me a peculiar look. "You needn't worry," he said. "We have high expectations for you. I was i n Washington recently..." H i s voice trailed off a n d he smiled inscrutably. " I n any case, you k n o w we have a b i g project i n Kuwait. It'll be a while before you leave for Indonesia. I t h i n k y o u should use some of your time to read up on K u w a i t . T h e Boston Public Libraryis a great resource, and we can get you passes to the M I T and H a r v a r d libraries. ' -

After that, I spent m a n y hours i n those libraries, especially i n the B P L , w h i c h was located a few blocks away from the office a n d very close to my Back Bay apartment. I became familiar with Kuwait as well as w i t h m a n y books on economic statistics, published by the U n i t e d Nations, the Internationa] M o n e t a r y F u n d ( I M F ) , a n d the W o r l d Bank. I knew that I w o u l d be expected to produce econometric m o d els for Indonesia and Java, a n d I decided that I might as well get started by doing one for K u w a i t . However, my B S i n business administration h a d not prepared me as an econometrician, so I spent a lot of time trying to figure out how to go about it. I went so far as to enroll i n a couple of courses on the subject I n the process, I discovered that statistics can be m a n i p u lated to produce a large array of conclusions, i n c l u d i n g those substantiating the. predilections of the analyst. M A I N was a macho corporation. There were only four w o m e n who held professional positions i n 1971- However, there were perhaps two h u n d r e d w o m e n divided between the cadres of personal

"In for Life"

secretaries — even vice president a n d department manager had 7

one — a n d the steno pool, w h i c h s e n e d the rest of us. I h a d become accustomed to this gender bias, and I was therefore especially astounded by what happened one day i n the B P L ' s reference section. A n attractive brunette w o m a n came up a n d sat i n a chair across the table f r o m me. In her dark green business suit, she looked very sophisticated. I j u d g e d her to be several years m y senior, but I tried to focus on not noticing her, on acting indifferent. A f t e r a few m i n utes, without a w o r d , she slid an open book i n m y direction. It c o n tained a table w i t h information I h a d been searching for about K u w a i t — and a card w i t h her name, Claudine M a r t i n , a n d her title, Special Consultant to Chas. T. M a i n , Inc. I looked up into her soft green eyes, a n d she extended her h a n d . "I've been asked to help i n your training," she said. I could not believe this was h a p p e n i n g to me. Beginning the next day, we met i n Claudine's Beacon Street apartment, a few blocks f r o m M A I N ' S P r u d e n t i a l Center headquarters. D u r i n g our first hour together, she explained that my position was an unusual one and that we needed to keep everything highly confidential. She told m e that no one h a d given me specifics about m y job because no one w as authorized to — except her. T h e n she i n r

formed me that her assignment was to m o l d me into an economic hit man. T h e very name awakened old cloak-and-dagger dreams. I was embarrassed by the nen'ous laughter I heard c o m i n g from me. She smiled and assured me that h u m o r was one of the reasons they used the t e r m . " W h o w o u l d take it seriously?" she asked. I confessed ignorance about the role of economic h i t men. "You're not alone," she laughed. "We're a rare breed, i n a dirty business. N o one can k n o w about your involvement — not even your wife." T h e n she turned serious. " I ' l l be very frank w i t h you, teach you all I can d u r i n g the next w eeks. T h e n you'll have to choose. Your der

cision is final. Once you're i n , you're i n for life." A f t e r that, she seld o m used the full name; we were simply E H M s . I know now what I d i d not then — that Claudine took full advantage of the personality weaknesses the N S A profile h a d disclosed about me. I do not know who supplied her with the information — Einar, the N S A , M A I N ' s personnel department, or someone else — only that she used it masterfully. H e r approach, a c o m b i n a t i o n of physical

Part 1:1963-1971

seduction a n d verbal manipulation, was tailored specifically for me, and yet it fit within the standard operating procedures I have since seen used by a variety of businesses when the stakes are h i g h and the pressure to close lucrative deals is great. She knew from the start that I w o u l d not jeopardize m y marriage by disclosing our clandestine activities. A n d she was brutally frank w h e n it came to describing the shadowy side of things that w o u l d be expected of me. I have no idea w h o p a i d her salary, although I have no reason to suspect i t was not, as her business card i m p l i e d , M A I N . A t the time, I was too naive, intimidated, a n d bedazzled to ask the questions that today seem so obvious. Claudine t o l d me that there were two p r i m a r y objectives of m y work. First, I was to justify huge international loans that w o u l d funnel money back to M A I N a n d other U.S. companies (such as Bechtel, H a l l i b u r t o n , Stone & Webster, and B r o w n & Root) through massive engineering a n d construction projects. Second, I w o u l d work to bankrupt the countries that received those loans (after they h a d paid M A I N a n d the other U.S. contractors, of course) so that they w o u l d be forever beholden to their creditors, and so they w o u l d present easy targets w h e n we needed favors, i n c l u d i n g military bases, U N votes, or access to o i l a n d other natural resources. M y job, she said, was to forecast the effects of investing billions of dollars i n a country. Specifically, I w o u l d produce studies that projected economic growth twenty to twenty-five years into the future a n d that evaluated the impacts of a variety of projects. F o r example, i f a decision was made to l e n d a country $1 b i l l i o n to persuade its leaders not to align w i t h the Soviet U n i o n , I w o u l d compare the b e n efits of investing that money i n power plants w i t h the benefits o f i n vesting i n a new national railroad network or a telecommunications system. O r I might be told that the country was being offered the opportunity to receive a modern electric utility system, and it w o u l d be up to me to demonstrate that such a system w o u l d result i n sufficient economic growth to justify the loan. The critical factor, i n every case, was gross national product. T h e project that resulted i n the highest average a n n u a l growth of G N P w o n . If only one project was under consideration, I w o u l d need to demonstrate that developing it w o u l d b r i n g superior benefits to the G N R 7

T h e unspoken aspect o f every one of these projects was that they were intended to create large profits for the contractors, and to make

I n for Life"

a handful of wealthy and influential families i n the receiving c o u n tries very happy, while assuring the long-term financial dependence and therefore the political loyalty of governments around the w o r l d . T h e larger the loan, the better. T h e fact that the debt burden placed on a country w o u l d deprive its poorest citizens of health, education, a n d other social services for decades to come was not taken into consideration. Claudine and I openly discussed the deceptive nature of G N P . F o r instance, the growth of G N P may result even when it profits only one person, such as an i n d i v i d u a l who owns a utility company, a n d even if the majority of the population is burdened w i t h debt. The rich get richer and the poor grow poorer. Yet, f r o m a statistical standpoint, this is recorded as economic progress. L i k e U.S. citizens i n general, most M A I N employees believed we were d o i n g countries favors when we built power plants, highways, and ports. O u r schools and our press have taught us to perceive all of our actions as altruistic. Over the years, I've repeatedly heard c o m ments like, "If they're going to b u r n the U . S . flag a n d demonstrate against our embassy, w h y don't we just get out of their d a m n c o u n try a n d let t h e m w a l l o w i n their own poverty?" r

People who say such things often h o l d diplomas certifying that they are well educated. However, these people have no clue that the m a i n reason we establish embassies around the w o r l d is to serve our own interests, w h i c h d u r i n g the last h a l f of the twentieth century meant t u r n i n g the A m e r i c a n republic into a global empire. Despite credentials, such people are as uneducated as those eighteenthcentury colonists w h o believed that the Indians fighting to defend their lands were servants of the devil. W i t h i n several months, I w o u l d leave for the island of Java i n the country oflndonesia, described at that time as the most heavily populated piece of real estate on the planet. Indonesia also happened to be an oil-rich M u s l i m nation and a hotbed of communist activity. "It's the next d o m i n o after V i e t n a m , " is the way Claudine put it. "We must w i n the Indonesians over. If they j o i n the C o m m u n i s t bloc, well..." She drew a finger across her throat a n d then smiled sweetly. "Let's just say you need to come up w i t h a very optimistic forecast of the economy, how it will mushroom after all the new power plants a n d distribution lines are built. T h a t w i l l allow U S A I D a n d the international banks to justify' the loans. Y o u ' l l be well rewarded,

Part 1:1963-1971

of course, a n d can move on to other projects i n exotic places. The w o r l d is your shopping cart." She went on to w a r n me that m y role w o u l d be tough. "Experts at the banks w i l l come after you. It's their job to punch holes i n your forecasts — that's what they're p a i d to do. M a k i n g y o u look bad makes them look good." O n e day I r e m i n d e d C l a u d i n e that the M A I N team being sent to Java i n c l u d e d ten other m e n . I asked i f they all were receiving the same type of t r a i n i n g as me. She assured me they were not. "They're engineers," she said. "They design power plants, transmission a n d distribution lines, a n d seaports a n d roads to b r i n g i n the fuel. You're the one w ho predicts the future. Your forecasts determine the magnitude of the systems they design — a n d the size of the loans. Y o u see, you're the key." Every time I walked away from Claudine's apartment, I wondered whether I was d o i n g the right thing. Somewhere i n m y heart, I suspected I was not. But the frustrations of m y past haunted me. M A I N seemed to offer everything m y life h a d lacked, a n d yet I kept asking myself i f T o m Paine w o u l d have approved. I n the end, I convinced myself that by learning more, by experiencing it, I c o u l d better expose it l a t e r — t h e old " w o r k i n g f r o m the inside" justification. r

W h e n I shared this idea w i t h Claudine, she gave me a perplexed look. "Don't be ridiculous. Once you're i n , you can never get out. Y o u must decide for yourself, before you get i n any deeper." I understood her, a n d what she said frightened me. A f t e r I left, I strolled d o w n Commonwealth Avenue, turned onto D a r t m o u t h Street, and assured myself that I was the exception. One afternoon some months later, C l a u d i n e a n d I sat i n a w i n dow settee watching the snow fall on Beacon Street. "We're a small, exclusive club," she said. "We're paid — well p a i d — t o cheat countries around the globe out of billions of dollars. A large part of your job is to encourage w o r l d leaders to become part of a vast network that promotes U . S . commercial interests. I n the end, those leaders become ensnared i n a web of debt that ensures their loyalty. We can draw on them whenever we desire — to satisfy our political, economic, or military needs. In t u r n , these leaders bolster their political positions by b r i n g i n g industrial parks, power plants, a n d airports to their people. M e a n w h i l e , the owners of U.S. engineering a n d construction companies become very- wealthy." That afternoon, i n the idyllic setting of Claudine's apartment,

"In for Life"

relaxing i n the window while snow swirled around outside, I learned the history of the profession I was about to enter. Claudine described h o w throughout most of history, empires were built largely through m i l i t a r y force or the threat of it. B u t w i t h the e n d of W o r l d W a r II, the emergence of the Soviet U n i o n , a n d the specter of nuclear holocaust, the military solution became just too risky. T h e decisive moment occurred i n 1951, when Iran rebelled against a B r i t i s h oil company that was exploiting Iranian natural resources and its people. The company was the forerunner of British Petroleum, today's B P . I n response, the highly popular, democratically elected Iranian p r i m e minister (and T I M E magazine's M a n o f the Year i n 1951), M o h a m m a d Mossadegh, nationalized all Iranian petroleum assets. A n outraged E n g l a n d sought the help of her W o r l d W a r II ally, the U n i t e d States. However, both countries feared that military retaliation w o u l d provoke the Soviet U n i o n into taking action o n behalf of Iran. Instead o f sending i n the M a r i n e s , therefore, W a s h i n g t o n d i s patched C I A agent K e r m i t Roosevelt (Theodore's grandson). H e performed brilliantly, w i n n i n g people over through payoffs a n d threats. H e then enlisted t h e m to organize a series of street riots a n d violent demonstrations, w h i c h created the impression that Mossadegh was both unpopular a n d inept. In the end, Mossadegh went d o w n , a n d he spent the rest of his life under house arrest. The p r o - A m e r i c a n M o h a m m a d Reza Shah became the unchallenged dictator. K e r m i t Roosevelt h a d set the stage for a new profession, the one whose ranks I was j o i n i n g . 1

Roosevelt's gambit reshaped M i d d l e Eastern history even as it rendered obsolete a l l the o l d strategies for empire b u i l d i n g . It also coincided w i t h the b e g i n n i n g of experiments i n "limited nonnuclear military actions," w h i c h ultimately resulted i n U . S . h u m i l i a t i o n s i n K o r e a a n d V i e t n a m . B y 1968, the year I interviewed w i t h the N S A , it h a d become clear that i f the U n i t e d States wanted to realize its dream of global empire (as envisioned by m e n like presidents Johnson a n d N i x o n ) , it w o u l d have to employ strategies modeled o n Roosevelt's Iranian example. T h i s was the only way to beat the Soviets without the threat of nuclear war. There was one problem, however. K e r m i t Roosevelt was a C I A employee. H a d he been caught, the consequences w o u l d have been dire. H e h a d orchestrated the first U . S . operation to overthrow a

Part 1:1963-1971

foreign government, a n d it was likely that many more w o u l d follow, but it was important to find an approach that w o u l d not directly i m plicate Washington. Fortunately for the strategists, the 1960s also witnessed another type of revolution: the empowerment of international corporations and of multinational organizations such as the W o r l d B a n k a n d the I M F . The latter were financed primarily by the U n i t e d States and our sister empire builders i n Europe. A symbiotic relationship developed between governments, corporations, a n d multinational organizations. B y the time I enrolled i n B U ' s business school, a solution to the Roosevelt-as-CIA-agent problem h a d already been worked out. U . S . intelligence agencies â&#x20AC;&#x201D; including the N S A â&#x20AC;&#x201D; w o u l d identify prospective E H M s , who could then be h i r e d by international corporations. These E H M s w o u l d never be p a i d by the government; instead, they w o u l d draw their salaries from the private sector. A s a result, their dirty work, i f exposed, w o u l d be chalked up to corporate greed rather than to government policy. In addition, the corporations that h i r e d them, although p a i d by government agencies a n d their m u l t i national b a n k i n g counterparts (with taxpayer money), w o u l d be i n sulated from congressional oversight a n d public scrutiny, shielded by a growing body of legal initiatives, i n c l u d i n g trademark, i n t e r n a tional trade, a n d Freedom of Information l a w s . 2

"So you see," Claudine concluded, "we are just the next generation i n a p r o u d tradition that began back w h e n you were i n first grade."

"In for L i f e "

CHAPTER

Indonesia: Lessons for an EHM

In a d d i t i o n to l e a r n i n g about my new career, I also spent time reading books about Indonesia. "The more you k n o w about a country before you get there, the easier your job w i l l be," Claudine h a d advised. I took her words to heart. W h e n Columbus set sail i n 1492, he was trying to reach Indonesia, k n o w n at the time as the Spice Islands. Throughout the colonial era, it was considered a treasure w o r t h far more t h a n the Americas. Java, w i t h its rich fabrics, fabled spices, a n d opulent kingdoms, was both the crown jewel a n d the scene of violent clashes between S p a n ish, D u t c h , Portuguese, and British adventurers. The Netherlands emerged t r i u m p h a n t i n 1750, but even though the D u t c h controlled Java, it took t h e m more t h a n 150 years to subdue the outer islands. W h e n the Japanese invaded Indonesia d u r i n g W o r l d W a r II, D u t c h forces offered little resistance. A s a result, Indonesians, especially the Javanese, suffered terribly. Following the Japanese surrender, a charismatic leader n a m e d Sukarno emerged to declare i n d e p e n d ence. Four years of fighting finally ended on December 27, 1949, when the Netherlands lowered its flag a n d returned sovereignty to a people who h a d k n o w n nothing but struggle and d o m i n a t i o n for more t h a n three centuries. Sukarno became the new republic's first president. R u l i n g Indonesia, however, proved to be a greater challenge than defeating the D u t c h . Far f r o m homogeneous, the archipelago of about 17,500 islands was a boiling pot of tribalism, divergent cultures,

dozens of languages a n d dialects, a n d ethnic groups w h o nursed centuries-old animosities. Conflicts were frequent and brutal, a n d Sukarno clamped down. H e suspended parliament i n I 9 6 0 a n d was n a m e d president-for-life i n 1963. H e formed close alliances w i t h C o m m u n i s t governments around the w o r l d , i n exchange for military equipment a n d training. H e sent Russian-armed Indonesian troops into neighboring M a l a y s i a i n an attempt to spread c o m m u n i s m throughout Southeast A s i a a n d w i n the approval of the world's Socialist leaders. O p p o s i t i o n built, a n d a coup was launched i n 1965. Sukarno escaped assassination only through the quick wits of his mistress. M a n y of his top military officers a n d his closest associates were less lucky. The events were reminiscent of those i n Iran i n 1953. In the end, the C o m m u n i s t Party was h e l d responsible â&#x20AC;&#x201D; especially those factions aligned w i t h C h i n a . In the A r m y - i n i t i a t e d massacres that followed, an estimated three hundred thousand to five hundred t h o u sand people were killed. The head of the military, General Suharto, took over as president i n 1968.

B y 1971, the U n i t e d States' determination to seduce Indonesia away from c o m m u n i s m was heightened because the outcome of the V i e t n a m W a r was looking very uncertain. President NLxon h a d begun a series of troop withdrawals i n the summer of 1969, a n d U . S . strategy was t a k i n g o n a more global perspective. The strategy focused o n preventing a domino effect of one country after another falling under C o m m u n i s t rule, a n d it focused on a couple of countries; Indonesia was the key. M A I N ' S electrification project was part of a comprehensive p l a n to ensure A m e r i c a n dominance i n Southeast A s i a . T h e premise of U.S. foreign policy was that Suharto w o u l d serve W a s h i n g t o n i n a m a n n e r similar to the shah of Iran. T h e U n i t e d States also hoped the nation w o u l d serve as a model for other c o u n tries i n the region. W a s h i n g t o n based part of its strategy on the assumption that gains made i n Indonesia might have positive repercussions throughout the Islamic w o r l d , particularly i n the explosive M i d d l e East. A n d i f that were not incentive enough, Indonesia h a d oil. N o one was certain about the magnitude or quality of its reserves, but o i l company seismologists were exuberant over the possibilities. A s I pored over the books at the B P L , my excitement grew. I began to imagine the adventures ahead. In w o r k i n g for M A I N , I w o u l d be trading the rugged Peace Corps lifestyle for a m u c h more luxurious

Indonesia: Lessons for an E H M

and glamorous one. M y time w i t h Claudine already represented the realization of one of my fantasies; it seemed too good to be true. I felt at least partially vindicated for serving the sentence at that all-boys' prep school. Something else was also happening i n m y life: A n n a n d I were not getting along. I t h i n k she must have sensed that I was leading two lives. I justified it as the logical result of the resentment I felt t o w a r d her for forcing us to get m a r r i e d i n the first place. Never m i n d that she h a d nurtured a n d supported me through the challenges of our Peace Corps assignment i n Ecuador; I still saw her as a c o n t i n uation of my pattern of giving i n to m y parents' whims. O f course, as I look back o n it, I'm sure m y relationship w i t h Claudine was a m a jor factor. I could not tell A n n about this, b u t she sensed it. In any case, we decided to move into separate apartments. One day i n 1971, about a week before my scheduled departure for Indonesia, I arrived at Claudine's place to find the small d i n i n g room table set w i t h an assortment of cheeses and breads, and there was a fine bottle o f Beaujolais. She toasted me. "You've made it." She smiled, but somehow i t seemed less t h a n sincere. "You're n o w one of us." W e chatted casually for h a l f an hour or so; then, as we were finishing off the wine, she gave me a look unlike any I had seen before. "Never a d m i t to anyone about our meetings," she said i n a stern voice. "I won't forgive y o u i f you do, ever, a n d I ' l l deny I ever met you." She glared at me â&#x20AC;&#x201D; perhaps the only time I felt threatened b y her â&#x20AC;&#x201D; and then gave a cold laugh. "Talking about us w o u l d make life dangerous for you." I was stunned. I felt terrible. B u t later, as I walked alone back to the Prudential Center, I h a d to admit to the cleverness of the scheme. The fact is that a l l our time together h a d been spent i n her apartment. There was not a trace of evidence about our relationship, and no one at M A I N w as implicated i n any way. There was also part of me that appreciated her honesty; she had not deceived me the way my parents h a d about T i l t o n and M i d d l e b u r y . r

Part 1:1963-1971

CHAPTER

Saving a Country from Communism

I h a d a romanticized vision of Indonesia, the country where I was to live for the next three months. Some of the books I read featured photographs o f beautiful w o m e n i n brightly colored sarongs, exotic Balinese dancers, shamans blowing fire, a n d warriors p a d d l i n g long dugout canoes i n emerald waters at the foot of s m o k i n g volcanoes. Particularly striking was a series on the magnificent black-sailed galleons of the infamous B u g i pirates, w h o still sailed the seas of the archipelago, a n d who h a d so terrorized early European sailors that they returned home to w a r n their children, "Behave yourselves, or the B u g i m e n w i l l get you." O h , how those pictures stirred m y soul. The history and legends of that country represent a cornucopia of larger-than-life figures: wrathful gods, K o m o d o dragons, tribal s u l tans, a n d ancient tales that l o n g before the b i r t h of Christ h a d traveled across A s i a n mountains, through Persian deserts, and over the Mediterranean to embed themselves i n the deepest realms of our collective psyche. The very names of its fabled i s l a n d s â&#x20AC;&#x201D; J a v a , S u m a tra, Borneo, Sulawesi â&#x20AC;&#x201D; seduced the m i n d . Here was a l a n d of mysticism, m y t h , and erotic beauty; an elusive treasure sought but never found by Columbus; a princess wooed yet never possessed by Spain, by H o l l a n d , by Portugal, by J a p a n ; a fantasy a n d a dream. M y expectations were h i g h , and I suppose they m i r r o r e d those of the great explorers. L i k e Columbus, though, I should have k n o w n to temper my fantasies. Perhaps I could have guessed that the beacon shines on a destiny that is not always the one we envision. Indonesia

offered treasures, but i t was not the chest of panaceas I h a d come to expect. I n fact, m y first days i n Indonesia's steamy capital, Jakarta, i n the summer of 1971, were shocking. T h e beauty was certainly present. Gorgeous w o m e n sporting colorful sarongs. L u s h gardens ablaze w i t h tropical flowers. Exotic Balinese dancers. Bicycle cabs with fanciful, rainbow-colored scenes painted on the sides of the h i g h seats, where passengers reclined i n front of the pedaling drivers. D u t c h Colonial mansions a n d turreted mosques. B u t there was also an ugly, tragic side to the city. Lepers h o l d i n g out bloodied stumps instead of hands. Young girls offering their bodies for a few coins. Once-splendid D u t c h canals turned into cesspools. Cardboard hovels where entire families lived along the trash-lined banks of black rivers. B l a r i n g horns a n d choking fumes. T h e beautiful a n d the ugly, the elegant a n d the vulgar, the spiritual and the profane. This was Jakarta, where the enticing scent of cloves a n d o r c h i d blossoms battled the m i a s m a of open sewers for dominance. I h a d seen poverty before. Some of m y N e w H a m p s h i r e classmates lived i n cold-water tarpaper shacks a n d arrived at school wearing t h i n jackets a n d frayed tennis shoes o n subzero winter days, their unwashed bodies reeking of old sweat and manure. I h a d lived i n m u d shacks w i t h A n d e a n peasants whose diet consisted almost entirely of dried corn a n d potatoes, a n d where it sometimes seemed that a newborn was as likely to die as to experience a birthday. I h a d seen poverty, but n o t h i n g to prepare me for Jakarta. O u r team, of course, was quartered i n the country's fanciest hotel, the H o t e l Intercontinental Indonesia. O w n e d by Pan A m e r i c a n A i r ways, like the rest of the Intercontinental chain scattered around the globe, it catered to the whims of wealthy foreigners, especially oil executives and their families. O n the evening of our first day, our p r o j ect manager Charlie Illingworth hosted a dinner for us i n the elegant restaurant o n the top floor. Charlie was a connoisseur of war; he devoted most of his free time to reading history books and historical novels about great militar).' leaders a n d battles. H e was the epitome of the p r o - V i e t n a m W a r armchair soldier. A s usual, this night he was wearing k h a k i slacks and a short-sleeved k h a k i shirt w i t h military-style epaulettes. After w e l c o m i n g us, he lit up a cigar. "To the good life," he sighed, raising a glass of champagne.

Part 1:1963-1971

We j o i n e d h i m . "To the good life." O u r glasses c l i n k e d . Cigar smoke s w i r l i n g around h i m , Charlie glanced about the r o o m . "We w i l l be well pampered here," he said, n o d d i n g his head appreciatively. "The Indonesians w i l l take very good care of us. A s will the U.S. Embassy people. But let's not forget that we have a m i s sion to accomplish." He looked down at a handful of note cards. "Yes, we're here to develop a master p l a n for the electrification of Java — the most populated l a n d i n the world. But that's just the tip of the iceberg." H i s expression t u r n e d serious; he r e m i n d e d me of George C. Scott playing General Patton, one of Charlie's heroes. "We are here to accomplish nothing short of saving this country from the clutches of c o m m u n i s m . A s you know, Indonesia has a long a n d tragic history. N o w , at a time w hen it is poised to l a u n c h itself into the twentieth century, it is tested once again. O u r responsibility is to make sure that Indonesia doesn't follow i n the footsteps of its n o r t h e r n neighbors, V i e t n a m , Cambodia, a n d Laos. A n integrated electrical system is a key element. That, more than any other single factor (with the possible exception of oil), w i l l assure that capitalism a n d democracy rule. T

"Speaking of oil," he said. H e took another puff on his cigar a n d flipped past a couple of the note cards. "We all k n o w h o w dependent our own country is on o i l . Indonesia can be a powerful ally to us i n that regard. So, as you develop this master plan, please do everything you can to make sure that the oil i n d u s t r y a n d a l l the others that serve it —ports, pipelines, construction companies — get whatever they are likely to need i n the way of electricity for the entire duration of this twenty-five-year plan." He raised his eyes from his note cards a n d looked directly at me. "Better to err o n the high side than to underestimate. Y o u don't want the blood of Indonesian children — or our o w n — on your hands. You don't want t h e m to live under the h a m m e r a n d sickle or the R e d flag of C h i n a ! " A s I lay i n my bed that night, high above the city, secure i n the luxury of a first-class suite, an image o f Claudine came to me. H e r discourses o n foreign debt haunted me. I tried to comfort myself by recalling lessons learned i n my macroeconomics courses at business school. After all, I told myself, I a m here to help Indonesia rise out of a medieval economy a n d take its place i n the m o d e r n industrial w o r l d . B u t I k n e w that i n the m o r n i n g I w o u l d look out m y window-,

Saving a Country from C o m m u n i s m

across the opulence of the hotel's gardens a n d s w i m m i n g pools, and see the hovels that fanned out for miles beyond. I w o u l d k n o w that babies were dying out there for lack of food a n d potable water, a n d that infants a n d adults alike were suffering from horrible diseases and l i v i n g i n terrible conditions. Tossing a n d t u r n i n g i n m y bed, I found it impossible to deny that Charlie a n d everyone else o n our team were here for selfish reasons. We were p r o m o t i n g U.S. foreign policy and corporate interests. We were driven by greed rather than by any desire to make life better for the vast majority of Indonesians. A w o r d came to m i n d : corporatocracy. I was not sure whether I h a d heard it before or h a d just i n vented it, but it seemed to describe perfectly the new elite who h a d made up their minds to attempt to rule the planet. T h i s was a close-knit fraternity of a few men w i t h shared goals, and the fraternity's members moved easily and often between corporate boards a n d government positions. It struck me that the current president of the W o r l d Bank, Robert M c N a m a r a , was a perfect example. H e h a d moved from a position as president o f F o r d M o t o r Company, to secretary- of defense under presidents K e n n e d y and Johnson, a n d now occupied the top post at the world's most powerful financial institution. I also realized that my college professors h a d not understood the true nature of macroeconomics: that i n many cases helping an economy grow only makes those few people who sit atop the p y r a m i d even richer, w h i l e it does nothing for those at the b o t t o m except to push them even lower. Indeed, promoting capitalism often results i n a system that resembles medieval feudal societies. If any of m y p r o fessors k n e w this, they h a d not admitted it â&#x20AC;&#x201D; probably because b i g corporations, a n d the men w h o r u n t h e m , f u n d colleges. Exposing the truth w o u l d undoubtedly cost those professors their jobs â&#x20AC;&#x201D; just as such revelations could cost me m i n e . These thoughts continued to disturb my sleep every night that I spent at the H o t e l I n t e r c o n t i n e n t a l Indonesia. In the end, m y p r i mary defense was a highly personal one: I h a d fought m y way out of that N e w H a m p s h i r e t o w n , the prep school, a n d the draft. T h r o u g h a combination of coincidences a n d h a r d work, I h a d earned a place i n the good life. I also took comfort i n the fact that I was doing the right t h i n g i n the eyes of m y culture. I was o n m y way to becoming a successful a n d respected economist. I was d o i n g what business

Part 1:1963-1971

school h a d prepared me for. I was helping implement a development model that was sanctioned by the best minds at the world's top think tanks. Nonetheless, i n the middle of the night I often had to console myself w i t h a promise that someday I w o u l d expose the t r u t h . T h e n I w o u l d read myself to sleep w i t h L o u i s L ' A m o u r novels about g u n fighters i n the O l d West.

Saving a Country from C o m m u n i s m

CHAPTER

Selling My Soul

O u r eleven-man team spent six days i n Jakarta registering at the U.S. Embassy, meeting various officials, organizing ourselves, a n d relaxing around the pool. T h e number of Americans w h o lived at the H o t e l Intercontinental amazed me. I took great pleasure i n w a t c h ing the beautiful y o u n g women â&#x20AC;&#x201D; wives of U.S. o i l a n d construction company executives â&#x20AC;&#x201D; who passed their days at the p o o l a n d their evenings i n the h a l f dozen posh restaurants i n a n d around the hotel. T h e n Charlie moved our team to the m o u n t a i n city o f B a n d u n g . The climate was milder, the poverty less obvious, a n d the distractions fewer. W e were given a government guesthouse k n o w n as the W i s m a , complete w i t h a manager, a cook, a gardener, a n d a staff of servants. Built d u r i n g the D u t c h colonial period, the W i s m a was a haven. Its spacious veranda faced tea plantations that flowed across rolling hills a n d u p the slopes of Java's volcanic mountains. In a d d i tion to housing, we were provided w i t h eleven Toyota off-road vehicles, each w i t h a driver a n d translator. Finally, we were presented w i t h memberships to the exclusive B a n d u n g G o l f a n d Racket Club, and we were housed i n a suite of offices at the local headquarters of Perusahaan U m u m L i s t r i k Negara ( P L N ) , the government-owned electric utility company. F o r me, the first several days i n B a n d u n g involved a series of meetings w i t h Charlie a n d H o w a r d Parker. H o w a r d was i n his seventies a n d was the retired chief load forecaster for the N e w E n g l a n d

Electric System. N o w he was responsible for forecasting the amount of energy a n d generating capacity (the load) the island of Java w o u l d need over the next twenty-five years, as well as for breaking this down into city a n d regional forecasts. Since electric demand is highly correlated w i t h economic growth, his forecasts depended o n my economic projections. The rest of our team w o u l d develop the master p l a n a r o u n d these forecasts, locating a n d designing power plants, transmission a n d distribution lines, a n d fuel transportation systems i n a manner that w o u l d satisfy our projections as efficiently as possible. D u r i n g our meetings, Charlie continually emphasized the i m portance of m y job, a n d he badgered me about the need to be very optimistic i n my forecasts. Claudine h a d been right; I was the key to the entire master p l a n . "The first few weeks here," Charlie explained, "are about data collection." H e , H o w a r d , a n d I were seated i n b i g rattan chairs i n Charlie's plush private office. The walls were decorated w i t h batik tapestries depicting epic tales from the ancient H i n d u texts of the Ramayana. Charlie puffed o n a fat cigar. "The engineers w i l l put together a detailed picture of the current electric system, port capacities, roads, railroads, all those sorts of things." H e pointed his cigar at me. "You gotta act fast. B y the end of m o n t h one, H o w a r d ' l l need to get a pretty good idea about the full extent of the economic miracles that'll happen w h e n we get the new grid online. B y the end of the second m o n t h , he'll need more details â&#x20AC;&#x201D; broken d o w n into regions. The last m o n t h w i l l be about filling i n the gaps. T h a t ' l l be critical. A l l of us w i l l put our heads together then. So, before we leave we gotta be absolutely certain we have a l l the information we'll need. H o m e for Thanksgiving, that's m y motto. There's no c o m i n g back." H o w a r d appeared to be an amiable, grandfatherly type, but he was actually a bitter old m a n who felt cheated by life. H e h a d never reached the pinnacle of the N e w E n g l a n d Electric System a n d he deeply resented it. "Passed over," he t o l d me repeatedly, "because I refused to buy the company line." H e h a d been forced into retirement a n d then, unable to tolerate staying at h o m e w i t h his wife, h a d accepted a consulting job w i t h M A I N . T h i s was his second assignment, a n d I h a d been w a r n e d by b o t h E i n a r a n d Charlie to watch

Selling M y Soul

out for h i m . They described h i m with words like s t u b b o r n , m e a n , and v i n d i c t i v e . As it turned out, H o w a r d was one of m y wisest teachers, although not one I was ready to accept at the time. H e h a d never received the type of t r a i n i n g Claudine h a d given me. I suppose they considered him too o l d , or perhaps too stubborn. O r maybe they figured he was only i n i t for the short r u n , u n t i l they could lure i n a more pliable full-timer like me. In any case, f r o m their standpoint, he t u r n e d out to be a problem. H o w a r d clearly saw the situation a n d the role they wanted h i m to play, and he was determined not to be a pawn. A l l the adjectives E i n a r and Charlie h a d used to describe h i m were appropriate, but at least some of his stubbornness grew out of his personal c o m m i t m e n t not to be their servant. I doubt he h a d ever heard the t e r m economic hit m a n , but he knew they intended to use h i m to promote a f o r m of imperialism he could not accept. He took me aside after one of our meetings w i t h Charlie. H e wore a hearing a i d a n d fiddled w i t h the little box under his shirt that controlled its volume. "This is between you and me," H o w a r d said i n a hushed voice. W e were standing at the w i n d o w i n the office we shared, l o o k i n g out at the stagnant canal that w o u n d past the P L N b u i l d i n g . A young w o m a n was b a t h i n g i n its foul waters, attempting to retain some semblance of modesty by loosely d r a p i n g a sarong around her otherwise naked body. '"They'll try to convince you that this economy is going to skyrocket," he said. "Charlie's ruthless. Don't let h i m get to you." His words gave me a sinking feeling, but also a desire to convince him that Charlie was right; after all, my career depended on pleasing m y M A I N bosses. "Surely this economy w i l l boom," I said, m y eyes d r a w n to the w o m a n i n the canal. "Just look at what's happening." "So there y o u are," he muttered, apparently unaware of the scene in front of us. "You've already bought their line, have you?" A movement up the canal caught m y attention. A n elderly m a n had descended the bank, dropped his pants, a n d squatted at the edge of the water to answer nature's call. T h e young w o m a n saw h i m but was undeterred; she continued bathing. I t u r n e d away from the w i n d o w a n d looked directly at H o w a r d . "I've been around," I said. "I may be young, but I just got back

Part 1:1963-1971

f r o m three years i n South A m e r i c a . I've seen what can happen w h e n oil is discovered. Things change fast." " O h , I've been around too," he said mockingly. "A great many years. I'll tell you something, young m a n . I don't give a d a m n for your oil discoveries a n d a l l that. I forecasted electric loads all my life — d u r i n g the Depression, W o r l d W a r II, times of bust a n d b o o m . I've seen what Route 128's so-called Massachusetts M i r a c l e d i d for Boston. A n d I can say for sure that no electric load ever grew by more t h a n 7 to 9 percent a year for any sustained period. A n d that's i n the best of times. Six percent is more reasonable." I stared at h i m . Part of me suspected he was right, but I felt defensive. I k n e w I h a d to convince h i m , because m y o w n conscience cried out for justification. " H o w a r d , this isn't Boston. T h i s is a country where, until now, no one could even get electricity. Things are different here." H e turned on his heel a n d waved his h a n d as though he could brush me away. "Go ahead," he snarled. "Sell out. I don't give a d a m n what you come up with." H e jerked his chair f r o m behind his desk a n d fell into it. " I ' l l make m y electricity forecast based on what I believe, not some pie-in-the-sky economic study." H e picked up his pencil a n d started to scribble on a p a d of paper. It was a challenge I could not ignore. I went a n d stood i n front of his desk. "You'll look pretty stupid i f I come up w i t h what everyone expects — a b o o m to rival the California gold r u s h — a n d you forecast electricity growth at a rate comparable to Boston i n the 1960s." He slammed the pencil d o w n and glared at me. "Unconscionable! That's what it is. You — all of you — " he waved his arms at the offices beyond our walls, "you've sold your souls to the devil. You're i n it for the money. Now," he feigned a smile a n d reached under his shirt, "I'm t u r n i n g off m y hearing a i d a n d going back to work." It shook me to the core. I stomped out of the r o o m a n d headed for Charlie's office. Halfway there, I stopped, uncertain about what I intended to accomplish. Instead, I turned and walked down the stairs, out the door, into the afternoon sunlight. The young w o m a n was c l i m b i n g out of the canal, her sarong w r a p p e d tightly about her body. The elderly m a n h a d disappeared. Several boys played i n the

Selling M y Soul

canal, splashing and shouting at each other. A n older w o m a n was standing knee-deep i n the water, brushing her teeth; another was scrubbing clothes. A huge l u m p grew i n my throat. I sat down on a slab of broken concrete, t r y i n g to disregard the pungent odor from the canal. I fought h a r d to h o l d back the tears; I needed to figure out w h y I felt so miserable. You're i n i t f o r t h e m o n e y . I heard Howard's words, over a n d over. H e h a d struck a raw nerve. The little boys continued to splash each other, their gleeful voices filling the air. I wondered what I could do. W h a t would it take to make me carefree like them? The question tormented me as I sat there watching t h e m cavort i n their blissful innocence, apparently u n aware of the risk they took by playing i n that fetid water. A n elderly, hunchbacked m a n w i t h a gnarled cane hobbled along the bank above the canal. H e stopped a n d watched the boys, a n d his face broke into a toothless grin. Perhaps I could confide i n H o w a r d ; maybe together we w o u l d arrive at a solution. I immediately felt a sense of relief. I picked up a little stone and threw it into the canal. A s the ripples faded, however, so d i d m y euphoria. I k n e w I could do no such thing. H o w a r d was old a n d bitter. H e h a d already passed up opportunities to advance his o w n career. Surely, he w o u l d not buckle now. I was young, just starting out, a n d certainly d i d not want to end up like h i m . Staring into the water of that p u t r i d canal, I once again saw i m ages of the N e w H a m p s h i r e prep school o n the h i l l , where I h a d spent vacations alone while the other boys went off to their d e b u tante balls. Slowly the sorry fact settled i n . Once again, there was no one I could talk to. That night I lay i n bed, t h i n k i n g for a long time about the people i n my life â&#x20AC;&#x201D; H o w a r d , Charlie, Claudine, A n n , Einar, U n c l e Frank â&#x20AC;&#x201D; w o n d e r i n g what m y life w o u l d be like i f I h a d never met them. Where would I be living? N o t Indonesia, that was for sure. I wondered also about m y future, about where I was headed. I pondered the decision confronting me. Charlie h a d made it clear that he expected H o w a r d a n d me to come up w i t h growth rates of at least 17 percent per a n n u m . W h a t k i n d o f forecast w o u l d I produce? Suddenly a thought came to me that soothed my soul. W h y h a d it not occurred to me before? The decision was not mine at all. H o w a r d

Part I: 1963-1971

had said that he w o u l d do what he considered right, regardless of m y conclusions. I could please my bosses w i t h a high economic forecast and he w o u l d make his own decision; m y work w o u l d have no effect on the master plan. People kept emphasizing the importance of m y role, but they were wrong. A great burden h a d been lifted. I fell into a deep sleep. A few days later, H o w a r d was taken i l l w i t h a severe amoebic attack. W e rushed h i m to a Catholic missionary hospital. The doctors prescribed medication and strongly recommended that he return immediately to the U n i t e d States. H o w a r d assured us that he already h a d all the data he needed and c o u l d easily complete the load forecast from Boston. H i s p a r t i n g words to me were a reiteration of his earlier w a r n i n g . "No need to cook the numbers," he said. " I ' l l not be part of that scam, no matter wiiat you say about the miracles of economic growth!"

Selling M y Soul

PART II: 1971-1975

CHAPTER 6

My Role as Inquisitor

O u r contracts w i t h the Indonesian government, the A s i a n Development Bank, a n d U S A I D required that someone on our t e a m visit all the major population centers i n the area covered by the master plan. I was designated to fulfill this condition. A s Charlie put it, ' Y o u survived the A m a z o n ; you k n o w h o w to handle bugs, snakes, a n d b a d water." A l o n g w i t h a driver and translator, I visited many beautiful places and stayed i n some pretty d i s m a l lodgings. I met w i t h local business and political leaders a n d listened to their opinions about the prospects for economic growth. However, I found most of t h e m reluctant to share information w i t h me. They seemed intimidated by m y presence. Typically, they t o l d me that I w o u l d have to check w i t h their bosses, with government agencies, or w i t h corporate headquarters i n Jakarta. I sometimes suspected some sort of conspiracy was directed at me. These trips were usually short, not more t h a n two or three days. In between, I returned to the W i s m a i n B a n d u n g . T h e w o m a n w h o managed it h a d a son a few years younger t h a n me. H i s name was R a s m o n , but to everyone except his mother he was Rasy. A student of economics at a local university, he immediately took an interest i n my work. In fact, I suspected that at some point he w o u l d approach me for a job. H e also began to teach me Bahasa Indonesia. T

Creating an easy-to-learn language h a d been President Sukarno's highest priority after Indonesia w o n its independence from Holland.

Over 350 languages a n d dialects are spoken throughout the a r c h i pelago, a n d Sukarno realized that his country needed a c o m m o n vocabulary i n order to unite people from the many islands a n d c u l tures. H e recruited an international team of linguists, a n d Bahasa Indonesia was the highly successful result. Based on Malay, it avoids many of the tense changes, irregular verbs, a n d other complications that characterize most languages. By the early 1970s, the majority of Indonesians spoke it, although they continued to rely on Javanese and other local dialects w i t h i n their o w n communities. Rasy was a great teacher w i t h a wonderful sense of humor, a n d compared to learning Shuar or even Spanish, Bahasa was easy. Rasy owned a motor scooter a n d took it u p o n h i m s e l f to i n t r o duce me to his city and people. T i l show you a side of Indonesia you haven't seen," he promised one evening, a n d urged me to hop on behind h i m . We passed shadow-puppet shows, musicians playing traditional instruments, fire-blowers, jugglers, a n d street vendors selling every imaginable ware, from contraband A m e r i c a n cassettes to rare indigenous artifacts. Finally, we ended up at a tiny coffeehouse populated by young men a n d w o m e n whose clothes, hats, and hairstyles w o u l d have been right i n fashion at a Beatles concert i n the late 1960s; however, everyone was distinctly Indonesian. Rasy introduced me to a group seated around a table a n d we sat down. 1

T h e y a l l spoke E n g l i s h , w i t h varying degrees of fluency, but they appreciated and encouraged my attempts at Bahasa. They talked about this openly a n d asked me w h y A m e r i c a n s never learned their language. I h a d no answer. N o r could I explain why I was the only A m e r i c a n or European i n this part of the city , even though you could always find plenty' of us at the G o l f a n d Racket C l u b , the posh restaurants, the movie theaters, a n d the upscale supermarkets. 1

It was a night I shall always remember. Rasy a n d his friends treated me as one of their o w n . I enjoyed a sense of euphoria f r o m being there, sharing their city, food, a n d music, smelling the clove cigarettes and other aromas that were part of their lives, j o k i n g a n d laughing w i t h them. It was like the Peace Corps all over again, and I found myself wondering why I h a d thought that I wanted to travel first class a n d separate myself from people like this. A s the night wore on, they became increasingly interested i n learning my thoughts

Part II: 1971-1975

about their country a n d about the w a r my country was fighting i n V i e t n a m . Every one of them was horrified by what they referred to as "the illegal invasion," a n d they were relieved to discover I shared their feelings. By the time Rasy a n d I returned to the guesthouse it was late a n d the place was dark. I thanked h i m profusely for inviting me into his w o r l d ; he thanked me for opening up to his friends. W e promised to do it again, hugged, a n d headed off to our respective rooms. That experience w i t h Rasy whetted m y appetite for spending more time away f r o m the M A I N team. The next morning, I h a d a meeting with Charlie and told h i m I was becoming frustrated trying to obtain information from local people. In addition, most of the statistics I needed for developing economic forecasts could only be found at government offices i n Jakarta. Charlie a n d I agreed that I w o u l d need to spend one to two weeks i n Jakarta. He expressed sympathy for me, having to abandon B a n d u n g for the steaming metropolis, a n d I professed to detest the idea. Secretly, however, I was excited by the opportunity to have some time to myself, to explore Jakarta a n d to live at the elegant H o t e l I n t e r c o n tinental Indonesia. Once i n Jakarta, however, I discovered that I now viewed life from a different perspective. T h e night spent w i t h Rasy a n d the young Indonesians, as well as my travels a r o u n d the country, h a d changed me. I found that I saw m y fellow Americans i n a different light. T h e young wives seemed not quite so beautiful. T h e c h a i n - l i n k fence a r o u n d the pool a n d the steel bars outside the w i n dows on the lower floors, w h i c h I h a d barely noticed before, now took on an ominous appearance. The food i n the hotel's elegant restaurants seemed i n s i p i d . I noticed something else too. D u r i n g m y meetings w i t h political and business leaders, I became aware of subtleties i n the way they treated me. I had not perceived it before, but now I saw that many of them resented m y presence. F o r example, w h e n they introduced me to each other, they often used Bahasa terms that according to my dictionary translated to i n q u i s i t o r and i n t e r r o g a t o r . I purposely neglected disclosing my knowledge of their language â&#x20AC;&#x201D; even my translator k n e w only that I could recite a few stock phrases â&#x20AC;&#x201D; a n d I purchased a good B a h a s a / E n g l i s h dictionary, w h i c h I often used after leaving them.

M y Role as Inquisitor

Were these addresses just coincidences of language? M i s i n t e r pretations i n my dictionary? I tried to convince myself they were. Yet, the more time I spent w i t h these men, the more convinced I became that I was an intruder, that an order to cooperate h a d come d o w n from someone, a n d that they h a d little choice but to comply. I had no idea whether a government official, a banker, a general, or the U . S . Embassy h a d sent the order. A l l I knew was that although they invited me into their offices, offered me tea, politely answered m y questions, a n d i n every overt manner seemed to welcome m y presence, beneath the surface there was a shadow of resignation a n d rancor. It made me wonder, too, about their answers to my questions and about the validity of their data. For instance, I could never just walk into an office w i t h m y translator a n d meet w i t h someone; we first had to set up an appointment. I n itself, this w o u l d not have seemed so strange, except that doing so was outrageously time consuming. Since the phones seldom w o r k e d , we h a d to drive through the traffic-choked streets, w h i c h were laid out i n such a contorted manner that i t could take an hour to reach a b u i l d i n g only blocks away. Once there, we were asked to fill out several forms. Eventually, a male secretary w o u l d appear. Politely—always w i t h the courteous smile for w h i c h the Javanese are famous —he w o u l d question me about the types of information I desired, a n d then he w o u l d establish a time for the meeting. W i t h o u t exception, the scheduled appointment was at least several days away, a n d w h e n the meeting finally occurred I was handed a folder of prepared materials. T h e industry owners gave me fiveand ten-year plans, the bankers h a d charts a n d graphs, a n d the government officials provided lists of projects that were i n the process of leaving the d r a w i n g boards to become engines of economic growth. Everything these captains of commerce a n d government provided, and a l l they said d u r i n g the interviews, indicated that Java was poised for perhaps the biggest b o o m any economy h a d ever enjoyed. N o one — not a single person — ever questioned this premise or gave me any negative information. A s I headed back to B a n d u n g , though, I found myself w o n d e r i n g about a l l these experiences; something was deeply disturbing. It occurred to me that everything I was d o i n g i n Indonesia was more like

Part II: 1971-1975

a game than reality. It was as though we were playing a game of poker. We kept our cards hidden. We could not trust each other or count o n the reliability of the i n f o r m a t i o n we shared. Yet, this game was deadly serious, a n d its outcome w o u l d impact m i l l i o n s of lives for decades to come.

M y Role as Inquisitor

CHAPTER 7

Civilization on Trial

' T m taking y o u to a d a l a n g " Rasy beamed. "You know, the famous Indonesian puppet masters." H e was obviously pleased to have me back i n B a n d u n g . "There's a very important one i n town tonight." He drove me o n his scooter through parts of his city I d i d not k n o w existed, through sections filled w i t h traditional Javanese k a m p o n g houses, w h i c h looked like a poor person's version of tiny tile-roofed temples. Gone were the stately D u t c h Colonial mansions and office buildings I h a d grown to expect. T h e people were obviously poor, yet they bore themselves w i t h great pride. They wore threadbare but clean batik sarongs, brightly colored blouses, a n d w i d e - b r i m m e d straw hats. Everywhere we went we were greeted w i t h smiles a n d laughter. W h e n we stopped, children rushed up to touch me a n d feel the fabric of my jeans. O n e little g i r l stuck a fragrant frangipani blossom i n m y hair. We parked the scooter near a sidewalk theater where several h u n dred people were gathered, some standing, others sitting i n portable chairs. T h e night was clear a n d beautiful. A l t h o u g h we were i n the heart of the oldest section of Bandung, there were no streetlights, so the stars sparkled over our heads. T h e air was filled w i t h the aromas of w o o d fires, peanuts, a n d cloves. Rasy disappeared into the crowd a n d soon returned w i t h many of the young people I h a d met at the coffeehouse. They offered me hot tea, little cakes, and s a t e , tiny bits of meat cooked i n peanut o i l . I must have hesitated before accepting the latter, because one of the

w o m e n pointed at a small fire. "Very fresh meat," she laughed. "Just cooked." Then the music started â&#x20AC;&#x201D; t h e hauntingly magical sounds of the g a m a l o n g , an instrument that conjures images of temple bells. "The dalang plays all the music by himself," Rasy whispered. " H e also works all the puppets a n d speaks their voices, several languages. W e ' l l translate for you." It was a remarkable performance, c o m b i n i n g traditional legends w i t h current events. I w o u l d later l e a r n that the dalang is a shaman who does his w o r k i n trance. H e h a d over a h u n d r e d puppets and he spoke for each i n a different voice. It was a night I w i l l never forget, and one that has influenced the rest of my life. After completing a classic selection from the ancient texts of the Ramayana, the dalang produced a puppet of Richard N i x o n , complete w i t h the distinctive long nose a n d sagging jowls. T h e U.S. president was dressed like U n c l e S a m , i n a stars-and-stripes top hat a n d tails. H e was accompanied by another puppet, w h i c h wore a three-piece pin-striped suit. The second puppet carried i n one h a n d a bucket decorated w i t h dollar signs. H e used his free h a n d to wave an A m e r i can flag over Nixon's head i n the manner of a slave fanning a master. A map of the M i d d l e a n d F a r East appeared b e h i n d the two, the various countries hanging f r o m hooks i n their respective positions. N i x o n immediately approached the map, lifted V i e t n a m off its hook, and thrust it to his m o u t h . H e shouted something that was translated as, "Bitter! R u b b i s h . W e don't need any more of this!" T h e n he tossed it into the bucket a n d proceeded to do the same w i t h other countries. I was surprised, however, to see that his next selections d i d not include the d o m i n o nations of Southeast A s i a . Rather, they were all M i d d l e Eastern countries â&#x20AC;&#x201D; Palestine, K u w a i t , Saudi A r a b i a , Iraq, Syria, a n d Iran. After that, he t u r n e d to Pakistan a n d Afghanistan. E a c h time, the N i x o n d o l l screamed out some epithet before dropp i n g the country into his bucket, a n d i n every instance, his vituperative words were anti-Islamic: " M u s l i m dogs," "Mohammed's monsters," and "Islamic devils." 7

T h e crowd became very excited, the tension m o u n t i n g w i t h each new addition to the bucket. They seemed torn between fits of laughter, shock, and rage. A t times, I sensed they took offense at the puppeteer's language. I also felt i n t i m i d a t e d ; I stood out i n this crowd, taller

Civilization on Trial

than the rest, and I worried that they might direct their anger at me. T h e n N i x o n said something that made m y scalp tingle when Rasy translated it. "Give this one to the W o r l d Bank. See what it can do to make us some money off Indonesia." H e lifted Indonesia from the map a n d moved to drop it into the bucket, but just at that m o m e n t another puppet leaped out of the shadows. T h i s puppet represented an I n donesian m a n , dressed i n batik shirt a n d k h a k i slacks, a n d he wore a sign w i t h his name clearly p r i n t e d on it. "A popular B a n d u n g politician," Rasy explained. This puppet literally flew between N i x o n and Bucket M a n and held u p his h a n d . "Stop!" he shouted. "Indonesia is sovereign." The crowd burst into applause. T h e n Bucket M a n lifted his flag and thrust it like a spear into the Indonesian, who staggered a n d died a most dramatic death. T h e audience members booed, hooted, screamed, and shook their fists. N i x o n a n d Bucket M a n stood there, l o o k i n g out at us. They bowed a n d left the stage. "I t h i n k I should go," I said to Rasy. H e placed a h a n d protectively around my shoulder. "It's okay," he said. "They have nothing against you personally." I wasn't so sure. Later we a l l retired to the coffeehouse. Rasy a n d the others assured me that they h a d not been informed ahead of time about the N i x o n - W o r l d B a n k skit. "You never k n o w what to expect from that puppeteer" one of the young m e n observed. I wondered aloud whether this h a d been staged i n m y honor. Someone laughed and said I h a d a very big ego. "Typical of A m e r i cans," he added, patting m y back congenially. "Indonesians are very conscious of politics," the m a n i n the chair beside me said. "Don't A m e r i c a n s go to shows like this?" A beautiful w o m a n , an English major at the university, sat across the table f r o m me. "But you do work for the W o r l d Bank, don't you?" she asked. I t o l d her that my current assignment was for the A s i a n Development B a n k and the U n i t e d States Agency for Internationa] Development. "Aren't they really all the same?" She didn't wait for an answer. "Isn't it like the play tonight showed? Doesn't your government look

Part li: 1971-1975

at Indonesia a n d other countries as though we are just a bunch of..." She searched for the w o r d . "Grapes," one of her friends coached. "Exactly. A b u n c h of grapes. Y o u can pick a n d choose. Keep E n g land. E a t C h i n a . A n d t h r o w away Indonesia." "After you've taken a l l our oil," another w o m a n added. I tried to defend myself but was not at a l l up to the task. I wanted to take pride i n the fact that I h a d come to this part of t o w n a n d h a d stayed to watch the entire a n t i - U . S . performance, w h i c h I might have construed as a personal assault. I wanted t h e m to see the courage of what I h a d done, to k n o w that I was the only member of my team w h o bothered to l e a r n Bahasa or h a d any desire to take i n their culture, a n d to point out that I was the sole foreigner attending this production. B u t I decided it w o u l d be more prudent not to m e n tion any of this. Instead, I t r i e d to refocus the conversation. I asked them w h y they thought the dalang h a d singled out M u s l i m c o u n tries, except for V i e t n a m . The beautiful E n g l i s h major laughed at this. "Because that's the plan." " V i e t n a m is just a h o l d i n g a c t i o n " one of the m e n interjected, "like H o l l a n d was for the Nazis. A stepping-stone." "The real target," the w o m a n continued, "is the M u s l i m world." I could not let this go unanswered. "Surely" I protested, "you can't believe that the U n i t e d States is anti-Islamic." "Oh no?" she asked. "Since when? Y o u need to read one of your o w n historians â&#x20AC;&#x201D; a Brit n a m e d Toynbee. Back i n the fifties he p r e dicted that the real war i n the next century w o u l d not be between C o m m u n i s t s a n d capitalists, but between Christians a n d M u s l i m s . " " A r n o l d Toynbee said that?" I was stunned. "Yes.

R e a d C i v i l i z a t i o n o n T r i a l and T h e W o r l d a n d t h e W e s t "

"But w h y should there be such animosity between M u s l i m s a n d Christians?" I asked. Looks were exchanged around the table. They appeared to find it hard to believe that I could ask such a foolish question. "Because," she said slowly, as though addressing someone slowwitted or h a r d o f hearing, "the West â&#x20AC;&#x201D; especially its leader, the U.S. â&#x20AC;&#x201D; is determined to take control of all the world, to become the greatest empire i n history. It has already gotten very close to succeeding.

Civilization on Trial

T h e Soviet U n i o n currently stands i n its way, but the Soviets w i l l not endure. Toynbee could see that. They have no religion, no faith, no substance b e h i n d their ideology. H i s t o r y demonstrates that faith â&#x20AC;&#x201D; soul, a belief i n higher powers â&#x20AC;&#x201D; is essential. We M u s l i m s have it. We have it more t h a n anyone else i n the w o r l d , even more t h a n the Christians. So we wait. W e grow strong." "We w i l l take our time," one of the m e n c h i m e d i n , "and t h e n like a snake we w i l l strike." " W h a t a horrible thought!" I could barely contain myself. " W h a t can we do to change this?" T h e E n g l i s h major looked me directly i n the eyes. "Stop being so greedy," she said, "and so selfish. Realize that there is more to the w o r l d than your big houses a n d fancy stores. People are starving a n d you worry about o i l for your cars. Babies are dying of thirst a n d you search the fashion magazines for the latest styles. N a t i o n s like ours are d r o w n i n g i n poverty, but your people don't even hear our cries for help. Y o u shut your ears to the voices o f those who try to tell you these things. You label them radicals or Communists. Y o u must open your hearts to the poor a n d downtrodden, instead of d r i v i n g t h e m further into poverty a n d servitude. There's not m u c h time left. If you don't change, you're doomed." Several days later the popular B a n d u n g politician, whose puppet stood up to N i x o n a n d was i m p a l e d by Bucket M a n , was struck a n d k i l l e d by a h i t - a n d - r u n driver.

Part II: 1971-1975

CHAPTER

Jesus, Seen Differently

The memory of that dalang stuck w i t h me. So d i d the words of the beautiful E n g l i s h major. T h a t night i n B a n d u n g catapulted me to a new level of t h i n k i n g a n d feeling. W h i l e I h a d not exactly ignored the implications of what we were doing i n Indonesia, m y reactions had been r u l e d by emotions, a n d I usually h a d been able to c a l m my feelings by calling on reason, o n the example of history, a n d on the biological imperative. I h a d justified our involvement as part of the h u m a n condition, convincing myself that Einar, Charlie, a n d the rest of us were simply acting as m e n always have: taking care of ourselves and our families. M y discussion w i t h those young Indonesians, however, forced me to see another aspect of the issue. T h r o u g h their eyes, I realized that a selfish approach to foreign policy does not serve or protect future generations anywhere. It is myopic, like the annual reports of the corporations and the election strategies of the politicians w h o formulate that foreign policy. As it t u r n e d out, the data I needed for m y economic forecasts required frequent visits to Jakarta. I took advantage of m y time alone there to ponder these matters a n d to write about them i n a journal. I wandered the streets of that city, handed money to beggars, and attempted to engage lepers, prostitutes, a n d street urchins i n conversation. M e a n w h i l e , I pondered the nature of foreign aid, a n d I considered the legitimate role that developed countries (DCs, i n W o r l d

Bank jargon) might play i n helping alleviate poverty a n d misery i n less-developed countries ( L D C s ) . I began to wonder w h e n foreign aid is genuine a n d w h e n it is only greedy a n d self-serving. Indeed, I began to question whether such aid is ever altruistic, and i f not, whether that could be changed. I was certain that countries like m y o w n should take decisive action to help the sick a n d starving of the w o r l d , but I was equally certain that this was seldom — i f ever — the p r i m e motivation for our intervention. I kept c o m i n g back to one m a i n question: i f the objective of foreign a i d is imperialism, is that so wrong? I often found myself envying people like Charlie w h o believed so strongly i n our system that they wanted to force it o n the rest of the w o r l d . I doubted whether l i m i t e d resources w o u l d allow the whole w o r l d to live the opulent life of the U n i t e d States, when even the United States h a d millions of citizens living i n poverty. In addition, it wasn't entirely clear to me that people i n other nations actually want to live like us. O u r own statistics about violence, depression, drug abuse, divorce, a n d crime i n dicated that although ours was one o f the wealthiest societies i n history, it may also be one of the least happy societies. W h y w o u l d we want others to emulate us? Perhaps Claudine h a d warned me of all this. I was no longer sure what it was she h a d been t r y i n g to tell me. I n any case, intellectual arguments aside, it h a d n o w become painfully clear that m y days of innocence were gone. I wrote i n my j o u r n a l : Is anyone i n the U . S . innocent? A l t h o u g h those at the very pinnacle of the economic p y r a m i d gain the most, m i l l i o n s of us depend — either directly or indirectly — o n the exploitation of the L D C s for our livelihoods. T h e resources a n d cheap labor that feed nearly all our b u s i nesses come from places like Indonesia, a n d very little ever makes its way back. The loans of foreign aid ensure that today's children a n d their grandchildren w i l l be h e l d hostage. They w i l l have to allow our corporations to ravage their natural resources a n d w i l l have to forego education, health, a n d other social services merely to pay us back. The fact that our own companies already received most of this money to b u i l d the power plants, airports, a n d

Part II: 1971-1975

industrial parks does not factor into this formula. Does the excuse that most Americans are unaware of this constitute innocence? U n i n f o r m e d and intentionally misinformed, yes — b u t innocent? O f course, I h a d to face the fact that I was now numbered among those who actively m i s i n f o r m . The concept of a worldwide holy w a r was a disturbing one, but the longer I contemplated it, the more convinced I became of its possibility. It seemed to me, however, that i f this j i h a d were to occur it would be less about M u s l i m s versus Christians than it w o u l d be about L D C s versus D C s , perhaps w i t h M u s l i m s at the forefront. We i n the D C s were the users of resources; those i n the L D C s were the suppliers. It was the colonial mercantile system all over again, set up to make it easy for those w i t h power and l i m i t e d natural resources to exploit those w i t h resources but no power. I d i d not have a copy of Toynbee w i t h me, but I knew enough history to understand that suppliers who are exploited long enough will rebel. I only had to return to the A m e r i c a n Revolution and T o m Paine for a model. I recalled that B r i t a i n justified its taxes by c l a i m ing that E n g l a n d was providing aid to the colonies i n the form of military protection against the French and the Indians. The colonists had a very different interpretation. W h a t Paine offered to his countrymen i n the b r i l l i a n t C o m m o n S e n s e was the soul that my young Indonesian friends h a d referred to — an idea, a faith i n the justice of a higher power, and a religion of freedom and equality that was diametrically opposed to the British monarchy and its elitist class systems. W h a t M u s l i m s offered was similar: faith i n a higher power and a belief that developed countries have no right to subjugate and exploit the rest of the w o r l d . L i k e colonial minutemen, M u s l i m s were threatening to fight for their rights, and like the British i n the 1770s, we classified such actions as terrorism. History appeared to be repeating itself. I wondered what sort of a w o r l d we might have i f the U n i t e d States and its allies diverted all the monies expended i n colonial wars — like the one i n V i e t n a m — to eradicating w o r l d hunger or to m a k i n g education and basic health care available to all people, i n c l u d i n g our own. I wondered how future generations w o u l d be

Jesus, Seen Differently

affected i f we committed to alleviating the sources o f misery a n d to protecting watersheds, forests, a n d other natural areas that ensure clean water, air, and the things that feed our spirits as well as our bodies. I could not believe that our F o u n d i n g Fathers had envisioned the right to life, liberty, a n d the pursuit of happiness to exist only for Americans, so w h y were we now i m p l e m e n t i n g strategies that promoted the imperialist values they had fought against? O n m y last night i n Indonesia, I awoke f r o m a dream, sat up i n bed, and switched on the light. I h a d the feeling that someone" was i n the r o o m w i t h me. I peered around at the familiar H o t e l InterContinental furniture, the batik tapestries, a n d the framed shadowpuppets hanging on the walls. T h e n the dream came back. I h a d seen Christ standing i n front of me. H e seemed like the same Jesus I h a d talked w i t h every night when, as a young boy, I shared my thoughts w i t h h i m after saving m y formal prayers. Except that the Jesus of my childhood was f a i r - s k i n n e d a n d b l o n d , w h i l e this one h a d curly black hair a n d a dark complexion. H e bent d o w n and heaved something u p to his shoulder. I expected a cross. I n stead, I saw the axle of a car w i t h the attached wheel rim p r o t r u d i n g above his head, forming a metallic halo. Grease dripped like b l o o d d o w n his forehead. H e straightened, peered into m y eyes, a n d said, " I f I were to come now, y o u w o u l d see me differently." I asked h i m why. "Because," he answered, "the w o r l d has changed." T h e clock t o l d me it was nearly daylight. I knew I could not go back to sleep, so I dressed, took the elevator to the empty lobby, a n d wandered into the gardens around the s w i m m i n g pool. T h e m o o n was bright; the sweet smell of orchids filled the air. I sat d o w n i n a lounge chair a n d wondered what I was doing here, w h y the coincidences of my life h a d taken me along this path, w h y Indonesia. I knew my life had changed, but I h a d no idea h o w drastically. r

A n n a n d I met i n Paris on m y way home, to attempt reconciliation. Even d u r i n g this French vacation, however, we continued to quarrel. A l t h o u g h there were many special a n d beautiful moments, I t h i n k we both came to the realization that our l o n g history of anger and

Part II: 1971-1975

resentment was too large an obstacle. Besides, there was so m u c h I could not tell her. T h e only person I could share such things w i t h was Claudine, a n d I thought about her constantly. A n n a n d I landed at Bostons L o g a n A i r p o r t a n d took a taxi to our separate apartments i n the Back Bay.

Jesus, Seen Differently

CHAPTER

Opportunity of a Lifetime

The true test of Indonesia awaited me at M A I N . I went to the P r u dential Center headquarters first t h i n g i n the m o r n i n g , a n d while I was standing with dozens of other employees at the elevator I learned that M a c H a l l , M A I N ' s enigmatic, octogenarian c h a i r m a n a n d C E O , h a d p r o m o t e d E i n a r to president of the Portland, Oregon office. A s a result, I now officially reported to B r u n o Z a m b o t t i . N i c k n a m e d "the silver fox" because of the color of his hair a n d his uncanny ability to outmaneuver everyone who challenged h i m , B r u n o h a d the dapper good looks o f Gary Grant. H e was eloquent, and he held b o t h an engineering degree a n d an M B A . H e understood econometrics and was vice president i n charge of M A I N ' s electrical power division a n d of most of our international projects. H e also was the obvious choice to take over as president of the corporation w h e n his mentor, the aging Jake Dauber, retired. L i k e most M A I N employees, I was awed a n d terrified by B r u n o Z a m b o t t i . Just before lunch, I was summoned to Bruno's office. F o l l o w i n g a cordial discussion about Indonesia, he said something that made me j u m p to the edge of my seat. "I'm firing H o w a r d Parker. W e don't need to go into the details, except to say that he's lost touch w i t h reality." H i s smile was d i s c o n certingly pleasant as he tapped his finger against a sheaf of papers on his desk. "Eight percent a year. That's his load forecast. C a n you believe it? I n a country w i t h the potential of Indonesia!" H i s smile faded a n d he looked me squarely i n the eye. "Charlie

Illingworth tells me that your economic forecast is right on target and w i l l justify l o a d growth of between 17 a n d 20 percent. Is that right?" I assured h i m it was. H e stood up a n d offered me his h a n d . "Congratulations. You've just been promoted." Perhaps I should have gone out a n d celebrated at a fancy restaurant w i t h other M A I N employees â&#x20AC;&#x201D; or even by myself. However, m y m i n d was o n Claudine. I was dying to tell her about m y p r o m o t i o n and all my experiences i n Indonesia. She h a d w arned me not to call her from abroad, and I h a d not. N o w I was dismayed to find that her phone was disconnected, w i t h no forwarding number. I went looking for her. A young couple h a d moved into her apartment. It was lunchtime but I believe I roused t h e m from their bed; obviously annoyed, they professed to k n o w nothing about C l a u d i n e . I p a i d a visit to the real estate agency, pretending to be a cousin. Their files indicated they h a d never rented to anyone w i t h her name; the previous lease h a d been issued to a m a n w h o w o u l d remain anonymous by his request. Back at the Prudential Center, M A I N ' s employment office also claimed to have no record of her. T h e y admitted only to a "special consultants" file that was not available for my scrutiny. T

By late afternoon, I was exhausted a n d emotionally drained. O n top of everything else, a b a d case of jet lag h a d set i n . R e t u r n i n g to my empty apartment, I felt desperately lonely a n d abandoned. M y p r o m o t i o n seemed meaningless or, even worse, to be a badge of m y willingness to sell out. I threw myself onto the bed, overwhelmed w i t h despair. I h a d been used by Claudine a n d t h e n discarded. D e termined not to give i n to m y anguish, I shut down my emotions. I lay there on m y bed staring at the bare walls for what seemed like hours. Finally, I managed to p u l l myself together. I got up, swallowed a beer, a n d smashed the empty bottle against a table. T h e n I stared out the window. L o o k i n g down a distant street, I thought I saw her w a l k i n g t o w a r d me. I started for the door a n d then returned to the w i n d o w for another look. T h e w o m a n h a d come closer. I could see that she was attractive, a n d that her w a l k was reminiscent of Claudine's, but it was not Claudine. M y heart sank, a n d m y feelings changed from anger a n d loathing to fear. A n image flashed before me of Claudine flailing, falling i n a rain

Opportunity of a Lifetime

of bullets, assassinated. I shook it off, took a couple V a l i u m , a n d drank myself to sleep. The next morning, a call from M A I N ' s personnel department woke me f r o m m y stupor. Its chief, Paul M o r m i n o , assured me he understood my need for rest, but he urged me to come i n that afternoon. "Good news," he said. "The best thing for catching up w i t h yourself." I obeyed the summons a n d learned that B r u n o h a d been more than true to his w o r d . I had not only been promoted to Howard's old job; I h a d been given the title of C h i e f Economist a n d a raise. It d i d cheer me up a bit. I took the afternoon off a n d wandered d o w n along the Charles River w i t h a quart of beer. A s I sat there, watching the sailboats a n d nursing combined jet l a g and vicious hangover, I convinced myself that Claudine h a d done her job a n d h a d moved on to her next assignment. She h a d always emphasized the need for secrecy. She w o u l d call me. M o r m i n o h a d been right. M y jet lag â&#x20AC;&#x201D; a n d m y a n x i ety â&#x20AC;&#x201D; dissipated. D u r i n g the next weeks, I tried to put a l l thoughts of Claudine aside. I focused on w r i t i n g m y report on the Indonesian economy and on revising Howard's load forecasts. I came up w i t h the type of study my bosses wanted to see: a growth i n electric d e m a n d averaging 19 percent per a n n u m for twelve years after the n e w system was completed, tapering d o w n to 17 percent for eight more years, a n d then h o l d i n g at 15 percent for the remainder of the twenty-five-year projection. I presented m y conclusions at formal meetings w i t h the i n t e r n a tional l e n d i n g agencies. T h e i r teams of experts questioned me extensively and mercilessly. B y then, m y emotions h a d t u r n e d into a sort of g r i m determination, not unlike those that h a d driven me to excel rather than to rebel d u r i n g m y prep school days. Nonetheless, Claudine's m e m o r y always hovered close. W h e n a sassy young economist out to make a name for himself at the A s i a n Development Bank g r i l l e d me relentlessly for an entire afternoon, I recalled the advice Claudine h a d given me as we sat i n her Beacon Street apartment those many months before. " W h o can see twenty-five years into the future?" she h a d asked. "Your guess is as good as theirs. Confidence is everything." I convinced myself I was an expert, r e m i n d i n g myself that I h a d experienced more of life i n developing countries t h a n m a n y of the

Part II: 1971-1975

m e n — some of them twice my age — who now sat i n judgment of m y work. I h a d lived i n the A m a z o n and h a d traveled to parts of Java no one else wanted to visit. I h a d taken a couple of intensive courses aimed at teaching executives the finer points of econometrics, and I told myself that I was part of the new breed of statistically o r i ented, econometric-worshipping w h i z kids that appealed to Robert M c N a m a r a , the buttoned-down president of the W o r l d Bank, former president of F o r d M o t o r Company, a n d J o h n Kennedy's secretary of defense. Here was a m a n w h o h a d built his reputation on numbers, on probability theory, on mathematical models, and — I suspected — on the bravado of a very large ego. I tried to emulate both M c N a m a r a and my boss, Bruno. I adopted manners of speech that imitated the former, a n d I took to w a l k i n g w i t h the swagger of the latter, attaché case swinging at my side. L o o k i n g back, I have to wonder at m y gall. In t r u t h , m y expertise was extremely l i m i t e d , but what I lacked i n training and knowledge I made up for i n audacity. A n d it worked. Eventually the team of experts stamped my reports w i t h their seals of approval. D u r i n g the ensuing months, I attended meetings i n Tehran, Caracas, G u a t e m a l a City, L o n d o n , V i e n n a , a n d Washington, D C . I met famous personalities, i n c l u d i n g the shah of Iran, the former presidents o f several countries, and Robert M c N a m a r a himself. L i k e prep school, it was a w o r l d of men. I was amazed at h o w m y new t i tle a n d the accounts of m y recent successes before the international lending agencies affected other people's attitudes t o w a r d me. A t first, all the attention went to my head. I began to think of m y self as a M e r l i n who could wave his w a n d over a country, causing it suddenly to light up, industries sprouting like flowers. T h e n I became disillusioned. I questioned my own motives and those of all the people I w o r k e d w i t h . It seemed that a glorified title or a P h D d i d little to help a person understand the plight of a leper living beside a cesspool i n Jakarta, and I doubted that a knack for manipulating statistics enabled a person to see into the future. T h e better I came to k n o w those w h o made the decisions that shape the w o r l d , the more skeptical I became about t h e i r abilities and their goals. L o o k i n g at the faces around the meeting room tables, I found myself struggling very h a r d to restrain my anger. Eventually, however, this perspective also changed. I came to

Opportunity of a Lifetime

understand that most of those m e n believed they were d o i n g the right thing. Like Charlie, they were convinced that c o m m u n i s m a n d terrorism were evil forces — rather than the predictable reactions to decisions they and their predecessors h a d made — a n d that they h a d a duty to their country, to their offspring, a n d to G o d to convert the w o r l d to capitalism. They also clung to the principle of survival of the fittest; i f they happened to enjoy the good fortune to have been b o r n into a privileged class instead of inside a cardboard shack, then they saw it as an obligation to pass this heritage on to their progeny. I vacillated between v i e w i n g such people as an actual conspiracy and simply seeing them as a tight-knit fraternity bent on dominating the world. Nonetheless, over time I began to liken t h e m to the p l a n tation owners of the p r e - C i v i l W a r South. They were men d r a w n together i n a loose association by c o m m o n beliefs a n d shared selfinterest, rather than an exclusive group meeting i n clandestine hideaways with focused and sinister intent. T h e plantation autocrats had grown up with servants and slaves, h a d been educated to believe that it was their right a n d even their duty to take care o f the "heathens" a n d to convert t h e m to the owners' religion a n d way of life. Even i f slavery repulsed t h e m philosophically, they could, like T h o m a s Jefferson, justify it as a necessity, the collapse of w h i c h w o u l d result i n social and economic chaos. The leaders of the modern oligarchies, what I now thought of as the corporatocracy, seemed to fit the same m o l d . I also began to wonder who benefits from war a n d the mass production of weapons, from the d a m m i n g of rivers a n d the destruction of indigenous environments a n d cultures. I began to look at who benefits when hundreds of thousands of people die from insufficient food, polluted water, or curable diseases. Slowly, I came to realize that i n the long r u n no one benefits, but i n the short t e r m those at the top of the p y r a m i d — m y bosses a n d me — appear to benefit, at least materially. This raised several other questions: W h y does this situation persist? W h y has it endured for so long? Does the answer lie simply i n the old adage that "might is right," that those w i t h the power perpetuate the system? It seemed insufficient to say that power alone allows this situation to persist. W h i l e the proposition that might makes right explained a great deal, I felt there must be a more compelling force at work here.

Part II: 1971-1975

I recalled an economics professor from my business school days, a m a n f r o m northern India, who lectured about l i m i t e d resources, about man's need to grow continually, and about the principle of slave labor. A c c o r d i n g to this professor, all successful capitalist systems involve hierarchies w i t h rigid chains of c o m m a n d , including a handful at the very top who control descending orders of subordinates, a n d a massive army of workers at the bottom, w h o i n relative economic terms truly can be classified as slaves. Ultimately, then, I became convinced that we encourage this system because the corporatocracy has c o n vinced us that G o d has given us the right to place a few of our people at the very top of this capitalist pyramid and to export our system to the entire w o r l d . O f course, we are not the first to do this. The list of practitioners stretches back to the ancient empires of N o r t h Africa, the M i d d l e East, a n d A s i a , a n d works its way up through Persia, Greece, Rome, the Christian Crusades, a n d a l l the E u r o p e a n empire builders of the p o s t - C o l u m b i a n era. T h i s imperialist drive has been a n d continues to be the cause of most wars, p o l l u t i o n , starvation, species extinctions, a n d genocides. A n d it has always taken a serious toll on the conscience a n d well-being of the citizens of those empires, contributing to social malaise a n d resulting i n a situation where the wealthiest cultures i n human history are plagued with the highest rates of suicide, drug abuse, a n d violence. I thought extensively on these questions, but I avoided considering the nature of my own role i n all of this. I tried to t h i n k of myself not as an E H M but as a chief economist. It sounded so very legitimate, a n d i f I needed any confirmation, I could look at my pay stubs: all were f r o m M A I N , a private corporation. I didn't earn a penny from the N S A or any government agency. A n d so I became convinced. A l m o s t . One afternoon B r u n o called me into his office. He walked behind my chair a n d patted me on the shoulder. "You've done an excellent job," he p u r r e d . "To show our appreciation, we're giving you the opportunity of a lifetime, something few m e n ever receive, even at twice your age."

Opportunity of a Lifetime

CHAPTER

Panama's President and Hero

I landed at Panama's Tocumen International A i r p o r t late one A p r i l night i n 1972, d u r i n g a tropical deluge. A s was c o m m o n i n those days, I shared a taxi w i t h several other executives, a n d because I spoke Spanish, I ended u p i n the front seat beside the driver. I stared blankly out the taxi's w i n d s h i e l d . T h r o u g h the r a i n , the headlights illuminated a billboard portrait of a handsome m a n w i t h a p r o m i nent brow a n d flashing eyes. One side of his w i d e - b r i m m e d hat was hooked rakishly up. I recognized h i m as the hero of modern Panama, O m a r Torrijos. I h a d prepared for this trip i n m y customary fashion, by visiting the reference section of the Boston Public Library. I k n e w that one of the reasons for Torrijos's popularity among his people was that he was a f i r m defender of both Panama's right of self-rule a n d of its claims to sovereignty over the P a n a m a C a n a l . H e was determined that the country under his leadership w o u l d avoid the pitfalls o f its ignominious history. Panama was part of Colombia when the French engineer Ferdinand de Lesseps, w h o directed construction o f the Suez Canal, decided to b u i l d a canal through the Central A m e r i c a n isthmus, to connect the A t l a n t i c a n d Pacific oceans. B e g i n n i n g i n 1881, the French undertook a m a m m o t h effort that met w i t h one catastrophe after another. Finally, i n 1889, the project ended i n financial disasterâ&#x20AC;&#x201D;but it h a d inspired a dream i n Theodore Roosevelt. D u r i n g the first years of the twentieth century, the U n i t e d States demanded that C o l o m b i a sign

a treaty t u r n i n g the isthmus over to a N o r t h A m e r i c a n consortium. C o l o m b i a refused. In 1903, President Roosevelt sent i n the U.S. warship N a s h v i l l e . U.S. soldiers landed, seized and k i l l e d a popular local m i l i t i a c o m mander, a n d declared P a n a m a an independent nation. A puppet government was installed and the first Canal Treaty was signed; it established an A m e r i c a n zone o n both sides of the future waterway, legalized U.S. military intervention, and gave Washington virtual control over this newly formed "independent" nation. Interestingly, the treaty was signed by U.S. Secretary of State H a y and a French engineer, Philippe Bunau-Varilla, who h a d been part of the original team, but i t was not signed by a single Panamanian. I n essence, P a n a m a was forced to leave C o l o m b i a i n order to serve the U n i t e d States, i n a deal struck by an A m e r i c a n and a F r e n c h m a n â&#x20AC;&#x201D; i n retrospect, a prophetic b e g i n n i n g . For more than half a century, P a n a m a was ruled by an oligarchy of wealthy families with strong connections to Washington. They were right-wing dictators who took whatever measures they deemed necessary to ensure that their country promoted U.S. interests. In the manner of most of the L a t i n A m e r i c a n dictators who allied t h e m selves with Washington, Panama's rulers interpreted U.S. interests to mean p u t t i n g down any populist movement that smacked of socialism. They also supported the C I A a n d N S A i n a n t i - C o m m u n i s t activities throughout the hemisphere, and they helped b i g A m e r i c a n businesses like Rockefeller's Standard O i l and U n i t e d Fruit Company (which was purchased by George H . W . Bush). These governments apparently d i d not feel that U.S. interests were promoted by i m proving the lives of people who l i v e d i n dire poverty or served as virtual slaves to the b i g plantations and corporations. 1

Panama's ruling families were w e l l rewarded for their support; U.S. military forces intervened on their behalf a dozen times between the declaration of P a n a m a n i a n independence and 1968. However, that year, while I was still a Peace Corps volunteer i n Ecuador, the course of Panamanian history suddenly changed. A coup overthrew A r n u l f o Arias, the latest i n the parade of dictators, and O m a r Torrijos emerged as the head of state, although he h a d not actively p a r t i c i pated i n the coup. 2

Torrijos was highly regarded by the P a n a m a n i a n m i d d l e and lower classes. H e himself h a d grown up i n the rural city o f Santiago,

Panama's President and Hero

where his parents taught school. H e h a d risen quickly through the ranks of the N a t i o n a l G u a r d , Panama's primary military u n i t a n d an institution that d u r i n g the 1960s gained increasing support among the poor. Torrijos earned a reputation for listening to the dispossessed. H e w a l k e d the streets of their shantytowns, held meetings i n slums politicians didn't dare to enter, helped the unemployed f i n d jobs, a n d often donated his own l i m i t e d financial resources to f a m ilies stricken by illness or tragedy. H i s love of life and his compassion for people reached even beyond Panama's borders. Torrijos was committed to t u r n i n g his nation into a haven for fugitives from persecution, a place that w o u l d offer asylum to refugees from both sides of the political fence, f r o m leftist opponents o f Chile's Pinochet to r i g h t - w i n g anti-Castro guerrillas. M a n y people saw h i m as an agent of peace, a perception that earned h i m praise throughout the hemisphere. H e also developed a reputation as a leader who was dedicated to resolving differences among the various factions that were tearing apart so m a n y L a t i n A m e r i c a n countries: Honduras, Guatemala, E l Salvador, Nicaragua, C u b a , C o l o m b i a , Peru, A r g e n t i n a , Chile, a n d Paraguay. H i s small nation of two m i l l i o n people served as a model of social reform and an inspiration for w o r l d leaders as diverse as the labor organizers w h o plotted the dismemberment of the Soviet U n i o n a n d Islamic militants like M u a m m a r Gadhafi of L i b y a . 3

M y first night i n Panama, stopped at the traffic light, peering past the noisy windshield wipers, I was moved by this m a n s m i l i n g down at me f r o m the b i l l b o a r d â&#x20AC;&#x201D; h a n d s o m e , charismatic, a n d courageous. I k n e w f r o m my hours at the B P L that he stood b e h i n d his beliefs. For the first time i n its history, P a n a m a was not a puppet of W a s h ington or of anyone else. Torrijos never succumbed to the t e m p t a tions offered by M o s c o w or Beijing; he believed i n social reform a n d i n h e l p i n g those b o r n into poverty, but he d i d not advocate c o m m u nism. U n l i k e Castro, Torrijos was determined to w i n freedom from the U n i t e d States without forging alliances w i t h the U n i t e d States' enemies. I h a d stumbled across an article i n some obscure j o u r n a l i n the B P L racks that praised Torrijos as a m a n w h o w o u l d alter the history of the Americas, reversing a long-term t r e n d toward U . S . d o m i n a tion. T h e author cited as his starting point Manifest Destiny â&#x20AC;&#x201D; the doctrine, popular w i t h many A m e r i c a n s d u r i n g the 1840s, that

Part II: 1971-1975

the conquest of N o r t h A m e r i c a was divinely ordained; that G o d , not men, had ordered the destruction of Indians, forests, and buffalo, the d r a i n i n g o f swamps and the channeling of rivers, and the development of an economy that depends on the continuing exploitation of labor and natural resources. The article got me to t h i n k i n g about m y country's attitude toward the w o r l d . The M o n r o e Doctrine, originally enunciated by President James Monroe i n 1823, was used to take Manifest Destiny a step further when, i n the 1850s and 1860s, it was used to assert that the U n i t e d States h a d special rights all over the hemisphere, i n c l u d i n g the right to invade any nation i n Central or South A m e r i c a that refused to back U.S. policies. Teddy Roosevelt invoked the M o n r o e Doctrine to justify U.S. intervention i n the D o m i n i c a n Republic, i n Venezuela, and d u r i n g the "liberation" of P a n a m a from C o l o m b i a . A string of subsequent U.S. presidents — most notably Taft, W i l s o n , and F r a n k l i n Roosevelt — relied on it to expand Washington's P a n A m e r i c a n activities through the end of W o r l d W a r II. Finally, d u r i n g the latter half of the twentieth century, the U n i t e d States used the C o m m u n i s t threat to justify expansion o f this concept to countries around the globe, i n c l u d i n g V i e t n a m and Indonesia. 5

Now, it seemed, one m a n was standing i n Washington's way. I k n e w that he was not the first — leaders like Castro and Allende h a d gone before h i m — but Torrijos alone was d o i n g it outside the realm of C o m m u n i s t ideology a n d without c l a i m i n g that his movement was a revolution. H e was simply saying that P a n a m a h a d its o w n rights — to sovereignty over its people, its lands, and a waterway that bisected i t — and that these rights were as valid and as divinely bestowed as any enjoyed by the U n i t e d States. Torrijos also objected to the School o f the Americas and to the U.S. Southern Command's tropical warfare t r a i n i n g center, b o t h l o cated i n the C a n a l Zone. For years, the U n i t e d States armed forces had invited L a t i n A m e r i c a n dictators and presidents to send their sons and m i l i t a r y leaders to these facilities — the largest and best equipped outside N o r t h A m e r i c a . There, they learned interrogation and covert operational skills as well as military tactics that they w o u l d use to fight c o m m u n i s m and to protect their o w n assets and those of the oil companies and other private corporations. They also h a d opportunities to b o n d w i t h the U n i t e d States' top brass. These facilities were hated by L a t i n A m e r i c a n s — except for the

Panama's President and Hero

few wealthy ones who benefited from t h e m . They were k n o w n to provide schooling for right-wing death squads and the torturers who had turned so many nations into totalitarian regimes. Torrijos made it clear that he d i d not want training centers located i n Panama â&#x20AC;&#x201D; and that he considered the Canal Zone to be included w i t h i n his borders. Seeing the handsome general on the billboard, and reading the caption beneath his face â&#x20AC;&#x201D;"Omar's ideal is freedom; the missile is not invented that can k i l l an i d e a l ! " â&#x20AC;&#x201D; I felt a shiver r u n down m y spine. I h a d a premonition that the story of P a n a m a i n the twentieth century was far from over, and that Torrijos was i n for a difficult and perhaps even tragic time. T h e tropical storm battered against the w i n d s h i e l d , the traffic light turned green, a n d the driver h o n k e d his horn at the car ahead of us. I thought about m y o w n position. I h a d been sent to P a n a m a to close the deal on what w o u l d become M A I N ' s first truly c o m prehensive master development plan. T h i s p l a n w o u l d create a j u s tification for W o r l d B a n k , Inter-American Development B a n k , a n d U S A I D investment of billions of dollars i n the energy, transportation, and agricultural sectors of this t i n y and very crucial country. It was, of course, a subterfuge, a means of m a k i n g P a n a m a forever indebted and thereby r e t u r n i n g it to its puppet status. 6

A s the taxi started to move through the night, a pa roxysm of guilt flashed through me, but I suppressed it. W h a t d i d I care? I h a d taken the plunge i n Java, sold m y soul, and now I could create m y opportunity of a lifetime. I could become rich, famous, and powerful i n one blow.

Part li: 1971-1975

CHAPTER

Pirates in the Canal Zone

The next day, the P a n a m a n i a n government sent a m a n to show me around. H i s name was F i d e l , and I was immediately drawn to h i m . H e was tall and s l i m a n d took an obvious pride i n his country. H i s great-great-grandfather had fought beside Bolivar to w i n independence from Spain. I t o l d h i m I was related to T o m Paine, and was thrilled to learn that F i d e l had read C o m m o n S e n s e i n Spanish. H e spoke E n g l i s h , but when he discovered I was fluent i n the language of his country, he was overcome w i t h emotion. " M a n y of your people live here for years and never bother to learn it," he said. Fidel took me on a drive through an impressively prosperous sector of his city, w h i c h he called the N e w Panama. A s we passed modern glass-and-steel skyscrapers, he explained that Panama had more i n ternational banks than any other country south of the R i o Grande. "We're often called the Switzerland of the Americas," he said. "We ask very few questions of our clients." Late i n the afternoon, w i t h the sun s l i d i n g toward the Pacific, we headed out on an avenue that followed the contours of the bay. A long line of ships was anchored there. I asked F i d e l whether there was a problem w i t h the canal. "It's always l i k e this," he replied w i t h a laugh. "Lines of them, waiting their t u r n . H a l f the traffic is coming from or going to J a p a n . M o r e even than the U n i t e d States." I confessed that this was news to me.

"I'm not surprised," he said. " N o r t h A m e r i c a n s don't k n o w m u c h about the rest of the world." We stopped at a beautiful park i n w h i c h bougainvillea crept over ancient ruins. A sign proclaimed that this was a fort built to protect the city against m a r a u d i n g English pirates. A family was setting up for an evening picnic: a father, mother, son a n d daughter, and an elderly m a n who I assumed was the children's grandfather. I felt a sudden longing for the tranquility that seemed to embrace these five people. A s we passed them, the couple smiled, waved, a n d greeted us i n E n g l i s h . I asked i f they were tourists, a n d they laughed. T h e m a n came over to us. "I'm t h i r d generation i n the Canal Zone," he explained proudly. " M y granddad came three years after it was created. H e drove one of the mules, the tractors that hauled ships through the locks." H e pointed at the elderly m a n , who was preoccupied helping the c h i l dren set the picnic table. " M y d a d was an engineer a n d I've followed i n his footsteps." The w o m a n h a d returned to h e l p i n g her father-in-law and c h i l dren. Beyond t h e m , the sun dipped into the blue water. It was a scene of idyllic beauty, reminiscent of a M o n e t painting. I asked the m a n i f they were U.S. citizens. H e looked at me incredulously. " O f course. The Canal Zone is U . S . territory." The boy ran up to tell his father that dinner was ready. " W i l l your son be the fourth generation?" T h e m a n brought his hands together i n a sign of prayer a n d raised t h e m t o w a r d the sky. "I pray to the good L o r d every day that he may have that opportunity. L i v i n g i n the Zone is a wonderful life." T h e n he lowered his hands a n d stared directly at Fidel. "I just hope we can h o l d on to her for another fifty years. T h a t despot Torrijos is m a k i n g a lot of waves. A dangerous man." A sudden urge gripped me, a n d I said to h i m , i n Spanish, " A d i o s . I hope y o u a n d your family have a good time here, a n d learn lots about Panama's culture." H e gave me a disgusted look. "I don't speak their language," he said. T h e n he t u r n e d abruptly a n d headed t o w a r d his family a n d the picnic. F i d e l stepped close to me, placed an a r m around my shoulders, and squeezed tightly. " T h a n k you," he said.

Part II: 1971-1975

Back i n the city, F i d e l drove us through an area he described as a slum. "Not our worst," he said. "But y o u ' l l get the flavor." Wooden shacks a n d ditches filled w i t h standing water l i n e d the street, the frail homes suggesting dilapidated boats scuttled i n a cesspool. T h e smell of rot a n d sewage filled our car as c h i l d r e n w i t h distended bellies r a n alongside. W h e n we slowed, they congregated at my side, calling me u n c l e a n d begging for money. It r e m i n d e d me of Jakarta. Graffiti covered many of the walls. There were a few of the usual hearts w i t h couples' names scrawled inside, but most of the graffiti were slogans expressing hatred o f the U n i t e d States: "Go home, gringo," "Stop shitting i n our canal," "Uncle S a m , slave master," a n d "Tell N i x o n that P a n a m a is not V i e t n a m . " T h e one that chilled m y heart the most, however, read, "Death for freedom is the way to Christ." Scattered among these were posters of O m a r Torrijos. " N o w the other side," Fidel said. "I've got official papers and you're a U.S. citizen, so we can go." Beneath a magenta sky, he drove us into the C a n a l Zone. A s prepared as I thought I was, it was not enough. I could hardly believe the opulence of the place â&#x20AC;&#x201D; huge white b u i l d ings, m a n i c u r e d lawns, plush homes, golf courses, stores, a n d theaters. "The facts," he said. "Everything i n here is U.S. property. A l l the businesses â&#x20AC;&#x201D; the supermarkets, barbershops, beauty salons, restaurants, a l l of t h e m â&#x20AC;&#x201D; are exempt from Panamanian laws and taxes. There are seven 18-hoIe golf courses, U . S . post offices scattered conveniently around, U.S. courts of law a n d schools. It truly is a country w i t h i n a country." "What an affront!" Fidel peered at me as though m a k i n g a quick assessment. "Yes," he agreed. "That's a pretty good w o r d for it. Over there," he pointed back toward the city, "income per capita is less than one thousand dollars a year, and unemployment rates are 30 percent. O f course, i n the little shantytown we just visited, no one makes close to one t h o u sand dollars, a n d hardly anyone has a job." "What's being done?" H e t u r n e d a n d gave me a look that seemed to change from anger to sadness. " W h a t c a n we do?" H e shook his head. "I don't know, but I ' l l say

Pirates in the Canal Zone

6 5

this: Torrijos is trying. I think it may be the death of h i m , but he sure as hell is giving it all he's got. He's a man who'll go d o w n fighting for his people." A s we headed out of the Canal Zone, F i d e l smiled. "You like to dance?" W i t h o u t waiting for me to reply, he said, "Let's get some d i n ner, and then I ' l l show you yet another side of Panama."

Part II: 1971-1975

CHAPTER

Soldiers and Prostitutes

After a juicy steak and a cold beer, we left the restaurant and drove down a dark street. F i d e l advised me never to walk i n this area. "When you come here, take a cab right to the front door." H e pointed. "Just there, beyond the fence, is the Canal Zone." H e drove o n u n t i l we arrived at a vacant lot filled w i t h cars. H e found an empty spot a n d parked. A n o l d m a n hobbled up to us. Fidel got out a n d patted h i m on the back. T h e n he ran his hand lovingly across the fender of his car. "Take good care of her. She's m y lady." H e h a n d e d the m a n a b i l l . W e took a short footpath out of the p a r k i n g lot a n d suddenly found ourselves on a street flooded w i t h flashing neon lights. Two boys raced past, p o i n t i n g sticks at each other a n d m a k i n g the sounds of m e n shooting guns. O n e s l a m m e d into Fidel's legs, his head reaching barely as h i g h as Fidel's thigh. T h e little boy stopped and stood back. "I'm sorry, sir," he gasped i n Spanish. Fidel placed both his hands on the boy's shoulders. " N o h a r m done, m y man," he said. "But tell me, what were you a n d your friend shooting at?" T h e other boy came u p to us. H e placed his a r m protectively around the first. " M y brother," he explained. "We're sorry." "It's okay," F i d e l chuckled gently. " H e didn't hurt me. I just asked h i m what you guys were shooting at. I t h i n k I used to play the same game."

T h e brothers glanced at each other. T h e older one smiled. "He's the gringo general at the Canal Zone. H e tried to rape our mother and I'm sending h i m packing, back to where he belongs." Fidel stole a look at me. "Where does he belong?" "At home, i n the U n i t e d States." "Does your mother work here?" "Over there." B o t h boys pointed proudly at a neon light d o w n the street. "Bartender." "Go on then." Fidel handed them each a coin. "But be careful. Stay i n the lights." " O h yes, sir. T h a n k you." They raced off. A s we walked on, F i d e l explained that P a n a m a n i a n w o m e n were prohibited by law from prostitution. "They can tend bar a n d dance, but cannot sell their bodies. That's left to the imports." We stepped inside the bar and were blasted w i t h a popular A m e r ican song. M y eyes a n d ears took a moment to adjust. A couple of burly U.S. soldiers stood near the door; bands around their uniformed arms identified them as M P s . F i d e l led me along a bar, a n d then I saw the stage. Three young w o m e n were dancing there, entirely naked except for their heads. One wore a sailor's cap, another a green beret, and the t h i r d a cowboy hat. They h a d spectacular figures and were laughing. They seemed to be playing a game w i t h one another, as though d a n c i n g i n a c o m petition. T h e music, the way they danced, the stage â&#x20AC;&#x201D; it could have been a disco i n Boston, except that they were naked. We pushed our way through a group of young English-speaking men. A l t h o u g h they wore T-shirts a n d blue jeans, their crew cuts gave t h e m away as soldiers from the C a n a l Zone's m i l i t a r y base. F i del tapped a waitress on the shoulder. She turned, let out a scream of delight, a n d threw her arms around h i m . The group of young men watched this intently, glancing at one another w i t h disapproval. I wondered i f they thought Manifest Destiny included this P a n a m a n ian w o m a n . The waitress led us to a corner. F r o m somewhere, she produced a small table a n d two chairs. A s we settled i n , Fidel exchanged greetings i n Spanish w i t h two men at a table beside ours. U n l i k e the soldiers, they wore p r i n t e d short-sleeved shirts a n d creased slacks. T h e waitress returned w i t h a couple of Balboa beers, a n d Fidel patted her on the r u m p as she

Part II: 1971-1975

turned to leave. She smiled a n d threw h i m a kiss. I glanced around a n d was relieved to discover that the young men at the bar were no longer watching us; they were focused on the dancers. T h e majority of the patrons were English-speaking soldiers, but there were others, like the two beside us, w h o obviously were Panamanians. They stood out because their hair w o u l d not have passed inspection, a n d because they d i d not wear T-shirts and jeans. A few of them sat at tables, others leaned against the walls. They seemed to be highly alert, like border collies guarding flocks of sheep. W o m e n roamed the tables. They moved constantly, sitting on laps, shouting to the waitresses, dancing, swirling, singing, t a k i n g turns on the stage. They wore tight skirts, T-shirts, jeans, clinging dresses, high heels. O n e was dressed i n a V i c t o r i a n gown a n d veil. A n o t h e r wore only a b i k i n i . It was obvious that only the most beautiful could survive here. I marveled at the numbers who made their way to Panam a and wondered at the desperation that h a d driven them to this. " A l l from other countries?" I shouted to F i d e l above the music. H e nodded. "Except..." H e pointed at the waitresses. "They're Panamanian." " W h a t countries?" "Honduras, E l Salvador, Nicaragua, a n d Guatemala." "Neighbors." "Not entirely. Costa Rica and C o l o m b i a are our closest neighbors." The waitress who h a d l e d us to this table came a n d sat o n Fidel's knee. H e gently rubbed her back. "Clarissa," he said, "please tell m y N o r t h A m e r i c a n friend w h y they left their countries." H e nodded his head i n the direction o f the stage. Three new girls were accepting the hats from the others, who j u m p e d down and started dressing. T h e music switched to salsa, a n d as the newcomers danced, they shed their clothes to the r h y t h m . Clarissa held out her right hand. "I'm pleased to meet you," she said. T h e n she stood up a n d reached for our empty bottles. "In a n swer to Fidel's question, these girls come here to escape brutality. I ' l l b r i n g a couple more Balboas." After she left, I t u r n e d to F i d e l . "Come on," I said. "They're here for U.S. dollars." "True. But why so many from the countries where fascist dictators rule?"

Soldiers and Prostitutes

6 9

I glanced back at the stage. T h e three o f t h e m were giggling and t h r o w i n g the sailors cap a r o u n d like a ball. I looked Fidel i n the eye. "You're not k i d d i n g , are you?" "No," he said seriously, "I wish I were. M o s t of these girls have lost their families â&#x20AC;&#x201D; fathers, brothers, husbands, boyfriends. They grew up w i t h torture and death. D a n c i n g and prostitution don't seem all that bad to t h e m . They can make a lot o f money here, then start fresh somewhere, buy a little shop, open a cafe â&#x20AC;&#x201D; " He was interrupted by a commotion near the bar. I saw a waitress swing her fist at one of the soldiers, who caught her h a n d and began to twist her wrist. She screamed and fell to her knee. H e laughed and shouted to his buddies. They a l l laughed. She t r i e d to h i t h i m w i t h her free h a n d . H e twisted harder. H e r face contorted w i t h p a i n . The M P s remained by the door, watching calmly. F i d e l j u m p e d to his feet and started toward the bar. O n e of the men at the table next to ours held out a h a n d to stop h i m . " T r a n q u i l o , h e r m a n o l ' he said. "Be calm, brother. E n r i q u e has control."' A tall, s l i m P a n a m a n i a n came out of the shadows near the stage. He moved like a cat and was u p o n the soldier i n an instant. One h a n d encircled the man's throat while the other doused h i m i n the face w i t h a glass of water. T h e waitress slipped away. Several of the Panamanians who had been lounging against the walls f o r m e d a protective semicircle around the tall bouncer. H e lifted the soldier against the bar and said something I couldn't hear. T h e n he raised his voice and spoke slowly i n E n g l i s h , loudly enough for everyone i n the still room to hear over the music. "The waitresses are off-limits to you guys, and you don't touch the others u n t i l after you pay them." The two M P s finally swung into action. They approached the cluster of Panamanians. " W e ' l l take it f r o m here, Enrique," they said. The bouncer lowered the soldier to the floor and gave his neck a final squeeze, forcing the others head back and eliciting a cry of pain. "Do you understand me?" There was a feeble groan. "Good." H e pushed the soldier at the two M P s . "Get h i m out of here."

Part il: 1971-1975

CHAPTER

Conversations with the General

The invitation was completely unexpected. One m o r n i n g d u r i n g that same 1972 visit, I was sitting i n an office I h a d been given at the I n stituto de Recursos Hidr谩ulicos y Electrificaci贸n, Panama's government-owned electric utility company. I was p o r i n g over a sheet of statistics when a m a n knocked gently o n the frame of m y open door. I invited h i m i n , pleased w i t h any excuse to take my attention off the numbers. H e announced h i m s e l f as the general's chauffeur a n d said he h a d come to take me to one of the generals bungalows. A n hour later, I was sitting across the table f r o m General O m a r Torrijos. H e was dressed casually, i n typical Panamanian style: khaki slacks a n d a short-sleeved shirt buttoned down the front, light blue w i t h a delicate green pattern. H e was tall, fit, and handsome. H e seemed amazingly relaxed for a m a n w i t h his responsibilities. A lock of dark h a i r fell over his prominent forehead. H e asked about my recent travels to Indonesia, Guatemala, a n d Iran. T h e three countries fascinated h i m , but he seemed especially intrigued w i t h Iran's k i n g , Shah M o h a m m a d Reza Pahlavi. The shah had come to power i n 1941, after the B r i t i s h a n d Soviets overthrew his father, w h o m they accused of collaborating w i t h H i t l e r . 1

"Can you imagine," Torrijos asked, "being part of a plot to dethrone your o w n father?" Panama's head of state k n e w a good deal about the history of this far-off land. We talked about how the tables were turned on the shah

i n 1951, a n d h o w his own premier, M o h a m m a d Mossadegh, forced h i m into exile. Torrijos knew, as d i d most of the w o r l d , that it had been the C I A that labeled the premier a Communist a n d that stepped i n to restore the shah to power. However, he d i d not k n o w — o r at least d i d not m e n t i o n —the parts C l a u d i n e had shared w i t h me, about K e r m i t Roosevelt's brilliant maneuvers and the fact that this had been the beginning of a new era i n i m p e r i a l i s m , the match that had ignited the global empire conflagration. "After the shah was reinstated," Torrijos continued, "he launched a series of revolutionary programs a i m e d at developing the i n d u s trial sector a n d b r i n g i n g Iran into the m o d e r n era." I asked h i m how he happened to k n o w so m u c h about Iran. "I make it m y point," he said. "I don't t h i n k too highly of the shah's politics — his willingness to overthrow his own father a n d become a C I A p u p p e t — b u t it looks as though he's doing good things for his country. Perhaps I can learn something from h i m . If he survives." "You t h i n k he won't?" " H e has powerful enemies." " A n d some of the world's best bodyguards." Torrijos gave me a sardonic look. " H i s secret police, S A V A K , have the reputation of being ruthless thugs. That doesn't w i n many friends. H e won't last m u c h longer." H e paused, then rolled his eyes. "Bodyguards? I have a few myself." H e waved at the door. "You t h i n k they'll save m y life i f your country decides to get rid of me?" I asked whether he truly saw that as a possibility. H e raised his eyebrows i n a manner that made me feel foolish for asking such a question. "We have the Canal. That's a lot bigger t h a n Arbenz a n d U n i t e d Fruit." I h a d researched Guatemala, a n d I understood Torrijos's m e a n ing. U n i t e d F r u i t Company h a d been that country's political equivalent of Panama's canal. Founded i n the late 1800s, U n i t e d Fruit soon grew into one of the most powerful forces i n Central A m e r i c a . D u r ing the early 1950s, reform candidate Jacobo A r b e n z was elected president of Guatemala i n an election h a i l e d all over the hemisphere as a model of the democratic process. A t the time, less than 3 percent of Guatemalans owned 70 percent of the l a n d . A r b e n z promised to help the poor dig their way out of starvation, and after his election he implemented a comprehensive l a n d reform program. "The poor a n d m i d d l e classes throughout L a t i n A m e r i c a a p -

Part II: 1971-1975

plauded Arbenz," Torrijos said. "Personally, he was one of my heroes. But we also held our breath. W e knew that U n i t e d Fruit opposed these measures, since they were one of the largest a n d most oppressive landholders i n Guatemala. They also owned b i g plantations i n C o l o m b i a , Costa Rica, Cuba, Jamaica, N i c a r a g u a , Santo D o m i n g o , and here i n Panama. They couldn't afford to let A r b e n z give the rest of us ideas." I k n e w the rest: U n i t e d Fruit h a d launched a major public relations campaign i n the U n i t e d States, aimed at convincing the A m e r ican public and congress that A r b e n z was part of a Russian plot a n d that Guatemala was a Soviet satellite. In 1954, the C I A orchestrated a coup. A m e r i c a n pilots bombed G u a t e m a l a City and the democratically elected A r b e n z was overthrown, replaced by Colonel Carlos Castillo A r m a s , a ruthless r i g h t - w i n g dictator. T h e new government owed everything to U n i t e d Fruit. B y way of thanks, the government reversed the l a n d reform process, abolished taxes on the interest and dividends p a i d to foreign investors, e l i m i nated the secret ballot, and jailed thousands of its critics. Anyone who dared to speak out against Castillo was persecuted. Historians trace the violence a n d terrorism that plagued Guatemala for most of the rest of the century to the not-so-secret alliance between U n i t e d Fruit, the C I A , a n d the Guatemalan army under its colonel dictator. 2

"Arbenz was assassinated," Torrijos continued. "Political a n d character assassination." H e paused a n d frowned. " H o w could your people swallow that C I A rubbish? I won't go so easily. The military here are my people. Political assassination won't do." H e smiled. "The C I A itself w i l l have to k i l l m e ! " We sat i n silence for a few moments, each lost i n his own thoughts. Torrijos was the first to speak. "Do y o u k n o w w h o owns U n i t e d F r u i t ? " he asked. "Zapata O i l , George Bush's c o m p a n y â&#x20AC;&#x201D; o u r U N ambassador." I said. "A m a n w i t h ambitions." H e leaned forward a n d lowered his voice. " A n d n o w I'm up against his cronies at Bechtel." This startled me. Bechtel was the world's most powerful engineering firm a n d a frequent collaborator on projects w i t h M A I N . In the case of Panama's master p l a n , I h a d assumed that they were one of our major competitors. "What do you mean?"

Conversations with the General

"We've been considering b u i l d i n g a new canal, a sea-level one, without locks. It can handle bigger ships. T h e Japanese may be i n terested i n financing it." "They're the Canal's biggest clients." "Exactly. O f course, i f they provide the money, they w i l l do the construction." It struck me. "Bechtel w i l l be out i n the cold." "The biggest construction job i n recent history." H e paused. "Bechtel's loaded w i t h N i x o n , Ford, and B u s h cronies." (Bush, as U . S . ambassador to the U N , and F o r d , as House M i n o r i t y Leader a n d C h a i r m a n of the R e p u b l i c a n N a t i o n a l Convention, were w e l l k n o w n to Torrijos as Republican powerbrokers.) "I've been told that the Bechtel family pulls the strings of the Republican Party." This conversation left me feeling very- uncomfortable. I was one of the people who perpetuated the system he so despised, a n d I was certain he k n e w it. M y job of convincing h i m to accept international loans i n exchange for h i r i n g U.S. engineering and construction firms appeared to have hit a m a m m o t h wall. I decided to confront h i m head-on. "General," I asked, "why d i d you invite me here?" H e glanced at his watch and smiled. "Yes, time now to get down to our own business. P a n a m a needs your help. I need your help." I was stunned. " M y help? W h a t can I do for you?" "We w i l l take back the C a n a l . But that's not enough." H e relaxed into his chair. "We must also serve as a model. We must show that we care about our poor a n d we must demonstrate beyond any doubt that our determination to w i n our independence is not dictated by Russia, C h i n a , or Cuba. W e must prove to the w o r l d that P a n a m a is a reasonable country, that we stand not a g a i n s t the U n i t e d States but f o r the rights of the poor." He crossed one leg over the other. " I n order to do that we need to b u i l d u p an economic base that is like none i n this hemisphere. Electricity, yes — but electricity that reaches the poorest of our poor a n d is subsidized. T h e same for transportation a n d communications. A n d especially for agriculture. D o i n g that w i l l take money — your money, the W o r l d Bank a n d the Inter-American Development Bank." Once again, he leaned forward. H i s eyes held mine. "I understand that your company wants more work and usually gets it by inflating the size of projects — w i d e r highways, bigger power plants, deeper

Part II: 1971-1975

harbors. T h i s time is different, though. Give me what's best for m y people, and I ' l l give y o u a l l the work y o u want." W h a t he proposed was totally unexpected, a n d i t both shocked and excited me. It certainly defied a l l I h a d learned at M A I N . Surely, he k n e w that the foreign a i d game was a sham â&#x20AC;&#x201D; he h a d to know. It existed to make h i m rich and to shackle his country with debt. It was there so Panama w o u l d be forever obligated to the U n i t e d States and the corporatocracy. It was there to keep L a t i n A m e r i c a o n the path of Manifest Destiny a n d forever subservient to W a s h i n g t o n a n d W a l l Street. I was certain that he k n e w that the system was based on the assumption that all m e n i n power are corruptible, a n d that his decision not to use it for his personal benefit w o u l d be seen as a threat, a new form of d o m i n o that might start a c h a i n reaction a n d eventually topple the entire system. I looked across the coffee table at this m a n w h o certainly understood that because of the C a n a l he enjoyed a very special a n d unique power, and that it placed h i m i n a particularly precarious position. H e h a d to be careful. H e already h a d established h i m s e l f as a leader among L D C leaders. If he, like his hero A r b e n z , was determined to take a stand, the w o r l d w o u l d be watching. H o w w o u l d the system react? M o r e specifically, h o w w o u l d the U . S . government react? L a t i n A m e r i c a n history was littered w i t h dead heroes. I also k n e w I was l o o k i n g at a m a n who challenged a l l the j u s t i f i cations I h a d formulated for my own actions. T h i s m a n certainly h a d his share o f personal flaws, but he was no pirate, no H e n r y M o r g a n or Francis Drake â&#x20AC;&#x201D; those swashbuckling adventurers w h o used letters of marque f r o m E n g l i s h kings as a cloak to legitimatize piracy. T h e picture on the b i l l b o a r d h a d not been your typical political deception. "Omar's ideal is freedom; the missile is not invented that can k i l l an i d e a l ! " H a d n ' t T o m Paine penned something similar? It made me wonder, though. Perhaps ideals do not die, but what about the men b e h i n d them? Che, A r b e n z , A l l e n d e ; the latter was the only one still alive, but for how long? A n d it raised another question: how w o u l d I respond i f Torrijos were thrust into the role of martyr? By the time I left h i m we both understood that M A I N w o u l d get the contract for the master p l a n , a n d that I w o u l d see to it that we d i d Torrijos's b i d d i n g .

Conversations with the General

CHAPTER

Entering a New and Sinister Period in Economic History

A s chief economist, I not only was i n charge of a department at M A I N a n d responsible for the studies we carried out around the globe, but I also was expected to be conversant w i t h current econ o m i c trends a n d theories. The early 1970s were a time of major shifts i n international economics. D u r i n g the 1960s, a group of countries h a d formed O P E C , the cartel of o i l - p r o d u c i n g nations, largely i n response to the power o f the big refining companies. Iran was also a major factor. Even though the shah owed his position a n d possibly his life to the U n i t e d States' clandestine intervention d u r i n g the Mossadegh struggle — or perhaps because of that fact —the shah was acutely aware that the tables could be turned on h i m at a n y t i m e . The heads of state of other petroleum-rich nations shared this awareness and the paranoia that accompanied it. T h e y also knew that the major international oil companies, k n o w n as "The Seven Sisters," were collaborating to h o l d d o w n petroleum prices — a n d thus the revenues they paid to the prod u c i n g countries — as a means o f reaping their own w i n d f a l l profits. O P E C was organized i n order to strike back. T h i s a l l came to a head i n the early 1970s, when O P E C brought the industrial giants to their knees. A series o f concerted actions, ending w i t h a 1973 oil embargo symbolized by long lines at U.S. gas stations, threatened to b r i n g on an economic catastrophe rivaling the Great Depression. It was a systemic shock to the developed

w o r l d economy, and of a magnitude that few people could begin to comprehend. The oil crisis could not have come at a worse time for the U n i t e d States. It was a confused nation, full of fear a n d self-doubt, reeling from a h u m i l i a t i n g war i n V i e t n a m a n d a president who was about to resign. Nixon's problems were not l i m i t e d to Southeast A s i a a n d Watergate. H e h a d stepped up to the plate d u r i n g an era that, i n retrospect, w o u l d be understood as the threshold of a new epoch i n world politics and economics. In those days, it seemed that the "little guys," i n c l u d i n g the O P E C countries, were getting the upper h a n d . I was fascinated by w o r l d events. M y bread was buttered by the corporatocracy, yet some secret side of me enjoyed watching my masters being put i n their places. I suppose it assuaged m y guilt a bit. I saw the shadow of T h o m a s Paine standing o n the sidelines, cheering O P E C on. None of us could have been aware of the full impact o f the e m bargo at the time it was happening. W e certainly h a d our theories, but we could not understand what has since become clear. I n h i n d sight, we k n o w that economic growth rates after the oil crisis were about h a l f those prevailing i n the 1950s a n d 1960s, a n d that they have taken place against m u c h greater inflationĂ¤r}' pressure. T h e growth that d i d occur was structurally different a n d d i d not create nearly as many jobs, so unemployment soared. To top it a l l off, the international monetary system took a blow; the network of fixed exchange rates, w h i c h h a d prevailed since the end of W o r l d W a r II, essentially collapsed. D u r i n g that time, I frequently got together w i t h friends to discuss these matters over l u n c h or over beers after work. Some of these people worked for me â&#x20AC;&#x201D; m y staff included very smart m e n and women, mostly young, w h o for the most part were freethinkers, at least by conventional standards. Others were executives at Boston think tanks or professors at local colleges, a n d one was an assistant to a state congressman. These were informal meetings, sometimes attended by as few as two of us, w h i l e others m i g h t include a dozen participants. The sessions were always lively a n d raucous. W h e n I look back at those discussions, I am embarrassed by the sense of superiority I often felt. I knew things I could not share. M y friends sometimes flaunted their credentials â&#x20AC;&#x201D; connections on Beacon

Entering a N e w and Sinister Period in Economic History

H i l l or i n Washington, professorships and P h D s — a n d I w o u l d a n swer this i n m y role as chief economist of a major consulting f i r m , who traveled around the w o r l d first class. Yet, I could not discuss my private meetings w i t h men like Torrijos, or the things I k n e w about the ways we were m a n i p u l a t i n g countries o n every continent. It was both a source of inner arrogance and a frustration. W h e n we talked about the power of the little guys, I h a d to exercise a great deal of restraint. I knew what none of them could possibly know, that the corporatocracy, its b a n d of E H M s , a n d the jackals waiting i n the background w o u l d never allow the little guys to gain control. I only h a d to draw u p o n the examples of A r b e n z and Mossadegh — a n d more recently, u p o n the 1973 C I A overthrow of Chile s democratically elected president, Salvador A l l e n d e . I n fact, I understood that the stranglehold of global empire was growing stronger, despite O P E C — or, as I suspected at the time but d i d not confirm u n t i l later, w i t h O P E C ' s help. O u r conversations often focused on the similarities between the early 1970s a n d the 1930s. T h e latter represented a major watershed i n the international economy and i n the way it was studied, analyzed, and perceived. That decade opened the door to Keynesian economics and to the idea that government should play a major role i n m a n a g ing markets a n d providing services such as health, unemployment compensation, and other forms of welfare. W e were m o v i n g away from old assumptions that markets w ere self-regulating a n d that the state's intervention should be m i n i m a l . r

T h e Depression resulted i n the N e w Deal and i n policies that prom o t e d economic regulation, governmental financial m a n i p u l a t i o n , and the extensive application of fiscal policy. In addition, both the Depression a n d W o r l d W a r II led to the creation of organizations like the W o r l d Bank, the I M F , a n d the General Agreement on Tariffs and Trade ( G A T T ) . T h e 1960s was a pivotal decade i n this period and i n the shift from neoclassic to Keynesian economics. It happened under the Kennedy a n d Johnson administrations, a n d perhaps the most important single influence was one m a n , Robert M c N a m a r a . M c N a m a r a was a frequent visitor to our discussion groups — i n absentia, of course. W e a l l k n e w about his meteoric rise to fame, f r o m manager of p l a n n i n g a n d financial analysis at F o r d M o t o r C o m p a n y i n 1949 to Ford's president i n I 9 6 0 , the first company

Part II: 1971-1975

head selected from outside the F o r d family. Shortly after that, Kennedy appointed h i m secretan' of defense. M c N a m a r a became a strong advocate of a Keynesian approach to government, using mathematical models a n d statistical approaches to determine troop levels, allocation of funds, and other strategies i n V i e t n a m . H i s advocacy of "aggressive leadership" became a hallmark not only of government managers but also of corporate executives. It formed the basis of a new philosophical approach to teaching m a n agement at the nation's top business schools, and it ultimately led to a new breed of C E O s who w o u l d spearhead the rush to global empire. As we sat around the table discussing w o r l d events, we were especially fascinated by M c N a m a r a ' s role as president of the W o r l d Bank, a job he accepted soon after leaving his post as secretary of defense. M o s t of my friends focused on the fact that he symbolized what was popularly k n o w n as the military-industrial complex. H e h a d held the top position i n a major corporation, i n a government cabinet, and now at the most powerful bank i n the w o r l d . Such an apparent breach i n the separation of powers horrified many of them; I may have been the only one among us who was not i n the least surprised. 1

I see n o w that Robert M c N a m a r a ' s greatest a n d most sinister contribution to history was to jockey the W o r l d Bank into becoming an agent of global empire on a scale never before witnessed. H e also set a precedent. H i s ability to bridge the gaps between the p r i m a r y components of the corporatocracy w o u l d be fine-tuned by his successors. For instance, George Shultz was secretary of the treasury and c h a i r m a n of the C o u n c i l on Economic Policy under N i x o n , served as Bechtel president, and then became secretan' of state under Reagan. Caspar Weinberger was a Bechtel vice president and general council, a n d later the secretary of defense under Reagan. R i c h a r d H e l m s was Johnsons C I A director a n d then became ambassador to Iran under N i x o n . R i c h a r d Cheney served as secretary of defense under George H . W . Bush, as H a l l i b u r t o n president, and as U.S. vice president to George W. Bush. Even a president of the U n i t e d States, George H . W . B u s h , began as founder of Zapata Petroleum Corp, served as U.S. ambassador to the U . N . under presidents N i x o n and Ford, a n d was Ford's C I A director. Looking back, I a m struck by the innocence of those days. In many respects, we were still caught up i n the o l d approaches to empire

Entering a N e w and Sinister Period in Economic History

building. K e r m i t Roosevelt had shown us a better way when he overthrew an Iranian democrat and replaced h i m w i t h a despotic king. We E H M s were accomplishing many of our objectives i n places like Indonesia and Ecuador, and yet V i e t n a m was a stunning example of how easily we could slip back into old patterns. It w o u l d take the leading member of O P E C , Saudi A r a b i a , to change that.

Part ii: 1971-1975

CHAPTER

The Saudi Arabian Money-laundering Affair

In 1974, a diplomat from Saudi A r a b i a showed me photos of Riyadh, the capital of his country. Included i n these photos was a herd of goats r u m m a g i n g among piles of refuse outside a government b u i l d ing. W h e n I asked the diplomat about t h e m , his response shocked me. He told me that they were the city's m a i n garbage disposal system. " N o self-respecting Saudi w o u l d ever collect trash," he said. "We leave it to the beasts." Goats! I n the capital of the world's greatest oil kingdom. It seemed unbelievable. A t the time, I was one of a group of consultants just beginning to try to piece together a solution to the oil crisis. Those goats led me to an understanding of how that solution might evolve, especially given the country's pattern of development over the previous three centuries. Saudi Arabia's history is full of violence a n d religious fanaticism. In the eighteenth century, M o h a m m e d i b n Saud, a local w a r l o r d , joined forces w i t h fundamentalists from the ultraconservative W a h habi sect. It was a powerful u n i o n , a n d d u r i n g the next two hundred years the S a u d family a n d their W a h h a b i allies conquered most of the A r a b i a n Peninsula, i n c l u d i n g Islam's holiest sites, M e c c a a n d Medina. Saudi society reflected the puritanical idealism o f its founders, and a strict interpretation of K o r a n i c beliefs was enforced. Religious police ensured adherence to the mandate to pray five times a day.

W o m e n were required to cover themselves f r o m head to toe. P u n ishment for criminals was severe; public executions a n d stonings were c o m m o n . D u r i n g m y first visit to R i y a d h , I was amazed w h e n m y driver t o l d me I could leave m y camera, briefcase, a n d even my wallet i n p l a i n sight inside our car, parked near the open market, without locking it. " N o one," he said, " w o u l d t h i n k of stealing here. Thieves have their hands cut off." Later that day, he asked me i f I w o u l d like to visit so-called C h o p C h o p Square a n d watch a beheading. Wahhabism's adherence to what we w o u l d consider extreme p u r i t a n i s m made the streets safe from thieves â&#x20AC;&#x201D; a n d demanded the harshest form of corporal p u n ishment for those who violated the laws. I declined the i m i t a t i o n . T h e Saudi view of religion as an important element of politics and economics contributed to the oil embargo that shook the Western world. O n October 6,1973 (Yom K i p p u r , the holiest of Jewish h o l i days), Egypt and Syria launched simultaneous attacks on Israel. It was the beginning of the October W a r â&#x20AC;&#x201D; the fourth and most destructive of the A r a b - I s r a e l i wars, a n d the one that w o u l d have the greatest impact on the w o r l d . Egypt's President Sadat pressured Saudi A r a bia's K i n g Faisal to retaliate against the U n i t e d States' complicity w i t h Israel by employing what Sadat referred to as "the o i l weapon." O n October 16, Iran a n d the five A r a b G u l f states, i n c l u d i n g Saudi A r a b i a , announced a 70 percent increase i n the posted price of oil. M e e t i n g i n K u w a i t City, A r a b oil ministers pondered further o p tions. The Iraqi representative was vehemently i n favor of targeting the U n i t e d States. H e called on the other delegates to nationalize A m e r i c a n businesses i n the A r a b world, to impose a total oil embargo on the U n i t e d States a n d o n a l l other nations friendly to Israel, a n d to w i t h d r a w A r a b funds from every A m e r i c a n bank. H e pointed out that A r a b bank accounts were substantial a n d that this action could result i n a panic not unlike that of 1929. Other A r a b ministers were reluctant to agree to such a radical plan, but on October 17 they d i d decide to move forward w i t h a more l i m i t e d embargo, w h i c h w o u l d begin w i t h a 5 percent cut i n p r o duction and then impose an additional 5 percent reduction every month until their political objectives were met. They agreed that the U n i t e d States should be punished for its pro-Israeli stance a n d should therefore have the most severe embargo levied against it.

Part II: 1971-1975

Several of the countries attending the meeting announced that they w o u l d implement cutbacks of 10 percent, rather than 5 percent. O n October 19, President N i x o n asked Congress for $2.2 b i l l i o n i n aid to Israel. T h e next day, S a u d i A r a b i a and other A r a b producers imposed a total embargo on o i l shipments to the U n i t e d States. The oil embargo ended on M a r c h 18,1974. Its duration was short, its impact immense. The selling price of Saudi oil leaped from SI.39 a barrel on January 1,1970, to $8.32 on January-1,1974. Politicians and future administrations w o u l d never forget the lessons learned d u r i n g the early- to mid-1970s. In the l o n g r u n , the t r a u m a of those few months served to strengthen the corporatocracy; its three pillars â&#x20AC;&#x201D; big corporations, international banks, a n d government â&#x20AC;&#x201D; bonded as never before. That b o n d w o u l d endure. T h e embargo also resulted i n significant attitude and policy changes. It convinced W a l l Street and Washington that such an e m bargo could never again be tolerated. Protecting our oil supplies had always been a priority; after 1973, it became an obsession. The e m bargo elevated Saudi Arabia's status as a player i n w o r l d politics and forced Washington to recognize the kingdom's strategic importance to our o w n economy. Furthermore, it encouraged U.S. corporatocracy leaders to search desperately for methods to funnel petrodollars back to A m e r i c a , and to ponder the fact that the Saudi government lacked the administrative a n d institutional frameworks to properly manage its m u s h r o o m i n g wealth. 1

For Saudi A r a b i a , the additional oil income resulting from the price hikes was a mixed blessing. It filled the national coffers w i t h billions of dollars; however, it also served to undermine some of the strict religious beliefs of the Wahhabis. Wealthy Saudis traveled around the world. They attended schools and universities i n Europe and the U n i t e d States. They bought fancy cars and furnished their houses w i t h Western-style goods. Conservative religious beliefs were replaced by a new form of materialism â&#x20AC;&#x201D; and it was this materialism that presented a solution to fears of future oil crises. A l m o s t immediately after the embargo ended, Washington began negotiating with the Saudis, offering them technical support, military hardware and training, and an opportunity to bring their nation into the twentieth century, i n exchange for petrodollars and, most i m p o r tantly, assurances that there would never again be another oil embargo. The negotiations resulted i n the creation of a most extraordinary

The Saudi Arabian Money-laundering Affair

organization, the U n i t e d States-Saudi Arabian Joint Economic C o m mission. K n o w n as J E C O R , it embodied an innovative concept that was the opposite of traditional foreign aid programs: it relied o n Saudi money to hire A m e r i c a n firms to b u i l d u p Saudi A r a b i a . A l t h o u g h overall management and fiscal responsibility were delegated to the U . S . Department of the Treasury, this commission was independent to the extreme. Ultimately, it w o u l d spend billions of dollars over a period of more than twenty-five years, w i t h virtually no congressional oversight. Because no U . S . f u n d i n g was involved, Congress h a d no authority' i n the matter, despite Treasury's role. After studying J E C O R extensively, D a v i d H o l d e n a n d R i c h a r d Johns c o n clude, "It was the most far-reaching agreement of its k i n d ever concluded by the U.S. w i t h a developing country. It h a d the potential to entrench the U.S. deeply i n the K i n g d o m , fortifying the concept of m u t u a l interdependence." The Department of the Treasury brought M A I N i n at an early stage to serve as an adviser. I was s u m m o n e d a n d t o l d that m y job w o u l d be critical, a n d that everything I d i d a n d learned should be considered highly confidential. F r o m my vantage point, it seemed like a clandestine operation. A t the time, I was l e d to believe that M A I N was the lead consultant i n that process; I subsequently came to realize that we were one of several consultants whose expertise was sought. 3

Since everything was done i n the greatest secrecy, I was not privy to Treasury's discussions w i t h other consultants, a n d I therefore cannot be certain about the importance of m y role i n this precedentsetting deal. I do k n o w that the arrangement established new standards for E H M s and that it launched innovative alternatives to the traditional approaches for advancing the interests of empire. I also k n o w that most of the scenarios that evolved from m y studies were ultimately implemented, that M A I N was rewarded w i t h one of the first major â&#x20AC;&#x201D; a n d extremely profitable â&#x20AC;&#x201D; contracts i n Saudi A r a b i a , and that I received a large bonus that year. M y job was to develop forecasts of what might happen i n Saudi A r a b i a i f vast amounts of money were invested i n its infrastructure, and to map out scenarios for spending that money. I n short, I was asked to apply as m u c h creativity as I could to justifying the infusion of hundreds of millions of dollars into the Saudi A r a b i a n economy, u n der conditions that w o u l d include U.S. engineering and construction

84.

Part II: 1971-1975

companies. I was t o l d to do this on my own, not to rely on my staff, and I was sequestered i n a small conference r o o m several floors above the one where my department was located. I was warned that my job was both a matter of national security and potentially very l u crative for M A I N . I understood, of course, that the p r i m a r y objective here was not the u s u a l â&#x20AC;&#x201D; t o burden this country w i t h debts it could never repayâ&#x20AC;&#x201D; but rather to find ways that w o u l d assure that a large portion of petrodollars found their way back to the U n i t e d States. In the process, Saudi A r a b i a w o u l d be drawn i n , its economy w o u l d become increasingly intertwined w i t h a n d dependent upon ours, and presumably it w o u l d grow more Westernized a n d therefore more sympathetic with and integrated into our system. Once I got started, I realized that the goats wandering the streets of R i y a d h were the symbolic key; they were a sore point among Saudis jet-setting around the world. Those goats begged to be replaced by something more appropriate for this desert k i n g d o m that craved entry into the m o d e r n w o r l d . I also k n e w that O P E C economists were stressing the need for oil-rich countries to obtain more valueadded products from their petroleum. Rather than simply exporting crude oil, the economists were u r g i n g these countries to develop i n dustries of their own, to use this oil to produce petroleum-based products they could sell to the rest of the w o r l d at a higher price than that brought by the crude itself. T h i s t w i n realization opened the door to a strategy I felt certain w o u l d be a w i n - w i n situation for everyone. T h e goats, of course, were merely an entry point. O i l revenues could be employed to hire U . S . companies to replace the goats with the world's most modern garbage collection and disposal system, and the Saudis could take great pride i n this state-of-the-art technology. I came to t h i n k of the goats as one side of an equation that could be applied to most of the kingdom's economic sectors, a f o r m u l a for success i n the eyes of the royal family, the U . S . Department of the Treasury, a n d my bosses at M A I N . U n d e r this formula, money w o u l d be earmarked to create an industrial sector focused on transforming raw petroleum into finished products for export. Large petrochemical complexes w o u l d rise f r o m the desert, a n d around t h e m , huge industrial parks. Naturally, such a p l a n w o u l d also require the construction of thousands of megawatts of electrical generating capacity,

The Saudi Arabian Money-laundering Affair

transmission and distribution lines, highways, pipelines, c o m m u n i cations networks, and transportation systems, including new airports, improved seaports, a vast array of service industries, and the i n f r a structure essential to keep a l l these cogs t u r n i n g . W e all h a d h i g h expectations that this plan w o u l d evolve into a model of h o w things should be done i n the rest of the w o r l d . Globe-trotting Saudis w o u l d sing our praises; they w o u l d invite leaders f r o m m a n y countries to come to Saudi A r a b i a and witness the miracles we h a d accomplished; those leaders w o u l d then call on us to help them devise similar plans for their countries a n d — i n most cases, for countries outside the ring of O P E C — w o u l d arrange W o r l d B a n k or other debt-ridden methods for financing t h e m . T h e global empire w o u l d be well served. A s I w o r k e d t h r o u g h these ideas, I thought of the goats, a n d the words of my driver often echoed i n my ears: " N o self-respecting Saudi w o u l d ever collect trash." I h a d heard that refrain repeatedly, i n many different contexts. It was obvious that the Saudis h a d no intention of putting their own people to w o r k at menial tasks, whether as laborers i n industrial facilities or i n the actual construction of any of the projects. In the first place, there were too few of them. I n addition, the royal House of S a u d h a d indicated a c o m m i t ment to providing its citizens with a level of education a n d a lifestyle that were inconsistent w i t h those of m a n u a l laborers. The Saudis might manage others, but they h a d no desire or motivation to become factory a n d construction workers. Therefore, i t w o u l d be necessary to i m p o r t a labor force f r o m other countries — countries where labor was cheap a n d where people needed work. If possible, the labor should come from other M i d d l e Eastern or Islamic countries, such as Egypt, Palestine, Pakistan, a n d Yemen. T h i s prospect created an even greater new stratagem for development opportunities. M a m m o t h housing complexes w o u l d have to be constructed for these laborers, as w o u l d shopping malls, hospitals, fire and police department facilities, water a n d sewage treatment plants, electrical, communications, a n d transportation networks — i n fact, the end result w o u l d be to create m o d e r n cities where once only deserts h a d existed. Here, too, was the opportunity to explore emerging technologies i n , for example, desalinization plants, m i c r o wave systems, health care complexes, a n d computer technologies. Saudi A r a b i a was a planner's dream come true, a n d also a fantasy

Part II: 1971-1975

realized for anyone associated w i t h the engineering and construction business. It presented an economic opportunity unrivaled by any other i n history: an underdeveloped country w i t h virtually u n l i m i t e d financial resources and a desire to enter the modern age i n a big way, very quickly. I must admit that I enjoyed this job immensely. There was no solid data available i n Saudi A r a b i a , i n the Boston Public Library, or anywhere else that justified the use of econometric models i n this context. In fact, the magnitude of the job â&#x20AC;&#x201D; the total a n d immediate transformation of an entire nation on a scale never before witnessed â&#x20AC;&#x201D; meant that even h a d historical data existed, it w o u l d have been irrelevant. N o r was anyone expecting this type of quantitative analysis, at least not at this stage of the game. I simply put m y imagination to work a n d wrote reports that envisioned a glorious future for the k i n g d o m . I h a d rule-of-thumb numbers I could use to estimate such things as the approximate cost to produce a megawatt of electricity, a mile of road, or adequate water, sewage, housing, food, a n d public services for one laborer. I was not supposed to refine these estimates or to draw final conclusions. M y job was s i m p l y to describe a series of plans (more accurately, perhaps, "visions") of what might be possible, and to arrive at rough estimates of the costs associated w i t h them. I always kept i n m i n d the true objectives: m a x i m i z i n g payouts to U.S. firms a n d m a k i n g Saudi A r a b i a increasingly dependent o n the U n i t e d States. It d i d not take long to realize h o w closely the two went together: almost all the newly developed projects w o u l d require continual upgrading and servicing, and they were so highly technical as to assure that the companies that originally developed them w o u l d have to m a i n t a i n a n d modernize them. In fact, as I moved forward w i t h my work, I began to assemble two lists for each of the projects I envisioned: one for the types of design-and-construction contracts we could expect, a n d another for long-term service and management agreements. M A I N , Bechtel, B r o w n & Root, H a l l i b u r t o n , Stone & Webster, a n d m a n y other U.S. engineers a n d contractors w o u l d profit handsomely for decades to come. Beyond the purely economic, there was another twist that w o u l d render Saudi A r a b i a dependent on us, though i n a very different way. The modernization of this o i l - r i c h k i n g d o m w o u l d trigger adverse reactions. For instance, conservative M u s l i m s would be furious; Israel

T h e Saudi Arabian Money-laundering Affair

and other neighboring countries w o u l d feel threatened. T h e economic development of this nation was likely to spawn the growth of another industry: protecting the A r a b i a n Peninsula. Private companies specializing i n such activities, as well as the U . S . m i l i t a r y a n d defense industry, could expect generous contracts — and, once again, long-term service and management agreements. T h e i r presence w o u l d require another phase of engineering a n d construction p r o j ects, i n c l u d i n g airports, missile sites, personnel bases, a n d a l l of the infrastructure associated w i t h such facilities. I sent my reports i n sealed envelopes through interoffice mail, addressed to "Treasury Department Project Manager." I occasionally met w i t h a couple of other members of our t e a m — v i c e presidents at M A I N a n d my superiors. Sincawe h a d no official name for this p r o j ect, w h i c h was still i n the research a n d development phase a n d was not yet part o f J E C O R , we referred to it only — a n d w i t h hushed voices — as S A M A . Ostensibly, this stood for Saudi A r a b i a n M o n e y laundering Affair, but it was also a tongue-in-cheek play o n words; the kingdom's central b a n k was called the Saudi A r a b i a n M o n e t a r y Agency, or S A M A . Sometimes a Treasury representative w o u l d j o i n us. I asked few questions d u r i n g these meetings. M a i n l y , I just described m y work, responded to their comments, a n d agreed to try to do whatever was asked of me. T h e vice presidents a n d Treasury representatives were especially impressed w i t h my ideas about the long-term service a n d management agreements. It prodded one of the vice presidents to coin a phrase we often used after that, referring to the k i n g d o m as "the cow we can m i l k u n t i l the sun sets o n our retirement." F o r me, that phrase always conjured images of goats rather t h a n cows. It was d u r i n g those meetings that I came to realize that several of our competitors were involved i n similar tasks, a n d that i n the end we a l l expected to be awarded lucrative contracts as a result of our efforts. I assumed that M A I N a n d the other firms were footing the b i l l for this p r e l i m i n a r y work, t a k i n g a short-term risk i n order to t h r o w our hats into the ring. T h i s assumption was reinforced by the fact that the number I charged my time to on our daily personal time sheets appeared to be a general a n d administrative overhead account. Such an approach was typical of the research a n d development/proposal preparation phase of most projects. In this case, the

Part II: 1971-1975

initial investment certainly far exceeded the n o r m , but those vice presidents seemed extremely confident about the payback. Despite the knowledge that our competitors were also involved, we all assumed that there was enough w o r k to go around. I also h a d been i n the business long enough to believe that the rewards bestowed w o u l d reflect the level of Treasury's acceptance of the w o r k we h a d done, and that those consultants w h o came up w i t h the a p proaches that were finally i m p l e m e n t e d w o u l d receive the choicest contracts. I took it as a personal challenge to create scenarios that w o u l d make it to the design-and-construct stage. M y star was a l ready rising rapidly at M A I N . Being a key player i n S A M A w o u l d guarantee its acceleration, i f we were successful. D u r i n g our meetings, we also openly discussed the likelihood that S A M A a n d the entire J E C O R operation w o u l d set new precedents. It represented an innovative approach to creating lucrative work i n countries that d i d not need to i n c u r debts t h r o u g h the international banks. Iran a n d Iraq came immediately to m i n d as two additional examples of such countries. Moreover, given h u m a n nature, we felt that the leaders of such countries w o u l d likely be motivated to try to emulate Saudi A r a b i a . There seemed little doubt that the 1973 oil e m b a r g o — w h i c h h a d initially appeared to be so negative — w o u l d end up offering many unexpected gifts to the engineering and construction business, a n d w o u l d help to further pave the road to global empire. I worked on that visionary phase for about eight months — although never for more than several intense days at a time — sequestered i n my private conference r o o m or i n my apartment overlooking Boston C o m m o n . M y staff all h a d other assignments a n d pretty m u c h took care of themselves, although I checked i n on t h e m periodically. Over time, the secrecy around our w o r k declined. M o r e people became aware that something b i g involving S a u d i A r a b i a was going on. E x citement swelled, rumors swirled. The vice presidents a n d Treasury representatives grew^ more open — i n part, I believe, because they themselves became privy to more i n f o r m a t i o n as details about the ingenious scheme emerged. U n d e r this evolving p l a n , Washington wanted the Saudis to guarantee to m a i n t a i n oil supplies a n d prices at levels that could fluctuate but that w o u l d always r e m a i n acceptable to the U n i t e d

T h e Saudi Arabian Money-laundering Affair

States and our allies. If other countries such as Iran, Iraq, Indonesia, or Venezuela threatened embargoes, Saudi A r a b i a , w i t h its vast petroleum supplies, w o u l d step i n to fill the gap; simply the knowledge that they might do so w o u l d , i n the long r u n , discourage other countries from even considering an embargo. I n exchange for this guarantee, Washington w o u l d offer the House of Saud an amazingly attractive deal: a commitment to provide total a n d unequivocal U . S . political a n d â&#x20AC;&#x201D; i f necessary â&#x20AC;&#x201D; military support, thereby ensuring their continued existence as the rulers of their country. It was a deal the House of Saud c o u l d hardly refuse, given its geographic location, lack of military might, a n d general vulnerability to neighbors like Iran, Syria, Iraq, a n d Israel. Naturally, therefore, Washington used its advantage to impose one other critical c o n d i tion, a condition that redefined the role of E H M s i n the w o r l d a n d served as a model w e w o u l d later attempt to apply i n other countries, most notably i n Iraq. I n retrospect, I sometimes find it difficult to understand h o w Saudi A r a b i a could have accepted this condition. Certainly, most of the rest of the A r a b w o r l d , O P E C , a n d other Isl a m i c countries were appalled w h e n they discovered the terms of the deal a n d the manner i n w h i c h the royal house capitulated to W a s h ington's demands. r

T h e condition was that Saudi A r a b i a w o u l d use its petrodollars to purchase U.S. government securities; i n t u r n , the interest earned by these securities w ould be spent by the U . S . Department of the Treasury i n ways that enabled Saudi A r a b i a to emerge f r o m a medieval society into the modern, industrialized w o r l d . I n other words, the interest c o m p o u n d i n g on billions of dollars of the kingdom's oil i n come w^ould be used to pay U.S. companies to fulfill the vision I (and presumably some of my competitors) h a d come up w i t h , to convert Saudi A r a b i a into a modern industrial power. O u r o w n U . S . D e partment of the Treasury w o u l d hire us, at Saudi expense, to b u i l d infrastructure projects and even entire cities throughout the A r a b i a n Peninsula. r

A l t h o u g h the Saudis reserved the right to provide input regarding the general nature of these projects, the reality w as that an elite corps of foreigners (mostly infidels, i n the eyes of M u s l i m s ) w o u l d determine the future appearance a n d economic makeup o f the A r a bian Peninsula. A n d this w o u l d occur i n a k i n g d o m founded on c o n servative W a h h a b i principles a n d r u n according to those principles r

Part tl: 1971-1975

for several centuries. It seemed a huge leap of faith o n their part, yet under the circumstances, a n d due to the political a n d military pressures undoubtedly brought to bear by Washington, I suspected the Saud family felt they had few alternatives. F r o m our perspective, the prospects for immense profits seemed limitless. It was a sweetheart deal w i t h potential to set an amazing precedent. A n d to make the deal even sweeter, no one h a d to obtain congressional approval â&#x20AC;&#x201D; a process loathed by corporations, p a r t i c u larly privately owned ones like Bechtel a n d M A I N , w h i c h prefer not to open their books or share their secrets w i t h anyone. Thomas W . L i p p m a n , an adjunct scholar at the M i d d l e East Institute a n d a former journalist, eloquently summarizes the salient points of this deal: The Saudis, rolling i n cash, w o u l d deliver hundreds of millions of dollars to Treasury, w h i c h held on to the funds until they were needed to pay vendors or employees. T h i s system assured that the Saudi money w o u l d be recycled back into the A m e r i c a n economy... It also ensured that the commission's managers could undertake whatever projects they a n d the Saudis agreed were useful without having to justify' t h e m to Congress.

Establishing the parameters for this historic u n d e r t a k i n g took less time t h a n anyone could have imagined. After that, however, we had to figure out a way to implement it. To set the process i n motion, someone at the highest level of government was dispatched to Saudi A r a b i a â&#x20AC;&#x201D; an extremely confidential mission. I never k n e w for sure, but I believe the envoy was H e n r y Kissinger. Whoever the envoy was, his first job was to remind the royal family about what h a d happened i n neighboring Iran when Mossadegh tried to oust B r i t i s h petroleum interests. Next, he w o u l d outline a plan that w o u l d be too attractive for t h e m to t u r n d o w n , i n effect conveying to the Saudis that they h a d few alternatives. I have no doubt that they were left with the distinct impression that they could either accept our offer a n d thus gain assurances that we would support a n d protect them as rulers, or they could refuse â&#x20AC;&#x201D; a n d go the way of Mossadegh. W h e n the envoy returned to Washington, he brought w i t h h i m the message that the Saudis w o u l d like to comply. There was just one slight obstacle. We would have to convince key

The Saudi Arabian Money-laundering Aft'air

players i n the Saudi government. T h i s , we were informed, was a family matter. Saudi A r a b i a was not a democracy, and yet it seemed that w i t h i n the House of Saud there was a need for consensus. In 1975, I was assigned to one of those key players. I always thought of h i m as Prince W., although I never determined that he was actually a crown prince. M y job was to persuade h i m that the Saudi A r a b i a M o n e y - l a u n d e r i n g Affair w o u l d benefit his country as well as h i m personally. T h i s was not as easy as it appeared at first. Prince W . professed himself a good W a h h a b i a n d insisted that he d i d not want to see his country follow i n the footsteps of Western commercialism. H e also claimed that he understood the insidious nature of what we were proposing. W e had, he said, the same objectives as the crusaders a m i l l e n n i u m earlier: the Christianization of the A r a b w o r l d . In fact, he was partially right about this. In my opinion, the difference between the crusaders and us was a matter of degree. Europe's medieval Catholics claimed their goal was to save M u s l i m s f r o m purgatory; we claimed that we w a n t e d to help the Saudis modernize. In t r u t h , I believe the crusaders, like the corporatocracy, were p r i m a r i l y seeking to expand their empire. Religious beliefs aside, Prince W. had one weakness â&#x20AC;&#x201D; for beautiful blonds. It seems almost ludicrous to m e n t i o n what has now become an unfair stereotype, and I should m e n t i o n that Prince W . was the only m a n among many Saudis I have k n o w n who had this proclivity, or at least the only one who was w i l l i n g to let me see it. Yet, it played a role i n structuring this historic deal, and it demonstrates how far I w o u l d go to complete m y mission.

Part II: 1971-1975

CHAPTER

Pimping, and Financing Osama bin Laden

F r o m the start, Prince W. let me k n o w that whenever he came to visit me i n Boston he expected to be entertained by a w o m a n of his liking, and that he expected her to perform more functions than those of a simple escort. But he most definitely d i d not want a professional call girl, someone he or his family members might b u m p into on the street or at a cocktail party. M y meetings w i t h Prince W. were held i n secret, w h i c h made it easier for me to comply w i t h his wishes. "Sally" was a beautiful blue-eyed b l o n d w o m a n who lived i n the Boston area. H e r husband, a United Airlines pilot who traveled a great deal both o n and off the job, made little attempt to hide his infidelities. Sally had a cavalier attitude about her husband's activities. She appreciated his salary, the plush Boston condo, and the benefits a pilot's spouse enjoyed i n those days. A decade earlier, she h a d been a hippie who h a d become accustomed to promiscuous sex, and she found the idea of a secret source of income attractive. She agreed to give Prince W. a try, on one condition: she insisted that the future of their relationship depended entirely upon his behavior and attitude toward her. Fortunately for me, each met the other's criteria. The Prince W . - S a l l y Affair, a subchapter of the Saudi A r a b i a M o n e y - l a u n d e r i n g Affair, created its own set of problems for me. M A I N strictly prohibited its partners f r o m doing anything illicit. F r o m a legal standpoint, I was procuring sex â&#x20AC;&#x201D; p i m p i n g â&#x20AC;&#x201D; an illegal activity i n Massachusetts, and so the m a i n problem was figuring out

how to pay for Sally's services. Luckily, the accounting department allowed me great liberties w i t h m y expense account. I was a good tipper, a n d I managed to persuade waiters i n some of the most posh restaurants i n Boston to provide me w i t h blank receipts; it was an era w h e n people, not computers, filled out receipts. Prince W . grew bolder as time went by. Eventually, he wanted me to arrange for Sally to come a n d live i n his private cottage i n Saudi A r a b i a . T h i s was not an unheard-of request i n those days; there was an active trade i n young w o m e n between certain European countries and the M i d d l e East. These w o m e n were given contracts for some specified period of time, a n d when the contract expired they went home to very substantial b a n k accounts. Robert Baer, a case officer in the CIA's directorate of operations for twenty years, a n d a specialist i n the M i d d l e East, sums it up: " I n the early 1970s, when the petrodollars started flooding i n , enterprising Lebanese began s m u g gling hookers into the k i n g d o m for the princes... Since no one i n the royal family knows h o w to balance a checkbook, the Lebanese became fabulously wealthy." 1

I was familiar w i t h this situation a n d even knew people who could arrange such contracts. However, for me, there were two major obstacles: Sally a n d the payment. I was certain Sally was not about to leave Boston a n d move to a desert m a n s i o n i n the M i d d l e East. It was also pretty obvious that no collection of b l a n k restaurant receipts w o u l d cover this expense. Prince W. took care of the latter concern by assuring me that he expected to pay for his new mistress himself; I was only required to make the arrangements. It also gave me great relief when he went on to confide that the Saudi A r a b i a n Sally d i d not have to be the exact same person as the one w h o h a d kept h i m company i n the U n i t e d States. I made calls to several friends who h a d Lebanese contacts i n L o n d o n and A m s t e r d a m . W i t h i n a couple of weeks, a surrogate Sally signed a contract. Prince W. was a complex person. Sally satisfied a corporeal desire, and m y ability to help the prince i n this regard earned me his trust. However, it by no means convinced h i m that S A M A was a strategy he wanted to recommend for his country. I h a d to w o r k very h a r d to w i n my case. I spent many hours showing h i m statistics a n d helping h i m analyze studies we had undertaken for other countries, including the econometric models I h a d developed for Kuwait while training

Part II: 1971-1975

with C l a u d i n e , d u r i n g those first few months before heading to I n donesia. Eventually he relented. I a m not familiar w i t h the details o f what went on between my fellow E H M s a n d the other key Saudi players. A l l I k n o w is that the entire package was finally approved by the royal family. M A I N was rewarded for its part w i t h one of the first highly lucrative contracts, administered by the U.S. Department of the Treasury. W e were c o m missioned to make a complete survey of the country's disorganized and outmoded electrical system a n d to design a new one that w o u l d meet standards equivalent to those i n the U n i t e d States. A s usual, it was m y job to send i n the first team, to develop economic a n d electric load forecasts for each region of the country. Three of the men w h o w o r k e d for me â&#x20AC;&#x201D; all experienced i n i n t e r n a tional projects â&#x20AC;&#x201D; were preparing to leave for Riyadh when w o r d came down from our legal department that under the terms of the c o n tract we were obligated to have a fully equipped office up a n d r u n n i n g i n R i y a d h w i t h i n the next few weeks. T h i s clause h a d apparently gone unnoticed for over a m o n t h . O u r agreement w i t h Treasury further stipulated that all equipment h a d to be manufactured either i n the U n i t e d States or i n Saudi A r a b i a . Since Saudi A r a b i a d i d not have factories for p r o d u c i n g such items, everything had to be sent f r o m the States. To our chagrin, we discovered that long lines of tankers were queued up, waiting to get into ports on the A r a b i a n Peninsula. It could take many months to get a shipment of supplies into the k i n g d o m . M A I N was not about to lose such a valuable contract over a couple of rooms of office furniture. A t a conference of all the partners i n volved, we brainstormed for several hours. The solution we settled on was to charter a Boeing 747, fill it w i t h supplies from Boston-area stores, a n d send it off to S a u d i A r a b i a . I remember t h i n k i n g that it w o u l d be fitting i f the plane were owned by U n i t e d A i r l i n e s a n d commanded by a certain pilot whose wife h a d played such a critical role i n b r i n g i n g the House of Saud around.

T h e deal between the U n i t e d States a n d Saudi A r a b i a transformed the k i n g d o m practically overnight. T h e goats were replaced by two

Pimping, and Financing Osama b i n Laden

h u n d r e d bright yellow A m e r i c a n trash compactor trucks, provided under a $200 m i l l i o n contract with Waste Management, I n c . In similar fashion, even' sector of the Saudi economy was modernized, from agriculture a n d energy to education a n d communications. A s T h o m a s L i p p m a n observed i n 2003: 2

A m e r i c a n s have reshaped a vast, bleak landscape o f nomads' tents a n d farmers' m u d huts i n their o w n image, right down to Starbucks on the corner a n d the wheelchairaccessible ramps i n the newest public buildings. Saudi A r a b i a today is a country of expressways, computers, air-conditioned malls filled w i t h the same glossy shops found i n prosperous A m e r i c a n suburbs, elegant hotels, fast-food restaurants, satellite television, up-to-date hospitals, high-rise office towers, a n d amusement parks featuring w h i r l i n g

rides.

T h e plans we conceived i n 1974 set a standard for future negotiations w i t h o i l - r i c h countries. In a way, S A M A / J E C O R was the next plateau after the one K e r m i t Roosevelt h a d established i n Iran. It introduced an innovative level of sophistication to the arsenal of political-economic weapons used by a new breed of soldiers for global empire. T h e Saudi A r a b i a M o n e y - l a u n d e r i n g Affair a n d the Joint C o m mission also set new precedents for international jurisprudence. This was very evident i n the case of Idi A m i n . W h e n the notorious U g a n dan dictator went into exile i n 1979, he was given asylum i n Saudi Arabia. A l t h o u g h he was considered a murderous despot responsible for the deaths of between one h u n d r e d thousand a n d three h u n d r e d thousand people, he retired to a life of luxury, complete w i t h cars and domestic servants provided by the House of Saud. The U n i t e d States quietly objected but refused to press the issue for fear o f u n d e r m i n i n g its arrangement w i t h the Saudis. A m i n w h i l e d away his last years fishing a n d t a k i n g strolls on the beach. In 2003, he died i n J i d d a h , succumbing to kidney failure at the age of eighty. 4

M o r e subtle a n d ultimately m u c h more damaging was the role Saudi A r a b i a was allowed to play i n financing international terrorism. T h e U n i t e d States made no secret of its desire to have the House of Saud b a n k r o l l O s a m a b i n Laden's A f g h a n war against the Soviet

Part II; 1971-1975

U n i o n d u r i n g the 1980s, and Riyadh and Washington together contributed a n estimated S3.5 b i l l i o n to the m u j a h i d e e n . However, U.S. a n d Saudi participation went far beyond this. In late 2003, U.S. N e w s & W o r l d R e p o r t conducted an exhaustive study titled, "The Saudi Connection." The magazine reviewed t h o u sands of pages of court records, U.S. and foreign intelligence reports, and other documents, a n d interviewed dozens of government officials a n d experts o n terrorism a n d the M i d d l e East. Its findings include the following: 5

The evidence was indisputable: S a u d i A r a b i a , America's longtime ally and the world's largest o i l producer, h a d somehow become, as a senior Treasury Department official put it, "the epicenter" of terrorist

financing...

Starting i n the late 1980s â&#x20AC;&#x201D; after the dual shocks of the Iranian revolution and the Soviet war i n Afghanistan â&#x20AC;&#x201D; Saudi Arabia's quasi-official charities became the p r i mary source of funds for the fast-growing j i h a d movement. In some 20 countries the money was used to r u n p a r a military training camps, purchase weapons, a n d recruit new members... Saudi largess encouraged U.S. officials to look the other way, some veteran intelligence officers say. B i l l i o n s of dollars i n contracts, grants, a n d salaries have gone to a broad range of former U.S. officials w h o h a d dealt w i t h the Saudis: ambassadors, C I A station chiefs, even cabinet secretaries... Electronic intercepts of conversations implicated members o f the royal family i n backing not only A l Qaeda but also other terrorist groups.

After the 2001 attacks o n the W o r l d Trade Center a n d the Pentagon, more evidence emerged about the covert relationships between Washington a n d R i y a d h . I n October 2003, V a n i t y F a i r magazine disclosed information that h a d not previously been made public, i n an in-depth report titled, "Saving the Saudis." The story that emerged about the relationship between the B u s h family, the House of Saud, and the b i n L a d e n family d i d not surprise me. I k n e w that those relationships went back at least to the t i m e of the Saudi A r a b i a n

Pimping, and Financing O s a m a bin Laden

Money-laundering Affair, w h i c h began i n 1974, and to George H . W. Bush's terms as U.S. Ambassador to the U n i t e d N a t i o n s (from 1971 to 1973) a n d then as head of the C I A (from 1976 to 1977). W h a t surprised me was the fact that the truth h a d finally made the press. V a n i t y F a i r concluded: The B u s h family a n d the House of Saud, the two most powerful dynasties i n the w o r l d , have h a d close personal, business, a n d political ties for more t h a n 2 0 years... In the private sector, the Saudis supported H a r k e n Energy, a struggling oil company i n w h i c h George W . B u s h was an investor. M o s t recently, former president George H . W . B u s h a n d his longtime ally, former Secretary of State James A . Baker III, have appeared before Saudis at fundraisers for the Carlyle G r o u p , arguably the biggest private equity f i r m i n the world. Today, former president B u s h continues to serve as a senior adviser to the f i r m , whose investors allegedly include a Saudi accused of ties to terrorist support groups... Just days after 9/11, wealthy Saudi A r a b i a n s , i n c l u d ing members of the b i n L a d e n family, were whisked out of the U.S. on private jets. N o one w i l l admit to clearing the flights, a n d the passengers weren't questioned. D i d the B u s h family's long relationship w i t h the Saudis help make i t h a p p e n ? 7

Part II: 1971-1975

PART III: 1975-1981

CHAPTER

Panama Canal Negotiations and Graham Greene

Saudi A r a b i a made many careers. M i n e was already well on the way, but m y successes i n the desert k i n g d o m certainly opened new doors for me. B y 1977,1 h a d built a small empire that included a staff of around twenty professionals headquartered i n our Boston office, and a stable of consultants from M A I N ' s other departments a n d offices scattered across the globe. I h a d become the youngest partner in the firm's hundred-year history. I n addition to my title of C h i e f Economist, I was named manager of Economics a n d Regional P l a n ning. I was lecturing at H a r v a r d a n d other venues, a n d newspapers were soliciting articles from me about current events. I owned a sailing yacht that was docked i n Boston H a r b o r next to the historic battleship C o n s t i t u t i o n , " O l d Ironsides," renowned for subduing the Barbary pirates not long after the Revolutionary- War. I was being paid an excellent salary and I had equity that promised to elevate me to the rarified heights of m i l l i o n a i r e well before I turned forty. True, my marriage h a d fallen apart, but I was spending time w i t h beautiful a n d fascinating w o m e n o n several continents. 1

B r u n o came up w i t h an idea for an innovative approach to forecasting: an econometric model based o n the writings of a turn-ofthe-century Russian mathematician. T h e model involved assigning subjective probabilities to predictions that certain specific sectors of an economy w o u l d grow. It seemed an ideal tool to justify the i n flated rates of increase we l i k e d to show i n order to obtain large loans, a n d B r u n o asked me to see what I could do w i t h the concept.

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I brought a young M I T mathematician, Dr. N a d i p u r a m Prasad, into m y department a n d gave h i m a budget. W i t h i n six months he developed the M a r k o v method for econometric modeling. Together we hammered out a series of technical papers that presented M a r k o v as a revolutionary m e t h o d for forecasting the impact of i n frastructure investment on economic development. It was exactly what we wanted: a tool that scientifically "proved" we were doing countries a favor by h e l p i n g them i n c u r debts they would never be able to pay off. In addition, only a highly skilled econometrician w i t h lots of time a n d money could possibly comprehend the intricacies of M a r k o v or question its conclusions. T h e papers were published by several prestigious organizations, and we formally presented them at conferences and universities i n a number of countries. The papers — and we — became famous throughout the i n d u s t r y . 2

O m a r Torrijos a n d I honored our secret agreement. I made sure our studies were honest and that our recommendations took into account the poor. A l t h o u g h I heard g r u m b l i n g that m y forecasts i n P a n a m a were not up to their usual inflated standards, a n d even that they smacked of socialism, the fact was that M A I N kept w i n n i n g contracts from the Torrijos government. These contracts i n c l u d e d a f i r s t — t o provide innovative master plans that involved agriculture along w i t h the more traditional infrastructure sectors. I also watched from the sidelines as Torrijos a n d J i m m y Carter set out to renegotiate the C a n a l Treaty. T h e C a n a l negotiations generated great interest a n d great passions around the w o r l d . People everywhere waited to see whether the U n i t e d States w o u l d do what most of the rest of the w o r l d believed was the right t h i n g — allow the Panamanians to take control — or w o u l d instead try to reestablish our global version of Manifest Destiny, w h i c h h a d been shaken by our V i e t n a m debacle. F o r many, it appeared that a reasonable and compassionate m a n h a d been elected to the U.S. presidency at just the right time. However, the conservative bastions of Washington and the pulpits of the religious right rang w i t h indignation. H o w could we give up this bulwark of national defense, this symbol of U.S. ingenuity, this ribbon of water that tied South America's fortunes to the w h i m s of U.S. commercial interests? D u r i n g m y trips to Panama, I became accustomed to staying at

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the H o t e l Continental. However, on my fifth visit I moved across the street to the H o t e l Panama because the Continental was undergoing renovations a n d the construction was very noisy. A t first, I resented the inconvenience — the Continental h a d been m y home away from home. But now the expansive lobby where I sat, with its rattan chairs and paddle-bladed wooden ceiling fans, w as growing o n me. It could have been the set of C a s a b l a n c a , a n d I fantasized that H u m p h r e y Bogart might stroll i n at any moment. I set d o w n the copy of the N e w York R e v i e w of B o o k s , i n w h i c h I h a d just finished reading a G r a h a m Greene article about Panama, a n d stared up at those fans, recalling an evening almost two years earlier. "Ford is a weak president who won't be reelected," O m a r Torrijos predicted i n 1975. H e was speaking to a group of influential P a n a manians. I was one of the few foreigners who h a d been invited to the elegant old club w i t h its w h i r r i n g ceiling fans. "That's the reason I decided to accelerate this C a n a l issue. It's a good time to l a u n c h an all-out political battle to w i n it back." T

The speech inspired me. I returned to my hotel room and scratched out a letter that I eventually m a i l e d to the B o s t o n G l o b e . Back i n Boston, an editor responded by calling me at my office to request that I write an O p - E d piece. " C o l o n i a l i s m i n P a n a m a H a s N o Place in 1975" took up nearly h a l f the page opposite the editorials i n the September 19,1975, edition. T h e article cited three specific reasons for transferring the Canal to Panama. First, "the present situation is unjust — a good reason for any decision." Second, "the existing treaty creates far graver security risks than w o u l d result f r o m t u r n i n g more control over to the P a n a manians." I referenced a study conducted by the Interoceanic Canal C o m m i s s i o n , w h i c h concluded that "traffic could be halted for two years by a b o m b planted — conceivably by one m a n — i n the side of G a t u n D a m , " a point General Torrijos h i m s e l f h a d publicly e m phasized. A n d t h i r d , "the present situation is creating serious p r o b lems for already-troubled U n i t e d S t a t e s - L a t i n A m e r i c a n relations." I ended w i t h the following: T h e best way of assuring the continued a n d efficient operation of the Canal is to help Panamanians gain control over and responsibility for it. In so doing, we could take

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pride i n initiating an action that w o u l d reaffirm c o m m i t ments to the cause of self-determination to w h i c h we pledged ourselves 2 0 0 years ago... Colonialism was i n vogue at the t u r n o f the century (early 1900s) as it h a d been i n 1775. Perhaps ratification of such a treaty can be understood i n the context o f those times. Today it is without justification. C o l o n i a l i s m has no place i n 1975. We, celebrating our bicentennial, should realize this, and act accordingly. 3

W r i t i n g that piece was a b o l d move on my part, especially since I had recently been made a partner at M A I N . Partners were expected to avoid the press and certainly to refrain f r o m publishing political diatribes on the editorial pages of N e w England's most prestigious newspaper. I received through interoffice m a i l a pile of nasty, mostly anonymous notes stapled to copies of the article. I was certain that I recognized the h a n d w r i t i n g on one as that of Charlie Illingworth. M y first project manager h a d been at M A I N for over ten years (compared to less t h a n five for me) and was not yet a partner. A fierce skull and crossbones figured prominently on the note, and its message was simple: "Is this C o m m i e really a partner i n our firm?" B r u n o s u m m o n e d me to his office and said, "You'll get loads of grief over thi- M A I N ' s a pretty conservative place. But I want you to k n o w I t h i n k you're smart. Torrijos w i l l love it; I do hope you're sending h i m a copy. G o o d . W e l l , these jokers here i n this office, the ones who t h i n k Torrijos is a Socialist, really won't give a d a m n as l o n g as the w o r k flows i n . " B r u n o had been right â&#x20AC;&#x201D; as usual. N o w it was 1977, Carter was i n the W h i t e House, and serious Canal negotiations were under way. M a n y o f M A I N ' s competitors had taken the w r o n g side and h a d been turned out of Panama, but our work had multiplied. A n d I was sitting i n the lobby of the H o t e l Panama, having just finished reading an article by G r a h a m Greene i n the N e w York R e v i e w of B o o k s . T h e article, "The C o u n t r y w i t h Five Frontiers," was a gutsy piece that included a discussion of corruption among senior officers i n Panama's N a t i o n a l G u a r d , T h e author pointed out that the general himself admitted to giving many of his staff special privileges, such as superior housing, because "If I don't pay them, the C I A w i l l . " The clear i m p l i c a t i o n was that the U.S. intelligence community was

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determined to undermine the washes of President Carter and, i f necessary, w o u l d bribe Panama's military chiefs into sabotaging the treaty negotiations. I could not help but wonder i f the jackals h a d begun to circle Torrijos. I h a d seen a photograph i n the "People" section o f T I M E or N e w s w e e k of Torrijos a n d Greene sitting together; the caption i n d i cated that the writer was a special guest w h o h a d become a good friend. I wondered how the general felt about this novelist, w h o m he apparently trusted, wTiting such a critique. G r a h a m Greene's article raised another question, one that related to that day i n 1972 when I h a d sat across a coffee table from Torrijos. A t the time, I h a d assumed that Torrijos k n e w the foreign aid game was there to make h i m r i c h w h i l e shackling his country w i t h debt. I had been sure he k n e w that the process was based on the assumption that men i n power are corruptible, a n d that his decision not to seek personal benefitâ&#x20AC;&#x201D;but rather to use foreign aid to truly help his people â&#x20AC;&#x201D; w o u l d be seen as a threat that might eventually topple the entire system. T h e w o r l d was watching this m a n ; his actions had ramifications that reached far beyond P a n a m a a n d w o u l d therefore not be taken lightly. 4

I h a d wondered how the corporatocracy w o u l d react i f loans made to Panama helped the poor without contributing to impossible debts. N o w I wondered whether Torrijos regretted the deal he and I had struck that dayâ&#x20AC;&#x201D; a n d I wasn't quite sure h o w I felt about those deals myself. I h a d stepped back from m y E H M role. I h a d played his game instead of mine, accepting his insistence on honesty i n exchange for more contracts. In purely economic terms, i t h a d been a wise business decision for M A I N . Nonetheless, it h a d been i n c o n sistent w i t h what Claudine h a d instilled i n me; i t was not advancing the global empire. H a d it now unleashed the jackals? I recalled t h i n k i n g , w h e n I left Torrijos's bungalow that day, that L a t i n A m e r i c a n history is littered with dead heroes. A system based on corrupting public figures does not take k i n d l y to p u b l i c figures who refuse to be corrupted. T h e n I thought m y eyes were playing tricks. A familiar figure was w a l k i n g slowly across the lobby. A t first, I was so confused that I believed it was H u m p h r e y Bogart, but Bogart was long deceased. T h e n I recognized the m a n a m b l i n g past me as one of the great figures i n modern English literature, author of T h e P r i d e a n d t h e G l o r y , T h e

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C o m e d i a n s , O u r M a n i n H a v a n a , a n d of the article I h a d just set d o w n o n the table next to me. G r a h a m Greene hesitated a moment, peered around, a n d headed for the coffee shop. I was tempted to call out or to r u n after h i m , but I stopped m y self. A n inner voice said he needed his privacy; another w a r n e d that he w o u l d shun me. I picked up the N e w Y o r k R e v i e w of B o o k s a n d was surprised a moment later to discover that I was standing i n the doorway to the coffee shop. I h a d breakfasted earlier that m o r n i n g , a n d the maitre d' gave me an odd look. I glanced around. G r a h a m Greene sat alone at a table near the w a l l . I pointed to the table beside h i m . "Over there," I t o l d the maitre d'. " C a n I sit there for another breakfast?" I was always a good tipper; the maitre d' smiled knowingly a n d led me to the table. The novelist was absorbed i n his newspaper. I ordered coffee a n d a croissant w i t h honey. I wanted to discover Greene's thoughts about Panama, Torrijos, a n d the Canal affair, but h a d no idea h o w to i n i t i ate such a conversation. T h e n he looked up to take a sip f r o m his glass. "Excuse me," I said. He glared at me â&#x20AC;&#x201D; or so it seemed. "Yes?" "I hate to intrude. B u t you are G r a h a m Greene, aren't you?" "Why, yes indeed." H e smiled warmly. " M o s t people i n P a n a m a don't recognize me." I gushed that he was my favorite novelist, a n d t h e n gave h i m a brief life history, i n c l u d i n g my work at M A I N and my meetings w i t h Torrijos. H e asked i f I was the consultant w h o h a d w r i t t e n an article about the U n i t e d States getting out of Panama. " I n the B o s t o n G l o b e , if I recall correctly." I was flabbergasted. "A courageous t h i n g to do, given your position," he said. "Won't you j o i n me?" I moved to his table a n d sat there w i t h h i m for what must have been an hour and a half. I realized as we chatted how very close to Torrijos he h a d grown. H e spoke of the general at times like a father speaking about his son.

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"The general," he said, "invited me to write a book about his country. I'm doing just that. This one w i l l be nonfiction â&#x20AC;&#x201D; something a bit off'the line for me." I asked h i m w h y he usually wrote novels instead of nonfiction. " F i c t i o n is safer," he said. " M o s t of m y subject matter is controversial. V i e t n a m . H a i t i . The M e x i c a n Revolution. A lot of publishers w o u l d be afraid to p u b l i s h nonfiction about these matters." H e pointed at the N e w York R e v i e w o f B o o k s , where it lay on the table I had vacated. "Words like those can cause a great deal of damage." T h e n he smiled. "Besides, I like to write fiction. It gives me m u c h greater freedom." H e looked at me intensely. "The important t h i n g is to write about things that matter. L i k e your G l o b e article about the Canal." His admiration for Torrijos was obvious. It seemed that Panama's head of state could impress a novelist every bit as m u c h as he i m pressed the poor and dispossessed. E q u a l l y obvious was Greene's concern for his friend's life. "It's a huge endeavor," he exclaimed, "taking on the G i a n t of the North." H e shook his head sadly. "I fear for his safety." T h e n it was time for h i m to leave. " M u s t catch a flight to France," he said, rising slowly and shaking my h a n d . H e peered into my eyes. " W h y don't you w rite a book?" H e gave me an encouraging nod. "It's i n you. B u t remember, make it about things that matter." H e t u r n e d and walked away. T h e n he stopped and came back a few steps into the restaurant. T

"Don't worry," he said. "The general w i l l prevail. H e ' l l get the Canal back." Torrijos d i d get it back. In that same year, 1977, he successfullynegotiated new treaties w i t h President Carter that transferred the Canal Zone and the C a n a l itself over to P a n a m a n i a n control. T h e n the W h i t e House had to convince the U.S. Congress to ratify it. A long and arduous battle ensued. In the final tally, the C a n a l Treaty was ratified by a single vote. Conservatives swore revenge. W h e n G r a h a m Greene's nonfiction book G e t t i n g t o K n o w t h e G e n e r a l came out many years later, it was dedicated, "To the friends of my friend, O m a r Torrijos, i n Nicaragua, E l Salvador, and Panama." 5

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CHAPTER

Iran's King of Kings

Between 1975 a n d 1978,1 frequently visited Iran. Sometimes I c o m muted between L a t i n A m e r i c a or Indonesia a n d Tehran. The S h a h of Shahs (literally, " K i n g of Kings," his official title) presented a c o m pletely different situation from that i n the other countries where we worked. Iran was oil rich and, like Saudi A r a b i a , it d i d not need to i n c u r debt i n order to finance its ambitious list of projects. However, Iran differed significantly f r o m Saudi A r a b i a i n that its large population, while predominantly M i d d l e Eastern a n d M u s l i m , was not A r a b i c . In addition, the country h a d a history of political t u r m o i l â&#x20AC;&#x201D; b o t h i n ternally a n d i n its relationships w i t h its neighbors. Therefore, we took a different approach: Washington and the business community joined forces to t u r n the shah into a symbol of progress. W e launched an immense effort to show the w o r l d what a strong, democratic friend of U.S. corporate a n d political interests could accomplish. Never m i n d his obviously undemocratic title or the less obvious fact of the CIA-orchestrated coup against his democratically elected premier; Washington a n d its European partners were determined to present the shah's government as an alternative to those i n Iraq, L i b y a , C h i n a , Korea, a n d other nations where a powerful undercurrent o f a n t i - A m e r i c a n i s m was surfacing. To all appearances, the shah was a progressive friend of the underprivileged. In 1962, he ordered large private landholdings broken up and turned over to peasant owners. The following year, he inaugurated

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his W h i t e Revolution, w h i c h involved an extensive agenda for socioeconomic reforms. The power of O P E C grew d u r i n g the 1970s, a n d the shah became an increasingly influential w o r l d leader. A t the same time, Iran developed one of the most powerful military forces i n the M u s l i m M i d d l e E a s t . M A I N was involved i n projects that covered most of the country, from tourist areas along the Caspian Sea i n the north to secret m i l itary installations overlooking the Straits of H o r m u z i n the south. Once again, the focus of our w o r k was to forecast regional development potentials a n d then to design electrical generating, transmission, a n d distribution systems that w o u l d provide the a l l - i m p o r t a n t energy required to fuel the industrial a n d commercial growth that w o u l d realize these forecasts. I visited most of the major regions o f Iran at one time or another. I followed the o l d caravan trail through the desert mountains, from K i r m a n to Bandar Abbas, a n d I roamed the ruins of Persepolis, the legendary palace of ancient kings and one of the wonders of the classical world. I toured the country's most famous and spectacular sites: Shiraz, Isfahan, and the magnificent tent city near Persepolis where the shah h a d been crowned. In the process, I developed a genuine love for this l a n d a n d its complex people. 1

O n the surface, Iran seemed to be a m o d e l example of C h r i s t i a n M u s l i m cooperation. However, I soon learned that tranquil appearances may mask deep resentment. Late one evening i n 1977, I returned to my hotel r o o m to find a note shoved under m y door. I was shocked to discover that it was signed by a m a n named Y a m i n . I h a d never met h i m , but he h a d been described to me d u r i n g a government briefing as a famous a n d most subversive radical. I n beautifully crafted E n g l i s h script, the note invited me to meet h i m at a designated restaurant. However, there was a w a r n i n g : I was to come only i f I was interested i n exp l o r i n g a side of Iran that most people " i n m y position" never saw. I wondered whether Y a m i n knew what m y true position was. I realized that I was t a k i n g a b i g risk; however, I could not resist the temptation to meet this enigmatic figure. M y taxi dropped me off i n front of a t i n y gate i n a h i g h w a l l â&#x20AC;&#x201D; so h i g h that I could not see the b u i l d i n g b e h i n d it. A beautiful Iranian w o m a n wearing a l o n g black gown ushered me i n a n d led me d o w n a corridor illuminated by ornate oil lamps hanging from a low ceiling.

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A t the end of this corridor, we entered a r o o m that dazzled like the interior of a d i a m o n d , b l i n d i n g me w i t h its radiance. W h e n m y eyes finally adjusted, I saw that the walls were inlaid w i t h semiprecious stones a n d mother-of-pearl. The restaurant was lighted by tall white candles protruding from intricately sculpted bronze chandeliers. A tall m a n with l o n g black hair, wearing a tailored navy blue suit, approached and shook my h a n d . He introduced himself as Y a m i n , i n an accent that suggested he was an Iranian w h o h a d been educated i n the B r i t i s h school system, a n d I was immediately struck by h o w little he looked like a subversive radical. H e directed me past several tables where couples sat quietly eating, to a very private alcove; he assured me we could talk i n complete confidentiality. I h a d the distinct impression that this restaurant catered to secret rendezvous. Ours, quite possibly, was the only non-amorous one that night. Y a m i n was very cordial. D u r i n g our discussion, it became obvious that he thought of me merely as an economic consultant, not as someone w i t h ulterior motives. H e explained that he h a d singled me out because he knew I h a d been a Peace Corps volunteer a n d because he h a d been t o l d that I took every possible opportunity to get to k n o w his country a n d to mix w i t h its people. "You are very young compared to most i n your profession," he said. "You have a genuine interest i n our history a n d our current problems. Y o u represent our hope." This, as well as the setting, his appearance, and the presence of so many others i n the restaurant, gave me a certain degree of comfort. I h a d become accustomed to people befriending me, like Rasy i n Java a n d Fidel i n Panama, a n d I accepted it as a compliment a n d an opportunity. I k n e w that I stood out from other Americans because I was i n fact infatuated w i t h the places I visited. I have found that people w a r m to you very quickly i f you open your eyes, ears, a n d heart to their culture. Y a m i n asked i f I k n e w about the F l o w e r i n g Desert project. "The shah believes that our deserts were once fertile plains a n d l u s h forests. A t least, that's what he claims. D u r i n g Alexander the Great's reign, according to this theory, vast armies swept across these lands, traveling w i t h millions of goats and sheep. The animals ate all the grass and other vegetation. T h e disappearance of these plants caused a drought, a n d eventually the entire region became a desert. N o w all we have to do, or so the shah says, is plant millions u p o n m i l l i o n s of 2

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trees. After that — presto — the rains w i l l return a n d the desert w i l l b l o o m again. O f course, i n the process we w i l l have to spend h u n dreds of millions of dollars." H e smiled condescendingly. "Companies like yours w i l l reap huge profits." "I take it you don't believe i n this theory." "The desert is a symbol. T u r n i n g it green is about m u c h more than agriculture." Several waiters descended u p o n us w i t h trays of beautifully presented Iranian food. A s k i n g my permission first, Y a m i n proceeded to select an assortment from the various trays. T h e n he t u r n e d back to me. "A question for you, M r . Perkins, i f I m i g h t be so b o l d . W h a t destroyed the cultures of your o w n native peoples, the Indians?" I responded that I felt there h a d been many factors, i n c l u d i n g greed a n d superior weapons. "Yes. True. A l l of that. But more than anything else, d i d it not come down to a destruction of the environment?" H e went o n to explain how once forests a n d animals such as the buffalo are destroyed, and once people are moved onto reservations, the very foundations of cultures collapse. ' Y o u see, it is the same here," he said. "The desert is our environment. The F l o w e r i n g Desert project threatens nothing less than the destruction of our entire fabric. H o w can we allow this to happen?" I told h i m that it was m y understanding that the whole idea beh i n d the project came f r o m his people. H e responded w i t h a cynical laugh, saving that the idea was planted i n the shah's m i n d by m y own U n i t e d States government, a n d that the shah was just a puppet of that government. "A true Persian w o u l d never permit such a thing," Y a m i n said. T h e n he launched into a long dissertation about the relationship between his people — the Bedouins — and the desert. H e emphasized the fact that m a n y urbanized Iranians take their vacations i n the desert. They set up tents large enough for the entire family and spend a week or more living i n t h e m . "We — m y people —are part of the desert. T h e people the shah claims to rule with that iron h a n d of his are not just of the desert. We a r e the desert." After that, he t o l d me stories about his personal experiences i n the desert. W h e n the evening was over, he escorted me back to the

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tiny door i n the large w a l l . M y taxi was w a i t i n g i n the street outside. Y a m i n shook my h a n d and expressed his appreciation for the time I had spent w i t h h i m . H e again mentioned my young age and my openness, and the fact that my occupying such a position gave h i m hope for the future. "I am so glad to have h a d this time w i t h a m a n like you." H e continued to hold m y h a n d i n his. "I w o u l d request of you only one more favor. I do not ask this lightly. I do it only because, after our time together tonight, I k n o w it w i l l be meaningful to you. You'll gain a great deal f r o m it." " W h a t is it I can do for you?" "I w o u l d like to introduce you to a dear friend of mine, a m a n who can tell you a great deal about our K i n g of Kings. H e may shock you, but I assure you that meeting h i m w i l l be well w o r t h your time."

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CHAPTER

Confessions of a Tortured Man

Several days later, Y a m i n drove me out of Tehran, t h r o u g h a dusty and impoverished shantytown, along an old camel trail, and out to the edge of the desert. W i t h the sun setting b e h i n d the city, he stopped his car at a cluster of tiny m u d shacks surrounded by p a l m trees. "A very o l d oasis," he explained, "dating back centuries before M a r c o Polo." H e preceded me to one of the shacks. "The m a n inside has a P h D f r o m one of your most prestigious universities. For r e a sons that w i l l soon be clear, he must r e m a i n nameless. Y o u can call h i m Doc." H e knocked on the wooden door, a n d there was a muffled r e sponse. Y a m i n pushed the door open a n d led me inside. T h e t i n y r o o m was windowless a n d l i t only by an o i l lamp on a low table i n one corner. A s m y eyes adjusted, I saw that the dirt floor was covered w i t h Persian carpets. T h e n the shadowy outline o f a m a n began to emerge. H e was seated i n front of the l a m p i n a way that kept his features hidden. I could tell only that he was b u n d l e d i n blankets and was wearing something around his head. H e sat i n a wheelchair, and other than the table, this was the only piece of furniture i n the room. Y a m i n motioned for me to sit o n a carpet. H e went up a n d gently embraced the m a n , speaking a few words i n his ear, then returned a n d sat at m y side. "I've told you about M r . Perkins," he said. "We're both honored to have this opportunity to visit w i t h you, sir."

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" M r . Perkins. You are welcome." T h e voice, w i t h barely any detectable accent, was low and hoarse. I found myself leaning forward into the s m a l l space between us as he said, "You see before y o u a broken m a n . I have not always been so. Once I was strong like you. I was a close and trusted adviser to the shah." There was a long pause. "The Shah of Shahs, K i n g of Kings." H i s tone of voice sounded, I thought, more sad than angry. "I personally knew many of the world's leaders. Eisenhower, Nixon, de G a u l l e . They trusted me to help lead this country into the capitalist camp. The shah trusted me, and," he made a sound that could have been a cough, but w h i c h I took for a laugh, "I trusted the shah. I believed his rhetoric. I was convinced that Iran w o u l d lead the M u s l i m w o r l d into a new epoch, that Persia w o u l d fulfill its promise. It seemed our destiny — the shah's, mine, a l l of ours w h o carried out the mission we thought we h a d been b o r n to fulfill." T h e l u m p of blankets moved; the wheelchair made a wheezing noise a n d t u r n e d slightly. I could see the outline of the man's face i n profile, his shaggy beard, a n d — then it grabbed me — the flatness. H e h a d no nose! I shuddered and stifled a gasp. "Not a pretty sight, w o u l d y o u say, ah, M r . Perkins? Too bad you can't see it i n full light. It is truly grotesque." A g a i n there was the sound of choking laughter. "But as I'm sure you can appreciate, I must remain anonymous. Certainly, you could learn my identity if you tried, although you m i g h t find that I a m dead. Officially, I no longer exist. Yet I trust you won't try. Y o u a n d your family are better off not k n o w i n g who I a m . The a r m of the shah and S A V A K reaches far." T h e chair wheezed a n d returned to its original position. I felt a sense of relief, as though not seeing the profile somehow obliterated the violence that h a d been done. A t the time, I d i d not k n o w of this custom among some Islamic cultures. Individuals deemed to have brought dishonor or disgrace upon society or its leaders are p u n ished by having their noses cut off. In this way, they are marked for life — as this man's face clearly demonstrated. "I'm sure, M r . Perkins, you're wondering why we invited you here," W i t h o u t w a i t i n g for my response, the m a n i n the w heelchair c o n tinued, "You see, this m a n who calls h i m s e l f the K i n g of K i n g s is i n reality satanic. H i s father was deposed by your C I A w i t h — I hate to say it — my help, because he was said to be a N a z i collaborator. A n d then there was the Mossadegh calamity. Today, our shah is on the r

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route to surpassing H i t l e r i n the realms of evil. H e does this with the full knowledge a n d support of your government." " W h y is that?" I asked. "Quite simple. H e is your only real ally i n the M i d d l e East, a n d the industrial w o r l d rotates o n the axle of oil that is the M i d d l e East. O h , you have Israel, o f course, but that's actually a liability to you, not an asset. A n d no oil there. Your politicians must placate the Jewish vote, must get their money to finance campaigns. So you're stuck w i t h Israel, I'm afraid. However, Iran is the key. Your oil companies — w h i c h carry even more power than the Jews — need us. Y o u need our shah — or you t h i n k you do, just as you thought you needed South Vietnam's corrupt leaders." 'Are you suggesting otherwise? Is Iran the equivalent to Vietnam?" "Potentially m u c h worse. Y o u see, this shah won't last m u c h longer. T h e M u s l i m w o r l d hates h i m . N o t just the A r a b s , but M u s lims everywhere — Indonesia, the U n i t e d States, but mostly right here, his own Persian people." There was a t h u m p i n g sound a n d I realized that he h a d struck the side of his chair. " H e is evil! W e Persians hate him." T h e n silence. I could hear only his heavy breathing, as though the exertion h a d exhausted h i m . "Doc is very close to the mullahs," Y a m i n said to me, his voice l o w and calm. "There is a huge undercurrent among the religious factions here a n d i t pervades most of our country, except for a h a n d f u l of people i n the commercial classes who benefit from the shah's capitalism." "I don't doubt you," I said. "But I must say that d u r i n g four visits here, I've seen n o t h i n g of it. Everyone I talk w i t h seems to love the shah, to appreciate the economic upsurge." "You don't speak Farsi," Y a m i n observed. "You hear only what is t o l d to y o u by those m e n w h o benefit the most. The ones who have been educated i n the States or i n E n g l a n d end up w o r k i n g for the shah. Doc here is an exception — now." H e paused, seeming to ponder his next words. "It's the same w i t h your press. They only talk w i t h the few who are his k i n , his circle. O f course, for the most part, your press is also controlled by oil. So they hear what they want to hear a n d write what their advertisers want to read." " W h y are we telling y o u a l l this, M r . Perkins?" Doc's voice was even more hoarse than before, as i f the effort of speaking a n d the

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emotions were draining what little energy the man h a d mustered for this meeting. "Because we'd like to convince you to get out a n d to persuade your company to stay away from our country. We want to w a r n y o u that although you may think y o u ' l l make a great deal of money here, it's an illusion. T h i s government w i l l not last." A g a i n , I heard the sound of his h a n d t h u d d i n g against the chair. " A n d when it goes, the one that replaces it w i l l have no sympathy for you and your kind." "You're saying we won't be paid?" Doc broke down i n a fit of coughing. Y a m i n went to h i m and rubbed his back. W h e n the coughing ended, he spoke to Doc i n Farsi and then came back to his seat. "We must end this conversation," Y a m i n said to me. "In answer to your question: yes, you w i l l not be paid. Y o u ' l l do a l l that work, a n d when it comes time to collect your fees, the shah w i l l be gone." D u r i n g the drive back, I asked Y a m i n w h y he a n d D o c wanted to spare M A I N the financial disaster he h a d predicted. "We'd be happy to see your company go bankrupt. However, we'd rather see you leave Iran. Just one company like yours, w a l k i n g away, could start a trend. That's what we're hoping. Y o u see, we don't want a bloodbath here, but the shah must go, a n d we'll try anything that w i l l make that easier. So we pray to A l l a h that you'll convince your M r . Z a m b o t t i to get out while there is still time." " W h y me?" "I k n e w d u r i n g our d i n n e r together, w h e n we spoke of the F l o w ering Desert project, that you were open to the truth. I knew that our information about you was correct â&#x20AC;&#x201D; y o u are a m a n between two worlds, a m a n i n the middle." It made me wonder just how m u c h he d i d k n o w about me.

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CHAPTER

The Fall of a King

One evening i n 1978, while I was sitting alone at the luxurious bar oft" the lobby of the H o t e l Intercontinental i n Tehran, I felt a tap on my shoulder. I t u r n e d to see a heavyset Iranian i n a business suit. "John Perkins! You don't remember me?" The former soccer player had gained a lot of weight, but the voice was unmistakable. It was my old M i d d l e b u r y friend Farhad, w h o m I h a d not seen i n more t h a n a decade. W e embraced a n d sat d o w n together. It quickly became obvious that he k n e w a l l about me a n d about my work. It was equally obvious that he d i d not i n t e n d to share m u c h about his o w n work. "Let's get right to the point," he said as we ordered our second beers. "I'm flying to Rome tomorrow. M y parents live there. I have a ticket for you on my flight. T h i n g s are falling apart here. You've got to get out." H e handed me an airline ticket. I d i d not doubt h i m for a moment. In Rome, we dined w i t h Farhad's parents. H i s father, the retired Iranian general who once stepped i n front of a would-be assassin's bullet to save the shah's life, expressed disillusionment w i t h his former boss. H e said that during the past few years the shah h a d showed his true colors, his arrogance a n d greed. T h e general blamed U . S . policy â&#x20AC;&#x201D; particularly its backing of Israel, of corrupt leaders, a n d of despotic governments â&#x20AC;&#x201D; for the hatred sweeping the M i d d l e East, and he predicted that the shah w o u l d be gone w i t h i n months. "You know," he said, "you sowed the seeds of this rebellion i n the

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early fifties, w h e n you overthrew Mossadegh. Y o u thought it very clever back then â&#x20AC;&#x201D; as d i d I. B u t now it returns to haunt you â&#x20AC;&#x201D; us." I was astounded by his pronouncements. I h a d heard something similar from Y a m i n a n d Doc, but c o m i n g from this m a n it took on new significance. B y this time, everyone k n e w o f the existence of a fundamentalist Islamic underground, but we h a d convinced o u r selves that the shah was immensely popular among the majority of his people a n d was therefore politically invincible. T h e general, however, was adamant. " M a r k my words," he said solemnly, "the shah's fall w i l l be only the beginning. It's a preview of where the M u s l i m w o r l d is headed. O u r rage has smoldered beneath the sands too long. Soon i t w i l l erupt." Over dinner, I heard a great deal about Ayatollah R u h o l l a h K h o m e i n i . Farhad a n d his father made it clear that they d i d not support his fanatical S h i i s m , but they were obviously impressed by the i n roads he h a d made against the shah. They t o l d me that this cleric, whose given name translates to "inspired of God," was b o r n into a family of dedicated Shiite scholars i n a village near Tehran, i n 1902. 1

K h o m e i n i h a d made it a point not to become involved i n the Mossadegh-shah struggles of the early 1950s, but he actively opposed the shah i n the 1960s, criticizing the ruler so adamantly that he was banished to Turkey, then to the Shiite holy city of A n Najaf i n Iraq, where he became the acknowledged leader of the opposition. H e sent out letters, articles, a n d tape-recorded messages urging Iranians to rise up, overthrow the shah, a n d create a clerical state. Two days after that dinner w i t h F a r h a d a n d his parents, news came out of Iran of bombings a n d riots. Ayatollah K h o m e i n i and the mullahs h a d begun the offensive that w o u l d soon give them control. After that, things happened fast. T h e rage Farhad's father h a d described exploded i n a violent Islamic uprising. T h e shah fled his country for Egypt i n January 1979, and then, diagnosed with cancer, headed for a N e w York H o s p i t a l . Followers of the Ayatollah K h o m e i n i demanded his return. In November 1979, a militant Islamic m o b seized the U n i t e d States Embassy i n Tehran a n d held fifty-two A m e r i c a n hostages for the next 444 days. President Carter attempted to negotiate the release of the hostages. W h e n this failed, he authorized a m i l i t a r y rescue mission, launched i n A p r i l 1980. It was a disaster, a n d it turned out 2

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to be the h a m m e r that w o u l d drive the final nail into Carter's p r e s i dential coffin. Tremendous pressure, exerted by U.S. commercial a n d political groups, forced the cancer-ridden shah to leave the U n i t e d States. F r o m the day he fled Tehran he h a d a difficult time finding sanctuary : all his former friends shunned h i m . However, General Torrijos exhibited his customary compassion a n d offered the shah asylum i n Panama, despite a personal dislike of the shah's politics. T h e shah arrived a n d received sanctuary at the very same resort where the new P a n a m a Canal Treaty h a d so recently been negotiated. The mullahs demanded the shah's return i n exchange for the hostages held i n the U.S. Embassy. Those i n Washington w h o h a d opposed the C a n a l Treaty accused Torrijos of corruption a n d c o l l u sion with the shah, a n d of endangering the lives of U.S. citizens. They too demanded that the shah be t u r n e d over to Ayatollah K h o m e i n i . Ironically, u n t i l only a few weeks earlier, many of these same people had been the shah's staunchest supporters. The once-proud K i n g of Kings eventually returned to Egypt, where he died of cancer. 7

Doc's prediction came true. M A I N lost millions of dollars i n Iran, as d i d m a n y of our competitors. Carter lost his b i d for reelection. T h e R e a g a n - B u s h administration m a r c h e d into Washington w i t h promises to free the hostages, to b r i n g dow n the mullahs, to return democracy to Iran, a n d to set straight the Panama Canal situation. T

For me, the lessons were irrefutable. Iran illustrated beyond any doubt that the U n i t e d States was a nation laboring to deny the t r u t h of our role i n the world. It seemed incomprehensible that we could have been so misinformed about the shah and the tide of hatred that had surged against h i m . E v e n those o f us i n companies like M A I N , w h i c h h a d offices and personnel in the country, h a d not k n o w n . I felt certain that the N S A a n d the C I A must have seen what h a d been so obvious to Torrijos even as far back as m y meeting w i t h h i m i n 1972, but that our o w n intelligence community had intentionally encouraged us all to close our eyes.

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CHAPTER

Colombia: Keystone of Latin America

W h i l e Saudi A r a b i a , Iran, and P a n a m a offered fascinating a n d d i s turbing studies, they also stood out as exceptions to the rule. Due to vast o i l deposits i n the first two a n d the Canal i n the t h i r d , they d i d not fit the n o r m . Colombia's situation was more typical, a n d M A I N was the designer a n d lead engineering f i r m on a huge hydroelectric project there. A C o l o m b i a n college professor w r i t i n g a book o n the history of P a n - A m e r i c a n relations once told me that Teddy Roosevelt h a d appreciated the significance of his country. P o i n t i n g at a map, the U . S . president a n d former R o u g h Rider reportedly described C o l o m b i a as "the keystone to the arch of South America." I have never verified that story; however, it is certainly true that o n a m a p C o l o m b i a , poised at the top of the continent, appears to h o l d the rest of the continent together. It connects all the southern countries to the Isthmus of P a n a m a and therefore to both Central a n d N o r t h A m e r i c a . Whether Roosevelt actually described C o l o m b i a i n those terms or not, he was only one of m a n y presidents who understood its pivotal position. F o r nearly two centuries, the U n i t e d States has viewed C o l o m b i a as a keystone â&#x20AC;&#x201D; or perhaps more accurately, as a portal into the southern hemisphere for both business a n d politics. The country also is endowed w i t h great natural beauty: spectacular p a l m - l i n e d beaches on both the Atlantic and Pacific coasts, m a jestic mountains, pampas that rival the Great Plains of the N o r t h A m e r i c a n Midwest, and vast rain forests rich i n biodiversity. T h e

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people, too, have a special quality, c o m b i n i n g the physical, cultural, and artistic traits of diverse ethnic backgrounds ranging from the local Taironas to imports from Africa, A s i a , Europe, and the M i d d l e East. Historically, C o l o m b i a has played a crucial role i n L a t i n A m e r i can history and culture. D u r i n g the colonial period, C o l o m b i a was the seat of the viceroy for all Spanish territories n o r t h of Peru and south of Costa R i c a . The great fleets of gold galleons set sail f r o m its coastal city- of Cartagena to transport priceless treasures from as far south as Chile and A r g e n t i n a to ports i n Spain. M a n y of the critical actions i n the wars for independence occurred i n C o l o m b i a ; for example, forces under SimĂłn BolĂvar were victorious over Spanish royalists at the pivotal Battle of BoyacĂĄ, i n 1819. In modern times, C o l o m b i a has h a d a reputation for producing some of Latin America's most brilliant writers, artists, philosophers, and other intellectuals, as well as fiscally responsible and relatively d e m ocratic governments. It became the m o d e l for President Kennedy's nation-building programs throughout L a t i n America. Unlike Guatemala, its government was not tarnished w i t h the reputation of being a C I A creation, and unlike Nicaragua, the government was an elected one, w h i c h presented an alternative to both right-wing dictators and Communists. Finally, unlike so many other countries, i n c l u d i n g powerful Brazil and Argentina, Colombia d i d not mistrust the U n i t e d States. The image of C o l o m b i a as a reliable ally has continued, despite the blemish of its d r u g cartels. 1

T h e glories of Colombia's history, however, are counterbalanced by hatred and violence. The seat of the Spanish viceroy was also home to the Inquisition. Magnificent forts, haciendas, and cities were constructed over the bones of Indian and A f r i c a n slaves. The treasures carried on the gold galleons, sacred objects and masterpieces of art that h a d been melted down for easy transport, were ripped from the hearts of ancient peoples. The p r o u d cultures themselves were l a i d to waste by conquistador swords and diseases. M o r e recently, a controversial presidential election i n 1945 resulted i n a deep division between political parties and l e d to L a V i o l e n c i a (1948-1957), d u r i n g w h i c h more than two h u n d r e d thousand people died. Despite the conflicts and ironies, both Washington and W a l l Street historically have viewed C o l o m b i a as an essential factor i n promoting P a n - A m e r i c a n political and commercial interests. This is due to several factors, i n addition to Colombia's critical geographic

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location, including the perception that leaders throughout the h e m i sphere look to Bogota for inspiration and guidance, and the fact that the country is both a source of many products purchased i n the U n i t e d States â&#x20AC;&#x201D; coffee, bananas, textiles, emeralds, flowers, o i l , a n d cocaine â&#x20AC;&#x201D; and a market for our goods a n d services. One of the most important services we sold to Colombia, d u r i n g the late twentieth century was engineering a n d construction expertise. C o l o m b i a was typical of many places where I worked. It was relatively easy to demonstrate that the country could assume vast amounts of debt a n d then repay these debts from the benefits realized both from the projects themselves a n d f r o m the country's natural resources. T h u s , huge investments i n electrical power grids, highways, a n d telecommunications w o u l d help C o l o m b i a open up its vast gas and oil resources and its largely undeveloped A m a z o n i a n territories; these projects, i n t u r n , w o u l d generate the income necessary to pay off the loans, plus interest. That was the theory. However, the reality, consistent w i t h our true intent around the w o r l d , was to subjugate Bogota, to further the global empire. M y job, as it h a d been i n so m a n y places, was to present the case for exceedingly large loans. C o l o m b i a d i d not have the benefit of a Torrijos; therefore, I felt I h a d no choice but to develop inflated economic a n d electric l o a d forecasts. W i t h the exception of the occasional bouts of guilt over m y job, C o l o m b i a became a personal refuge for me. A n n and I had spent a couple of months there i n the early 1970s, and h a d even made a down payment o n a small coffee farm located i n the mountains along the Caribbean coast. I t h i n k our t i m e together d u r i n g that period came as close as anything could to healing the wounds we h a d inflicted on each other over the preceding years. Ultimately, however, the wounds went too deep, and it was not until after our marriage fell apart that I became truly acquainted w i t h the country. D u r i n g the 1970s, M A I N h a d been awarded a number of contracts to develop various infrastructure projects, including a network of hydroelectric facilities a n d the distribution systems to transport the electricity from deep i n the jungle to cities h i g h i n the m o u n tains. I was given an office i n the coastal city of Barranquilla, and it was there, i n 1977, that I met a beautiful C o l o m b i a n w o m a n w h o w o u l d become a powerful agent of change i n m y life.

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Paula h a d long b l o n d hair and striking green eyes â&#x20AC;&#x201D; not what most foreigners expect i n a C o l o m b i a n . H e r mother and father h a d emigrated from northern Italy, a n d i n keeping with her heritage, she became a fashion designer. She went a step further, however, and built a small factory where her creations were transformed into clothes, w h i c h she then sold at upscale boutiques throughout the country, as well as i n P a n a m a a n d Venezuela. She was a deeply compassionate person who helped me get through some of the personal t r a u m a of my broken marriage and begin dealing with some of m y attitudes toward women, w h i c h had affected me so negatively. She also taught me a great deal about the consequences of the actions I took i n m y job. As I have said before, life is composed of a series of coincidences over w h i c h we have no control. F o r me, those i n c l u d e d being raised as the son of a teacher at an all-male prep school i n rural N e w H a m p shire, meeting A n n a n d her Uncle Frank, the V i e t n a m War, a n d meeting E i n a r Greve. However, once we are presented w i t h such coincidences, we face choices. H o w we respond, the actions we take i n the face of coincidences, makes a l l the difference. F o r example, excelling at that school, m a r r y i n g A n n , entering the Peace Corps, a n d choosing to become an economic h i t m a n -â&#x20AC;&#x201D; all these decisions h a d brought me to m y current place i n life. Paula was another coincidence, a n d her influence w o u l d lead me to take actions that changed the course of my life. U n t i l I met her, I h a d pretty m u c h gone along w i t h the system. I often f o u n d myself questioning what I was doing, sometimes feeling guilty about it, yet I always discovered a way to rationalize staving i n the system. Perhaps Paula just happened along at the right time. It is possible that I w ould have taken the plunge anyway, that my experiences i n Saudi A r a b i a , Iran, a n d P a n a m a w o u l d have nudged me into action. But I a m certain that even as one w o m a n , Claudine, h a d been i n s t r u mental i n persuading me to j o i n the ranks of E H M s , another, Paula, was the catalyst I needed at that time. She convinced me to go deep inside myself a n d see that I w o u l d never be happy as long as I c o n tinued i n that role. r

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12.3

CHAPTER

American Republic versus Global Empire

" I ' l l be frank," Paula said one day, while we were sitting i n a coffee shop. "The Indians and all the farmers who live along the river you're d a m m i n g hate you. E v e n people i n the cities, who aren't directly affected, sympathize w i t h the guerrillas who've been attacking your construction camp. Your government calls these people Communists, terrorists, and narcotics traffickers, but the truth is they're just people w i t h families who live o n lands your company is destroying." I h a d just t o l d her about M a n u e l Torres. H e was an engineer e m ployed by M A I N and one of the men recently attacked by guerrillas at our hydroelectric d a m construction site. M a n u e l was a C o l o m b i a n citizen who had a job because of a U.S. Department of State rule prohibiting us from sending U.S. citizens to that site. We referred to it as the Colombians are Expendable doctrine, and it symbolized an attitude I h a d grown to hate. M y feelings toward such policies were m a k i n g i t increasingly difficult for me to live w i t h myself. "According to M a n u e l , they fired A K - 4 7 s into the air a n d at his feet," I t o l d Paula. " H e sounded c a l m w h e n he told me about it, but I k n o w he was almost hysterical. They didn't shoot anyone. Just gave them that letter and sent them downriver i n their boats." " M y God," Paula exclaimed. "The poor m a n was terrified." " O f course he was." I t o l d her that I had asked M a n u e l whether he thought they were F A R C or M - 1 9 , referring to two of the most i n f a mous C o l o m b i a n guerrilla groups. "And?"

124.

" H e said, neither. But he told me that he believes what they said in that letter." Paula picked up the newspaper I h a d brought and read the letter aloud. "'We, who w o r k every day just to survive, swear o n the b l o o d of our ancestors that we w i l l never allow dams across our rivers. W e are simple Indians a n d mestizos, but we w o u l d rather die than stand by as our l a n d is flooded. W e w a r n our C o l o m b i a n brothers: stop w o r k i n g for the construction companies.'" She set the paper down. " W h a t d i d y o u say to h i m ? " I hesitated, but only for a moment. "I h a d no choice. I had to toe the company line. I asked h i m i f he thought that sounds like a letter a farmer w o u l d write." She sat watching me, patiently. " H e just shrugged." O u r eyes met. " O h , Paula, I detest myself for playing this role." "What d i d you do next?" she pressed. "I s l a m m e d my fist on the desk. I i n t i m i d a t e d h i m . I asked h i m whether farmers w i t h A K - 4 7 s made any sense to h i m . T h e n I asked i f he knew w h o invented the A K - 4 7 " T

" D i d he?" "Yes, but I could h a r d l y hear his answer. A Russian,' he said. O f course, I assured h i m that he was right, that the inventor h a d been a C o m m u n i s t named Kalashnikov, a highly decorated officer i n the R e d Army. I brought h i m around to understand that the people who wrote that note were Communists." "Do you believe that?" she asked. H e r question stopped me. H o w could I answer, honestly? I recalled Iran a n d the time Y a m i n described me as a m a n caught between two worlds, a m a n i n the middle. In some ways, I wished I had been i n that camp when the guerrillas attacked, or that I was one of the guerrillas. A n odd feeling crept over me, a sort of jealous} for Y a m i n and Doc and the C o l o m b i a n rebels. These were men w i t h convictions. T h e y h a d chosen real worlds, not a no-man's territory somewhere between. 7

"I have a job to do," I said at last. She smiled gently. "I hate it," I continued. I thought about the m e n whose images had come to me so often over the years, T o m Paine a n d other R e v o lutionary W a r heroes, pirates and frontiersmen. They stood at the

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edges, not i n the middle. They had taken stands and lived w i t h the consequences. "Every day I come to hate m y job a little more."' She took m y h a n d . "Your j o b ? " O u r eyes met and held. I understood the implication. "Myself." She squeezed my h a n d and nodded slowly. I felt an immediate sense of relief, just a d m i t t i n g it. " W h a t w i l l you do, J o h n ? " I h a d no answer. T h e relief turned into defensiveness. I s t a m mered out the standard justifications: that I was t r y i n g to do good, that I was exploring ways to change the system from w i t h i n , and — the old s t a n d b y — t h a t i f I quit, someone even worse w o u l d fill my shoes. But I could see from the way she watched me that she was not buying it. Even worse, I knew that I was not buying it either. She had forced me to understand the essential t r u t h : it was not m y job, but me, that was to blame. " W h a t about you?" I asked at last. " W h a t do you believe?" She gave a little sigh and released my hand, asking, ' Y o u t r y i n g to change the subject?" I nodded. "Okay," she agreed. " U n d e r one condition. T h a t w e ' l l return to it another day" She picked up a spoon and appeared to examine it. "I k n o w that some of the guerrillas have trained i n Russia and China." She lowered the spoon into her cafe c o n l e c h e , stirred, and then slowly l i c k e d the spoon. " W h a t else can they do? They need to learn about modern weapons and how to fight the soldiers who've gone through your schools. Sometimes they sell cocaine i n order to raise money for supplies. H o w else can they buy guns? They're up against terrible odds. Your W o r l d B a n k doesn't help t h e m defend themselves. In fact, it forces t h e m into this position." She took a sip of coffee. "I believe their cause is just. The electricity will help only a few, the wealthiest Colombians, and thousands w i l l die because the fish and water are poisoned, after you b u i l d that dam of yours." H e a r i n g her speak so compassionately about the people who opposed us — me — caused m y flesh to crawl. I found myself clawing at my forearms. " H o w do you k n o w so m u c h about the guerrillas?" Even as I asked it, I had a s i n k i n g feeling, a premonition that I d i d not want to k n o w the answer.

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"I went to school with some of t h e m " she said. She hesitated, pushed her cup away. " M y brother joined the movement." There it was. I felt absolutely deflated. I thought I k n e w all about her, but this... I h a d the fleeting image of a m a n coming home to find his wife i n bed w i t h another man. " H o w come you never told me?" "Seemed irrelevant. W h y w o u l d I? It isn't something I brag about." She paused. "I haven't seen h i m for two years. H e has to be very careful." " H o w do you k n o w he's alive?" "I don't, except recently the government put h i m on a wanted list. That's a good sign." I was fighting the urge to be judgmental or defensive. I hoped she could not discern my jealousy. " H o w d i d he become one of them?" I asked. Fortunately, she kept her eyes on the coffee cup. "Demonstrating outside the offices of an oil company â&#x20AC;&#x201D; Occidental, I think. H e was protesting drilling on indigenous lands, i n the forests of a tribe facing extinctionâ&#x20AC;&#x201D;him and a couple dozen of his friends. They were attacked by the army, beaten, a n d t h r o w n into prison â&#x20AC;&#x201D; for doing nothing illegal, m i n d you, just standing outside that building waving placards and singing." She glanced out a nearby window. "They kept h i m i n j a i l for nearly six months. H e never d i d tell us what happened there, but when he came out he was a different person." It was the first of m a n y similar conversations w i t h Paula, a n d I now k n o w that these discussions set the stage for what was to follow. M y soul was t o r n apart, yet I was still r u l e d by my wallet and by those other weaknesses the N S A h a d identified w h e n they profiled me a decade earlier, i n 1968. By forcing me to see this and to c o n front the deeper feelings behind my fascination w i t h pirates and other rebels, Paula helped me along the trail toward salvation. Beyond m y own personal dilemmas, m y times i n C o l o m b i a also helped me comprehend the distinction between the old A m e r i c a n republic and the new global empire. The republic offered hope to the w o r l d . Its foundation was m o r a l a n d philosophical rather than materialistic. It was based on concepts of equality and justice for all. But it also could be pragmatic, not merely a Utopian d r e a m but also a living, breathing, magnanimous entity. It could open its arms to

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127

shelter the downtrodden. It was an inspiration a n d at the same time a force to reckon w i t h ; i f needed, it could swing into action, as it had d u r i n g W o r l d W a r II, to defend the principles for w h i c h it stood. The very institutions — the big corporations, banks, and government bureaucracies — that threaten the republic could be used instead to institute fundamental changes i n the world. Such institutions possess the communications networks and transportation systems necessary to end disease, starvation, a n d even wars — if only they could be convinced to take that course. T h e global empire, on the other hand, is the republic's nemesis. It is self-centered, self-serving, greedy, a n d materialistic, a system based on mercantilism. L i k e empires before, its arms open only to accumulate resources, to grab everything i n sight a n d stuff its i n s a tiable maw. It w i l l use whatever means it deems necessary to help its rulers gain more power and riches. O f course, i n l e a r n i n g to understand this distinction I also developed a clearer sense of my own role. Claudine h a d warned me; she h a d honestly outlined what w o u l d be expected of me i f I accepted the job M A I N offered. Yet, it took the experience of w o r k i n g i n countries like Indonesia, Panama, Iran, and C o l o m b i a i n order for me to understand the deeper implications. A n d it took the patience, love, and personal stories of a w o m a n like Paula. I was loyal to the A m e r i c a n republic, but what we were perpetrating through this new, highly subtle form of i m p e r i a l i s m was the financial equivalent of what we h a d attempted to accomplish m i l i tarily i n V i e t n a m . If Southeast A s i a h a d taught us that armies have limitations, the economists h a d responded by devising a better plan, and the foreign a i d agencies a n d the private contractors w h o served t h e m (or, more appropriately, were served by them) h a d become proficient at executing that plan. In countries on every continent, I saw h o w m e n a n d w o m e n w o r k i n g for U.S. corporations — though not officially part of the E H M network—participated i n something far more pernicious than anything envisioned i n conspiracy theories. L i k e many of M A I N ' s engineers, these workers were b l i n d to the consequences of their actions, convinced that the sweatshops a n d factories that made shoes and automotive parts for their companies were helping the poor climb out of poverty, instead of simply burying them deeper i n a type

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Part III: 1975-1981

of slavery reminiscent of medieval manors and southern plantations. Like those earlier manifestations of exploitation, modern serfs or slaves were socialized into believing they were better off than the u n f o r t u nate souls who lived on the margins, i n the dark hollows of Europe, i n the jungles of Africa, or i n the wilds of the A m e r i c a n frontier. The struggle over whether I should continue at M A I N or should quit had become an open battlefield. There was no doubt that m y conscience wanted out, but that other side, what I liked to t h i n k of as my business-school persona, was not so sure. M y own empire kept expanding; I added employees, countries, a n d shares of stock to m y various portfolios a n d to m y ego. I n addition to the seduction o f the money a n d lifestyle, a n d the adrenaline h i g h of power, I often recalled Claudine w a r n i n g rne that once I was i n I could never get out. O f course, Paula sneered at this. " W h a t w o u l d she k n o w ? " I pointed out that Claudine h a d been right about a great many things. "That was a long time ago. l i v e s change. Anyway, what difference does it make? You're not happy w i t h yourself. W h a t can Claudine or anyone else do to make things worse than that?" It was a refrain Paula often came back to, a n d I eventually agreed. I admitted to her a n d to myself that a l l the money, adventure, a n d glamour no longer justified the t u r m o i l , guilt, a n d stress. A s a M A I N partner, I w as becoming wealthy, a n d I k n e w that i f I stayed longer I w o u l d be permanently trapped. T

One day, w h i l e we were strolling along the beach near the old Spanish fort at Cartagena, a place that h a d endured countless pirate attacks, Paula hit u p o n an approach that h a d not occurred to me. " W h a t i f y o u never say anything about the things you k n o w ? " she asked. "You mean... just keep quiet?" "Exactly. Don't give t h e m an excuse to come after you. I n fact, give t h e m every reason to leave you alone, to not m u d d y the water." It made a great deal of sense â&#x20AC;&#x201D; I wondered w h y it never occurred to me before. I w o u l d not write books or do anything else to expose the truth as I h a d come to see it. I w o u l d not be a crusader; instead, I w o u l d just be a person, concentrate on enjoying life, travel for pleasure, perhaps even start a family w i t h someone like Paula. I h a d h a d enough; I simply wanted out.

American Republic versus Global Empire

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"Everything Claudine taught you is a deception," P a u l a added. "Your life's a lie." She smiled condescendingly. "Have you looked at your own rĂŠsumĂŠ recently?" 1 admitted that I h a d not. "Do," she advised. "I read the Spanish version the other day. If it's anything like the English one, I t h i n k you'll find it very interesting."

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Part IN: 1975-1981

CHAPTER

The Deceptive Résumé

W h i l e I was i n Colombia, w o r d arrived that Jake Dauber h a d retired as M A I N s president. A s expected, c h a i r m a n a n d C E O M a c H a l l appointed B r u n o as Dauber's replacement. The phone lines between Boston a n d B a r r a n q u i l l a went crazy. Everyone predicted that I, too, w o u l d soon be promoted; after ali, I was one of Bruno's most trusted proteges. These changes a n d rumors were an added incentive for me to review m y own position. W h i l e still i n Colombia, I followed Paula's a d vice and read the Spanish version of m y résumé. It shocked me. Back i n Boston, I pulled out both the E n g l i s h original a n d a November 1978 copy of M A I N L I N E S , the corporate magazine; that edition featured me i n an article titled, "Specialists Offer M A I N ' s Clients N e w Services." (See pages 133 a n d 134.) I once h a d taken great pride i n that résumé a n d that article, and yet now, seeing them as Paula d i d , I felt a growing sense of anger and depression. The material i n these documents represented i n t e n tional deceptions, i f not lies. A n d these documents carried a deeper significance, a reality that reflected our times and reached to the core of our current march to global empire: they epitomized a strategy calculated to convey appearances, to shield an underlying reality. In a strange way, they symbolized the story of m y life, a glossy veneer covering synthetic surfaces. O f course, it d i d not give me any great comfort to k n o w that I h a d to take m u c h of the responsibility for what was included i n my

131

resume. A c c o r d i n g to standard operating procedures, I was required to constantly update both a basic resume and a file w i t h pertinent backup information about clients served and the type of work done. If a marketing person or project manager wanted to include me i n a proposal or to use my credentials i n some other way, he could massage this basic data i n a m a n n e r that emphasized his particular needs. For instance, he m i g h t choose to highlight my experience i n the M i d d l e East, or i n m a k i n g presentations before the W o r l d B a n k a n d other m u l t i n a t i o n a l forums. Whenever this was done, that person was supposed to get m y approval before actually publishing the revised resume. However, since like m a n y other M A I N employees I traveled a great deal, exceptions were frequently made. T h u s , the resume Paula suggested I look at, a n d its E n g l i s h counterpart, were completely new to me, although the i n f o r m a t i o n certainly was i n cluded i n m y file. A t first glance, m y resume seemed innocent enough. U n d e r E x p e r i e n c e , it stated that I h a d been i n charge of major projects i n the U n i t e d States, A s i a , L a t i n A m e r i c a , a n d the M i d d l e East, and i t p r o vided a l a u n d r y list of the types of projects: development planning, economic forecasting, energy d e m a n d forecasting, a n d so on. T h i s section ended by describing m y Peace Corps work i n Ecuador; h o w ever, it omitted any reference to the Peace Corps itself, leaving the impression that I h a d been the professional manager of a construction materials company, instead of a volunteer assisting a small cooperative composed of illiterate A n d e a n peasant brick makers. F o l l o w i n g that was a long list of clients. This list i n c l u d e d the I n ternational B a n k for Reconstruction a n d Development (the official name of the W o r l d B a n k ) ; the A s i a n Development B a n k ; the government of K u w a i t ; the Iranian M i n i s t r y of Energy; the A r a b i a n A m e r i c a n O i l C o m p a n y of Saudi A r a b i a ; Instituto de Recursos Hidr谩ulicos y Electrificaci贸n; Perusahaan U m u m Listrik Negara; and many others. But the one that caught m y attention was the final entry: U . S . Treasury Department, K i n g d o m of Saudi Arabia. I was amazed that such a listing h a d ever made it to print, even though it was obviously part of my file. Setting aside the resume for a moment, I t u r n e d to the M A I N L I N E S article. I clearly recalled my interview w i t h its author, a very talented and well-intentioned young w o m a n . She h a d given it to me for my approval before publishing it. I remembered feeling gratified

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Part III: 1975-1981

EXPERIENCE

JOHN M. PERKINS

M h n M - Perkins is M a n j a r of the Economics ] )[*:,;irnnen t of the Power and Einiramnenta! S> items

S ^ r e -omine M A I N , M r . Perkins has been in ch.irse of ,,v,¡nr projects in the United Stales. Asia. Latin \_ y 11J the Middle East. This work has included .[.>-.-cl<>pn';?ul planning, economic forecasting, energy . i . - m ^ l ioieeasting. marketing studies, plant siting. T

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Bachelor of Aits m Business Administration Boston University Post Graduate Studies Model Building, Engineering E c o n o m i c ; . Econometric?. Probability Methods L A N G U A G E S

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Arabia r - A m e r icari Oïl C o m p a n y . Saudi Arabia

Asian Development

Boise Cascade Corporation

City Service Corporation

Dayton Power & Light Company

General Elevine C o m p a r s

Government or' Kuwait

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Development

PUBLICATIONS " A Markov Process Applied to Forecasting the Demand for Electricity"

" A Mae i o Approach to Energy Forecasting '

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Ministry of Energy. Iran

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m The Deceptive Résumé

133

Specialists offer VIAIN's clients new services jy Pauline Duellette L o o < i n r j o v e r [he 3 c e s b p " ine he desks.. T's easy to ILI tknt I c o n c r i i c s a n d R e g i o n a l P l a n n i n g is : n o of i h e m o s t r e c e n t l y f o r m e d »nd r g o i d l y Q'C-w:ng d i s c i p l i n o * at v l A I N . ì c date, m e r e are a b o u t 2 C •cecia i5ts in t m s gre-up. n a t n e e d j v e r a seven-year period. These 'pot" rtHsts ircf-jde net only •co^omiSts, but :.:ity p l a n r ers, ì 0rriogry p he r s, n a r ke t s p e c is I :s~s .nd N ' A I N ' s f r s i sociologist. W h ii e several people w^e n f L e n t i a l r getting the e c o n o m i c s ; r o u p s t a r t e d , it n a s i c a ! ly c a m e i b o u t r m o u g h t h e e f f o r t s of o n e r a n , J o h n Perkins, ^vho is n e w toad of t h e c / o u p H i r e d as an a s s i s ' y n t to t h e h e a d c a d f o r e c a s t e r in J a n u s r y , 1971.. ohp was one of the f e w o o n o r o i s t s w o r k ng f o r M A I N s i he t r i e . F o r his " r s : a s s i g n m e n t , , e w a s s e n : a s p a t d an T - m a r earn t c d o a n e l e c t r i c i t y d e m a n d tudy n Indonesia. J

" ~ h e y w a n t e d t c see if ! c e d e ^ r v i v e t h e r e f o r t h r e e m o n T h s , " " ho aid l a u g h i r g -emuniseent y . B u t his b a c k g r o u n d , J o h n h a d nc r o u b l e " s u r v i y m g , " H e h a d just pent ;hree years in E c u a d o r w i t h a Construct ion M a t e ? ia s Co-op i3ip no t h e Q u e c h u a I n d . a n s , d i r e c t ascendants of the mcas, Ire

MAINLINES

134

Part 111: 1975-1981

Indians, J c h n sa d. were b e ng e x p l o i t e d a) d i e i r w o ' k as hr c k m a k e r s so he w a s a s k e o b y c r E c u a d o r a n agency to forni a co-op. H e t h e n -ented a t r u c k t o h e i c t h e m sei^ t h e ^ b r i c k s c ' e e i l v t o t h e CLV"iSLiiF'e s, A s a res j i t , p r o f i t s •apid y i n<;i e a s e d by 6 0 % - T -e o r o M S were divided among m e m e m b e r s o f \\)<r. o . x r . i w h i c m , a f t e r Th years, redded 200 famines. 11 w a s e u r m g t n i s t i m e t h a t J o h n e r < i n s rnet Einar Greve la f o r m e r e m p l o y e e ) w h o w a s w e d k ine m the t o w n d "aute, E c u a d o r , o n a hydroelectric project "or M A I N . The t w o became H e n d ' y anc., through continual cO espondence, J o h n was offered a position w i t h MAIN. :

Perkins

r r

A b o u t a year a l e , J o h n became " h e h e a d a a d " G r e c a s t e a n d , as " h e demands f om clients and inst Tut o n s seen as t h e W c r l d tì5rik grow, be read/ed that more economists were needed a ' M A : N , "VVh I e V A I N s an e n g i n e e r i n g f i r n , " he said, 'the clients w e r e Telhng u s w e h a c t o oe m o r e t h a n t h a t . " H e h i r e d m o r e e c o n o m i s t s >n 1973 t o m e e t t h e c l i e n t s ' n e e d s a°d, as a r e s u l t , formed the d i s a p i r e which brought h i m the title of C h i d Economist, ^ohn's latest p r o j e c t involves :

agricultural d e v e l o p m e n t m FVjnona f r o m w n e e he reeen: y returned a f t e r a m o n t h ' s s t s v . = r VVH> in P a n a m a that IV A I N c o n d u c e d its r s t sot; i l l o g i c a l study vn o u gh Martha Hayes, MAIN'S f.rsr s o c i o i o g st. V l a m s p e n t IV, m o n t h s r P a n a m a t c d e t e r m i n e the i m e a c t o t h e o r o j e e : o r p e o p e's t yes a n d cultures. S p e c i a l i s t s in ag^oc d u r e ana other reialco e l w e r e also bred in c o r j u n c t i o r w i h th 1 s study, r

;

T h e e x p a n s i o n o Eoo-^omncs a n c Regional P l a n n i n g has b e e n fast o a c c d , v e t J c o n Seels n e has b e e n f u c k y in that e a r n m d w d u a l h i r e d has been a hard wor<my c r o + e s s i o n a i A s h e s p o k e ro m e f^om a c r o s s h i s d e s k , t h e m t e e s t a n d s u p p o r t e h c l d s =or "¡5 staff was e v i d e n t a ' d a d m i r a b l e . !

N o v e m b e r 1978

that she h a d painted such a flattering portrait of me, and I i m m e d i ately approved it. Once again, the responsibility fell on my shoulders. The article began: L o o k i n g over the faces behind the desks, it's easy to tell that Economics and Regional P l a n n i n g is one of the most recently formed and rapidly growing disciplines at M A I N . . . W h i l e several people were influential i n getting the economics group started, it basically came about through the efforts of one m a n , J o h n Perkins, who is now head of the group. H i r e d as an assistant to the head load forecaster i n January, 1971, J o h n was one of the few economists w o r k ing for M A I N at the time. For his first assignment, he was sent as part of an 11-man team to do an electricity demand study i n Indonesia. The article briefly summarized my previous w o r k history, described h o w I h a d "spent three years i n Ecuador," and then c o n t i n ued w i t h the following: It was d u r i n g this time that J o h n Perkins met E i n a r Greve (a former employee) [he had since left M A I N to become president of the Tucson Gas & Electric C o m pany] who was w o r k i n g i n the t o w n of Paute, Ecuador, on a hydroelectric project for M A I N . The two became friendly and, through continual correspondence, J o h n was offered a position w i t h M A I N . A b o u t a year later, J o h n became the head load forecaster and, as the demands from clients and institutions such as the W o r l d B a n k grew, he realized that more economists were needed at M A I N . N o n e o f the statements i n either document were outright lies â&#x20AC;&#x201D; the backup for both documents was on the record, i n my file; h o w ever, they conveyed a perception that I now found to be twisted and sanitized. A n d i n a culture that worships official documents, they perpetrated something that was even more sinister. Outright lies can be refuted. Documents like those two were impossible to refute

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because they were based on glimmers of t r u t h , not open deceptions, and because they were produced by a corporation that h a d earned the trust of other corporations, international banks, and governments. T h i s was especially true of the resume because it was an official document, as opposed to the article, w h i c h was a bylined interview in a magazine. T h e M A I N logo, appearing on the bottom o f the résumé a n d o n the covers of all the proposals and reports that résumé was likely to grace, carried a lot of weight i n the w o r l d of i n t e r n a tional business; it was a seal of authenticity that elicited the same level of confidence as those stamped o n diplomas a n d framed certificates hanging i n doctors' a n d lawyers' offices. These documents portrayed me as a very competent economist, head of a department at a prestigious consulting firm, who was traveling around the globe conducting a broad range of studies that w o u l d make the w o r l d a more civilized a n d prosperous place. T h e deception was not i n what was stated, but i n what was omitted. I f I put on an outsider's hat — took a purely objective look — I h a d to admit that those omissions raised many questions. For example, there was no mention of m y recruitment by the N S A or of E i n a r Greve's connection w i t h the A r m y a n d his role as an N S A liaison. There obviously was no discussion of the fact that I h a d been under tremendous pressure to produce highly inflated economic forecasts, or that m u c h of my j o b revolved around arranging huge loans that countries like Indonesia and P a n a m a could never repay. There was no praise for the integrity of m y predecessor, H o w a r d Parker, nor any acknowledgment that I became the head load forecaster because I was w i l l i n g to provide the biased studies my bosses wanted, rather than — l i k e H o w a r d — saying what I believed was true a n d getting fired as a result. M o s t puzzling was that final entry, under the list of m y clients: U.S. Treasury Department, K i n g d o m of Saudi A r a b i a . I kept returning to that line, a n d I wondered h o w people w o u l d interpret it. They might w e l l ask what is the connection between the U.S. Department of the Treasury and Saudi A r a b i a . Perhaps some w o u l d take i t as a typo, two separate lines erroneously compressed into one. M o s t readers, though, w o u l d never guess the truth, that it had been included for a specific reason. It was there so that those i n the inner circle of the w o r l d where I operated w o u l d understand that I had been part of the team that crafted the deal of the century, the

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deal that changed the course of w o r l d history but never reached the newspapers. I helped create a covenant that guaranteed continued oil for A m e r i c a , safeguarded the rule of the House of Saud, a n d assisted i n the financing of O s a m a b i n L a d e n a n d the protection of international criminals like Uganda's I d i A m i n . T h a t single line i n my resume spoke to those i n the know. It said that M A I N ' S chief economist was a m a n w h o could deliver. The final paragraph of the M A I N L I N E S

article was a personal

observation by the author, a n d it struck a raw nerve: T h e expansion of Economics a n d Regional P l a n n i n g has been fast paced, yet J o h n feels he has been lucky i n that each individual h i r e d has been a h a r d - w o r k i n g professional. A s he spoke to me from across his desk, the interest and support he holds for his staff was evident a n d admirable. T h e fact was that I h a d never thought of myself as a b o n a fide economist. I h a d graduated w i t h a bachelor of science i n business administration from Boston University, emphasis on marketing. I h a d always been lousy i n mathematics a n d statistics. A t M i d d l e b u r y College, I h a d majored i n A m e r i c a n literature; w r i t i n g h a d come easily to me. M y status as chief economist a n d as manager of E c o nomics a n d Regional P l a n n i n g c o u l d not be attributed to my capabilities i n either economics or p l a n n i n g ; rather, it was a function of m y willingness to provide the types of studies a n d conclusions m y bosses a n d clients wanted, combined w i t h a natural acumen for persuading others through the w r i t t e n w o r d . I n addition, I was clever enough to hire very competent people, many w i t h master's degrees and a couple with P h D s , acquiring a staff who knew a whole lot more about the technicalities of m y business than I d i d . Small wonder that the author of that article concluded that "the interest and support he holds for his staff was evident and admirable." I kept these two documents and several other similar ones i n the top drawer of my desk, and I returned to t h e m frequently. A f t e r ward, I sometimes found myself outside my office, wandering among the desks of m y staff, l o o k i n g at those m e n and w o m e n who w o r k e d for me a n d feeling guilty about what I h a d done to them, a n d about the role we a l l played i n w i d e n i n g the gap between r i c h a n d poor. I

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thought about the people who starved each day while m y staff and I slept i n first-class hotels, ate at the finest restaurants, a n d built up our financial portfolios. I thought about the fact that people I trained h a d now j o i n e d the ranks of E H M s . I h a d brought t h e m i n . I h a d recruited t h e m a n d trained t h e m . B u t it h a d not been the same as when I joined. T h e w o r l d h a d shifted and the corporatocracy h a d progressed. W e h a d gotten better or more pernicious. The people who w o r k e d for me were a different breed f r o m me. There h a d been no N S A polygraphs or Claudines i n their lives. N o one h a d spelled it out for t h e m , what they were expected to do to carry o n the mission of global empire. They h a d never heard the t e r m economic h i t m a n or even E H M , nor had they been t o l d they were i n for life. They simply h a d learned from m y example and f r o m m y system of rewards and punishments. They k n e w that they were expected to produce the types of studies and results I wanted. Their salaries, Christmas bonuses, indeed their very jobs, depended on pleasing me. I, of course, h a d done everything I could imagine to lighten their burden. I h a d written papers, given lectures, a n d taken every possible opportunity to convince t h e m of the importance of optimistic forecasts, of huge loans, o f infusions o f capital that w o u l d spur G N P growth a n d make the w o r l d a better place. It h a d required less than a decade to arrive at this point where the seduction, the coercion, had taken a m u c h more subtle form, a sort of gentle style of b r a i n washing. N o w these m e n a n d w o m e n w h o sat at desks outside m y office overlooking Boston's Back Bay were going out into the w o r l d to advance the cause of global empire. In a very real sense, I h a d created t h e m , even as Claudine h a d created me. But unlike me, they had been kept i n the dark. M a n y nights I lay awake, t h i n k i n g , fretting about these things. Paula's reference to m y rĂŠsumĂŠ h a d opened a Pandora's box, a n d I often felt jealous of m y employees for their naivetĂŠ. I h a d i n t e n t i o n ally deceived them, a n d i n so doing, h a d protected t h e m from their own consciences. They d i d not have to struggle with the moral issues that haunted me. I also thought a great deal about the idea of integrity i n business, about appearances versus reality. Certainly, I told myself, people have deceived each other since the beginning of history. Legend and folklore are full of tales about distorted truths a n d fraudulent deals:

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cheating rug merchants, usurious moneylenders, a n d tailors w i l l i n g to convince the emperor that his clothes are invisible only to h i m . However, m u c h as I wanted to conclude that things were the same as they always h a d been, that the facade of m y M A I N resume and the reality b e h i n d it were merely reflections of h u m a n nature, I k n e w i n my heart this was not the case. Things h a d changed. I now understood that we have reached a new level of deception, one that w i l l lead to our o w n destruction — not only morally, but also p h y s i cally, as a culture — unless we make significant changes soon. The example of organized crime seemed to offer a metaphor. Mafia bosses often start out as street thugs. B u t over time, the ones who make it to the t o p transform their appearance. T h e y take to wearing impeccably tailored suits, o w n i n g legitimate businesses, a n d W T a p ping themselves i n the cloak of upstanding society. They support local charities and are respected by their communities. T h e y are quick to lend money to those i n desperate straits. L i k e the J o h n Perkins i n the M A I N resume, these men appear to be model citizens. However, beneath this p a t i n a is a trail of blood. W h e n the debtors cannot pay, hit m e n move i n to d e m a n d their p o u n d of flesh. If this is not granted, the jackals close i n w i t h baseball bats. Finally, as a last resort, out come the guns. I realized that my gloss as chief economist, head of Economics and Regional Planning, was not the simple deception of a rug dealer, not something of w h i c h a buyer can beware. It was part of a sinister system aimed not at outfoxing an unsuspecting customer, but rather at p r o m o t i n g the most subtle and effective f o r m of i m p e r i a l i s m the w o r l d has ever k n o w n . Every one of the people on m y staff also held a title — financial analyst, sociologist, economist, lead economist, econometrician, shadow pricing expert, and so forth — and yet none of those titles indicated that every one of them was, i n his or her own way, an E H M , that every one of t h e m was serving the interests of global empire. N o r d i d the fact of those titles among my staff suggest that we were just the tip of the iceberg. E v e r y major international company — from ones that marketed shoes a n d sporting goods to those that manufactured heavy equipment — h a d its own E H M equivalents. T h e march h a d begun a n d it was rapidly encircling the planet. The hoods h a d discarded their leather jackets, dressed up i n business suits, and taken o n an air of respectability. M e n and w o m e n were

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descending f r o m corporate headquarters i n N e w York, Chicago, San Francisco, L o n d o n , and Tokyo, streaming across every continent to convince corrupt politicians to allow their countries to be shackled to the corporatocracy, and to induce desperate people to sell their bodies to sweatshops and assembly lines. It was disturbing to understand that the unspoken details behind the written words of m y resume and of that article defined a world of smoke and mirrors intended to keep us all shackled to a system that is morally repugnant a n d ultimately self-destructive. B y getting me to read between the lines, Paula had nudged me to take one more step along a path that w o u l d ultimately transform my life.

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CHAPTER

Ecuador's President Battles Big Oil

M y work i n C o l o m b i a and P a n a m a gave me m a n y opportunities to stay i n touch w i t h and to visit the first country to be my home away from home. E c u a d o r had suffered under a long line o f dictators and right-wing oligarchies manipulated by U.S. political and commercial interests. I n a way, the country was the quintessential banana republic, and the corporatocracy had made major inroads there. The serious exploitation of oil i n the E c u a d o r i a n A m a z o n basin began i n the late 1960s, and it resulted i n a b u y i n g spree i n w h i c h the small club of families who r a n E c u a d o r played into the hands of the international banks. They saddled their country w i t h huge amounts of debt, backed by the promise of oil revenues. Roads and industrial parks, hydroelectric dams, transmission and distribution systems, and other power projects sprang up a l l over the country. International engineering and construction companies struck it rich — once again. One m a n whose star was rising over this A n d e a n country was the exception to the rule of political corruption and complicity w i t h the corporatocracy. Jaime Roídos was a university professor and attorney i n his late thirties, w h o m I had met on several occasions. H e was charismatic and charming. Once, I impetuously offered to fly to Quito and provide free consulting services any time he asked. I said it partially i n jest, but also because I w o u l d gladly have done it on my own vacation time — I liked h i m and, as I was quick to tell h i m , was always looking for a good excuse to visit his country. H e laughed and

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offered me a similar deal, saving that whenever I needed to negotiate my oil b i l l , I could call on h i m . He had established a reputation as a populist a n d a nationalist, a person who believed strongly i n the rights of the poor a n d i n the responsibility of politicians to use a country's natural resources p r u dently. W h e n he began campaigning for the presidency i n 1978, he captured the attention of his countrymen and of citizens i n every n a tion where foreign interests exploited o i l â&#x20AC;&#x201D; or where people desired independence from the influences of powerful outside forces. Roldos was the rare modern politician w h o was not afraid to oppose the status quo. H e went after the o i l companies and the not-so-subtle system that supported t h e m . For instance, he accused the S u m m e r Institute of Linguistics (SIL), a n evangelical missionary group f r o m the U n i t e d States, of sinister collusion w i t h the oil companies. I was f a m i l i a r w i t h S I L missionaries from m y Peace Corps days. T h e organization h a d e n tered Ecuador, as it h a d so many other countries, under the pretext of studying, recording, a n d translating indigenous languages. S I L h a d been w o r k i n g extensively w i t h the H u a o r a n i tribe i n the A m a z o n basin area, d u r i n g the early years of oil exploration, when a disturbing pattern emerged. Whenever seismologists reported to corporate headquarters that a certain region h a d characteristics indicating a high probability of oil beneath the surface, S I L went i n and encouraged the indigenous people to move f r o m that l a n d , onto missionary reservations; there they w o u l d receive free food, shelter, clothes, medical treatment and missionary-style education. T h e condition was that they h a d to deed their lands to the oil companies. R u m o r s abounded that S I L missionaries used an assortment of underhanded techniques to persuade the tribes to abandon their homes and move to the missions. A frequently repeated story was that they had donated food heavily laced with laxatives â&#x20AC;&#x201D; then offered medicines to cure the diarrhea epidemic. Throughout H u a o r a n i territory. S I L airdropped false-bottomed food baskets containing tiny radio transmitters; receivers at highly sophisticated communications stations, manned b y U.S. military personnel at the army base i n Shell, tuned i n to these transmitters. Whenever a member of the tribe was bitten b y a poisonous snake or became seriously i l l , an S I L representative arrived with antivenom or the proper medicines â&#x20AC;&#x201D; often i n oil company helicopters.

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D u r i n g the early days of oil exploration, five S I L missionaries were found dead w i t h H u a o r a n i spears protruding from their b o d ies. Later, the Huaoranis claimed they d i d this to send S I L a message to keep out. The message went unheeded. In fact, it ultimately h a d the opposite effect. Rachel Saint, the sister of one of the murdered men, toured the U n i t e d States, appearing on national television i n order to raise money and support for S I L and the oil companies, who she claimed were helping the "savages" become civilized and educated. S I L received funding from the Rockefeller charities. Jaime Roídos claimed that these Rockefeller connections proved that S I L was really a front for stealing indigenous lands and p r o m o t i n g oil exploration; family scion J o h n D. Rockefeller h a d founded Standard O i l — w h i c h later divested into the majors, i n c l u d i n g Chevron, E x x o n , and M o b i l . Roídos struck me as a m a n who walked the path blazed by Torrijos. Both stood up to the world's strongest superpower. Torrijos wanted to take back the Canal, while Roldós's strongly nationalistic position on oil threatened the world's most influential companies. Like Torrijos, Roídos was not a C o m m u n i s t , but rather stood for the right of his country to determine its o w n destiny. A n d as they h a d w i t h Torrijos, pundits predicted that b i g business and Washington w o u l d never tolerate Roídos as president, that i f elected he w o u l d meet a fate similar to that of Guatemala's A r b e n z or Chile's A l l e n d e . 1

It seemed to me that the two m e n together m i g h t spearhead a new movement i n L a t i n A m e r i c a n politics and that this movement might form the foundation of changes that could affect every nation on the planet. These men were not Castras or Gadhafis. T h e y were not associated w i t h Russia or C h i n a or, as i n Allende's case, w i t h the international Socialist movement. They were popular, intelligent, charismatic leaders who were pragmatic instead of dogmatic. They were nationalistic but not anti-American. I f corporatocracy was built on three pillars — major corporations, international banks, and c o l l u d i n g governments — Roídos and Torrijos held out the possibility of removing the pillar o f government collusion. A major part of the Roídos platform was what came to be known as the Hydrocarbons Policy. T h i s policy was based o n the premise that Ecuador's greatest potential resource was petroleum and that all future exploitation of that resource should be done i n a manner that w o u l d b r i n g the greatest benefit to the largest percentage of the

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population. Roídos was a firm believer i n the state's obligation to assist the poor a n d disenfranchised. H e expressed hope that the Hydrocarbons Policy could i n fact be used as a vehicle for b r i n g i n g about social reform. H e h a d to walk a fine line, however, because he knew that i n Ecuador, as i n so many other countries, he could not be elected without the support of at least some of the most influential families, a n d that even i f he should manage to w i n without t h e m , he w o u l d never see his programs implemented without their support. I was personally relieved that Carter was i n the W h i t e House during this crucial time. Despite pressures from Texaco and other oil interests, Washington stayed pretty m u c h out of the picture. I k n e w this w o u l d not have been the case under most other administrations — R e p u b l i c a n or Democrat. M o r e than any other issue, I believe it was the Hydrocarbons Policy that convinced Ecuadorians to send Jaime Roídos to the Presidential Palace i n Quito — their first democratically elected president after a long line of dictators. H e outlined the basis of this policy i n his A u gust 10,1979, inaugural address: W e must take effective measures to defend the energy resources of the nation. The State (must) m a i n t a i n the diversification of its exports a n d not lose its economic independence... O u r decisions w i l l be inspired solely by national interests a n d i n the unrestricted defense of our sovereign r i g h t s .

Once i n office, Roídos h a d to focus o n Texaco, since by that time it had become the m a i n player i n the o i l game. It was a n extremely rocky relationship. T h e oil giant d i d not trust the new president a n d d i d not want to be part of any policy that w o u l d set new precedents. It was very aware that such policies m i g h t serve as models i n other countries. A speech delivered b y a key advisor to Roídos, José Carvajal, s u m m e d up the new administration's attitude: If a partner [Texaco] does not want to take risks, to make investments for exploration, or to exploit the areas of an oil concession, the other partner has the right to make those investments and then to take over as the owner...

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We believe our relations w i t h foreign companies have to be just; we have to be tough i n the struggle; we have to be prepared for a l l k i n d s of pressures, but we should not display fear or an inferiority complex i n negotiating w i t h those foreigners. 3

O n N e w Year's Day, 1980,1 made a resolution. It was the b e g i n ning of a new decade. In twenty-eight days, I w o u l d t u r n thirty-five. I resolved that d u r i n g the next year I would make a major change i n my life a n d that i n the future I w o u l d try to model myself after m o d ern heroes like J a i m e Roldos a n d O m a r Torrijos. In addition, something shocking h a d happened months earlier. F r o m a profitability standpoint, B r u n o h a d been the most successful president i n M A I N ' S history. Nonetheless, suddenly a n d without warning, M a c H a l l h a d fired h i m .

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CHAPTER

I Quit

M a c Hall's firing of B r u n o h i t M A I N like an earthquake. It caused t u r m o i l a n d dissension throughout the company. B r u n o h a d his share of enemies, but even some of t h e m were dismayed. To many employees it was obvious that the motive h a d been jealousy. D u r i n g discussions across the lunch table or around the coffee wagon, people often confided that they thought H a l l felt threatened by this m a n w h o was more than fifteen years his j u n i o r a n d who h a d taken the firm to new levels of profitability. " H a l l couldn't allow B r u n o to go on l o o k i n g so good," one m a n said. " H a l l h a d to k n o w that it was just a matter of time before B r u n o w o u l d take over and the o l d m a n w o u l d be out to pasture." As i f to prove such theories, H a l l appointed Paul P r i d d y as the new president. Paul h a d been a vice president at M A I N for years a n d was an amiable, nuts-and-bolts engineer. In m y opinion, he was also lackluster, a yes-man w h o w o u l d b o w to the chairman's w h i m s a n d w o u l d never threaten h i m with stellar profits. M y opinion was shared by many others. For me, Bruno's departure was devastating. H e h a d been a personal mentor and a key factor i n our international work. Priddy, on the other h a n d , h a d focused o n domestic jobs a n d k n e w little i f anyt h i n g about the true nature of our overseas roles. I h a d to question where the company w o u l d go from here. I called B r u n o at his home and found h i m philosophical. " W e l l , J o h n , he k n e w he h a d no cause," he said of H a l l , "so I

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demanded a very good severance package, and I got it. M a c controls a huge block o f voting stock, and once he made his move there was nothing I could do." B r u n o indicated that he was considering several offers of high-level positions at m u l t i n a t i o n a l banks that had been our clients. I asked h i m what he thought I should do. "Keep your eyes open," he advised. " M a c H a l l has lost touch w i t h reality, but no one w i l l tell h i m so — especially not now; after what he d i d to me." In late M a r c h 1980, still smarting f r o m the firing, I took a sailing vacation i n the V i r g i n Islands. I was joined by "Mary," a young w o m a n who also worked for M A I N . A l t h o u g h I d i d not t h i n k about it w h e n I chose the location, I now k n o w that the region's history was a factor i n h e l p i n g me make a decision that w o u l d start to fulfill m y N e w Year's resolution. T h e first i n k l i n g occurred early one afternoon as we rounded St. J o h n Island and tacked into Sir Francis Drake C h a n nel, w h i c h separates the A m e r i c a n f r o m the British V i r g i n Islands. T

The channel was named, of course, after the E n g l i s h scourge of the Spanish gold fleets. T h a t fact reminded me of the many times d u r i n g the past decade w h e n I had thought about pirates and other historical figures, men like Drake and Sir H e n r y M o r g a n , who robbed and plundered and exploited and yet were lauded — even knighted — for their activities. I h a d often asked myself why, given that I had been raised to respect such people, I should have qualms about exp l o i t i n g countries like Indonesia, Panama, C o l o m b i a , and Ecuador. So many of my heroes —- E t h a n A l l e n , Thomas Jefferson, George Washington, D a n i e l Boone, Davy Crockett, Lewis and Clark, to name just a few — h a d exploited Indians, slaves, and lands that d i d not belong to them, and I had drawn u p o n their examples to assuage m y guilt. N o w , tacking up Sir Francis Drake C h a n n e l , I saw the folly of my past rationalizations. I remembered some things I had conveniently ignored over the years. Ethan A l l e n spent several months i n fetid and cramped British prison ships, m u c h o f the time locked into thirty pounds of i r o n shackles, and then more time i n an English dungeon. H e was a prisoner of war, captured at the 1775 Battle of M o n t r e a l while fighting for the same sorts of freedom Jaime Roldos and O m a r Torrijos now sought for their people. Thomas Jefferson, George Washington, and all the other Founding Fathers had risked their lives for similar ideals.

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W i n n i n g the revolution was no foregone conclusion; they understood that i f they lost, they w o u l d be hanged as traitors. D a n i e l Boone, D a w Crockett, a n d Lewis and C l a r k also h a d endured great hardships a n d made many sacrifices. A n d Drake and Morgan? I was a bit hazy about that period i n history, but I remembered that Protestant E n g l a n d h a d seen itself sorely threatened by Catholic Spain. I h a d to admit to the possibility that Drake and M o r g a n h a d turned to piracy i n order to strike at the heart of the Spanish empire, at those gold ships, to defend the sanctity of E n g l a n d , rather than out of a desire for self-aggrandizement. As we sailed up that channel, tacking back a n d forth into the w i n d , i n c h i n g closer to the mountains rising from the sea — Great Thatch Island to the north and St. J o h n to the south — I could not erase these thoughts from m y m i n d . M a r y handed me a beer a n d turned up the volume on a J i m m y Buffett song. Yet, despite the beauty that surrounded me a n d the sense of freedom that sailing usually brings, I felt angry. I tried to b r u s h it off. I chugged d o w n the beer. The emotion w o u l d not leave. I was angered by those voices f r o m history a n d the way I h a d used t h e m to rationalize my o w n greed. I was furious at m y parents, and at T i l t o n — that self-righteous prep school on the hill-—for i m p o s i n g all that history o n me. I popped open another beer. I could have k i l l e d M a c H a l l for what he h a d done to B r u n o . A wooden boat w i t h a rainbow flag sailed past us, its sails b i l l o w ing out on both sides, d o w n w i n d i n g through the channel. A h a l f dozen young m e n a n d w o m e n shouted a n d waved at us, hippies i n brightly colored sarongs, one couple stark naked on the foredeck. It was obvious from the boat itself and the look about them that they lived aboard, a c o m m u n a l society, modern pirates, free, uninhibited. I tried to wave back but my h a n d w o u l d not obey. I felt overcome w i t h jealousy. M a r y stood on the deck, watching t h e m as they faded into the distance at our stern. " H o w w o u l d you like that life?" she asked. A n d then I understood. It was not about m y parents, T i l t o n , or M a c H a l l . It was my life I hated. M i n e . The person responsible, the one I loathed, was me. M a r y shouted something. She was pointing over the starboard bow. She stepped closer to me. "Leinster B a y " she said. "Tonight's anchorage."

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There it was, nestled into St. J o h n Island, a cove where pirate ships had l a i n i n wait for the gold fleet when it passed through this very body of water. I sailed i n closer, then handed the tiller over to M a r y and headed up to the foredeck. A s she navigated the boat around Watermelon Cay a n d into the beautiful bay, I lowered a n d bagged the jib a n d hauled the anchor out of its locker. She deftly dropped the mainsail. I nudged the anchor over the side; the chain rattled d o w n into the crystal clear water a n d the boat drifted to a stop. After we settled i n , M a r y took a s w i m a n d a nap. I left her a note and rowed the dinghy ashore, beaching it just below the ruins of an old sugar plantation. I sat there next to the water for a long time, trying not to think, concentrating o n emptying myself of all emotion. But it d i d not work. Late i n the afternoon, I struggled up the steep h i l l a n d found m y self standing on the c r u m b l i n g walls of this ancient plantation, looking down at our anchored sloop. I watched the sun sink toward the Caribbean. It a l l seemed very idyllic, yet I k n e w that the plantation surrounding me h a d been the scene of u n t o l d misery; hundreds of African slaves h a d died here â&#x20AC;&#x201D; forced at gunpoint to b u i l d the stately mansion, to plant a n d harvest the cane, a n d to operate the equipment that turned raw sugar into the basic ingredient of r u m . T h e tranquility of the place masked its history of brutality, even as it masked the rage that surged w i t h i n me. The sun disappeared b e h i n d a m o u n t a i n - r i d g e d island. A vast magenta arch spread across the sky. T h e sea began to darken, a n d I came face-to-face w i t h the shocking fact that I too h a d been a slaver, that my j o b at M A I N h a d not been just about u s i n g debt to draw poor countries into the global empire. M y inflated forecasts were not merely vehicles for assuring that w h e n m y country needed oil we could call i n our pound of flesh, and m y position as a partner was not simply about enhancing the firm's profitability. M y job was also about people and their families, people akin to the ones who h a d died to construct the wall I sat on, people I h a d exploited. For ten years, I h a d been the heir of those slavers who had marched into A f r i c a n jungles a n d hauled men and w o m e n off to waiting ships. M i n e h a d been a more modern approach, subtler â&#x20AC;&#x201D; I never h a d to see the dying bodies, smell the rotting flesh, or hear the screams of agony. B u t what I h a d done was every bit as sinister, a n d because I could remove myself from it, because I could cut myself off

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from the personal aspects, the bodies, the flesh, a n d the screams, perhaps i n the final analysis I was the greater sinner. I glanced again at the sloop where it rode at anchor, straining against the outflowing tide. M a r y was lounging on the deck, p r o b a bly d r i n k i n g a margarita a n d w a i t i n g to h a n d one to me. In that m o ment, seeing her there i n that last light of the day, so relaxed, so trusting, I was struck by what I was doing to her and to all the others who worked for me, the ways I was t u r n i n g t h e m into E H M s . I was doing to them what Claudine h a d done to me, but without Claudine s honesty. I was seducing t h e m through raises a n d promotions to be slavers, a n d yet they, like me, were also being shackled to the system. T h e y too were enslaved. I t u r n e d away f r o m the sea a n d the bay a n d the magenta sky. I closed my eyes to the walls that h a d been built by slaves t o r n f r o m their A f r i c a n homes. I tried to shut i t a l l out. W h e n I opened m y eyes, I was staring at a large gnarled stick, as thick as a baseball bat and twice as long. I leaped up, grabbed the stick, a n d began s l a m m i n g it against the stone walls. I beat on those walls until I collapsed f r o m exhaustion. I lay i n the grass after that, watching the clouds drift over me. Eventually I made m y way back d o w n to the dinghy. I stood there o n the beach, l o o k i n g out at our sailboat anchored i n the azure w a ters, a n d I k n e w what I h a d to do. I k n e w that i f I ever went back to m y former life, to M A I N a n d a l l it represented, I w o u l d be lost forever. The raises, the pensions, the insurance a n d perks, the equity... T h e longer I stayed, the more difficult it was to get out. I h a d become a slave. I could continue to beat myself u p as I h a d beat on those stone walls, or I could escape. Two days later I returned to Boston. O n A p r i l 1,1980,1 walked into Paul Priddy's office a n d resigned.

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PART IV: 1981-PRESENT

CHAPTER

Ecuador's Presidential Death

Leaving M A I N was no easy matter; Paul P r i d d y refused to believe me. " A p r i l Fool's," he w i n k e d . I assured h i m that I was serious. Recalling Paula's advice that I should do nothing to antagonize anyone or to give cause for suspicion that I might expose m y E H M work, I emphasized that I appreciated everything M A I N h a d done for me but that I needed to move on. I h a d always wanted to write about the people that M A I N h a d i n t r o duced me to around the world, but nothing political. I said I wanted to freelance for N a t i o n a l G e o g r a p h i c a n d other magazines, a n d to continue to travel. I declared m y loyalty to M A I N a n d sw ore that I w o u l d sing its praises at every opportunity. Finally, Paul gave i n . r

After that, everyone else tried to talk me out of resigning. I was reminded frequently about how good I h a d it, a n d I was even accused of insanity. I came to understand that no one wanted to accept the fact that 1 was leaving voluntarily, at least i n part, because it forced them to look at themselves. I f I were not crazy for leaving, then they might have to consider their own sanity i n staying. It was easier to see me as a person w h o h a d departed f r o m his senses. Particularly disturbing were the reactions of my staff. In their eyes, I was deserting them, a n d there was no strong heir apparent. However, I h a d made up m y m i n d . A f t e r all those years of vacillation, I now was determined to make a clean sweep. Unfortunately, i t d i d not quite w o r k out that way. True, I no longer h a d a job, but since I h a d been far from a fully vested partner,

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the cash-out of my stock was not sufficient for retirement. H a d I stayed at M A I N another few years, 1 might have become the fortyyear-old millionaire I h a d once envisioned; however, at thirty-five I had a long way to go to accomplish that objective. Tt was a cold a n d dreary A p r i l i n Boston. T h e n one day Paul P r i d d y called a n d pleaded w i t h me to come to his office. "One of our clients is threatening to drop us," he said. "They h i r e d us because they wanted you to represent t h e m on the expert witness stand." I thought a lot about it. By the time I sat across the desk from Paul, I h a d made m y decision. I named my price — a retainer that was more t h a n three times what my M A I N salary h a d been. To my surprise, he agreed, and that started me on a new career. For the next several years, I was employed as a highly p a i d expert witness — primarily for U.S. electric utility companies seeking to have new power plants approved for construction by public utilities commissions. One of m y clients was the P u b l i c Service C o m p a n y of N e w H a m p s h i r e . M y job was to justify, under oath, the economic feasibility of the highly controversial Seabrook nuclear power plant. A l t h o u g h I was no longer directly involved w i t h L a t i n A m e r i c a , I continued to follow events there. A s an expert witness, I h a d lots of time between appearances on the stand. I kept i n touch w i t h Paula and renewed o l d friendships from m y Peace Corps days i n E c u a d o r — a country that h a d suddenly j u m p e d to center stage i n the w o r l d of international oil politics. Jaime Roídos was m o v i n g forward. He took his campaign p r o m ises seriously and he was l a u n c h i n g an all-out attack on the oil c o m panies. H e seemed to see clearly the things that many others o n both sides of the P a n a m a Canal either missed or chose to ignore. H e u n derstood the underlying currents that threatened to t u r n the w o r l d into a global empire and to relegate the citizens of his country to a very minor role, bordering on servitude. A s I read the newspaper articles about h i m , I was impressed not only by his commitment, but also by his ability to perceive the deeper issues. A n d the deeper issues pointed to the fact that we were entering a new epoch of w o r l d politics. In November 1980, Carter lost the U . S . presidential election to R o n a l d Reagan. The Panama Canal Treaty he h a d negotiated with Torrijos, and the situation i n Iran, especially the hostages held at the U.S. Embassy a n d the failed rescue attempt, were major factors.

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However, something subtler was also happening. A president whose greatest goal was w o r l d peace and who was dedicated to reducing U.S. dependence on oil was replaced by a m a n who believed that the U n i t e d States' rightful place was at the top of a w o r l d p y r a m i d h e l d up by military muscle, a n d that controlling o i l fields wherever they existed was part of our Manifest Destiny. A president who installed solar panels on W h i t e House roofs was replaced by one who, i m m e diately upon occupying the Oval Office, h a d them removed. Carter may have been a n ineffective politician, but he had a vision for A m e r i c a that was consistent w i t h the one defined i n our D e c l a ration of Independence. I n retrospect, he now seems naively archaic, a throwback to the ideals that molded this nation a n d drew so m a n y of our grandparents to her shores. W h e n we compare h i m to his i m mediate predecessors a n d successors, he is an anomaly. H i s w o r l d view was inconsistent w i t h that of the E H M s . Reagan, o n the other h a n d , was most definitely a global empire builder, a servant of the corporatocracy. A t the time of his election, I found it fitting that he was a H o l l y w o o d actor, a m a n w h o h a d f o l l o w e d orders passed down f r o m moguls, w h o k n e w how to take d i rection. That w o u l d be his signature. H e would cater to the m e n who shuttled back and forth f r o m corporate C E O offices to bank boards a n d into the halls of government. H e w o u l d serve the men w h o appeared to serve h i m but who i n fact r a n the government â&#x20AC;&#x201D; men like Vice President George H . W. Bush, Secretary of State George Shultz, Secretary of Defense Caspar Weinberger, R i c h a r d Cheney; R i c h a r d H e l m s , and Robert M c N a m a r a . H e w o u l d advocate what those men wanted: an A m e r i c a that controlled the w o r l d a n d all its resources, a w o r l d that answered to the commands of that A m e r i c a , a U.S. m i l itary that w o u l d enforce the rules as they were written by A m e r i c a , and an international trade a n d b a n k i n g system that supported A m e r i c a as C E O of the global empire. A s I looked into the future, it seemed we w ere entering a period that w o u l d be very good to the E H M s . It was another twist of fate that 1 h a d chosen this m o m e n t i n history to drop out. T h e more I reflected on it, however, the better I felt about it. I k n e w that my t i m i n g was right. r

A s for what this meant i n the long t e r m , I h a d no crystal ball; however, I knew from history that empires do not endure and that the p e n d u l u m always swings i n both directions. F r o m my perspective,

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men like Roídos offered hope. I was certain that Ecuador's new president understood many of the subtleties of the current situation. I knew that he had been a Torrijos admirer and had applauded Carter for his courageous stand o n the Panama Canal issue. I felt certain that Roídos w o u l d not falter. I could only hope that his fortitude w o u l d light a candle for the leaders of other countries, w h o needed the type of inspiration he a n d Torrijos could provide. Early i n 1981, the Roídos administration formally presented his new hydrocarbons law to the E c u a d o r i a n Congress. If implemented, it w o u l d reform the country's relationship to oil companies. By many standards, i t was considered revolutionary and even radical. It certainly aimed to change the way business was conducted. Its i n f l u ence w o u l d stretch far beyond Ecuador, into m u c h of L a t i n A m e r i c a and throughout the w o r l d . The o i l companies reacted predictably — they pulled out a l l the stops. T h e i r public relations people went to w o r k to vilify J a i m e Roídos, and their lobbyists swept into Q u i t o and Washington, briefcases full of threats a n d payoffs. They tried to paint the first d e m o cratically elected president o f E c u a d o r i n modern times as another Castro. But Roídos w o u l d not cave i n to intimidation. H e responded by denouncing the conspiracy between politics and oil — and religion. H e openly accused the S u m m e r Institute of Linguistics of colluding w i t h the o i l companies a n d then, i n a n extremely bold —perhaps reckless — move, he ordered S I L out of the country. 1

O n l y weeks after sending his legislative package to Congress a n d a couple of days after expelling the S I L missionaries, Roídos warned all foreign interests, i n c l u d i n g but not l i m i t e d to oil companies, that unless they implemented plans that w o u l d help Ecuador's people, they w o u l d be forced to leave his country. H e delivered a major speech at the Atahualpa O l y m p i c S t a d i u m i n Quito and then headed off to a small c o m m u n i t y i n southern Ecuador. H e died there i n a fiery airplane crash, o n M a y 2 4 , 1 9 8 1 .

T h e w o r l d was shocked. L a t i n Americans were outraged. N e w s papers throughout the hemisphere blazed, " C I A Assassination!" In addition to the fact that Washington a n d the o i l companies hated h i m , many circumstances appeared to support these allegations, a n d such suspicions were heightened as more facts became k n o w n . N o t h i n g was ever proven, but eyewitnesses claimed that Roídos, forewarned about an attempt o n his life, h a d taken precautions,

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including traveling i n two airplanes. A t the last moment, it was said, one of his security officers had convinced h i m to board the decoy airplane. It h a d b l o w n u p . Despite w o r l d reaction, the news h a r d l y made the U . S . press. Osvaldo H u r t a d o took over as Ecuador's president. H e reinstated the S u m m e r Institute of Linguistics a n d their oil company sponsors. By the end of the year, he h a d launched an ambitious program to i n crease oil d r i l l i n g by Texaco and other foreign companies i n the G u l f of Guayaquil and the A m a z o n b a s i n . O m a r Torrijos, i n eulogizing RoĂdos, referred to h i m as "brother." H e also confessed to h a v i n g nightmares about his own assassinat i o n ; he saw h i m s e l f d r o p p i n g from the sky i n a gigantic fireball. It was prophetic. 4

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CHAPTER

Panama: Another Presidential Death

I was stunned by Roldós's death, but perhaps I should not have been. I was anything but naive. I k n e w about A r b e n z , Mossadegh, Allende — a n d about many other people whose names never made the newspapers or history books but whose lives were destroyed and sometimes cut short because they stood up to the corporatocracy. Nevertheless, I was shocked. It was just so very blatant. I h a d concluded, after our phenomenal success i n Saudi A r a b i a , that such wantonly overt actions were things of the past. I thought the jackals had been relegated to zoos. N o w I saw that I was wrong. I had no doubt that Roldós's death h a d not been an accident. It h a d all the markings of a CIA-orchestrated assassination. I understood that it h a d been executed so blatantly i n order to send a message. T h e new Reagan administration, complete w i t h its fast-draw H o l l y w o o d cowboy image, was the ideal vehicle for delivering such a message. T h e jackals were back, a n d they wanted O m a r Torrijos a n d everyone else who m i g h t consider j o i n i n g an anti-corporatocracy crusade to k n o w it. B u t Torrijos was not buckling. Like Roídos, he refused to be i n timidated. He, too, expelled the Summer Institute of Linguistics, and he adamantly refused to give i n to the Reagan administration's demands to renegotiate the C a n a l Treaty. Two months after Roldós's death, O m a r Torrijos's nightmare came true; he died i n a plane crash. It was J u l y 31,1981.

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L a t i n A m e r i c a and the w o r l d reeled. Torrijos was k n o w n across the globe; he was respected as the m a n who h a d forced the U n i t e d States to relinquish the Panama Canal to its rightful owners, a n d who continued to stand up to R o n a l d Reagan. H e was a champion of h u m a n rights, the head of state who h a d opened his arms to refugees across the political spectrum, including the shah of Iran, a charismatic voice for social justice who, m a n y believed, w o u l d be nominated for the N o b e l Peace Prize. N o w he was dead. " C I A Assassination!" once again headlined articles a n d editorials. G r a h a m Greene began his book G e t t i n g t o K n o w t h e G e n e r a l , the one that grew out of the trip when I met h i m at the H o t e l Panama, w i t h the following paragraph; In August 1981, m y bag was packed for my fifth visit to P a n a m a w h e n the news came to me over the telephone of the death of General O m a r Torrijos H e r r e r a , my friend and host. The small plane i n w h i c h he was flying to a house w h i c h he owned at Coclesito i n the mountains of P a n a m a h a d crashed, a n d there were no survivors. A few days later the voice of his security guard, Sergeant C h u c h u , alias José de Jesús Martínez, ex-professor of M a r x i s t p h i losophy at P a n a m a University, professor of mathematics and

a poet, told me, "There was a b o m b i n that plane. I

k n o w there was a bomb i n the plane, but I can't tell you why over the telephone."

People everywhere m o u r n e d the death of this m a n who h a d earned a reputation as defender of the poor a n d defenseless, a n d they clamored for Washington to open investigations into C I A activities. However, this was not about to happen. There were m e n who hated Torrijos, and the list included people w i t h immense power. Before his death, he was openly loathed by President Reagan, V i c e President B u s h , Secretary of Defense Weinberger, and the J o i n t Chiefs of Staff, as well as by the C E O s of many powerful corporations. T h e military chiefs were especially incensed by provisions i n the Torrijos-Carter Treaty that forced t h e m to close the School of the Americas and the U.S. Southern Command's tropical warfare center. T h e chiefs thus h a d a serious problem. Either they h a d to figure out

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some way to get around the n e w treaty; or they needed to find a n other country that w o u l d be w i l l i n g to harbor these facilities â&#x20AC;&#x201D; an unlikely prospect i n the closing decades of the twentieth century. O f course, there was also another option: dispose of Torrijos a n d renegotiate the treaty w i t h his successor. A m o n g Torrijos's corporate enemies were the huge multinationals. M o s t h a d close ties to U . S . politicians a n d were involved i n exploiting L a t i n A m e r i c a n labor forces and natural resources â&#x20AC;&#x201D; oil, lumber, tin, copper, bauxite, a n d agricultural lands. They included m a n u facturing firms, communications companies, shipping a n d t r a n s portation conglomerates, and engineering and other technologically oriented corporations. T h e Bechtel Group, Inc. was a prime example of the cozy relationship between private companies and the U.S. government. I k n e w Bechtel w e l l ; we at M A I N often w o r k e d closely w i t h the company, and its chief architect became a close personal friend. Bechtel was the United States' most influential engineering and construction company. Its president and senior officers included George Shultz a n d Caspar Weinberger, who despised Torrijos because he brazenly courted a Japanese p l a n to replace Panama's existing canal w i t h a new, more efficient o n e . Such a move not only w o u l d transfer ownership from the U n i t e d States to P a n a m a but also w o u l d exclude Bechtel from participating i n the most exciting a n d potentially lucrative engineering project o f the century. 2

Torrijos stood u p to these m e n , and he d i d so w i t h grace, c h a r m , and a wonderful sense of humor. N o w he was dead, a n d he h a d been replaced by a protege, M a n u e l Noriega, a m a n w ho lacked Torrijos's wit, charisma, and intelligence, and a m a n who many suspected h a d no chance against the Reagans, Bushes, a n d Bechtels of the world. r

I was personally devastated b y the tragedy. I spent m a n y hours reflecting o n my conversations w i t h Torrijos. Late one night, I sat for a long time staring at his photo i n a magazine a n d recalling m y first night i n Panama, riding i n a cab through the rain, stopping before his gigantic b i l l b o a r d picture. "Omar's ideal is freedom; the missile is not invented that can k i l l a n i d e a l ! " T h e memory of that i n s c r i p tion sent a shudder through me, even as it h a d o n that stormy night. I could not have k n o w n back then that Torrijos w o u l d collaborate w i t h Carter to return the P a n a m a Canal to the people who rightfully deserved to o w n it, or that this victory, along w i t h his attempts to

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reconcile differences between L a t i n A m e r i c a n Socialists and the dictators, w o u l d so infuriate the Reagan-Bush administration that i w o u l d seek to assassinate h i m . I could not have k n o w n that on another dark night he w o u l d be k i l l e d d u r i n g a routine flight i n hit T w i n Otter, or that most of the w o r l d outside the U n i t e d States woulc have no doubt that Torrijos's death at the age of fifty-two was jus1 one more i n a series of C I A assassinations. H a d Torrijos lived, he undoubtedly w o u l d have sought to quell the growing violence that has plagued so many Central a n d South American nations. Based on his record, we can assume that he would have tried to work out an arrangement to mitigate international oil company destruction of the A m a z o n regions of Ecuador, Colombia, and Peru. O n e result of such action w o u l d be the alleviation of the terrible conflicts that W a s h i n g t o n refers to as terrorist a n d drug wars, but w h i c h Torrijos w o u l d have seen as actions taken by desperate people to protect their families a n d homes. M o s t importantly, I feel certain that he w o u l d have served as a role model for a new generation of leaders i n the Americas, Africa, a n d A s i a â&#x20AC;&#x201D; something the C I A , the N S A , a n d the E H M s could not allow. 3

Panama: Another Presidential D e a t h

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CHAPTER

My Energy Company, Enron, and George W. Bush

A t the time of Torrijos's death, I had not seen Paula for several months. I was dating other w o m e n , i n c l u d i n g W i n i f r e d G r a n t , a young environmental planner I h a d met at M A I N , and whose father happened to be chief architect at Bechtel. Paula was dating a C o l o m bian journalist. We remained friends but agreed to sever our r o mantic ties. I struggled w i t h m y job as an expert witness, particularly i n j u s t i fying the Seabrook nuclear power plant. It often seemed as though I had sold out again, slipping back into an o l d role simply for the sake of money. W i n i f r e d was an immense help to me d u r i n g this period. She was an avowed environmentalist, yet she understood the practical necessities of providing ever-increasing amounts o f electricity. She h a d grown u p i n the Berkeley area of San Francisco's East Bay and had graduated f r o m U C Berkeley. She was a freethinker whose \iews o n life contrasted w i t h those of m y puritanical parents and of A n n . O u r relationship developed. W i n i f r e d took a leave of absence f r o m M A I N , and together we sailed m y boat down the Atlantic coast toward Florida. We took our time, frequently leaving the boat i n different ports so I could fly off to provide expert witness testimony. Eventually, we sailed into West P a l m Beach, F l o r i d a , and rented an apartment. We married, and our daughter, Jessica, was b o r n o n M a y 17,1982. I was thirty-six, considerably older t h a n a l l the other men who h u n g out i n Lamaze class.

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Part of m y job on the Seabrook case was to convince the N e w H a m p s h i r e P u b l i c Service C o m m i s s i o n that nuclear power was the best and most economical choice for generating electricity i n the state. Unfortunately, the longer I studied the issue, the more I began to doubt the validity of my own arguments. The literature was constantly changing at that time, reflecting a growth i n research, a n d the e v i dence increasingly indicated that m a n y alternative forms of energy were technically superior a n d more economical than nuclear power. The balance also was beginning to shift away f r o m the o l d theory that nuclear power was safe. Serious questions were being raised about the integrity of b a c k u p systems, the t r a i n i n g of operators, the h u m a n tendency to make mistakes, equipment fatigue, a n d the i n adequacy of nuclear waste disposal. I personally became u n c o m fortable w i t h the position I was expected to t a k e â&#x20AC;&#x201D; w a s p a i d to take â&#x20AC;&#x201D; under oath i n w h a t amounted to a court of law. A t the same time, I was becoming convinced that some of the emerging technologies offered electricity-generating methods that c o u l d actually help the environment. T h i s was particularly true i n the area of generating electricity from substances previously considered waste products. O n e day I informed m y bosses at the N e w Hampshire utility c o m pany that I could no longer testify on their behalf. I gave u p this very lucrative career a n d decided to create a company that w o u l d move some o f the new technologies off the drawing boards a n d put the theories into practice. W i n i f r e d supported me one h u n d r e d percent, despite the uncertainties of the venture a n d the fact that, for the first time i n her life, she was n o w starting a family. Several months after Jessica's b i r t h i n 1982,1 founded Independent Power Systems (IPS), a company whose mission included developing environmentally beneficial power plants a n d establishing models to inspire others to do likewise. It was a h i g h - r i s k business, a n d most of our competitors eventually failed. However, " c o i n c i dences" came to our rescue. I n fact, I was certain that many times someone stepped i n to help, that I was being rewarded for m y past service a n d for m y c o m m i t m e n t to silence. B r u n o Z a m b o t t i h a d accepted a high-level position at the InterA m e r i c a n Development B a n k . H e agreed to serve o n the I P S board and to help finance the fledgling company. We received backing from Bankers Trust; E S I Energy; P r u d e n t i a l Insurance Company; C h a d bourne a n d Parke (a major W a l l Street law f i r m , i n w h i c h former

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U.S. senator, presidential candidate, a n d secretary of slate E d M u s k i e , was a partner): and Riley Stoker Corporation (an engineeri n g firm, owned by A s h l a n d O i l Company, w h i c h designed a n d built highly sophisticated a n d innovative power plant boilers). We even had b a c k i n g f r o m the U . S . Congress, w h i c h singled out IPS for exe m p t i o n from a specific tax, a n d i n the process gave us a distinct a d vantage over our competitors. In 1986, I P S a n d Bechtel s i m u l t a n e o u s l y — b u t independently of each other—began construction of power plants that used highly i n novative, state-of-the-art technologies for b u r n i n g waste coal w i t h out producing acid rain. B y the end of the decade these two plants h a d revolutionized the utility industry, directly contributing to new national antipollution laws by proving once and for all that many socalled waste products actually can be converted into electricity, a n d that coal can be burned without creating acid rain, thereby dispelling long-standing utility company claims to the contrary. O u r plant also established that such unproven, state-of-the-art technologies could be financed by a small independent company, through W a l l Street and other conventional means. A s an added benefit, the I P S power plant sent vented heat to a three a n d one-half-acre hydroponic greenhouse, rather than into cooling ponds or cooling towers. 1

M y role as I P S president gave me an inside track on the energy industry. I dealt w i t h some of the most influential people i n the b u s i ness: lawyers, lobbyists, investment bankers, a n d high-level executives at the major firms. I also h a d the advantage of a father-in-law w h o h a d spent over thirty years at Bechtel, h a d risen to the position of chief architect, a n d n o w was i n charge of b u i l d i n g a city i n Saudi A r a b i a — a direct result of the work I h a d done i n the early 1970s, d u r i n g the Saudi A r a b i a n M o n e y - l a u n d e r i n g Affair. W i n i f r e d grew up near Bechtel's San Francisco w o r l d headquarters a n d was also a member of the corporate family; her first j o b after graduating f r o m U C Berkeley was at Bechtel. T h e energy industry was undergoing major restructuring. The big engineering firms were jockeying to take over — or at least to compete w i t h — the utility companies that previously h a d enjoyed the p r i v i leges of local monopolies. Deregulation was the watchword of the day, and rules changed overnight. Opportunities abounded for ambitious people to take advantage of a situation that baffled the courts and C o n gress. Industry pundits dubbed it the " W i l d West of Energy" era.

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O n e casualty of this process was M A I N . A s B r u n o predicted, M a c H a l l h a d lost touch w i t h reality a n d no one dared tell h i m so. Paul Priddy never asserted control, a n d M A I N ' s management not only failed to take advantage of the changes sweeping the industry but also made a series of fatal mistakes. O n l y a few years after B r u n o delivered record profits, M A I N dropped its E H M role and was i n dire financial straits. T h e partners sold M A I N to one of the large engineering and construction firms that h a d played its cards right. W h i l e I h a d received almost thirty dollars a share for my stock i n 1980, the r e m a i n i n g partners settled for less than h a l f that amount, approximately four years later. Thus d i d one h u n d r e d years o f proud service end i n h u m i l i a t i o n . I was sad to see the company fold, but I felt vindicated that I h a d gotten out w h e n I did. The M A I N name continued under the new ownership for a while, but then it was dropped. T h e logo that h a d once carried such weight i n countries around the globe fell into oblivion. M A I N was one example of a company that d i d not cope well i n the changing atmosphere of the energy industiy. A t the opposite end of the spectrum was a company we insiders found fascinating: E n r o n . One of the fastest-growing organizations i n the business, it seemed to come out of nowhere a n d immediately began p u t t i n g together m a m m o t h deals. M o s t business meetings open with a few moments of idle chatter while the participants settle into their seats, pour themselves cups of coffee, a n d arrange their papers; i n those days the idle chatter often centered on E n r o n . N o one outside the company could fathom how E n r o n was able to accomplish such miracles. Those o n the inside simply smiled at the rest of us, a n d kept quiet. Occasionally, w h e n pressed, they talked about new approaches to management, about "creative financing," a n d about their c o m m i t ment to h i r i n g executives who k n e w their way through the corridors of power i n capitals across the globe. To me, this all sounded like a new version of old E H M techniques. T h e global empire was m a r c h i n g forward at a r a p i d pace. For those of us interested i n oil and the international scene, there was another frequently discussed topic: the vice presidents son, George W. Bush. H i s first energy company, Arbusto (Spanish for b u s h ) was a failure that ultimately was rescued through a 1984 merger with Spectrum 7. T h e n Spectrum 7 found itself poised at the b r i n k of bankruptcy, and was purchased, i n 1986, by H a r k e n Energy

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C o r p o r a t i o n ; G . W . Bush was retained as a board member a n d consultant w i t h an annual salary of $ 1 2 0 , 0 0 0 . W e a l l assumed that having a father w h o was the U.S. vice president factored into this h i r i n g decision, since the younger Bush's record of accomplishment as an oil executive certainly d i d not w a r rant it. It also seemed no coincidence that H a r k e n took this opportunity to b r a n c h out into the international field for the first time i n its corporate history, a n d to begin actively searching for o i l investments i n the M i d d l e East. V a n i t y F a i r magazine reported, "Once B u s h took his seat o n the board, wonderful things started to happen to H a r k e n â&#x20AC;&#x201D; n e w investments, unexpected sources o f financing, serendipitous drilling rights." In 1989, A m o c o was negotiating with the government of B a h r a i n for offshore drilling rights. T h e n V i c e President B u s h was elected president. Shortly thereafter, M i c h a e l A m e e n â&#x20AC;&#x201D; a State Department consultant assigned to brief the newly confirmed U.S. ambassador to B a h r a i n , Charles Hostler â&#x20AC;&#x201D; arranged for meetings between the B a h r a i n i government a n d H a r k e n Energy. Suddenly, A m o c o was replaced by Harken. A l t h o u g h H a r k e n h a d not previously drilled outside the southeastern U n i t e d States, and never offshore, it w o n exclusive drilling rights i n Bahrain, something previously unheard of in the A r a b w o r l d . W i t h i n a few weeks, the price of H a r k e n E n e r g y stock increased by over twenty percent, f r o m $4.50 to $5.50 per share. 2

Even seasoned energy people were shocked by what h a d h a p pened i n B a h r a i n . "I hope G . W. isn't up to something his father w i l l pay for," said a lawyer friend of m i n e w h o specialized i n the energy industry a n d also was a major supporter of the Republican Party. W e were enjoying cocktails at a bar around the corner f r o m W a l l Street, h i g h atop the W o r l d Trade Center. H e expressed dismay. "I wonder i f it's really w o r t h it," he continued, shaking his head sadly. "Is the son's career w o r t h risking the presidency?" I was less surprised than my peers, b u t I suppose I h a d a unique perspective. I h a d w o r k e d for the governments o f K u w a i t , Saudi A r a b i a , Egypt, and Iran, I was familiar w i t h M i d d l e Eastern politics, and I knew that Bush, just like the E n r o n executives, was part of the network I and m y E H M colleagues h a d created; they were the feudal lords a n d plantation masters. 5

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CHAPTER

I Take a Bribe

D u r i n g this time i n my life, I came to realize that we truly h a d e n tered a new era i n w o r l d economics. Events set i n m o t i o n while Robert M c N a m a r a â&#x20AC;&#x201D; t h e m a n w h o h a d served as one of m y models â&#x20AC;&#x201D; reigned as secretar} of defense a n d president of the W o r l d B a n k had escalated beyond my gravest fears. M c N a m a r a ' s K e y n e s i a n inspired approach to economics, a n d his advocacy of aggressive leadership, h a d become pervasive. The E H M concept had expanded to include all manner of executives i n a wide variety of businesses. They may not have been recruited or profiled by the N S A , but they were performing similar functions. 7

The only difference now was that the corporate executive E H M s d i d not necessarily involve themselves w i t h the use of funds from the international b a n k i n g community. W h i l e the old branch, my branch, continued to thrive, the new version took o n aspects that were even more sinister. D u r i n g the 1980s, y o u n g m e n a n d w o m e n rose u p through the ranks of m i d d l e management believing that any means justified the e n d : an enhanced bottom line. Global empire was s i m ply a pathway to increased profits. The new trends were typified by the energy industry, where I worked. The P u b l i c U t i l i t y Regulatory Policy A c t ( P U R P A ) was passed by Congress i n 1978, went through a series of legal challenges, and finally became law i n 1982. Congress originally envisioned the l a w as a way to encourage small, independent companies like m i n e to develop alternative fuels a n d other innovative approaches to T

16?

producing electricity. U n d e r this law, the major utility companies were required to purchase energy generated by the smaller c o m p a nies, at fair a n d reasonable prices. T h i s policy was a result of Carters desire to reduce U . S . dependence o n oil â&#x20AC;&#x201D; a l l o i l , not just i m p o r t e d oil. T h e intent o f the l a w was clearly to encourage both alternative energy sources and the development of independent companies that reflected America's entrepreneurial spirit. However, the reality turned out to be something very different. D u r i n g the 1980s and into the 1990s, the emphasis switched from entrepreneurship to deregulation. I watched as most of the other small independents were swallowed u p by the large engineering a n d construction firms, a n d by the public utility companies themselves. T h e latter found legal loopholes that allowed them to create h o l d i n g companies, w h i c h could own both the regulated utility companies and the unregulated independent energy-producing corporations. M a n y of t h e m launched aggressive programs to drive the independents into bankruptcy and then purchase them. Others simply started from scratch and developed their o w n equivalent of the independents. T h e idea of reducing our oil dependence fell by the wayside. R e a gan was deeply indebted to the o i l companies; B u s h h a d made his o w n fortune as an o i l m a n . A n d most of the key players a n d cabinet members i n these two administrations were either part of the oil i n dustry or were part of the engineering a n d construction companies so closely tied to it. Moreover, i n the final analysis, oil a n d construction were not partisan; many Democrats had profited from and were beholden to t h e m also. IPS continued to m a i n t a i n a vision of environmentally beneficial energy. W e were c o m m i t t e d to the original P U R P A goals, a n d we seemed to lead a charmed life. W e were one of the few independents that not only survived but also thrived. I have no doubt that the r e a son for this was because of my past services to the corporatocracy. W h a t was going o n i n the energy field was symbolic of a t r e n d that was affecting the whole w o r l d . Concerns about social welfare, the environment, a n d other quality-of-life issues took a backseat to greed. In the process, an overwhelming emphasis was placed on prom o t i n g private businesses. A t first, this was justified o n theoretical bases, i n c l u d i n g the idea that capitalism was superior to and w o u l d deter c o m m u n i s m . Eventually, however, such justification was u n needed. It was simply accepted a p r i o r i that there was something

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inherently better about projects owned by wealthy investors rather than by governments. International organizations such as the W o r l d Bank bought into this notion, advocating deregulation a n d p r i v a t i zation of water and sewer systems, communications networks, utility grids, a n d other facilities that up until then h a d been managed by governments. A s a result, it w as easy to expand the E H M concept into the larger community, to send executives f r o m a broad spectrum of businesses o n missions previously reserved for the few of us recruited into an exclusive club. These executives fanned out across the planet. They sought the cheapest labor pools, the most accessible resources, a n d the largest markets. They were ruthless i n their approach. L i k e the E H M s w h o h a d gone before t h e m — l i k e me, i n Indonesia, i n P a n a m a , a n d i n C o l o m b i a — t h e y found ways to rationalize t h e i r misdeeds. A n d like us, they ensnared communities a n d countries. They promised affluence, a way for countries to use the private sector to dig themselves out of debt. They built schools a n d highways, donated telephones, televisions, a n d medical services. In the end, however, i f they found cheaper workers or more accessible resources elsewhere, they left. W h e n they abandoned a c o m m u n i t y whose hopes they h a d raised, the consequences were often devastating, but they apparently d i d this without a moment's hesitation or a n o d to their own consciences. T

I h a d to wonder, though, what all this was d o i n g to their psyches, whether they h a d their moments of doubt, as I h a d h a d mine. D i d they ever stand next to a befouled canal a n d watch a young w o m a n try to bathe while an o l d m a n defecated upriver? Were there no H o w a r d Parkers left to ask the tough questions? Although I enjoyed my IPS successes a n d m y life as a family m a n , I could not fight my moments of severe depression. I was now the f a ther of a young girl, a n d I feared for the future she w o u l d inherit. I was weighed d o w n w i t h guilt for the part I h a d played. I also c o u l d look back a n d see a very disturbing historical trend. The modern international financial system was created near the end of W o r l d W a r II, at a meeting of leaders from many countries, h e l d i n Bretton Woods, N e w H a m p s h i r e — m y home state. T h e W o r l d Bank a n d the International M o n e t a r y F u n d were formed i n order to reconstruct a devastated Europe, and they achieved remarkable success. The system expanded rapidly, a n d it was soon sanctioned by

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every major U.S. ally and hailed as a panacea for oppression. It would, we were assured, save us a l l f r o m the evil clutches of c o m m u n i s m . But I could not help wondering where all this w o u l d lead us. By the late 1980s, w i t h the collapse o f the Soviet U n i o n and the w o r l d C o m m u n i s t movement, it became apparent that deterring c o m m u nism was not the goal; i t was equally obvious that the global e m pire, w h i c h was rooted i n capitalism, w o u l d have free reign. A s J i m Garrison, president of the State of the W o r l d forum, observes: Taken cumulatively, the integration of the world as a whole, particularly i n terms of economic globalization and the mythic qualities of "free market" capitalism, represents a veritable "empire" i n its o w n right... N o nation on earth has been able to resist the compelling magnetism of globalization. Few have been able to escape the "structural adjustments" and "conditionalities" of the W o r l d Bank, the International M o n e t a r y F u n d , or the arbitrations of the W o r l d Trade Organization, those international financial institutions that, however inadequate, still determine what economic globalization means, what the rules are, a n d who is rewarded for submission and punished for infractions. Such is the power of globalization that w i t h i n our lifetime we are likely to see the integration, even i f unevenly, of all national economies i n the w o r l d into a single global, free market system.

A s I m u l l e d over these issues, I decided it was time to write a t e l l all book, C o n s c i e n c e of a n E c o n o m i c H i t M a n , but I made no attempt to keep the w o r k quiet. Even today, I a m not the sort o f writer who writes i n isolation. I find it necessary to discuss the work I a m doing. I receive inspiration from other people, and I call upon them to help me remember and put into perspective events of the past. I like to read sections o f the materials I am w o r k i n g on to friends, so I may hear their reactions. I understand that this may be risky, yet I k n o w no other way for me to write. T h u s , it was no secret that I was w r i t i n g a book about my time w i t h M A I N . One afternoon i n 1987, another former M A I N partner contacted me and offered me an extremely lucrative consulting contract w i t h Stone & Webster Engineering Corporation ( S W E C ) . A t that time,

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S W E C was one of the world's premier engineering and construction companies, and it was trying to forge a place for itself i n the changing environment of the energy industry. M y contact explained that I w o u l d report to their new subsidiary, an independent energydevelopment branch modeled after companies like m y own I P S . I was relieved to learn that I w o u l d not be asked to get involved i n any international or E H M - t y p e projects. In fact, he told me, I w o u l d not be expected to do very m u c h at all. I was one of the few people who had founded and managed a successful independent energy company, and I h a d a n excellent reputation i n the industry. S W E C s p r i m a r y interest was to use m y resume and to include me on its list of advisers, which was legal and was consistent w i t h standard i n d u s t r y practices. T h e offer was especially attractive to me because, due to a number of circumstances, I was considering selling I P S . The idea of j o i n i n g the S W E C stable and receiving a spectacular retainer was welcome. The day he h i r e d me, the C E O of S W E C took me out to a private l u n c h . W e chatted informally for some time, and as we d i d so I r e a l ized that a side of me was eager to get back into the consulting b u s i ness, to leave b e h i n d the responsibilities of r u n n i n g a complicated energy company, of being responsible for over a hundred people w h e n we w ere constructing a facility, and of dealing w i t h all the l i a bilities associated w i t h b u i l d i n g and operating power plants. I h a d already envisioned h o w I w o u l d spend the substantial retainer I k n e w he was about to offer me. I h a d decided to use it, among other things, to create a nonprofit organization. r

Over dessert, my host brought up the subject of the one book I had already published, T h e S t r e s s - F r e e H a b i t . H e told me he had heard wonderful things about it. T h e n he looked me squarely i n the eye. " D o you intend to write any more books?" he asked. M y stomach tightened. Suddenly, I understood what this was a l l about. I d i d not hesitate. "No," I said. "I don't intend to try to publish any more books at this time." "I'm glad to hear that," he said. "We value our privacy at this c o m pany. Just like at M A I N . " "I understand that." He sat back and, s m i l i n g , seemed to relax. "Of course, books like your last one, about dealing w i t h stress and such things, are perfectly acceptable. Sometimes they can even further a man's career. A s a

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consultant to S W E C , you are perfectly free to publish that sort o f thing." H e looked at me as though expecting a response. "That's good to know." "Yes, perfectly acceptable. However, it goes without saying that y o u ' l l never m e n t i o n the name of this company i n your books, and that you w i l l not write about anything that touches o n the nature o f our business here or the work you d i d at M A I N . You w i l l not mention political subjects or any dealings w i t h international banks and development projects." H e peered at me. "Simply a matter of confidentiality." "It goes without saying," I assured h i m . For an instant, my heart seemed to stop beating. A n o l d feeling returned, similar to ones I h a d experienced around H o w a r d Parker i n Indonesia, while d r i v i n g through P a n a m a City beside F i d e l , and while sitting i n a C o l o m b i a n coffee shop w i t h Paula. I was selling out â&#x20AC;&#x201D; again. T h i s was not a bribe i n the legal sense â&#x20AC;&#x201D; it was perfectly aboveboard and legitimate for this company to pay to include m y name on their roster, to call u p o n me for advice or to show up at a meeting f r o m time to time, but I understood the real reason I was being h i r e d . H e offered me an annual retainer that was equivalent to an executive's salary. Later that afternoon I sat i n an airport, stunned, waiting for m y flight back to F l o r i d a . I felt like a prostitute. Worse t h a n that, I felt I had betrayed m y daughter, my family, and m y country. A n d yet, I t o l d myself, I h a d little choice. I k n e w that i f I h a d not accepted this bribe, the threats w o u l d have followed.

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CHAPTER

The United States Invades Panama

Torrijos was dead, but P a n a m a continued to h o l d a special place i n m y heart. L i v i n g i n S o u t h F l o r i d a , I h a d access to many sources of i n f o r m a t i o n about current events i n Central A m e r i c a . Torrijos's legacy lived o n , even i f it was filtered through people w h o were not graced with his compassionate personality and, strength of character. Attempts to settle differences throughout the hemisphere continued after his death, as d i d P a n a m a s determination to force the U n i t e d States to live u p to the terms of the C a n a l Treaty. Torrijos's successor, M a n u e l Noriega, at first appeared committed to following i n his mentor's footsteps. I never met Noriega personally, but b y all accounts, he initially endeavored to further the cause of L a t i n America's poor a n d oppressed. O n e of his most important projects was the continued exploration of prospects for b u i l d i n g a new canal, to be financed a n d constructed b y the Japanese. P r e dictably, he encountered a great deal o f resistance from Washington and f r o m private U . S . companies. A s Noriega h i m s e l f writes: Secretary of State George Shultz was a former executive of the m u l t i n a t i o n a l construction company Bechtel; Defense Secretary Caspar Weinberger h a d been a Bechtel vice president. Bechtel w o u l d have liked nothing better than to earn the billions of dollars i n revenue that canal construction w o u l d generate... T h e Reagan a n d B u s h administrations feared the possibility that Japan might

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dominate an eventual canal construction project; not only was there a misplaced concern about security, there was also the question of commercial rivalry. U.S. construction firms stood to lose billions of dollars. 1

But Noriega was no Torrijos. H e d i d not have his former boss's charisma or integrity. Over time, he developed an unsavory reputation for corruption and drug dealing, and was even suspected of arranging the assassination of a political rival, Hugo Spadafora. Noriega built his reputation as a colonel heading u p the P a n a manian Defense Forces' G-2 unit, the military intelligence command that was the national liaison w i t h the C I A . I n this capacity, he d e veloped a close relationship with C I A Director W i l l i a m J . Casey. T h e C I A used this connection to further its agenda throughout the C a r i b bean and Central and South America. For example, when the Reagan administration wanted to give Castro advance w a r n i n g of the 1983 U.S. invasion of Grenada, Casey t u r n e d to Noriega, asking h i m to serve as messenger. The colonel also helped the C I A infiltrate C o l o m bian and other drug cartels. By 1984, Noriega h a d been promoted to general and commander in chief o f the P a n a m a n i a n Defense Forces. It is reported that when Casey arrived i n Panama City that year and was met at the airport by the local C I A chief, he asked, "Where's m y boy? Where's Noriega?" W h e n the general visited Washington, the two m e n met privately at Casey's house. M a n y years later, Noriega w o u l d admit that his close b o n d with Casey made h i m feel invincible. H e believed that the C I A , like G - 2 , was the strongest branch o f its country's government. H e was convinced that Casey would protect him, despite Noriega's stance on the P a n a m a Canal Treaty and U.S. Canal Zone military bases. 2

Thus, while Torrijos h a d been an international icon for justice and equality, Noriega became a symbol of corruption and decadence. His notoriety i n this regard was assured w h e n , o n June 12,1986, the N e w York T i m e s ran a front-page article w i t h the headline, "Panama Strongman Said to Trade i n Drugs a n d Illicit Money." T h e expose, written by a Pulitzer P r i z e - w i n n i n g reporter, alleged that the general was a secret a n d illegal partner i n several L a t i n A m e r i c a n b u s i nesses; that he had spied on and for both the U n i t e d States and Cuba, acting as a sort of double agent; that G - 2 , under his orders, h a d i n

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fact beheaded H u g o Spadafora; and that N o r i e g a had personally directed "the most significant drug r u n n i n g i n Panama." T h i s article was accompanied by an unflattering portrait of the general, and a follow-up the next day included more details. C o m p o u n d i n g his other problems, Noriega was also saddled w i t h a U . S . president w h o suffered from a n image problem, what journalists referred to as George H . W . Bush's " w i m p factor." T h i s took o n special significance w h e n N o r i e g a adamantly refused to consider a fifteen-year extension for the School of the Americas. The general's memoirs provide an interesting insight: 3

A s determined a n d proud as we were to follow through w i t h Torrijos's legacy, the U n i t e d States didn't want any of this to happen. They wanted an extension or a renegotiation for the installation [School of the A m e r i c a s ] , saying that w i t h their growing w a r preparations i n C e n t r a l A m e r i c a , they still needed it. B u t that School of the A m e r i c a s was an embarrassment to us. W e didn't want a t r a i n i n g g r o u n d for death squads a n d repressive rightw i n g militaries on our s o i l .

Perhaps, therefore, the w o r l d should have anticipated it, but i n fact the w o r l d was stunned when, on December 20,1989, the U n i t e d States attacked P a n a m a w i t h what was reported to be the largest airborne assault o n a city since W o r l d W a r I I . It was an unprovoked attack on a civilian population. P a n a m a a n d her people posed absolutely no threat to the U n i t e d States or to any other country. Politicians, governments, a n d press around the w o r l d denounced the unilateral U . S . action as a clear violation of international lawH a d this military operation been directed against a country that h a d committed mass m u r d e r or other h u m a n rights crimes â&#x20AC;&#x201D; P i n o chet's Chile, Stroessner's Paraguay, Somosa's Nicaragua, D'Aubuissons E l Salvador, or Saddam's Iraq, for example â&#x20AC;&#x201D; the w o r l d might have understood. But P a n a m a h a d done nothing of the sort; it had merely dared to defy the wishes of a handful of powerful politicians and corporate executives. It h a d insisted that the C a n a l Treaty be honored, it h a d h e l d discussions w i t h social reformers, a n d it h a d explored the possibility of b u i l d i n g a new canal w i t h Japanese financing a n d 6

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construction companies. A s a result, it suffered devastating consequences. A s Noriega puts i t : I want to make it very clear: the destabilization campaign launched by the U n i t e d States i n 1986, ending w i t h the 1989 P a n a m a invasion, was a result of the U . S . rejection of any scenario i n w h i c h future control of the Panama Canal might be i n the hands of an independent, sovereign P a n a m a â&#x20AC;&#x201D; s u p p o r t e d by Japan... Shultz and W e i n berger, meanwhile, masquerading as officials operating i n the public interest and basking i n popular ignorance about the powerful economic interests they represented, were b u i l d i n g a propaganda campaign to shoot me down." Washington's stated justification for the attack was based on one man. T h e U n i t e d States' sole rationale for sending its young m e n and w o m e n to risk their lives and consciences k i l l i n g innocent people, i n c l u d i n g u n t o l d numbers of children, and setting fire to huge sections of P a n a m a City, was Noriega. H e was characterized as evil, as the enemy of the people, as a drug-trafficking monster, a n d as such he provided the a d m i n i s t r a t i o n w i t h an excuse for the massive invasion of a country w i t h two m i l l i o n inhabitants â&#x20AC;&#x201D; w h i c h coincidentally happened to sit on one of the most valuable pieces of real estate i n the world. I found the invasion disturbing to the point of d r i v i n g me into a depression that lasted many days. I k n e w that N o r i e g a had bodyguards, yet I could not help believing that the jackals could have taken h i m out, as they had Roldos and Torrijos. M o s t of his bodyguards, I suspected, had been trained by U.S. military personnel and probably could have been p a i d either to look the other way or to carry out an assassination themselves. The more I thought and read about the invasion, therefore, the more convinced I became that it signaled a U . S . policy t u r n back toward the o l d methods of empire b u i l d i n g , that the B u s h a d m i n i s tration was determined to go one better than Reagan and to demonstrate to the w o r l d that it w o u l d not hesitate to use massive force i n order to achieve its ends. It also seemed that the goal i n Panama, i n addition to replacing the Torrijos legacy with a puppet administration

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favorable to the U n i t e d States, was to frighten countries like Iraq into submission. D a v i d H a r r i s , a contributing editor at the N e w Y o r k T i m e s M a g a z i n e and the author of many books, has an interesting observation. In his 2001 book S h o o t i n g t h e M o o n , he states: O f all the thousands of rulers, potentates, strongmen, juntas, a n d warlords the A m e r i c a n s have dealt w i t h i n all corners of the w o r l d , General M a n u e l A n t o n i o N o r i e g a is the only one the A m e r i c a n s came after l i k e this. Just once in its 225 years o f formal national existence has the U n i t e d States ever invaded another country a n d carried its ruler back to the U n i t e d States to face trial a n d i m prisonment for violations of A m e r i c a n l a w committed on that rulers o w n native foreign t u r f .

F o l l o w i n g the bombardment, the U n i t e d States suddenly found itself i n a delicate situation. For a while, it seemed as though the whole t h i n g w o u l d backfire. T h e B u s h administration might have quashed the w i m p rumors, but now it faced the problem of legitimacy, of appearing to be a bully caught i n an act of terrorism. It was disclosed that the U.S. A r m y h a d prohibited the press, the R e d Cross, and other outside observers from entering the heavily bombed areas for three days, w h i l e soldiers incinerated a n d b u r i e d the casualties. The press asked questions about how m u c h evidence of criminal a n d other inappropriate behavior was destroyed, a n d about how many died because they were denied timely medical attention, but such questions were never answered. W e shall never k n o w many of the facts about the invasion, nor shall we k n o w the true extent of the massacre. Defense Secretary R i c h a r d Cheney claimed a death t o l l between five h u n d r e d a n d six hundred, but independent h u m a n rights groups estimated it at three thousand to five thousand, w i t h another twenty-five thousand left homeless. Noriega was arrested, flown to M i a m i , a n d sentenced to forty years' i m p r i s o n m e n t ; at that time, he was the only person i n the U n i t e d States officially classified as a prisoner of w a r . 9

T h e w o r l d was outraged by this breach of international law a n d by the needless destruction of a defenseless people at the hands of the most powerful military force on the planet, but few i n the U n i t e d

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States were aware o f either the outrage or the crimes Washington had committed. Press coverage was very limited. A number of factors contributed to this, i n c l u d i n g government policy, W h i t e House phone calls to publishers a n d television executives, congresspeople w h o dared not object, lest the w i m p factor become their problem, and journalists w h o thought the public needed heroes rather than objectivity. One exception was Peter Eisner, a N e w s d a y editor a n d Associated Press reporter w h o covered the P a n a m a invasion a n d continued to analyze it for many years. I n T h e M e m o i r s of M a n u e l N o r i e g a : A m e r i c a ' s P r i s o n e r , published i n 1997, Eisner writes: The death, destruction a n d injustice wrought i n the name of fighting Noriega â&#x20AC;&#x201D; a n d the lies surrounding that event â&#x20AC;&#x201D;were threats to the basic A m e r i c a n principles of democracy... Soldiers were ordered to k i l l i n P a n a m a a n d they d i d so after being t o l d they h a d to rescue a country f r o m the clamp of a cruel, depraved dictator; once they acted, the people of their country (the U.S.) marched lockstep behind t h e m .

After lengthy research, i n c l u d i n g interviews w i t h Noriega i n his M i a m i prison cell, Eisner states: O n the key points, I do not t h i n k the evidence shows Noriega was guilty of the charges against h i m . I do not think his actions as a foreign m i l i t a r y leader or a sovereign head of state justify the invasion of P a n a m a or that he represented a threat to U . S . national security. 12

E i s n e r concludes: M y analysis of the political situation a n d my reporting i n P a n a m a before, d u r i n g , a n d after the invasion brought me to the conclusion that the U . S . invasion of P a n a m a was an abominable abuse of power. The invasion p r i n c i pally served the goals of arrogant A m e r i c a n politicians and their Panamanian allies, at the expense of u n c o n scionable b l o o d s h e d . 13

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T h e Arias family and the pre-Torrijos oligarchy, which had served as U . S . puppets f r o m the time when P a n a m a was t o r n from C o l o m bia u n t i l Torrijos took over, were reinstated. T h e new Canal Treaty became a moot point. In essence, Washington once again controlled the waterway, despite anything the official documents said. A s I reflected on those incidents a n d all that I h a d experienced w h i l e w o r k i n g for M A I N , I f o u n d myself asking the same questions over and over: H o w many decisions â&#x20AC;&#x201D; i n c l u d i n g ones of great h i s torical significance that impact m i l l i o n s of people â&#x20AC;&#x201D; are made hym e n a n d w o m e n who are driven by personal motives rather than by a desire to do the right thing? H o w m a n y of our top government officials are driven by personal greed instead of national loyalty? H o w many wars are fought because a president does not want his constituents to perceive h i m as a w i m p ? Despite m y promises to S W E C ' s president, m y frustration a n d feelings of impotence about the P a n a m a invasion prodded me into resuming work on my book, except now I decided to focus on Torrijos. I saw his story as a way to expose m a n y of the injustices that infect our world, a n d as a way to r i d myself of m y guilt. T h i s time, however, I was determined to keep silent about what I was doing, rather than seeking advice from friends a n d peers. A s I worked on the book, I was stunned by the magnitude of what we E H M s h a d accomplished, i n so m a n y places. I tried to concentrate on a few countries that stood out, but the list of places where I h a d w o r k e d a n d w h i c h were worse off afterward was astounding. I also was horrified by the extent of my o w n corruption. I h a d done a great deal of soul searching, yet I realized that while I was i n the midst of it I h a d been so focused on my daily activities that I h a d not seen the larger perspective. T h u s , w h e n I was i n Indonesia I fretted over the things H o w a r d Parker and I discussed, or the issues raised by Rasy's young Indonesian friends. W h i l e I was w o r k i n g i n Panama, I was deeply affected by the implications of what I h a d seen d u r i n g Fidel's introduction of the slums, the Canal Zone, a n d the discotheque. In Iran, m y conversations w i t h Y a m i n a n d Doc troubled me immensely. N o w , the act of w r i t i n g this book gave me an overview. I understood how easy it h a d been not to see the larger picture a n d therefore to miss the true significance of my actions. H o w simple this sounds, and h o w self-evident; yet, how insidious the nature of these experiences. For me it conjures the image of a

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soldier. In the beginning, he is naive. H e may question the morality of k i l l i n g other people, but mostly he has to deal w i t h his own fear, has to focus on survival. After he kills his first enemy, he is overw h e l m e d w i t h emotions. H e may wonder about the family of the dead m a n a n d feel a sense of remorse. But as time goes on a n d he participates i n more battles, kills more people, he becomes h a r d ened. H e is transformed into a professional soldier. I h a d become a professional soldier. A d m i t t i n g that fact opened the door for a better understanding of the process by w h i c h crimes are c o m m i t t e d and empires are built. I could now comprehend w h y so many people have committed atrocious acts â&#x20AC;&#x201D; how, for example, good, family-loving Iranians could work for the shah's brutal secret police, how good Germans could follow the orders of Hitler, howgood A m e r i c a n m e n a n d women could bomb P a n a m a City. As an E H M , I never drew a penny directly from the N S A or any other government agency; M A I N p a i d m y salary. I was a private citizen, employed by a private corporation. Understanding this helped me see more clearly the emerging role of the corporate executive-asE H M . A whole new class of soldier was emerging on the w o r l d scene, and these people were becoming desensitized to their own actions. I wrote: Today, men a n d w o m e n are going into T h a i l a n d , the Philippines, Botswana, Bolivia, and every other country where they hope to find people desperate for work. They go to these places w i t h the express purpose of exploiting wretched people â&#x20AC;&#x201D; people whose children are severely malnourished, even starving, people who live i n shantytowns a n d have lost all hope of a better life, people who have ceased to even dream of another day. These m e n and women leave their plush offices i n M a n h a t t a n or San Francisco or Chicago, streak across continents a n d oceans i n luxurious jetliners, check into first-class hotels, and dine at the finest restaurants the country has to offer. T h e n they go searching for desperate people. Today, we still have slave traders. They no longer find it necessary to m a r c h into the forests of A f r i c a l o o k i n g for prime specimens w h o w i l l b r i n g top dollar on the auction

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blocks i n Charleston, Cartagena, a n d H a v a n a . They s i m ply recruit desperate people a n d b u i l d a factory to p r o duce the jackets, blue jeans, tennis shoes, automobile parts, computer components, a n d thousands o f other items they can sell i n the markets of their choosing. O r they may elect not even to own the factory themselves; instead, they hire a local businessman to do a l l their dirty work for t h e m . These men a n d w o m e n t h i n k of themselves as upright. They return to their homes w i t h photographs o f quaint sites a n d ancient ruins, to show to their children. They attend seminars where they pat each other o n the back and exchange tidbits of advice about dealing w i t h the eccentricities of customs i n far-off lands. T h e i r bosses hire lawyers w h o assure t h e m that what they are d o i n g is perfectly legal. They have a cadre of psychotherapists a n d other h u m a n resource experts at their disposal to convince t h e m that they are h e l p i n g those desperate people. The old-fashioned slave trader t o l d h i m s e l f that he was dealing w i t h a species that was not entirely h u m a n , and that he was offering t h e m the opportunity to become Christianized. H e also understood that slaves were f u n damental to the survival of his own society, that they were the foundation of his economy. The m o d e r n slave trader assures h i m s e l f (or herself) that the desperate people are better off earning one dollar a day t h a n no dollars at all, and that they are receiving the opportunity to become integrated into the larger w o r l d community. She also understands that these desperate people are fundamental to the survival o f her company, that they are the foundation for her own lifestyle. She never stops to t h i n k about the larger implications of what she, her lifestyle, a n d the economic system b e h i n d t h e m are doing to the w o r l d â&#x20AC;&#x201D; or of how they may ultimately impact her children's future.

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CHAPTER

An EHM Failure in Iraq

M y role as president of IPS i n the 1980s, a n d as a consultant to S W E C i n the late 1980s a n d throughout m u c h of the 1990s, gave me access to information about Iraq that was not available to most people. Indeed, d u r i n g the 1980s the majority of A m e r i c a n s k n e w little about the country. It simply was not o n their radar screen. However, I was fascinated by what was going on there. I kept i n touch w i t h o l d friends w h o w o r k e d for the W o r l d Bank, U S A I D , the I M F , or one of the other international financial organizations, and w i t h people at Bechtel, Halliburton, and the other major engineering and construction companies, i n c l u d i n g my own fatherin-law. M a n y of the engineers employed by I P S subcontractors a n d other independent power companies were also involved i n projects i n the M i d d l e East. I was very aware that the E H M s were h a r d at work i n Iraq. T h e Reagan a n d B u s h administrations were determined to t u r n Iraq into another Saudi A r a b i a . There were many compelling reasons for S a d d a m H u s s e i n to follow the example of the House of Saud. H e had only to observe the benefits they h a d reaped from the M o n e y - l a u n d e r i n g Affair. Since that deal was struck, m o d e r n cities had risen from the Saudi desert, Riyadh's garbage-collecting goats had been transformed into sleek trucks, and now the Saudis enjoyed the fruits of some of the most advanced technologies i n the w o r l d : state-of-the-art desalinization plants, sewage treatment systems, communications networks, a n d electric utility grids.

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Saddam Hussein undoubtedly was aware that the Saudis also e n joyed special treatment when it came to matters of international law. T h e i r good friends i n Washington t u r n e d a b l i n d eye to many Saudi activities, i n c l u d i n g the financing of fanatical groups — m a n y of w h i c h were considered by most of the w o r l d to be radicals bordering on terrorism — and the h a r b o r i n g of international fugitives. In fact, the U n i t e d States actively sought a n d received S a u d i A r a b i a n financial support for O s a m a b i n Laden's A f g h a n war against the Soviet U n i o n . T h e Reagan a n d B u s h administrations not only encouraged the Saudis i n this regard, but also they pressured many other c o u n tries to do the same — or at least to look the other way. The E H M presence i n Baghdad was very strong d u r i n g the 1980s. They believed that Saddam eventually w o u l d see the light, and I h a d to agree w i t h this assumption. After all, i f Iraq reached an accord w i t h Washington similar to that of the Saudis, Saddam could basically write his own ticket i n r u l i n g his country, a n d might even expand his circle of influence throughout that part of the w o r l d . It hardly mattered that he was a pathological tyrant, that he h a d the blood of mass murders on his hands, or that his mannerisms and brutal actions conjured images of A d o l p h Hitler. T h e U n i t e d States h a d tolerated and even supported such m e n m a n y times before. W e w o u l d be happy to offer h i m U.S. government securities i n exchange for petrodollars, for the promise of continued o i l supplies, a n d for a deal whereby the interest on those securities was used to hire U . S . companies to improve infrastructure systems throughout Iraq, to create new cities, and to t u r n the deserts into oases. We would be w i l l ing to sell h i m tanks a n d fighter planes a n d to b u i l d h i m chemical and nuclear power plants, as we had done i n so many other countries, even i f these technologies could conceivably be used to produce a d vanced weaponry. Iraq was extremely i m p o r t a n t to us, m u c h more important than was obvious o n the surface. Contrary to c o m m o n public o p i n i o n , Iraq is not simply about o i l . It is also about water and geopolitics. Both the Tigris a n d Euphrates rivers flow through Iraq; thus, of all the countries i n that part of the w o r l d , Iraq controls the most i m portant sources of increasingly critical water resources. D u r i n g the 1980s, the importance of water — politically as well as economically— was becoming obvious to those of us i n the e n e r g y a n d engineering fields. In the rush toward privatization, many of the major companies

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that had set their sights on taking over the small independent power companies now looked toward privatizing water systems i n Africa, L a t i n A m e r i c a , a n d the M i d d l e East. In addition to oil a n d water, Iraq is situated i n a very strategic l o cation. It borders Iran, K u w a i t , Saudi A r a b i a , J o r d a n , Syria, a n d Turkey, a n d i t has a coastline on the Persian Gulf. It is w i t h i n easy missile-striking distance of both Israel and the former Soviet U n i o n . M i l i t a r y strategists equate m o d e r n Iraq to the H u d s o n River valley d u r i n g the French a n d Indian W a r and the A m e r i c a n Revolution. In the eighteenth century, the French, B r i t i s h , a n d A m e r i c a n s k n e w that whoever controlled the H u d s o n River valley controlled the continent. Today, it is c o m m o n knowledge that whoever controls Iraq holds the key to controlling the M i d d l e East. Above a l l else, Iraq presented a vast market for A m e r i c a n technology a n d engineering expertise. The fact that it sits atop one of the world's most extensive oil fields (by some estimates, even greater than Saudi Arabia's) assured that it was i n a position to finance huge infrastructure and industrialization programs. A l l the major players â&#x20AC;&#x201D; engineering and construction companies; computer systems s u p pliers; aircraft, missile, a n d tank manufacturers; a n d pharmaceutical and chemical companies â&#x20AC;&#x201D; were focused on Iraq. However, by the late 1980s it was apparent that S a d d a m was not buying into the E H M scenario. T h i s was a major frustration a n d a great embarrassment to the first B u s h administration. Like Panama, Iraq contributed to George H . W . Bush's w i m p image. A s B u s h searched for a way out, S a d d a m played into his hands. I n August 1990, he invaded the oil-rich sheikhdom of Kuwait. B u s h responded w i t h a denunciation of S a d d a m for violating international law, even though it h a d been less than a year since B u s h h i m s e l f h a d staged the illegal and unilateral invasion of Panama. It was no surprise, w h e n the president finally ordered an all-out military attack. Five h u n d r e d thousand U . S . troops were sent i n as part of an international force. D u r i n g the early months of 1991, an aerial assault was launched against Iraqi military and civilian targets. It was followed by a one h u n d r e d - h o u r l a n d assault that routed the outgunned a n d desperately inferior Iraqi army. K u w a i t was safe. A true despot h a d been chastised, though not brought to justice. Bush's popularity ratings soared to 90 percent among the A m e r i c a n people.

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I was i n Boston attending meetings at the time of the Iraq invasion â&#x20AC;&#x201D; one of the few occasions w h e n I was actually asked to do something for S W E C . I vividly recall the enthusiasm that greeted Bush's decision. Naturally, people throughout the Stone & Webster organization were excited, though not only because we had taken a stand against a murderous dictator. F o r t h e m , a U.S. victory i n Iraq offered possibilities for huge profits, promotions, a n d raises. The excitement was not l i m i t e d to those of us i n businesses that w o u l d directly benefit from war. People across the nation seemed a l most desperate to see our country reassert itself militarily. I believe there were many reasons for this attitude, i n c l u d i n g the p h i l o s o p h ical change that occurred w h e n Reagan defeated Carter, the Iranian hostages were released, a n d Reagan announced his intention to renegotiate the P a n a m a Canal Treaty. Bush's invasion of P a n a m a stirred the already smoldering flames. Beneath the patriotic rhetoric a n d the calls for action, however, I believe a m u c h more subtle transformation was occurring i n the way U.S. commercial interests â&#x20AC;&#x201D; and therefore most of the people who w o r k e d for A m e r i c a n corporations â&#x20AC;&#x201D; viewed the world. The m a r c h toward global empire h a d become a reality i n which m u c h of the country participated. T h e dual ideas of globalization and p r i v a tization were m a k i n g significant inroads into our psyches. In the final analysis, this was not solely about the U n i t e d States. The global empire h a d become just that; it reached across all b o r ders. W h a t we h a d previously considered U.S. coiporations were now truly international, even from a legal standpoint. M a n y of them were incorporated i n a multitude of countries; they could pick and choose from an assortment of rules a n d regulations under w h i c h to conduct their activities, a n d a multitude of globalizing trade agreements a n d organizations made this even easier. W o r d s like d e m o c r a c y , s o c i a l i s m , and c a p i t a l i s m were becoming almost obsolete. Corporatocracy had become a fact, and it increasingly exerted itself as the single m a j o r influence on w o r l d economies a n d politics. In a strange t u r n of events, I succumbed to the corporatocracy w h e n I sold I P S i n November 1990. It was a lucrative deal for m y partners and me, but we sold out m a i n l y because A s h l a n d O i l C o m pany put tremendous pressure on us. I k n e w from experience that fighting them w o u l d be extremely costly i n many ways, while selling w o u l d make us wealthy. However, it d i d strike me as ironic that an

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oil company w o u l d became the new owners of my alternative energycompany; part of me felt like a traitor. S W E C demanded very little of my time. Occasionally, I was asked to fly to Boston for meetings or to help prepare a proposal. I was sometimes sent to places like R i o de Janeiro, to hobnob w i t h the movers and shakers there. Once, I flew to Guatemala o n a private jet. I frequently called project managers to r e m i n d t h e m that I was o n the payroll a n d available. Receiving all that money for doing so very little rubbed at m y conscience. I knew the business well a n d wanted to contribute something useful. But i t simply was not o n the agenda. The image of being a m a n i n the middle haunted me. I wanted to take some action that w o u l d justify m y existence and that might t u r n all the negatives of my past into something positive. I continued to work surreptitiously — and very irregularly — o n C o n s c i e n c e of a n E c o n o m i c H i t M a n , and yet I d i d not deceive myself into believing that it w o u l d ever be published. In 1991,1 began guiding small groups of people into the A m a z o n to spend time w i t h a n d l e a r n from the Shuars, w h o were eager to share their knowledge about environmental stewardship a n d indigenous healing techniques. D u r i n g the next few years, the d e m a n d for these trips increased rapidly a n d resulted i n the formation of a n o n profit organization, D r e a m Change Coalition. Dedicated to changing the way people f r o m industrialized countries see the earth and our relationship to it, D r e a m Change developed a following around the w o r l d a n d empowered people to create organizations w i t h similar missions i n m a n y countries. T I M E magazine selected it as one of thirteen organizations whose W e b sites best reflect the ideals a n d goals o f E a r t h Day. 1

Throughout the 1990s, I became increasingly involved i n the nonprofit w o r l d , helping to create several organizations a n d serving o n the b o a r d of directors of others. M a n y of these grew out of the work o f highly dedicated people at D r e a m Change a n d involved w o r k i n g w i t h indigenous people i n L a t i n A m e r i c a — t h e Shuars a n d Achuars of the A m a z o n , the Quechuas of the A n d e s , the Mayas i n G u a t e m a l a — or teaching people i n the U n i t e d States a n d E u r o p e about these cultures. S W E C approved of this philanthropic w o r k ; it was consistent w i t h S W E C ' s o w n c o m m i t m e n t to the U n i t e d Way. I also wrote more books, always careful to focus on indigenous teachings and to avoid references to my E H M activities. Besides alleviating

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m y boredom, these measures helped me keep i n touch w i t h L a t i n A m e r i c a a n d the political issues that were dear to me. But try as I might to convince myself that m y nonprofit a n d w r i t ing activities provided a balance, that I was m a k i n g amends for my past activities, I found this increasingly difficult. In my heart, I knew I was s h i r k i n g my responsibilities to my daughter. Jessica was i n heriting a w o r l d where m i l l i o n s of c h i l d r e n are b o r n saddled w i t h debts they w i l l never be able to repay. A n d I h a d to accept responsibility for it. M y books grew i n popularity, especially one titled, T h e W o r l d I s A s Y o u D r e a m I t . Its success led to increasing demands for me to give workshops a n d lectures. Sometimes, standing i n front of an a u dience i n Boston or N e w York or M i l a n , I was struck by the irony. If the w o r l d is as y o u dream it, w h y h a d I dreamed such a world? H o w had I managed to play such an active role i n manifesting such a nightmare? In 1997,1 was commissioned to teach a weeklong Omega Institute workshop i n the Caribbean, at a resort o n St. J o h n Island. I arrived late at night. W h e n I awoke the next m o r n i n g , I walked onto a t i n y balcony a n d found myself l o o k i n g out at the very bay where, seventeen years earlier, I h a d made the decision to quit M A I N . I c o l lapsed into a chair, overcome w i t h emotion. Throughout the week, I spent m u c h of my free time on that b a l cony, looking down at Leinster Bay, trying to understand my feelings. I came to realize that although I h a d quit, I h a d not taken the next step, a n d that m y decision to r e m a i n i n the m i d d l e was exacting a devastating toll. By the end of the week, I had concluded that the world around me was not one that I wanted to dream, a n d that I needed to do exactly what I w as instructing m y students to do: to change my dreams i n ways that reflected what I really wanted i n my life. r

W h e n I returned home, I gave up my corporate consulting p r a c tice. T h e president of S W E C who h a d h i r e d me was now retired. A new m a n h a d come aboard, one w h o was younger than me and was apparently unconcerned about me telling my story. H e had initiated a cost-cutting program a n d was happy not to have to pay me that exorbitant retainer any longer. I decided to complete the book I had been w o r k i n g on for so long, and just m a k i n g the decision brought a wonderful sense of relief. I shared m y ideas about w r i t i n g w i t h close friends, mostly people i n

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the nonprofit w o r l d w h o were involved with indigenous cultures and rain forest preservation. To my surprise, they were dismayed. They feared that speaking out w o u l d undermine my teaching w o r k a n d jeopardize the nonprofit organizations I supported. M a n y of us were helping A m a z o n tribes protect their lands from oil companies; c o m ing clean, I was told, could u n d e r m i n e my credibility, and might set back the whole movement. Some even threatened to w i t h d r a w their support. So, once again, I stopped writing. Instead, I focused o n t a k i n g people deep into the A m a z o n , showing t h e m a place a n d a tribe that are mostly untouched by the m o d e r n w o r l d . In fact, that is where I was on September 11, 2001.

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CHAPTER

September 11 and its Aftermath for Me, Personally

O n September 10, 2001, I was traveling d o w n a river i n the Ecuadorian A m a z o n with Shakaim C h u m p i , the coauthor of my book S p i r i t of t h e S h u a r . W e were leading a group of sixteen N o r t h A m e r icans to his community deep i n the rain forest. The visitors h a d come to learn about his people a n d to help t h e m preserve their precious rain forests. S h a k a i m h a d fought as a soldier i n the recent Ecuador-Peru c o n flict. M o s t people i n the major oil-consuming nations have never heard about this war, yet it was fought p r i m a r i l y to provide t h e m w i t h o i l . A l t h o u g h the border between these two countries was d i s puted for many years, only recently d i d a resolution become urgent. T h e reason for the urgency was that the o i l companies needed to k n o w w i t h w h i c h country to negotiate i n order to w i n concessions for specific tracts o f the o i l - r i c h lands. Borders h a d to be defined. The Shuars formed Ecuador's first line of defense. They proved themselves to be ferocious fighters, often overcoming superior n u m bers and better-equipped forces. T h e Shuars d i d not k n o w anything about the politics b e h i n d the war or that its resolution w o u l d open the door to oil companies. They fought because they come f r o m a l o n g t r a d i t i o n of warriors a n d because they were not about to allow foreign soldiers onto their lands. As we paddled down the river, watching a flock of chattering parrots fly overhead, I asked S h a k a i m whether the truce was still holding.

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"Yes," he said, "but I'm afraid I must tell y o u that we are now preparing to go to war w i t h you." H e went o n to explain that, of course, he d i d not mean me personally or the people i n our group. "You are our friends," he assured me. H e was, he said, referring to our oil companies a n d to the military forces that w o u l d come into his jungle to defend t h e m . "We've seen what they d i d to the H u a o r a n i tribe. They destroyed their forests, polluted the rivers, a n d k i l l e d m a n y people, i n c l u d i n g children. Today, the H u a o r a n i h a r d l y exist as a people anymore. W e won't let that happen to us. W e won't allow oil companies into our territory, any more t h a n we w o u l d the Peruvians. W e have all sworn to fight to the last m a n . " That night our group sat around a fire i n the center of a beautiful Shuar longhouse built from split bamboo slats placed i n the g r o u n d and covered w i t h a thatched roof. I told them about my conversation w i t h Shakaim. We all wondered h o w many other people i n the w o r l d felt similarly about our o i l companies a n d our country. H o w many, like the Shuars, were terrified that we w o u l d come into their lives and destroy their culture a n d their lands? H o w many hated us? 1

The next m o r n i n g , I went d o w n to the little office where we kept our two-way radio. I needed to arrange for pilots to fly i n a n d pick us up i n a few days. A s I was talking w i t h them, I heard a shout. " M y G o d ! " the m a n on the other end of the radio exclaimed. " N e w York is under attack." H e t u r n e d up the commercial radio that h a d been playing music i n the background. D u r i n g the next h a l f hour, we received a m i n u t e - b y - m i n u t e account of the events unfolding i n the United States. Like everyone else, it was a moment I shall never forget. W h e n I returned to m y home i n F l o r i d a , I k n e w I h a d to visit G r o u n d Zero, the former site of the W o r l d Trade Center towers, so I arranged to fly to N e w York. I checked into my uptown hotel i n early afternoon. It was a sunny November day, unseasonably balmy. I strolled along Central Park, filled w i t h enthusiasm, then headed for a part of the city where once I h a d spent a lot of time, the area near W a l l Street now k n o w n as G r o u n d Zero. A s I approached, m y enthusiasm was replaced w i t h horror. T h e sights a n d smells were overwhelming â&#x20AC;&#x201D; the destruction; the twisted a n d melted skeletons of those buildings; the debris; the r a n c i d odor of smoke, charred

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a sense of incredible once-great ruins, a n d

b u r n t flesh. I had seen it all on T V , but being here was different I had not been prepared for this â&#x20AC;&#x201D; especially not for the people. Two months h a d passed and still they stood around, those who lived or worked nearby, those who h a d survived. A n Egyptian m a n was l o i tering outside his small shoe repair shop, shaking his head i n disbelief. "Can't get used to it," he muttered. "I lost m a n y customers, manyfriends. M y nephew d i e d up there." H e p o i n t e d at the blue sky. "I t h i n k I saw h i m j u m p . I d o n ' t k n o w . . . So m a n y were j u m p i n g , h o l d i n g hands a n d flapping their arms as though they could fly." It came as a surprise, the way people talked w i t h one another. In N e w York City. A n d it went beyond language. T h e i r eyes met. A l though somber, they exchanged looks of compassion, half-smiles that spoke more t h a n a m i l l i o n words. But there was something else, a sense about the place itself. A t first, I couldn't figure it out; then it struck me: the light. Lower M a n hattan h a d been a dark canyon, back i n the days w h e n I made the pilgrimage to this part of t o w n to raise capital for I P S , w h e n I used to plot strategy w i t h m y investment bankers over dinner at W i n d o w s on the W o r l d . You h a d to go that h i g h , to the top of the W o r l d Trade Center, i f you wanted to see light. N o w , here it was at street level. The canyon h a d been split wide open, a n d we w h o stood on the street beside the ruins were w a r m e d by the sunshine. I couldn't help wondering i f the view of the sky, of the light, h a d helped people open their hearts. I felt guilty just t h i n k i n g such thoughts. I turned the corner at Trinity C h u r c h a n d headed d o w n W a l l Street. Back to the old N e w York, enveloped i n shadow. N o sky, no light. People hurried along the sidewalk, ignoring one another. A cop screamed at a stalled car. I sat d o w n o n the first steps I came to, at n u m b e r fourteen. F r o m somewhere, the sounds of giant fans or an air blower rose above the other noises. It seemed to come f r o m the massive stone wall of the N e w York Stock Exchange building. I watched the people. They h u s tled up a n d down the street, leaving their offices, h u r r y i n g home, or heading to a restaurant or bar to discuss business. A few- w a l k e d i n tandem a n d chatted w i t h each other. M o s t , though, were alone a n d silent. I tried to make eye contact; it didn't happen. The wail of a car alarm drew my attention down the street. A m a n rushed out of an office a n d pointed a key at the car; the a l a r m went

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silent. I sat there quietly for a few long moments. After a while, I reached into m y pocket a n d pulled out a neatly folded piece of paper covered w i t h statistics. T h e n I saw h i m . H e shuffled along the street, staring down at his feet. H e h a d a scrawny gray beard a n d wore a grimy overcoat that looked especially out of place o n this w a r m afternoon on W a l l Street. I k n e w he was A f g h a n . H e glanced at me. T h e n , after only a second of hesitation, he started up the steps. H e nodded politely a n d sat d o w n beside me, leaving a yard or two between us. F r o m the way he looked straight ahead, I realized it w o u l d be up to me to begin the conversation. "Nice afternoon." "Beautiful." H i s accent was thick. "Times like these, we want s u n shine." "You mean because of the W o r l d Trade Center?" H e nodded. "You're f r o m Afghanistan?" H e stared at me. "Is it so obvious?" "I've traveled a lot. Recently, I visited the Himalayas, Kashmir." "Kashmir." H e p u l l e d at his beard. "Fighting." "Yes, I n d i a a n d Pakistan, H i n d u s and M u s l i m s . Makes y o u w o n der about religion, doesn't i t ? " H i s eyes met mine. T h e y were deep b r o w n , nearly black. They struck me as wise a n d sad. H e t u r n e d back toward the N e w York Stock Exchange b u i l d i n g . W i t h a long gnarled finger, he pointed at the b u i l d i n g . " O r maybe," I agreed, "it's about economics, not religion." "You were a soldier?" I couldn't help but chuckle. " N o . A n economic consultant." I handed h i m the paper with the statistics. "These were my weapons." H e reached over a n d took t h e m . "Numbers." " W o r l d statistics." H e studied the list, then gave a little laugh. "I can't read." H e handed it back to me. "The numbers tell us that twenty-four thousand people die every day from hunger." H e whistled softly, then took a moment to t h i n k about this, a n d sighed. "I was almost one of them. I h a d a little pomegranate f a r m near Kandahar. Russians arrived and mujahideen h i d b e h i n d trees

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and i n water ditches." H e raised his hands and pointed them like a rifle. "Ambushing." H e lowered his hands. " A l l m y trees and ditches were destroyed." "After that, what d i d you do?" H e nodded at the list I held. "Does it show beggars?" It d i d not, but I thought I remembered. "About eighty m i l l i o n i n the w o r l d , I believe." "I was one." H e shook his head, seemed lost i n thought. We sat i n silence for a few minutes before he spoke again. "I do not like beggaring. M y c h i l d dies. So I raise poppies." "Opium?" H e shrugged. "No trees, no water. The only way to feed our families." I felt a l u m p i n my throat, a depressing sense of sadness c o m bined w i t h guilt. "We call raising o p i u m poppies evil, yet many of our wealthiest people owe their fortunes to the drug trade." H i s eyes met m i n e and seemed to penetrate m y soul. ' Y o u were a soldier," he stated, n o d d i n g his head to confirm this simple fact. T h e n he rose slowly to his feet and hobbled d o w n the steps. I wanted h i m to stay, but I felt powerless to say anything. I managed to get to m y feet and start after h i m . A t the bottom of the steps I was stopped by a sign. It included a picture of the building where I had been seated. A t the top, it notified passersby that the sign had been erected by Heritage Trails of N e w York. It said: The M a u s o l e u m of Halicarnassus piled on top of the bell tower of St. M a r k ' s i n Venice, at the corner o f W a l l and B r o a d â&#x20AC;&#x201D; that's the design concept b e h i n d 14 W a l l Street. In its day the world's tallest bank b u i l d i n g , the 539-foothigh skyscraper originally housed the headquarters of Bankers Trust, one o f the country's wealthiest

financial

institutions. I stood there i n awe and looked up at this b u i l d i n g . Shortly after the t u r n of the last century, 14 W a l l Street had played the role the W o r l d Trade Center w o u l d later assume; it had been the very symbol of power and economic domination. It h a d also housed Bankers Trust, one of the firms I had employed to finance my energy c o m pany. It was an essential part of my heritage â&#x20AC;&#x201D; the heritage, as the old Afghan m a n so aptly put it, of a soldier. That I had ended up here this day, t a l k i n g w i t h h i m , seemed an

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odd coincidence. Coincidence. The word stopped me. I thought about h o w our reactions to coincidences m o l d our lives. H o w should I react to this one? Continuing to walk, I scanned the heads i n the crowd, but I could find no sign of h i m . A t the next b u i l d i n g , there was an immense statue shrouded i n blue plastic. A n engraving on the building's stone face revealed that this was Federal H a l l , 26 W a l l Street, where on A p r i l 30, 1789, George Washington h a d taken the oath of office as first president of the U n i t e d States. This was the exact spot where the first m a n given the responsibility to safeguard life, liberty, a n d the pursuit of happiness for all people was sworn i n . So close to G r o u n d Zero; so close to W a l l Street. I went on around the block, to Pine Street. There I came face-toface w i t h the w o r l d headquarters of Chase, the bank D a v i d Rockefeller built, a bank seeded w i t h oil money a n d harvested by men like me. This bank, an institution that served the E H M s a n d that was a master at promoting global empire, was i n many ways the very s y m bol of the corporatocracy. I recalled reading that the W o r l d Trade Center was a project started by D a v i d Rockefeller i n I 9 6 0 , a n d that i n recent years the complex h a d been considered an albatross. It h a d the reputation of being a financial misfit, unsuited to modern fiber-optic a n d Internet technologies, a n d burdened w i t h an inefficient a n d costly elevator system. Those two towers once h a d been n i c k n a m e d D a v i d and N e l son. N o w the albatross was gone. I kept walking, slowly, almost reluctantly. Despite the w a r m t h of the afternoon, I felt a chill, a n d I realized that a strange anxiousness, a foreboding, h a d taken h o l d of me. I could not identify its source and I tried to brush it off, p i c k i n g u p m y pace. I eventually found myself once again looking at that smoldering hole, the twisted metal, that great scar i n the earth. I leaned against a b u i l d i n g that h a d escaped the destruction and stared into the pit. I tried to imagine the people rushing out of the collapsing tower and the firefighters dashing i n to help them. I tried to t h i n k about the people w h o h a d j u m p e d , the desperation they felt. But none of these things came to me. Instead, I saw Osama b i n L a d e n accepting money, a n d weapons w o r t h millions of dollars, f r o m a m a n employed by a consulting company under contract to the U n i t e d States government. T h e n I saw myself sitting at a computer w i t h a b l a n k screen.

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I looked around, away f r o m G r o u n d Zero, at the N e w York streets that h a d avoided the tire a n d now were r e t u r n i n g to n o r m a l . I wondered what the people who walked those streets today thought about all this â&#x20AC;&#x201D; not simply about the destruction o f the towers, but also about the r u i n e d pomegranate farms a n d the twenty-four thousand w h o starve every single day. I wondered i f they thought about such things at a l l , i f they could tear themselves away f r o m their jobs a n d gas-guzzling cars a n d their interest payments long enough to consider their o w n contribution to the w o r l d they were passing o n to their children. I wondered what they k n e w about A f ghanistan â&#x20AC;&#x201D; not the Afghanistan on television, the one littered w i t h U.S. m i l i t a r y tents a n d tanks, but the o l d man's Afghanistan. I w o n dered what those twenty-four thousand w h o die every day think. A n d then I saw myself again, sitting before a b l a n k computer screen. I forced my attention back to G r o u n d Zero. A t the moment, one thing was certain: m y country was t h i n k i n g about revenge, and it was focusing on countries like Afghanistan. B u t I was t h i n k i n g about a l l the other places i n the w o r l d where people hate our companies, our military, our policies, a n d our m a r c h t o w a r d global empire. 7

I wondered, W h a t about P a n a m a , Ecuador, Indonesia, Iran, Guatemala, most of Africa? I pushed myself off the w a l l I h a d been leaning against a n d started w a l k i n g away. A short, swarthy m a n was waving a newspaper i n the a i r a n d shouting i n Spanish. I stopped. "Venezuela o n the b r i n k of revolution!" he yelled above the noise o f the traffic, the h o n k i n g horns, a n d the m i l l i n g people. I bought his paper a n d stood there for a m o m e n t scanning the lead article. It was about H u g o Chavez, Venezuela's democratically elected, a n t i - A m e r i c a n president, a n d the undercurrent of hatred generated by U.S. policies i n L a t i n A m e r i c a . W h a t about Venezuela?

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CHAPTER

Venezuela: Saved by Saddam

I h a d watched Venezuela for m a n y years. It was a classic example of a country that rose f r o m rags to riches as a result of oil. It was also a model of the t u r m o i l o i l wealth foments, o f the d i s e q u i l i b r i u m between rich and poor, a n d of a country shamelessly exploited by the corporatocracy. It h a d become the epitome of a place where old-style E H M s like me converged w i t h the new-style, corporate version. The events I read about i n the newspaper that day at G r o u n d Zero were a direct result of the 1998 elections, w h e n the poor a n d disenfranchised of Venezuela elected H u g o Chavez by a landslide as their president. H e immediately instituted drastic measures, taking control of the courts and other institutions a n d dissolving the Venezuelan Congress. H e denounced the U n i t e d States for its "shameless imperialism," spoke out forcefully against globalization, and introduced a hydrocarbons law that was reminiscent, even i n name, to the one J a i m e Ro铆dos h a d brought to E c u a d o r shortly before his airplane went down. T h e law doubled the royalties charged to foreign oil c o m panies. T h e n Chavez defied the traditional independence of the state-owned oil company, Petr贸leos de Venezuela, by replacing its top executives w i t h people loyal to h i m . 1

Venezuelan oil is crucial to economies around the w o r l d . In 2 0 0 2 the nation was the world's fourth-largest oil exporter and the numberthree supplier to the U n i t e d States. Petr贸leos de Venezuela, w i t h forty thousand employees a n d $50 b i l l i o n a year i n sales, provides 80 percent of the country's export revenue. It is by far the most 3

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important factor i n Venezuela's economy.* By t a k i n g over the industry, Chavez h a d thrust himself onto the world stage as a major player. M a n y Venezuelans saw this as destiny, the completion of a process that began eighty years earlier. O n December 14, 1922, a huge oil blowout h a d gushed from the earth near M a r a c a i b o . One h u n d r e d thousand barrels of crude sprayed into the air each day for the next three days, and this single geologic event changed Venezuela forever. By 1930, the country was the world's largest o i l exporter. Venezuelans looked to o i l as a solution to all their problems. O i l revenues d u r i n g the next forty years enabled Venezuela to evolve f r o m one of the most impoverished nations i n the w o r l d to one of the wealthiest i n L a t i n A m e r i c a . A l l of the country's vital statistics improved: health care, education, employment, longevity, a n d infant survival rates. Businesses prospered. D u r i n g the 1973 O P E C o i l embargo, petroleum prices skyrocketed a n d Venezuela's national budget quadrupled. The E H M s went to work. T h e international banks flooded the country w i t h loans that p a i d for vast infrastructure and industrial projects a n d for the highest skyscrapers o n the continent. T h e n , i n the 1980s, the corporate-style E H M s arrived. It was an ideal opportunity for them to cut their fledgling teeth. T h e Venezuelan middle class h a d become sizable, and provided a ripe market for a vast array of products, yet there was still a very large poor sector available to labor i n the sweatshops a n d factories. T h e n o i l prices crashed, a n d Venezuela could not repay its debts. In 1989, the I M F imposed harsh austerity measures and pressured Caracas to support the corporatocracy i n many other ways. Venezuelans reacted violently; riots k i l l e d over two h u n d r e d people. The illusion of oil as a bottomless source of support w as shattered. Between T

1978 a n d 2 0 0 3 , Venezuela's per capita income p l u m m e t e d by over 4 0 percent.

A s poverty increased, resentment intensified. Polarization resulted, with the middle class pitted against the poor. A s so often occurs i n countries whose economies depend on oil production, demographics radically shifted. The s i n k i n g economy took its toll on the m i d d l e class, a n d many fell into the ranks of the poor. T h e new demographics set the stage for Chavez â&#x20AC;&#x201D;- a n d for conflict w i t h Washington. Once i n power, the new president took actions

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l 7 u

that challenged t h e B u s h administration. Just before t h e September 11 attacks, Washington was considering its options. T h e E H M s h a d failed; was it time to send i n the jackals? T h e n 9/11 changed all priorities. President B u s h and his advisers focused o n rallying the w o r l d community to support U.S. activities i n Afghanistan a n d an invasion of Iraq. O n top of that, the U.S. economy was i n the middle of a recession. Venezuela was relegated to a back burner. However, it was obvious that at some point B u s h a n d Chavez w o u l d come to blows. W i t h Iraqi a n d other M i d d l e Eastern oil supplies threatened, Washington could not afford to ignore Venezuela for long. Wandering around G r o u n d Zero and W a l l Street, meeting the old Afghan man, and reading about Chavez's Venezuela brought me to a point I h a d avoided for many years, a n d it forced me t o take a h a r d look at the consequences of the things I h a d done over the past three decades. I could not possibly deny the role I h a d played or the fact that my w o r k as an E H M now affected my daughter's generation i n very negative ways. I k n e w I could no longer postpone t a k i n g action to atone for what I h a d done. I h a d to come clean about my life, i n a manner that w o u l d help people wake up to the fact of corporatocracy a n d understand w h y so m u c h of the w o r l d hates us. I started w r i t i n g once again, but as I d i d so, it seemed to me that m y story was too old. Somehow, I needed to b r i n g it u p to date. I considered traveling to Afghanistan, Iraq, a n d Venezuela and w r i t i n g a contemporary commentary o n those three countries. T h e y seemed to embody an irony of current w o r l d affairs: each h a d undergone traumatic political t u r m o i l a n d ended up w i t h leaders w h o left a great deal to be desired (a cruel and despotic Taliban, a psychopathic Saddam, a n d an economically inept Chavez), yet i n no case d i d the corporatocracy respond by attempting to solve the deeper problems of these countries. Rather, the response was simply to undermine leaders w h o stood i n the way of our oil policies. In many respects, Venezuela was the most i n t r i g u i n g case because, w h i l e m i l i t a r y intervention had already occurred i n Afghanistan a n d appeared inevitable i n Iraq, the administration's response to Chavez remained a mystery. A s far as I was concerned, the issue was not about whether Chavez was a good leader; it was about Washington's reaction to a leader who stood i n the way of the corporatocracy's m a r c h to global empire.

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Before I h a d time to organize such a t r i p , however, circumstances once again intervened. M y nonprofit w ork took me to South A m e r i c a several times i n 2002. A Venezuelan family whose businesses were going b a n k r u p t under the Chavez regime j o i n e d one of my trips to the A m a z o n . We became close friends, and I heard their side of the story. I also met w i t h L a t i n A m e r i c a n s from the other end of the economic spectrum, w h o considered Chavez a savior. T h e events unfolding in Caracas were symptomatic of the w o r l d w e E H M s h a d created. T

By December 2 0 0 2 , the situation i n b o t h Venezuela and i n Iraq reached crisis points. The two countries were evolving into perfect counterpoints for each other. In Iraq, all the subtle efforts â&#x20AC;&#x201D; both the E H M s a n d the jackals â&#x20AC;&#x201D; h a d failed to force Saddam to comply, a n d now we were preparing for the ultimate solution, invasion. In Venezuela, the B u s h administration was b r i n g i n g K e r m i t Roosevelt's Iranian model into play. A s the N e w Y o r k T i m e s reported, H u n d r e d s of thousands of Venezuelans filled the streets here today to declare their c o m m i t m e n t to a national strike, now i n its 28th day, to force the ouster of President H u g o Chavez. T h e strike, j o i n e d by an estimated 3 0 , 0 0 0 o i l workers, threatens to wreak havoc o n this nation, the world's fifthlargest oil producer, for months to come... In recent days, the strike has reached a k i n d of stalemate. M r . Chavez is using nonstriking workers to try to normalize operations at the state-owned oil company. His opponents, led by a coalition of business a n d labor leaders, contend, though, that their strike w i l l p u s h the company, a n d thus the Chavez government, to collapse.

T h i s was exactly h o w the C I A brought dowTi Mossadegh a n d replaced h i m w i t h the shah. The analogy could not have been stronger. It seemed history was u n c a n n i l y repeating itself, fifty years later. Five decades, a n d still oil was the driving force. Chavez's supporters continued to clash w i t h his opponents. Several people, it was reported, were shot to death and dozens more were wounded. The next day, I talked w i t h an old friend who for many years h a d been involved with the jackals. L i k e me, he h a d

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never worked directly for any government, b u t he h a d led clandestine operations i n many countries. H e t o l d me that a private contractor h a d approached h i m to foment strikes i n Caracas a n d to bribe military officers â&#x20AC;&#x201D; m a n y of w h o m h a d been trained at the School of the Americas â&#x20AC;&#x201D; to t u r n against their elected president. H e had t u r n e d d o w n the offer, but he confided, "The m a n w h o took the j o b knows what he's doing." O i l company executives a n d W a l l Street feared a rise i n o i l prices and a decline i n A m e r i c a n inventories. G i v e n the M i d d l e East s i t u ation, I knew the B u s h administration was d o i n g everything i n its power to overthrow Chavez. T h e n came the news that they h a d succeeded; Chavez h a d been ousted. T h e N e w Y o r k T i m e s took this t u r n o f events as a n opportunity to provide a historical perspective â&#x20AC;&#x201D; and also to identify the m a n who appeared to play the K e r m i t Roosevelt role i n contemporary Venezuela: 7

T h e U n i t e d States... supported authoritarian regimes throughout Central a n d South A m e r i c a d u r i n g a n d after the C o l d W a r i n defense of its economic a n d political interests. In t i n y Guatemala, the Central Intelligence Agencym o u n t e d a coup overthrowing the democratically elected government i n 1954, a n d it backed subsequent rightw i n g governments against small leftist rebel groups for four decades. Roughly 2 0 0 , 0 0 0 civilians died. In Chile, a C I A - s u p p o r t e d coup helped put G e n . Augusto Pinochet i n power f r o m 1973 to 1990. I n Peru, a fragile democratic government is still unraveling the agency's role i n a decade of support for the now-deposed and disgraced president, A l b e r t o K . F u j i m o r i , and his disreputable spy chief, V l a d i m i r o L . Montesinos. The U n i t e d States h a d to invade P a n a m a i n 1989 to topple its narco-dictator, M a n u e l A . Noriega, who, for almost 20 years, was a valued informant for A m e r i c a n intelligence. A n d the struggle to mount an u n a r m e d opposition against Nicaragua's leftists i n the 1980s by any means necessary, i n c l u d i n g selling arms to Iran for cold cash, l e d to indictments against senior Reagan administration officials.

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A m o n g those investigated back then was Otto J . Reich, a veteran of L a t i n A m e r i c a n struggles. N o charges were ever filed against Mr. Reich. He later became U n i t e d States Ambassador to Venezuela a n d now serves as assistant secretary of state for inter-American affairs by presidential appointment. The fall of Mr. Chavez is a feather i n his cap. 8

If M r . R e i c h a n d the B u s h administration were celebrating the coup against Chavez, the party was suddenly cut short. In an amazing turnabout, Chavez regained the upper h a n d a n d was back i n power less t h a n seventy-two hours later. U n l i k e Mossadegh i n Iran, Chavez h a d managed to keep the m i l i t a r y on his side, despite all attempts to t u r n its highest-ranking officers against h i m . In addition, he h a d the powerful state oil company o n his side. Petróleos de Venezuela defied the thousands of s t r i k i n g workers a n d made a comeback. Once the dust cleared, Chavez tightened his government's grip on oil company employees, purged the military of the few disloyal officers who h a d been persuaded to betray him, a n d forced many of his key opponents out of the country. H e demanded twenty-year prison terms for two prominent opposition leaders, Washington-connected operatives who h a d joined the jackals to direct the nationwide strike.

In the final analysis, the entire sequence of events was a calamity for the B u s h administration. A s the L o s A n g e l e s T i m e s reported, Bush a d m i n i s t r a t i o n officials acknowledged Tuesday that they h a d discussed the removal of Venezuelan President H u g o Chavez for months w i t h military a n d civilian l e a d ers f r o m Venezuela... T h e administration's h a n d l i n g of the abortive coup has come under increasing s c r u t i n y .

It was obvious that not only h a d the E H M s failed, but so h a d the jackals. Venezuela i n 2 0 0 3 turned out to be very different from Iran i n 1953.1 wondered if this was a harbinger or simply an anomaly— and what Washington w o u l d do next. A t least for the time being, I believe a serious crisis was averted i n Venezuela—and Chavez was saved — by Saddam Hussein. The Bush administration could not take on Afghanistan, Iraq, a n d Venezuela all at once. A t the moment, it had neither the military muscle nor the

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political support to do so. I knew, however, that such circumstances could change quickly, and that President Chavez was likely to face fierce opposition i n the near future. Nonetheless, Venezuela was a reminder that not m u c h h a d changed i n fifty years â&#x20AC;&#x201D; except the outcome.

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CHAPTER

Ecuador Revisited

Venezuela was a classic case. However, as I w atched events unfolding there, I was struck by the fact that the truly significant battle lines were being drawn in yet another country. They were significant not because they represented more in terms of dollars or human lives, but because they involved issues that went far beyond the materialistic goals that generally define empires. These battle lines extended beyond the armies of bankers, business executives, and politicians, deep into the soul of modern civilization. And they were being established in a country I had come to know and love, the one where I had first worked as a Peace Corps volunteer: Ecuador. T

In the years since I first went there, in 1968, this tiny country had evolved into the quintessential victim of the corporatocracy. My contemporaries and I, and our modern corporate equivalents, had managed to bring it to virtual bankruptcy. We loaned it billions of dollars so it could hire our engineering and construction firms to build projects that would help its richest families. As a result, in those three decades, the official poverty level grew from 50 to 70 percent, under- or unemployment increased from 15 to 70 percent, public debt increased from $240 million to $16 billion, and the share of national resources allocated to the poorest citizens declined from 20 percent to 6 percent. Today, Ecuador must devote nearly 50 percent of its national budget simply to paving off its debts â&#x20AC;&#x201D; instead of to helping the millions of its citizens who are officially classified as dangerously impoverished. 1

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The situation i n Ecuador clearly demonstrates that this was not the result of a conspiracy; it was a process that h a d occurred d u r i n g b o t h Democratic a n d Republican administrations, a process that h a d involved a l l the major multinational banks, many corporations, and foreign a i d missions f r o m a multitude o f countries. T h e U n i t e d States played the lead role, but we h a d not acted alone. D u r i n g those three decades, thousands of m e n a n d w o m e n participated i n b r i n g i n g E c u a d o r to the tenuous position it found itself i n at the beginning of the m i l l e n n i u m . Some of t h e m , like me, h a d been aware of what they were doing, but the vast majority h a d merely performed the tasks they h a d been taught i n business, engineering, and law schools, or h a d followed the lead of bosses i n m y m o l d , who demonstrated the system by their o w n greedy example a n d through rewards a n d punishments calculated to perpetuate it. S u c h participants saw the parts they played as benign, at worst; i n the most optimistic view, they were helping an impoverished nation. A l t h o u g h unconscious, deceived, a n d â&#x20AC;&#x201D; i n many cases â&#x20AC;&#x201D;selfdeluded, these players were not members of any clandestine conspiracy; rather, they were the product of a system that promotes the most subtle and effective form of imperialism the w o r l d has ever w i t nessed. N o one h a d to go out a n d seek men and w o m e n who could be bribed or threatenedâ&#x20AC;&#x201D;they h a d already been recruited by companies, banks, a n d government agencies. T h e bribes consisted of salaries, bonuses, pensions, a n d insurance policies; the threats were based on social mores, peer pressure, a n d unspoken questions about the f u ture of their children's education. T h e system h a d succeeded spectacularly. B y the time the new m i l l e n n i u m rolled i n , E c u a d o r was thoroughly entrapped. W e h a d her, just as a M a f i a don has the m a n whose daughter's w e d d i n g a n d small business he has financed and then refinanced. L i k e any good Mafiosi, we h a d taken our time. We could afford to be patient, k n o w i n g that beneath Ecuador's rain forests lies a sea of oil, k n o w i n g that the proper day w o u l d come. That day h a d already arrived w h e n , i n early 2 0 0 3 , I w o u n d m y way from Q u i t o to the jungle t o w n of Shell i n m y Subaru Outback. Chavez h a d reestablished himself i n Venezuela. H e had defied George W . B u s h a n d h a d w o n . S a d d a m was standing his g r o u n d a n d was preparing to be invaded. O i l supplies were depleted to their lowest level i n nearly three decades, a n d the prospects of taking more from

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our prime sources looked bleak â&#x20AC;&#x201D; a n d therefore, so d i d the health of the corporatocracy's balance sheets. We needed an ace i n the hole. It was time to cut away our E c u a d o r i a n p o u n d o f flesh. As I drove past the monster d a m o n the Pastaza River, I realized that here i n E c u a d o r the battle was not s i m p l y the classic struggle between the rich of the w o r l d a n d the impoverished, between those w h o exploit and the exploited. These battle lines w o u l d ultimately define who we are as a civilization. W e were poised to force this t i n y country to open its A m a z o n rain forests to our oil companies. T h e devastation that w o u l d result was immeasurable. If we insisted on collecting the debt, the repercussions w o u l d go far beyond our abilities to quantify t h e m . It was not just about the destruction of indigenous cultures, h u m a n lives, a n d hundreds of thousands of species of animals, reptiles, fish, insects, a n d plants, some of w h i c h m i g h t contain the undiscovered cures to any number of diseases. It was not just that rain forests absorb the deadly greenhouse gases produced by our industries, give off the oxygen that is essential to our lives, a n d seed the clouds that ultimately create a large percentage of the world's fresh water. It went beyond all the standard arguments made by ecologists for saving such places, a n d reached deep into our souls. If we pursued this strategy, we w o u l d continue an imperialist pattern that had begun long before the R o m a n E m p i r e . We decry slavery, but our global empire enslaves more people than the Romans and all the other colonial powers before us. I wondered how we could execute such a shortsighted policy i n Ecuador and still live with our collective conscience. Peering through the w i n d o w of the Subaru at the deforested slopes of the Andes, an area that d u r i n g m y Peace Corps days h a d been lush w i t h tropical growth, I was suddenly surprised by another realization. It dawned on me that this view of Ecuador as a significant battle line was purely personal, that i n fact every country where I had worked, every country w i t h resources coveted by the empire, was equally significant. I h a d my o w n attachment to this one, w h i c h stemmed from those days back i n the late 1960s w h e n I lost m y i n nocence here. However, it was subjective, m y personal bias. Though the E c u a d o r i a n rain forests are precious, as are the i n digenous people a n d a l l the other life forms that inhabit them, they are no more precious than the deserts of Iran a n d the Bedouins of

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Yamin's heritage. N o more precious than the mountains of Java, the seas off the coast of the Philippines, the steppes of A s i a , the savannas of Africa, the forests of N o r t h A m e r i c a , the icecaps of the A r c t i c , or hundreds of other threatened places. Every one of these represents a battle line, a n d every one o f t h e m forces us to search the depths of our individual a n d collective souls. I was reminded of a statistic that sums it a l l u p : The income ratio of the one-fifth of the world's population i n the wealthiest countries to the one-fifth i n the poorest countries went from 3 0 to 1 i n i 9 6 0 to 74 to 1 i n 1995. A n d the W o r l d B a n k , the U . S . Agency for I n t e r n a tional Development, the I M F , a n d the rest of the banks, corporations, and governments involved i n international " a i d " continue to tell us that they are doing their jobs, that progress has been made. So here I was i n E c u a d o r again, i n the country that was just one of many battle lines but that holds a special place i n m y heart. It was 2 0 0 3 , thirty-five years after I h a d first arrived as a member of a U.S. organization that bears the w o r d peace i n its name. T h i s time, I had come i n order to try to prevent a w a r that for three decades I h a d helped to provoke. 2

It w o u l d seem that events i n Afghanistan, Iraq, and Venezuela might be enough to deter us from another conflict; yet, i n E c u a d o r the situation was very different. T h i s war w o u l d not require the U . S . A r m y , for it w o u l d be fought by a few thousand indigenous warriors equipped only w i t h spears, machetes, and single-shot, muzzle-loaded rifles. T h e y w o u l d face off against a m o d e r n E c u a d o r i a n army, a handful of U.S. Special Forces advisers, a n d jackal-trained mercenaries h i r e d by the oil companies. This w o u l d be a war, like the 1995 conflict between Ecuador a n d Peru, that most people i n the U n i t e d States w o u l d never hear about, a n d recent events h a d escalated the probability of such a war. In December 2 0 0 2 , oil company representatives accused an i n digenous community of t a k i n g a team of its workers hostage; they suggested that the warriors involved were members of a terrorist group, w i t h implications of possible ties to al-Qaeda. It was an issue made especially complicated because the oil company had not received government permission to begin drilling. However, the company claimed its workers h a d the right to perform preliminary, n o n d r i l l i n g investigations â&#x20AC;&#x201D; a c l a i m vehemently disputed by the indigenous groups a few days later, when they shared their side of the story.

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The oil workers, tribal representatives insisted, h a d trespassed on lands where they were not allowed: the warriors had carried no weapons, nor h a d they threatened the oil workers w i t h violence of any sort. In fact, they h a d escorted the workers to their village, where they offered t h e m food a n d c h i c h a , a local beer. W h i l e their visitors feasted, the warriors persuaded the workers' guides to paddle away. However, the tribe claimed, the workers were never held against their w i l l ; they were free to go wherever they pleased. D r i v i n g d o w n that road, I remembered what the Shuars h a d t o l d me i n 1990 w h e n , after selling I P S , I returned to offer to help t h e m save their forests. "The w o r l d is as you dream it," they h a d said, a n d then pointed out that we i n the N o r t h h a d dreamed of huge i n d u s tries, lots of cars, a n d gigantic skyscrapers. N o w we h a d discovered that our vision h a d i n fact been a nightmare that w o u l d ultimately destroy us a l l . "Change that dream," the Shuars h a d advised me. Yet here it was, more than a decade later, a n d despite the w ork of many people a n d nonprofit organizations, i n c l u d i n g the ones I h a d worked w i t h , the nightmare h a d reached new a n d horrifying proportions. 3

W h e n my Outback finally p u l l e d into the jungle town of Shell, I was hustled off to a meeting. T h e m e n a n d w o m e n who attended represented many tribes: K i c h w a , Shuar, A c h u a r , Shiwiar, a n d Z a paro. Some h a d walked for days through the jungle, others h a d flown in on small planes, funded by nonprofits. A few wore their traditional kilts, face paint, a n d feathered headbands, though most attempted to emulate the townspeople, wearing slacks, T-shirts, and shoes. Representatives from the c o m m u n i t y accused of taking hostages spoke first. They t o l d us that shortly after the workers returned to the oil company, over a h u n d r e d E c u a d o r i a n soldiers arrived i n their small community. They r e m i n d e d us that this was at the beginning of a special season i n the rain forests, the fruiting of the c h o n t a . A tree sacred to indigenous cultures, its fruit comes but once a year and signals the start of the mating season for many of the region's birds, i n c l u d i n g rare a n d endangered species. A s they flock to it, the birds are extremely vulnerable. The tribes enforce strict policies forbidding the h u n t i n g of these birds d u r i n g chonta season. "The t i m i n g of the soldiers couldn't have been worse," a w o m a n explained. I felt her p a i n a n d that of her companions as they t o l d their tragic stories about h o w the soldiers ignored the prohibitions.

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They shot d o w n the birds for sport a n d for food. In addition, they raided family gardens, banana groves, and manioc fields, often i r reparably destroying the sparse topsoil. They used explosives i n the rivers for fishing, a n d they ate family pets. They confiscated the local hunters' guns a n d blowguns, dug improper latrines, polluted the rivers w i t h fuel o i l a n d solvents, sexually molested w o m e n , a n d neglected to properly dispose of garbage, w h i c h attracted insects a n d vermin. "We h a d two choices," a m a n said. "We could fight, or we could swallow our pride a n d do our best to repair the damage. W e decided it was not yet the time to fight." H e described how they h a d attempted to compensate for the military's abuses by encouraging their o w n people to go without food. H e called it a fast, but i n fact i t sounded closer to voluntary starvation. O l d people a n d children became m a l nourished and grew sick. They spoke about threats a n d bribes. " M y son," a w o m a n said, "speaks English as well as Spanish a n d several indigenous dialects. H e w o r k e d as a guide a n d translator for an ecotourist company. They p a i d h i m a decent salary. T h e o i l company offered h i m ten times as m u c h . W h a t could he do? N o w he writes letters denouncing his o l d company a n d a l l the others who come to help us, a n d i n his letters calls the oil companies our friends," She shook her body, like a dog s h a k i n g off water. " H e is no longer one of us. M y son..." A n elderly m a n wearing the traditional toucan-feather headdress of a shaman stood up. "You k n o w about those three we elected to represent us against the oil companies, who died i n that plane crash? W e l l , I'm not going to stand here a n d tell you what so many say, that the oil companies caused the crash. B u t I can tell you that those three deaths dug a b i g hole i n our organization. The o i l companies lost no time filling that hole w i t h t h e i r people." A n o t h e r m a n produced a contract a n d read it. I n exchange for three h u n d r e d thousand dollars, it ceded a vast territory over to a lumber company. It was signed by three tribal officials. "These aren't their real signatures," he said. "I ought to know; one is my brother. It's another type of assassination. To discredit our leaders." It seemed ironic a n d strangely appropriate that this was taking place i n a region of E c u a d o r where the o i l companies h a d not yet been given permission to d r i l l . They h a d drilled i n m a n y areas around this one, a n d the indigenous people h a d seen the results, h a d

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witnessed the destruction of their neighbors. A s I sat there listening, I asked myself h o w the citizens of my country w o u l d react i f gatherings like this were featured o n C N N or the evening news. The meetings were fascinating and the revelations deeply disturbing. B u t something else also happened, outside the formal setting of those sessions. D u r i n g breaks, at l u n c h , a n d i n the evening, when I talked w i t h people privately, I frequently was asked w h y the U n i t e d States was threatening Iraq. T h e i m p e n d i n g war was discussed on the front pages of E c u a d o r i a n newspapers that made their way into this jungle t o w n , a n d the coverage was very different from coverage i n the States. It i n c l u d e d references to the B u s h family's ownership of oil companies a n d U n i t e d Fruit, a n d to V i c e President Cheney's role as former C E O of H a l l i b u r t o n . These newspapers were read to m e n a n d w o m e n who h a d never attended school. Everyone seemed to take an interest i n this issue. H e r e I was, i n the A m a z o n rain forest, among illiterate people many i n N o r t h A m e r i c a consider "backward," even "savages," and yet probing questions were being asked that struck at the heart of the global empire. D r i v i n g out of Shell, back past the hydroelectric d a m a n d h i g h into the Andes, I kept t h i n k i n g about the difference between what I had seen a n d heard d u r i n g this visit to E c u a d o r a n d what I h a d become accustomed to i n the U n i t e d States. It seemed that A m a z o n i a n tribes h a d a great deal to teach us, that despite a l l our schooling a n d our many hours reading magazines a n d watching television news, we lacked an awareness they h a d somehow found. This line of t h i n k ing made me think of "The Prophecy of the Condor and Eagle," which I have heard many times throughout L a t i n A m e r i c a , a n d of similar prophecies I have encountered around the w o r l d . N e a r l y every culture I k n o w prophesies that i n the late 1990s we entered a period of remarkable transition. A t monasteries i n the H i malayas, ceremonial sites i n Indonesia, a n d indigenous reservations i n N o r t h America, f r o m the depths of the A m a z o n to the peaks of the Andes a n d into the ancient M a y a n cities of Central A m e r i c a , I have heard that ours is a special moment i n h u m a n history, a n d that each of us was born at this time because we have a mission to accomplish. T h e titles a n d words of the prophecies differ slightly. They tell variously of a N e w Age, the T h i r d M i l l e n n i u m , the Age of Aquarius, the B e g i n n i n g of the Fifth S u n , or the end of old calendars a n d the

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commencement of new ones. Despite the varying terminologies, however, they have a great deal i n c o m m o n , a n d "The Prophecy of the Condor a n d Eagle" is typical. It states that back i n the mists of history, h u m a n societies divided a n d took two different paths: that of the condor (representing the heart, intuitive a n d mystical) a n d that of the eagle (representing the brain, rational a n d material). In the 1490s, the prophecy said, the two paths w o u l d converge a n d the eagle w o u l d drive the condor to the verge of extinction. T h e n , five h u n d r e d years later, i n the 1990s, a new epoch w o u l d begin, one i n w h i c h the condor a n d eagle w i l l have the opportunity to reunite and fly together i n the same sky, along the same path. If the condor a n d eagle accept this opportunity, they will create a most remarkable offspring, u n l i k e any ever seen before. "The Prophecy of the C o n d o r a n d Eagle" can be taken at many levels â&#x20AC;&#x201D;the standard interpretation is that it foretells the sharing of indigenous knowledge w i t h the technologies o f science, the b a l ancing of y i n a n d yang, a n d the b r i d g i n g of northern a n d southern cultures. However, most powerful is the message it offers about c o n sciousness; it says that we have entered a time w h e n we can benefit f r o m the many diverse ways of seeing ourselves a n d the w o r l d , a n d that we can use these as a springboard to higher levels of awareness. A s h u m a n beings, we can truly wake up a n d evolve into a more conscious species. The condor people of the A m a z o n make it seem so obvious that i f we are to address questions about the nature of what it is to be h u m a n i n this new m i l l e n n i u m , a n d about our c o m m i t m e n t to evaluating our intentions for the next several decades, then we need to open our eyes a n d see the consequences of our actions â&#x20AC;&#x201D;the actions of the eagle â&#x20AC;&#x201D; i n places like Iraq a n d Ecuador. We must shake ourselves awake. We who live i n the most powerful nation history has ever k n o w n must stop w o r r y i n g so m u c h about the outcome of soap operas, football games, quarterly balance sheets, a n d the daily D o w Jones averages, a n d must instead reevaluate who we are a n d where we want our c h i l d r e n to end up. The alternative to stopping to ask ourselves the important questions is simply too dangerous.

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CHAPTER

Piercing the Veneer

Shortly after I returned home f r o m Ecuador i n 2 0 0 3 , the U n i t e d States invaded Iraq for the second time i n a little over a decade. The E H M s had failed. The jackals had failed. So young men and women were sent to k i l l and die among the desert sands. One important question the invasion raised, but one that I figured few A m e r i c a n s w o u l d be i n a position to consider, was what this w o u l d mean for the royal House of Saud. I f the U n i t e d States took over Iraq, w h i c h according to m a n y estimates has more oil t h a n S a u d i A r a b i a , there w o u l d seem to be little need to continue honoring the pact we struck w i t h the Saudi royal family i n the 1970s, the deal that originated w i t h the Saudi A r a b i a n M o n e y - l a u n d e r i n g Affair. T h e end of Saddam, like the end of N o r i e g a i n Panama, w o u l d change the f o r m u l a . I n the case of Panama, once we had reinstated our puppets, we controlled the C a n a l , regardless of the terms of the treaty Torrijos and Carter h a d negotiated. Once we controlled Iraq, then, could we break O P E C ? W o u l d the Saudi royal family become irrelevant i n the arena of global oil politics? A few pundits were a l ready questioning w h y B u s h attacked Iraq rather than funneling all of our resources into p u r s u i n g al-Qaeda i n Afghanistan. C o u l d it be that from the point of view of this administration â&#x20AC;&#x201D; this oil family â&#x20AC;&#x201D; establishing oil supplies, as well as a justification for construction contracts, was more important than fighting terrorists? There also was another possible outcome, however; O P E C might attempt to reassert itself. If the U n i t e d States took control of Iraq,

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the other petroleum-rich countries might have little to lose by raising oil prices and/or reducing supplies. This possibility tied i n w i t h a n other scenario, one w i t h implications that w o u l d likely occur to few people outside the w o r l d of higher international finance, yet w h i c h could tip the scales of the geopolitical balance a n d ultimately b r i n g d o w n the system the corporatocracy h a d w o r k e d so h a r d to c o n struct. It could, i n fact, t u r n out to be the single factor that w o u l d cause history's first truly global empire to self-destruct. In the final analysis, the global empire depends to a large extent on the fact that the dollar acts as the standard w o r l d currency, a n d that the U n i t e d States M i n t has the right to p r i n t those dollars. Thus, we make loans to countries like Ecuador w i t h the full knowledge that they will never repay them; i n fact, we do not want them to honor their debts, since the nonpayment is what gives us our leverage, our p o u n d of flesh. U n d e r n o r m a l conditions, we w o u l d r u n the risk of eventually decimating our own funds; after all, no creditor can afford too many defaulted loans. However, ours are not n o r m a l c i r cumstances. The U n i t e d States prints currency that is not backed by gold. Indeed, it is not backed by anything other t h a n a general worldwide confidence i n our economy a n d our ability to marshal the forces a n d resources of the empire we have created to support us. T h e ability to p r i n t currency gives us immense power. It means, among other things, that we can continue to make loans that w i l l never be repaid — a n d that we ourselves can accumulate huge debts. B y the beginning of 2003, the U n i t e d States' national debt exceeded a staggering $6 trillion a n d was projected to reach $7 trillion before the end of the year —roughly $24,000 for each U . S . citizen. M u c h of this debt is owed to A s i a n countries, particularly to J a p a n and C h i n a , who purchase U.S. Treasury securities (essentially, I O U s ) with funds accumulated through sales of consumer goods — including electronics, computers, automobiles, appliances, a n d clothing goods — to the U n i t e d States a n d the worldwide market. 1

A s long as the w o r l d accepts the dollar as its standard currency, this excessive debt does not pose a serious obstacle to the corporatocracy. However, i f another currency should come along to replace the dollar, a n d i f some of the U n i t e d States' creditors (Japan or C h i n a , for example) should decide to call i n their debts, the situation w o u l d change drastically. The U n i t e d States w o u l d suddenly f i n d itself i n a most precarious situation.

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In fact, today the existence of such a currency is no longer hypothetical; the euro entered the international financial scene on January 1, 2002 a n d is growing i n prestige a n d power w i t h every passing m o n t h . The euro offers an unusual opportunity for O P E C , i f it chooses to retaliate for the Iraq invasion, or if for any other reason it decides to flex its muscles against the U n i t e d States. A decision by O P E C to substitute the euro for the dollar as its standard currency w o u l d shake the empire to its very foundations. If that were to h a p pen, and if one or two major creditors were to d e m a n d that we repay our debts i n euros, the impact w o u l d be enormous. I h a d these things on m y m i n d o n the m o r n i n g of G o o d Friday, A p r i l 18, 2003, as I w a l k e d the short distance f r o m m y house to the converted garage that serves as my office, sat d o w n at the desk, turned on the computer, and as usual, went to the N e w York T i m e s Web site. T h e headline leaped out at me; it immediately transported me f r o m m y thoughts about the n e w realities of international f i nance, the national debt, a n d euros back to that of m y old profession: "U.S. Gives Bechtel a M a j o r Contract i n R e b u i l d i n g Iraq." The article stated, "The B u s h administration awarded the Bechtel G r o u p of San Francisco the first major contract today i n a vast reconstruction plan for Iraq." Farther d o w n the page, the authors i n formed readers that "The Iraqis w i l l then w o r k w i t h the W o r l d B a n k and the Internationa] M o n e t a r y F u n d , institutions i n w h i c h the U n i t e d States enjoys wide influence, to reshape the country." 2

W i d e influence! There was an understatement. I l i n k e d to another T i m e s article, "Company H a s Ties i n W a s h ington, a n d to Iraq." I skipped through the first several paragraphs, w h i c h repeated m u c h o f the information f r o m the previous article, and came to: Bechtel has longstanding ties to the national security establishment... O n e director is George P. Shultz, who was secretary of state under President R o n a l d Reagan. Before j o i n i n g the Reagan administration, M r . Shultz, w h o also serves as a senior counselor to Bechtel, was the company's president, w o r k i n g alongside Caspar W . Weinberger, who served as an executive at the San F r a n cisco-based company before his appointment as defense secretary. T h i s year, President B u s h appointed Bechtel's

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chief executive, Riley P. Bechtel, to serve on the P r e s i dent's E x p o r t C o u n c i l . 3

Here i n these articles was the story of modern history, the drive to global empire, i n a nutshell. W h a t was going on i n Iraq a n d described i n the m o r n i n g press was the result of the work Claudine h a d trained me to do some thirty-five years before, a n d of the w o r k of other men a n d w o m e n who shared a lust for self-aggrandizement not u n l i k e the one I h a d k n o w n . It m a r k e d the current point of the corporatocracy's progress along the road to bringing every person i n the w o r l d under its influence. These articles were about the 2 0 0 3 invasion of Iraq and about the contracts now being signed, both to r e b u i l d that country from the wreckage created by our military a n d to b u i l d anew i n the m o l d of the m o d e r n , westernized model. Yet, without saying so, the news of A p r i l 18, 2 0 0 3 , also harked back to the early 1970s a n d the Saudi A r a b i a n M o n e y - l a u n d e r i n g Affair. S A M A a n d the contracts flowing out of it had established new and irrevocable precedents that allowed â&#x20AC;&#x201D; indeed mandated â&#x20AC;&#x201D; U.S. engineering and construction companies and the petroleum industry to co-opt the development of a desert k i n g d o m . In the same mighty blow, S A M A established new rules for the global management of petroleum, redefined geopolitics, and forged w i t h the Saudi royal family an alliance that w o u l d ensure their hegemony as well as their commitment to playing by our rules. As I read those articles, I could not help but wonder h o w many other people knew, as I d i d , that S a d d a m w o u l d still be i n charge i f he h a d played the game as the Saudis had. H e w o u l d have his m i s siles a n d chemical plants; we w o u l d have built t h e m for h i m , a n d our people w o u l d be i n charge of upgrading a n d servicing t h e m . It w o u l d be a very sweet deal â&#x20AC;&#x201D; even as Saudi A r a b i a h a d been. U n t i l now, the mainstream media h a d been careful not to p u b l i cize this story. But today, here it was. True, it was a mere i n k l i n g ; the articles were only the meekest ghosts of a summary, yet the story seemed to be emerging. Wondering i f the N e w York T i m e s was taking a maverick stance, I visited the C N N Web site a n d read, "Bechtel W i n s Iraq Contract." The C N N story was very similar to the one i n the T i m e s , except it added, Several other companies have at various times been reported as possible competitors for the job, either as

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p r i m a r y bidders or as parts of teams, i n c l u d i n g the K e l l o g g B r o w n & Root ( K B R ) u n i t of H a l l i b u r t o n Co. â&#x20AC;&#x201D; of w h i c h V i c e President D i c k Cheney once was C E O . . . [ A l r e a d y ] H a l l i b u r t o n has w o n a contract, w h i c h could be w o r t h $7 b i l l i o n a n d could last up to two years, to make emergency repairs to Iraq's o i l infrastructure. 4

The story of the m a r c h to global empire d i d indeed appear to be leaking out. N o t the details, not the fact that it was a tragic story of debt, deception, enslavement, exploitation, a n d the most blatant grab i n history for the hearts, m i n d s , souls, a n d resources of people around the w o r l d . N o t h i n g i n these articles h i n t e d that the story of Iraq i n 2 0 0 3 was the continuation of a shameful story. N o r d i d they disclose that this story, as old as empire, has now taken on new a n d terrifying dimensions, b o t h because of its magnitude d u r i n g this time of globalization a n d because of the subtlety w i t h w h i c h it is executed. Despite its shortfalls, however, the story d i d appear to be leaking out, almost reluctantly. The idea of the reluctant story, leaking out, hit very close to home. It r e m i n d e d me of m y o w n personal story a n d of the many years I h a d postponed telling it. I h a d k n o w n for a very long time that I h a d a confession to make; still, I postponed m a k i n g it. T h i n k i n g back, I see that my doubts, the whisperings of guilt, were there from the beginning. They h a d started i n Claudine's apartment, even before I made the c o m m i t m e n t to go to Indonesia on that first trip, a n d the}

h a d haunted me almost incessantly a l l these years. I also k n e w that h a d the doubts, the p a i n , a n d the guilt not constantly nagged me, I would never have gotten out. Like so many others, I w o u l d have been stuck. I w o u l d not have stood o n a beach i n the V i r g i n Islands a n d decided to quit M A I N . Yet, I was still deferring, just as we as a culture continue to defer. These headlines seemed to h i n t at the alliance between b i g corporations, international banks, and governments, but like m y M A I N resume, the stories barely touched the surface. It was a gloss. T h e real story h a d little to do w i t h the fact that the major engineering and construction firms were once again receiving billions of dollars to develop a country i n our image â&#x20AC;&#x201D; among a people who i n all l i k e l i h o o d h a d no desire to reflect that image â&#x20AC;&#x201D; or that an elite b a n d of

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men was repeating an age-old ritual of abusing the privileges of their high government positions. That picture is just too simple. It implies that a l l we need to do, if we decide to right the wrongs of the system, is to throw these m e n out. It feeds into the conspiracy theories a n d thereby provides a convenient excuse to turn on the T V and forget about it all, comfortable in our third-grade view of history, which runs: "They" will take care of it; the ship of state is seaworthy and will get nudged back on course. We may have to wait for the next election, but all w i l l turn out for the best. The real story of modern empire — of the corporatocracy that exploits desperate people and is executing history's most brutal, selfish, and ultimately self-destructive resource-grab — has little to do w i t h what was exposed i n the newspapers that m o r n i n g a n d has everyt h i n g to do w i t h us. A n d that, of course, explains why we have such difficulty listening to the real story. W e prefer to believe the m y t h that thousands of years of h u m a n social evolution has finally perfected the ideal economic system, rather than to face the fact we have merely bought into a false concept and accepted it as gospel. We have convinced ourselves that all economic growth benefits h u m a n k i n d , and that the greater the growth, the more widespread the benefits. Finally, we have persuaded one another that the corollary to this concept is valid and morally just: that people w h o excel at stoking the fires of economic growth should be exalted a n d rewarded, w h i l e those b o r n at the fringes are available for exploitation. This concept a n d its corollary are used to justify a l l manner of piracy — licenses are granted to rape a n d pillage a n d m u r d e r i n n o cent people i n Iran, Panama, C o l o m b i a , Iraq, and elsewhere. E H M s , jackals, a n d armies flourish for as l o n g as their activities can be shown to generate economic growth — a n d they almost always demonstrate such growth. T h a n k s to the biased "sciences" of forecasting, econometrics, a n d statistics, i f you bomb a city a n d then reb u i l d it, the data shows a huge spike i n economic growth. T h e real story is that we are l i v i n g a lie. L i k e m y M A I N resume, we have created a veneer that hides the fatal cancers beneath the surface. Those cancers are exposed by the X - r a y s of our statistics, w h i c h disclose the terrifying fact that history's most powerful a n d wealthiest empire has outrageously high rates of suicide, drug abuse, divorce, child molestation, rape, and murder, and that like a malignant

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cancer, these afflictions spread their tentacles i n an ever-widening radius every year. In our hearts, each of us feels the pain. We cry out for change. Yet, we slam our fists to our mouths, stifling those cries, and so we go unheard. It would he great if we could just blame it all on a conspiracy, but we cannot. T h e empire depends on the efficacy of big banks, corporations, and governments—the corporatocracy—but it is not a conspiracy. This corporatocracy is ourselves —we make i t h a p p e n — w h i c h , of course, is w h y most of us find it difficult to stand up a n d oppose i t . W e w o u l d rather glimpse conspirators l u r k i n g i n the shadows, because most of us w ork for one of those banks, corporations, or governments, or i n some way are dependent o n t h e m for the goods a n d services they produce a n d market. W e cannot b r i n g ourselves to bite the h a n d of the master w h o feeds us. That is the situation I was pondering as I sat staring at the h e a d lines on the screen of m y computer. A n d it raised a number of questions. H o w do you rise u p against a system that appears to provide you with your home and car, food and clothes, electricity and health care — even when y o u k n o w that the system also creates a w o r l d where twenty-four thousand people starve to death each day a n d millions more hate you, or at least hate the policies made by representatives you elected? H o w do you muster the courage to step out of line a n d challenge concepts you a n d your neighbors have always accepted as gospel, even w h e n you suspect that the system is ready to self-destruct? Slowiy, I stood up a n d headed back to the house to pour myself another cup of coffee. r

I took a short detour a n d picked up m y copy o f the P a l m B e a c h P o s t , lying near the mailbox beside our driveway. It h a d the same Bechtel-Iraq article, copyrighted by the N e w Y o r k T i m e s . But now I noticed the date on the masthead: A p r i l 18. It is a famous date, at least i n N e w E n g l a n d , instilled i n me by my Revolutionary W a r m i n d e d parents a n d by Longfellow's poem: Listen, my c h i l d r e n , a n d you shall hear O f the m i d n i g h t ride of Paul Revere, O n the eighteenth of A p r i l , i n Seventy-five; H a r d l y a m a n is now alive W h o remembers that famous day a n d year.

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T h i s year, G o o d Friday happened to fall on the anniversary- of Paul Revere's ride. Seeing that date on the front page of the P o s t made me t h i n k of the colonial silversmith racing his horse through the dark streets of N e w E n g l a n d towns, waving his hat a n d shouting, "The B r i t i s h are c o m i n g ! " Revere h a d risked his life to spread the w o r d , a n d loyal Americans responded. They stopped the empire, back then. I wondered what h a d motivated them, why those colonial A m e r icans were w i l l i n g to step out of line. M a n y of the ringleaders h a d been prosperous. W h a t h a d inspired t h e m to risk their businesses, to bite the h a n d that fed them, to risk their lives? E a c h of them u n doubtedly h a d personal reasons, a n d yet there must have been some unifying force, some energy or catalyst, a spark that ignited all those i n d i v i d u a l fires at that single m o m e n t i n history. A n d then it came to me: words. T h e telling of the real story about the British E m p i r e and its selfish and ultimately self-destructive mercantile system h a d provided that spark. T h e exposure of the underlying meaning, through the words of m e n like T o m Paine and Thomas Jefferson, fired the imaginations of their countrymen, opened hearts a n d minds. T h e colonists began to question, a n d when they d i d , they discovered a new reality that cut away at the deceits. They discerned the truth b e h i n d the patina, understood the way the British E m p i r e h a d manipulated, deceived, and enslaved them. They saw that their E n g l i s h masters had formulated a system a n d then h a d managed to convince most people of a l i e â&#x20AC;&#x201D; t h a t it was the best system m a n k i n d could offer, that the prospects for a better w o r l d depended on channeling resources t h r o u g h the K i n g of E n g l a n d , that an i m p e r i a l approach to commerce a n d politics was the most efficient and humane means of helping the majority of the peop l e â&#x20AC;&#x201D; w h e n i n fact the truth was that the system enriched only a very few at the expense of the many. T h i s lie, a n d the resulting exploitation, endured a n d expanded for decades, until a h a n d f u l of philosophers, businessmen, farmers, fishermen, frontiersmen, writers, a n d orators began to speak the truth. Words. I thought about their power as I refilled my coffee cup, walked back to my office, a n d returned to the computer.

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I logged off the C N N Web site and brought up the file I had been w o r k i n g on the night before. I read the last paragraph I had written: This story m u s t be told. We live i n a time of terrible crisis â&#x20AC;&#x201D; and tremendous opportunity. The story of this particular economic hit man is the story o f how we got to where we are and why we currently face crises that seem i n s u r mountable. T h i s story must be t o l d because only by understanding our past mistakes w i l l we be able to take advantage of future opportunities.... M o s t importantly, this story must be t o l d because today, for the first time i n history, one nation has the ability, the money, a n d the power to change all this. It is the nation where I was b o r n and the one I served as an E H M : the U n i t e d States of America. T h i s t i m e I w o u l d not stop. The coincidences o f m y life and the choices I h a d made around t h e m h a d brought me to this point. I w o u l d move forward. I thought again of that other m a n , that lone rider galloping through the dark N e w E n g l a n d countryside, shouting out his w a r n ing. The silversmith knew that the words of Paine had preceded h i m , that people had read those words i n their homes and discussed them i n the taverns. Paine h a d pointed out the t r u t h about the tyranny o f the B r i t i s h E m p i r e . Jefferson w o u l d proclaim that our nation was dedicated to the principles of life, liberty, and the pursuit of h a p p i ness. A n d Revere, r i d i n g through the night, understood that m e n and w o m e n throughout the colonies w o u l d be empowered by those words; they w o u l d rise up and fight for a better w o r l d . Words... I made my decision to stop procrastinating, to finish finally what I had started so m a n y times over all those years, to come clean, to confess â&#x20AC;&#x201D; to write the words i n this book.

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EPILOGUE

We have arrived at the end of this book, and also at a beginning. You are probably w o n d e r i n g where to go next, what y o u can do to stop the corporatocracy and to end this insane and self-destructive march to global empire. You are ready to leave the book b e h i n d and pounce o n the w o r l d . You want ideas, a n d I could offer you some. I could point out that the chapter you just read, about Bechtel and H a l l i b u r t o n i n Iraq, is old news. B y the time y o u read it, it may seem redundant. However, the significance o f those newspaper articles goes far beyond the timeliness of their content. T h a t chapter, I hope, w i l l change the way you view the news, help you to read between the lines of every newspaper article that comes before y o u and to question the deeper implications of every radio a n d television report you tune i n to. Things are not as they appear. N B C is owned by General Electric, A B C by Disney, C B S by V i a c o m , a n d C N N is part of the huge A O L T i m e W a r n e r conglomerate. M o s t of our newspapers, magazines, and p u b l i s h i n g houses are owned â&#x20AC;&#x201D; a n d m a n i p u l a t e d â&#x20AC;&#x201D; b y gigantic international corporations. O u r media is part of the corporatocracy. T h e officers a n d directors w h o control nearly a l l our c o m m u n i c a tions outlets k n o w their places; they are taught throughout life that one of their most important jobs is to perpetuate, strengthen, a n d expand the system they have inherited. They are very efficient at doing so, a n d w h e n opposed, they can be ruthless. So the burden falls on y o u to see the truth beneath the veneer a n d to expose it. Speak it to your family a n d friends; spread the w o r d . I could give you a list of practical things to do. For instance, cut back on your oil consumption. I n 1990, before we first invaded Iraq, we i m p o r t e d 8 m i l l i o n barrels of o i l ; by 2 0 0 3 a n d the second i n v a sion, this h a d increased more than 50 percent, to over 12 m i l l i o n barrels. T h e next time you are tempted to go shopping, read a book instead, exercise, or meditate. Downsize your home, wardrobe, car, office, a n d most everything else i n your life. Protest against "free" 1

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trade agreements a n d against companies that exploit desperate people in sweatshops or that pillage the environment. I could tell you that there is great hope w i t h i n the current system, that there is nothing inherently wrong with banks, corporations, a n d governments â&#x20AC;&#x201D; or w i t h the people who manage them â&#x20AC;&#x201D; a n d that they certainly do not have to compose a corporatocracy. I could go into detail about how the problems confronting us today are not the result of malicious institutions; rather, they stem from fallacious concepts about economic development. T h e fault lies not i n the institutions themselves, but i n our perceptions of the manner i n w h i c h they function a n d interact w i t h one another, and of the role their managers play i n that process. In fact, those highly effective worldwide communications a n d distribution networks could be used to b r i n g about positive and compassionate changes. Imagine i f the N i k e swoosh, MacDonald's arches, a n d C o c a - C o l a logo became symbols of companies whose p r i m a r y goals were to clothe a n d feed the world's poor i n e n v i r o n mentally beneficial ways. T h i s is no more unrealistic t h a n p u t t i n g a m a n on the m o o n , breaking up the Soviet U n i o n , or creating the i n frastructure that allows those companies to reach every corner of the planet. W e need a revolution i n our approach to education, to e m power ourselves a n d our children to think, to question, a n d to dare to act. Y o u can set an example. Be a teacher a n d a student; inspire everyone around y o u through your example. I could encourage you to take specific actions that w i l l impact the institutions i n your life. Speak out whenever any forum presents itself, write letters a n d e-mails, phone i n questions and concerns, vote for enlightened school boards, county commissions, a n d local o r d i nances. W h e n you must shop, do it consciously; get personally involved. I could r e m i n d you of what the Shuars told me i n 1990, that the w o r l d is as you dream it, a n d that we can trade i n that old nightmare of polluting industries, clogged highways, a n d overcrowded cities for a new dream based o n Earth-honoring and socially responsible p r i n ciples of sustainability a n d equality. It is w i t h i n our power to transform ourselves, to change the paradigm. I c o u l d enumerate the amazing opportunities we have available to us for creating a better world, right now: enough food and water for everyone; medicines to cure diseases a n d to prevent epidemics that needlessly plague m i l l i o n s of people today; transportation systems

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that can deliver life's essentials to even the most remote corners of the planet; the ability to raise literacy levels a n d to provide Internet services that could make it possible for every person on the planet to communicate w i t h every other person; tools for conflict resolution that could render wars obsolete; technologies that explore both the vastness of space a n d the most minute, subatomic energy, w h i c h could t h e n be applied to developing more ecologic a n d efficient homes for everyone; sufficient resources to accomplish a l l of the above; a n d m u c h more. I could suggest steps for you to take immediately, to help others understand the crises a n d the opportunities. •

Offer study groups about C o n f e s s i o n s of a n E c o n o m i c H i t M a n at your local bookstore or library, or both (a guideline for doing this is available at www.JohnPerkins.org).

•

Develop a presentation for a nearby elementary school on your favorite subject (sports, cooking, ants — almost anything), and use it to help students wake up to the true nature of the society they are inheriting.

•

Send e-mails to all the addresses i n your file, expressing feelings triggered by this a n d other books you read.

But I suspect you have already thought of most of these things. You just need to pick a couple that most appeal to y o u and do them, and to realize that all of these are part of a m u c h greater commitment that you a n d I must make. W e must c o m m i t ourselves absolutely and

unequivocally to shaking ourselves and everyone around us

awake. W e must hear the w i s d o m of the prophecies, open our hearts and minds to the possibilities, become conscious, and then take action. However, this book is not a prescription; it is a confession, pure and simple. It is the confession of a m a n who allowed himself to become a p a w n , an economic h i t m a n ; a m a n w h o bought into a corrupt system because i t offered so many perks, and because buying i n was easy to justify; a m a n who k n e w better but w h o could always find excuses for his o w n greed, for exploiting desperate people a n d pillaging the planet; a m a n w h o took full advantage of the fact that he was b o r n into one of the wealthiest societies history has ever k n o w n , a n d who also could pity h i m s e l f because his parents were not at the top of the p y r a m i d ; a m a n who listened to his teachers,

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223

read the textbooks on economic development, and then followed the example of other m e n a n d women who legitimatize every action that promotes global empire, even i f that action results i n murder, genocide, a n d environmental destruction; a m a n w h o trained others to follow i n his footsteps. It is my confession. T h e fact that y o u have read this far indicates that you can relate on some personal level to my confession, that you a n d I share a lot i n c o m m o n . W e may have traveled different roads, but we have driven similar vehicles, used the same fuels, a n d stopped to eat at restaurants owned by the same corporations. For me, confessing was an essential part of m y personal wake-up call. L i k e a l l confessions, i t is the first step toward redemption. N o w it is your t u r n . Y o u need to make your own confession. W h e n you come clean on w h o y o u are, w h y you are here d u r i n g this time i n history, w h y you have done the things y o u have â&#x20AC;&#x201D; t h e ones y o u are p r o u d of, and those others â&#x20AC;&#x201D; a n d where you i n t e n d to go next, you w i l l experience an immediate sense of relief. It may be nothing less t h a n euphoric. Believe me w h e n I say that w r i t i n g this book has been deeply emotional, and often a painful a n d h u m i l i a t i n g experience. It has been frightening i n a way n o t h i n g I ever faced before has been frightening. B u t it has opened me to a sense of relief I have never k n o w n u n t i l now, a feeling I can only describe as ecstatic. A s k yourself these questions. W h a t do I need to confess? H o w have I deceived myself and others? W h e r e have I deferred? W h y have I allowed myself to be sucked into a system that I k n o w is u n balanced? W h a t w i l l I do to make sure our children, a n d all children everywhere, are able to fulfill the dream of our Founding Fathers, the dream of life, liberty, a n d the pursuit of happiness? W h a t course w i l l I take to end the needless starvation, a n d make sure there is never again a day like September 11? H o w can I help our children understand that people who live gluttonous, unbalanced lives should be pitied but never, ever emulated, even i f those people present t h e m selves, through the media they control, as cultural icons and try to convince us that penthouses a n d yachts b r i n g happiness? W h a t changes w i l l I c o m m i t to m a k i n g i n my attitudes a n d perceptions? W h a t forums w i l l I use to teach others and to learn more o n my own? These are the essential questions of our time. E a c h of us needs to answer them i n our own way and to express our answers clearly,

224

Confessions of an Economic Hit Man

unequivocally. Paine and Jefferson and a l l the other patriots are watching over our shoulders. T h e i r words continue to inspire us t o day. T h e spirits of those men a n d w o m e n w h o left their farms a n d fishing boats a n d headed out to confront the mighty British E m p i r e , and of those w h o fought to emancipate the slaves d u r i n g the C i v i l War, and of those who sacrificed their lives to protect the w o r l d from fascism, speak to us. A s do the spirits of the ones who stayed at home and produced the food a n d clothes a n d gave their m o r a l support, and of all the men a n d w o m e n who have defended what was w o n on those battlefields: the teachers, poets, artists, entrepreneurs, health workers, the m a n u a l laborers... y o u a n d me. The hour is ours. It is now time for each a n d every one of us to step up to the battle line, to ask the i m p o r t a n t questions, to search our souls for our own answers, a n d to take action. The coincidences of your life, and the choices y o u have made i n response to t h e m , have brought you to this point...

Epilogue

225

JOHN

PERKINS PERSONAL

HISTORY

1963

Graduates prep school, enters M i d d l e b u r y College.

1964

Befriends Farhad, son of an I r a n i a n general. Drops out of M i d d l e b u r y .

1965

Works for Hearst newspapers i n Boston.

1966

Enters Boston University College of Business Administration.

1967

1968

M a r r i e s former M i d d l e b u r y classmate, whose "Uncle Frank" is a top-echelon executive at the N a t i o n a l Security Agency ( N S A ) . Profiled by the N S A as an ideal economic h i t m a n . W i t h U n c l e Frank's blessing, joins the Peace Corps and is assigned to the E c u a d o r i a n A m a z o n , where ancient indigenous tribes battle U . S . oil companies.

1969

Lives i n the rain forest a n d the Andes. Experiences firsthand the deceitful a n d destructive practices e m ployed by o i l companies a n d government agencies, and their negative impacts o n local cultures a n d environments.

1970

In Ecuador, meets vice president of international consulting firm M A I N , who is also an N S A liaison officer.

1971

Joins M A I N , undergoes clandestine training i n Boston as a n economic h i t m a n ( E H M ) , a n d is sent as part of an eleven-man team to Java, Indonesia. Struggles w i t h conscience over pressure to falsify economic studies.

1972

Due to willingness to "cooperate," is promoted to chief economist a n d is viewed as a "whiz kid." Meets i m portant leaders, i n c l u d i n g W o r l d B a n k president Robert M c N a m a r a . Sent o n special assignment to Panama. Befriended by Panamanian president and charismatic leader, O m a r Torrijos; learns about h i s tory o f U.S. i m p e r i a l i s m and Torrijos's determination

226

to transfer Canal ownership from the U n i t e d States to Panama. 1973

1974

Career skyrockets. Builds empire w i t h i n M A I N ; continues w o r k i n P a n a m a ; travels extensively a n d conducts studies i n A s i a , L a t i n A m e r i c a , a n d the M i d d l e East. Instrumental i n initiating a huge E H M success i n Saudi A r a b i a . R o y a l family agrees to invest billions of dollars of oil income i n U . S . securities a n d to allow the U . S . D e p a r t m e n t of the Treasury to use the i n t e r est from those investments to hire U . S . firms to b u i l d power a n d water systems, highways, ports, a n d cities i n the k i n g d o m . I n exchange, the U n i t e d States guarantees that the royal family w i l l continue to rule. T h i s w i l l serve as a m o d e l for future E H M deals, i n cluding one that ultimately fails i n Iraq.

1975

1976

Promoted again â&#x20AC;&#x201D; to youngest partner i n M A I N ' s one h u n d r e d - y e a r history â&#x20AC;&#x201D; a n d n a m e d manager of E c o n o m i c s a n d Regional P l a n n i n g . Publishes series of influential papers; lectures at H a r v a r d a n d other institutions. Heads major projects around the w o r l d , i n Africa, A s i a , L a t i n A m e r i c a , N o r t h A m e r i c a , a n d the M i d d l e East. Learns f r o m the shah of Iran a revolutionary approach to E H M empire b u i l d i n g .

1977

Due to personal relationships i n C o l o m b i a , becomes exposed to the plight of farmers w h o are branded as communist terrorists a n d d r u g traffickers, but are i n fact peasants trying to protect their families and homes.

1978

Rushed out o f Iran by Farhad. Together, they fly to the R o m e home o f Farhad's father, an Iranian general, w h o predicts the shah's i m m i n e n t ouster a n d blames U . S . policy, corrupt leaders, a n d despotic governments for the hatred sweeping the M i d d l e East. H e warns that if the U n i t e d States does not become more compassionate, the situation w i l l deteriorate.

1979

Struggles with conscience as the shah flees his country and Iranians storm the U . S . Embassy, t a k i n g fifty-two

J o h n Perkins Personal History

227

hostages. Realizes that the U n i t e d States is a nation laboring to deny the truth about its imperialist role i n the w o r l d . After years of tension and frequent separations, divorces first wife. 1980

Suffers from deep depression, guilt, and the realization that money and power have trapped h i m at M A I N . Quits.

1981

Is deeply disturbed w h e n Ecuador's president J a i m e Roldos (who has campaigned on an anti-oil platform) and Panama's O m a r Torrijos (who has i n c u r r e d the w r a t h of powerful Washington interests, due to his positions o n the P a n a m a Canal and U.S. military bases) die i n fiery airplane crashes that have all the markings of C I A assassinations. Marries for the second time, to a w o m a n whose father is chief architect at Bechtel Corporation and is i n charge o f designing and b u i l d i n g cities i n Saudi A r a b i a â&#x20AC;&#x201D; w o r k financed t h r o u g h the 1974 E H M deal.

1982

Creates Independent Power Systems Inc. (IPS), a company c o m m i t t e d to producing environmentally friendly electricity. Fathers Jessica.

1983-1989

Succeeds spectacularly as I P S C E O , w i t h m u c h help from "coincidences" â&#x20AC;&#x201D; people i n h i g h places, tax breaks, etc. A s a father, frets over w o r l d crises and former E H M role. Begins w r i t i n g a tell-all book, but is offered a lucrative consultants' retainer o n the c o n dition that he not write the book.

1990-1991

Following the U.S. invasion of P a n a m a and i m p r i s onment o f Noriega, sells I P S and retires at forty-five. Contemplates book about life as an E H M , but i n stead is persuaded to direct energies tow ard creating a nonprofit organization, an effort w h i c h , he is told, w o u l d be negatively impacted by such a book. f

1992-2000

228

Watches the E H M failures i n Iraq that result i n the first G u l f War. Three times starts to write the E H M book, but instead gives i n to threats and bribes. Tries to assuage conscience by w r i t i n g books about indigenous peoples, supporting nonprofit organizations,

Confessions of an Economic Hit Man

teaching at N e w Age forums, traveling to the A m a z o n and the Himalayas, meeting w i t h the D a l a i L a m a , etc. 2001-2002

Leads a group of N o r t h A m e r i c a n s deep into the A m a z o n , and is there w i t h an indigenous tribe o n September 11, 2001. Spends a day at G r o u n d Zero and commits to w r i t i n g the book that can heal his pain and expose the t r u t h b e h i n d E H M s .

2003-2004

Returns to the E c u a d o r i a n A m a z o n to meet w i t h the indigenous tribes who have threatened war against the oil companies; writes C o n f e s s i o n s of a n Economic H i tM a n .

John Perkins Personal History

229

NOTES

Preface 1. T h e U n i t e d Nations W o r l d Food Programme, http://wvw.wfp.org/ index.asp?section=l (accessed December 27, 2003). In addition, the National Association for the Prevention of Starvation estimates that "Every day 34,000 children under five die of hunger or preventable diseases resulting from hunger" (http://www.napsoc.org, accessed December 27, 2003). Starvation.net estimates that " i f we were to add the next two leading ways (after starvation) the poorest of the poor die, waterborne diseases and A I D S , we would be approaching a daily body count of 50,000 deaths" (http://www.starvation.net, accessed December 27, 2003). 2. U.S. Department of Agriculture findings, reported by the Food Research and Action Center ( F R A C ) , http://www.frac.org (accessed December 27, 2003). 3. United Nations. H u m a n Development

Report.

(New York: U n i t e d Nations,

1999). 4. "In 1998, the United Nations Development Program estimated that it would cost an additional $9 billion (above current expenditures) to provide clean water and sanitation for everyone on earth. It would cost an additional $12 billion, they said, to cover reproductive health services for all women worldwide. Another $13 billion would be enough not only to give every person on earth enough food to eat but also basic health care. A n additional $6 b i l lion could provide basic education for all... Combined they add up to S 4 0 billion." â&#x20AC;&#x201D; J o h n Robbins, author of D i e t f o r a New A m e r i c a and T h e

Food

R e v o l u t i o n , http://www.foodrevolution.org (accessed December 27, 2003).

Prologue 1. G i n a Chavez et al., T a r i m i a t â&#x20AC;&#x201D; F i r m e s e n N u e s t r o T e r r i t o r i o : F I F S E vs. A R C O , eds. M a r i o M e l o and Juana Sotomayor (Quito, Ecuador: C D E S and C O N A I E , 2002), 2. Sandy Tolan, " E c u a d o r : Lost Promises," National Public Radio, M o r n i n g E d i t i o n , July 9, 2003, http://www.npr.org/programs/morning/features/ 2003/jul/latinoil (accessed July 9, 2003). 3. Juan Forero, "Seeking Balance: Growth vs. Culture i n the A m a z o n , " New Y o r k T i m e s , December 10, 2003. 4. Abby E l l i n , "Suit Says ChevronTexaco D u m p e d Poisons i n Ecuador," New Y o r k T i m e s , M a y 8, 2003.

230

5. Chris Jochnick, "Perilous Prosperity," New I n t e r n a t i o n a l i s t , June 2O01, http://www.newint.org/issue335/perilous.htm.

For more extensive infor-

mation, see also Pamela M a r t i n , T h e G l o b a l i z a t i o n of C o n t e n t i o n s P o l i t i c s : T h e A m a z o n i a n I n d i g e n o u s R i g h t s Movement

(New York: Rutiedge,

2 0 0 2 ) ; YAmñvXmg, A m a z o n C r u d e (New York: Natural Resource Defense Council, 1 9 9 1 ) ; Leslie Wirpsa, trans., U p h e a v a l i n t h e Back m a t e Debts

a n d H u m a n R i g h t s — T h e Case

Yard: Illegiti-

of E c u a d o r - N o r w a y (Quito,

Ecuador: Centro de Derechos Económicos y Sociales, 2002); and Gregory Palast, "Inside Corporate America," G u a r d i a n , October 8, 2 0 0 0 . 6. For information about the impact of oil on national and global economies, see Michael T . Klare, Resource

W a r s : T h e New L a n d s c a p e of G l o b a l C o n f l i c t

(New York: H e n r y Holt and Company, 2001); Daniel Yergin, T h e P r i z e : T h e E p i c Quest

f o r O i l , Money

Power

(New York: Free Press, 1993); and

Daniel Yergin and Joseph Stanislaw, T h e C o m m a n d i n g H e i g h t s : T h e B a t t l e f o r t h e W o r l d Economy

(New York: Simon & Schuster, 2001).

7. James S. Henry, "Where the Money Went,"across t h e B o a r d , M a r c h / A p r i l 2004, pp 4 2 - 4 5 . For more information, see Henry's book T h e B l o o d B a n k e r s : Tales

f r o m t h e G l o b a l U n d e r g r o u n d Economy

(New York: Four

Walls Eight Windows, 2003). 8. G i n a Chavez et al., T a r i m i a t — F i r m e s en N u e s t r o T e r r i t o r i o : F I P S E v s . A R C O , eds. M a r i o Melo and Juana Sotomayor (Quito, Ecuador: C D E S and C O N A I E , 2002); Petróleo, A m b i e n t e y Derechos

en l a A m a z o n i a

Centro

S u r , Edition Victor López A , Centro de Derechos Económicos y Sociales, OPIP, I A C Y T - A (under the auspices of Oxfam America) (Quito, Ecuador: Sergrafic, 2002). 9. Sandy Tolan, " E c u a d o r : Lost Promises." National Public Radio, M o r n i n g E d i t i o n , July 9, 2003,

http://www.npr.org/programs/morning/features/

2003/jul/latinoil (accessed July 9, 2003). 10. For more o n the jackals and other types of hit men, see P. W . Singer, p o r a t e W a r r i o r s : T h e Rise

Cor-

of t h e P r i v a t i z e d M i l i t a r y I n d u s t r y (Ithaca, N Y

and L o n d o n : Cornell University Press, 2003); James R. Davis, F o r t u n e ' s W a r r i o r s : P r i v a t e A r m i e s a n d t h e New W o r l d O r d e r (Vancouver and Toronto: Douglas & Mclntyre, 2000); Felix I. Rodriguez and John Weisman, S h a d o w W a r r i o r : T h e C I A H e r o of 100

U n k n o w n B a t t l e s (New York:

S i m o n and Schuster, 1989).

Chapter 2. "In for Life" 1. For a detailed account of this fateful operation, see Stephen Kinzer, A l l t h e S h a h ' s M e n : A n A m e r i c a n Coup

a n d t h e Roots

of M i d d l e E a s t T e r r o r

(Hoboken, N J : John Wiley & Sons, Inc., 2003). 2. Jane Mayer, "Contract Sport: W h a t D i d the Vice-President D o for H a l l i b u r ton?", New Y o r k e r , February 16 & 23, 2004, p 83.

Chapter 3. Indonesia: Lessons for an EHM 1. For more o n Indonesia and its history , see Jean Gelman Taylor, I n d o n e s i a : 7

Notes

231

Peoples a n d H i s t o r i e s (New Haven and L o n d o n : Yale University Press, 2003); and Theodore Friend, I n d o n e s i a n D e s t i n i e s - (Cambridge M A and L o n d o n : T h e Belknap Press of Harvard University, 2003).

Chapter 6. My Role as Inquisitor 1. Theodore Friend, I n d o n e s i a n D e s t i n i e s (Cambridge M A and L o n d o n : T h e Belknap Press of H a r v a r d University, 2003), p 5.

Chapter 10. Panama's President and Hero 1. See David M c C u l l o u g h , T h e P a t h Between P a n a m a C a n a l 1870-1914

t h e Seas:

T h e C r e a t i o n of t h e

(New York: S i m o n and Schuster, 1999); W i l l i a m

Friar, P o r t r a i t of t h e P a n a m a C a n a l : F r o m C o n s t r u c t i o n to t h e T w e n t y - F i r s t C e n t u r y (New York: Graphic Arts Publishing Company, 1999); G r a h a m Greene, C o n v e r s a t i o n s w i t h t h e General

(New York: Pocket Books, 19840.

2. See "Zapata Petroleum Corp.", F o r t u n e , A p r i l 1958, p 248; Darwin Payne, I n i t i a t i v e i n E n e r g y : Dresser

I n d u s t r i e s , I n c . 1880-1978

(New York: Simon

and Schuster, 1979); Steve Pizzo et al., I n s i d e J o b : T h e L o o t i n g of A m e r i c a ' s S a v i n g s a n d L o a n s (New York: M c G r a w H i l l , 1989); Gary Webb, D a r k A l l i a n c e : T h e C I A , T h e C o n t r a s , a n d t h e C r a c k Cocaine

E x p l o s i o n (New York:

Seven Stories Press, 1999); Gerard Colby and Charlotte Dennet, T h y W i l l Be Done,

T h e Conquest

of t h e A m a z o n : N e l s o n Rockefeller

and Evangelism

i n t h e Age of O i l (New York: HarperCollins, 1995). 3. M a n u e l Noriega with Peter Eisner, T h e M e m o i r s o f ' M a n u e l N o r i e g a , ica's

Amer-

P r i s o n e r (NewYork: R a n d o m House, 1997); O m a r Torrijos Herrera,

I d e a r l o (Editorial Universitaria Centroamericano, 1983); G r a h a m Greene, C o n v e r s a t i o n s w i t h t h e General

(New York: Pocket Books, 1984).

4. G r a h a m Greene, C o n v e r s a t i o n s w i t h t h e General

(New York: Pocket Books,

1984); Manuel Noriega with Peter Eisner, T h e M e m o i r s of M a n u e l N o r i e g a , A m e r i c a ' s P r i s o n e r (New York: R a n d o m House, 1997). 5. Derrick Jensen, A L a n g u a g e O l d e r t h a n Words

(New York: Context Books,

2000), pp 8 6 - 8 8 . 6. Graham Greene, C o n v e r s a t i o n s w i t h t h e General

(New York: Pocket Books,

1984); Manuel Noriega with Peter Eisner, T h e M e m o i r s of M a n u e l N o r i e g a . A m e r i c a ' s P r i s o n e r (New York: R a n d o m House,

1997)-

Chapter 13. Conversations with the General 1. W i l l i a m Shawcross: T h e S h a h ' s L a s t R i d e : T h e F a t e of a n A l l y (New York: Simon and Schuster, 1988); Stephen Kinzer, ^4?? t h e S h a h ' s M e n : A n A m e r i c a n Coup

a n d t h e Roots

of M i d d l e E a s t T e r r o r (Hoboken, N J : J o h n Wiley &

Sons, Inc., 2003), p 45. 2. A great deal has been written about Arbenz, United Fruit, and the violent history of Guatemala; see for example (my Boston University political science professor) H o w a r d Zinn,^4 People's

H i s t o r y of t h e U n i t e d States

York: Harper & Row, 1980); Diane K . Stanley, F o r t h e Record:

232

Confessions of an Economic Hit Man

(New

The United

F r u i t Company's

S i x t y - S i x Years

i n G u a t e m a l a (Guatemala City: Centro

Impresor Piedra Santa, 1994), For quick references: " T h e Banana Republic: The "CIA

United Fruit Company," http://ww\v.mayaparadise.com/ufcle.html; Involved i n Guatemala Coup, 1954," http://w\vw.english.upenn.edu/

-afilreis/50s/guatemala.html. For more on the Bush family's involvement: "Zapata Petroleum Corp.," F o r t u n e , A p r i l 1958, p 248.

Chapter 14. Entering a New and Sinister Period in Economic History 1. "Robert S. M c N a m a r a : 8th Secretary of Defense," http://wwvv.defenselink.mil (accessed December 23, 2003).

Chapter 15. The Saudi Arabian Money-laundering Affair 1. For more on the events leading up to the 1973 oil embargo and the impact of the embargo, see: Thomas W. L i p p m a n , I n s i d e t h e M i r a g e : F r a g i l e P a r t n e r s h i p â&#x20AC;˘with

America's

S a u d i A r a b i a (Boulder C O : Westview Press,

2 0 0 4 ) , pp 155-159; Daniel Yergin, T h e P r i z e : T h e E p i c Questfor Power

Oil,

Money

(New York: Free Press, 1993); Stephen Schneider, T h e O i l P r i c e

R e v o l u t i o n (Baltimore: Johns Hopkins University Press, 1983); Ian Seymour, O P E C : I n s t r u m e n t of Change

( L o n d o n : M c M i l l a n , 1980).

2. Thomas W. L i p p m a n , I n s i d e t h e M i r a g e : A m e r i c a ' s F r a g i l e P a r t n e r s h i p - w i t h S a u d i A r a b i a (Boulder C O : Westview Press, 2004), p 160. 3. D a v i d H o l d e n and Richard Johns, T h e House t h e Most

ofSaud:

T h e Rise

and Rule

P o w e r f u l D y n a s t y i n t h e A r a b W o r l d (New York: Holt Rinehart

and Winston, 1981), p 359. 4. Thomas W. L i p p m a n , I n s i d e t h e M i r a g e : A m e r i c a ' s F r a g i l e P a r t n e r s h i p w i t h S a u d i A r a b i a (Boulder C O : Westview Press, 2004), p 167.

Chapter 16. Pimping, and Financing Osama bin Laden 1. Robert Baer, S l e e p i n g w i t h t h e D e v i l : Hozo

Washington Sold Our

Soulfor

S a u d i O i l (New York: Crown Publishers, 2003), p 26. 2. Thomas W . L i p p m a n , I n s i d e t h e M i r a g e : A m e r i c a ' s F r a g i l e P a r t n e r s h i p w i t h S a u d i A r a b i a (Boulder C O : Westview Press, 2004), p 1 6 2 . 3. Thomas W . L i p p m a n , I n s i d e t h e M i r a g e : A m e r i c a ' s F r a g i l e P a r t n e r s h i p w i t h S a u d i A r a b i a . (Boulder C O : Westview Press, 2004), p 2. 4. Henry Wassvva, T d i A m i n , Murderous Ugandan Dictator, Dies," Associated Press, August 17, 2003. 5. " T h e Saudi Connection," U.S. News 6. " T h e Saudi Connection," U.S. News

& W o r l d Report, & W o r l d Report,

December 15, 2003, p 21. December 15, 2003,

pp 1 9 , 20, 26. 7- Craig Unger, "Saving the Saudis," V a n i t y F a i r . October 2003. For more on the Bush family's involvement, Bechtel, etc., see: "Zapata Petroleum Corp.," F o r t u n e , A p r i l 1958, p 248; D a r w i n Payne, I n i t i a t i v e i n E n e r g y : I n d u s t r i e s , I n c . 1880-1978

Dresser

(New York: S i m o n and Schuster, 1979); Nathan

Notes

233

Vardi, "Desert Storm: Bechtel G r o u p Is Leading the Charge," and "Contacts for Contracts," both in Forbes,

June 23, 2003, pp 6 3 - 6 6 ; Graydon Carter,

"Editor's Letter: Fly the Friendly Skies..." V a n i t y F a i r , October 2 0 0 3 : Richard A . Oppel with D i a n a B. Henriques, " A N a t i o n at War: T h e C o n tractor. Company has ties i n Washington, and to Iraq," New York

Times,

A p r i l 18, 2003.

Chapter 17. Panama Canal Negotiations and Graham Greene 1. See for example: J o h n M . Perkins, "Colonialism in Panama Has N o Place i n 1975," Boston

E v e n i n g Globe,

O p - E d page, September 1 9 , 1 9 7 5 ; J o h n M .

Perkins, " U . S . - B r a z i l Pact Upsets Ecuador," The Boston

Globe,

O p - E d page,

M a y 10,1976. 2. For examples of papers by John Perkins published i n technical journals, see: J o h n M . Perkins et al., " A M a r k o v Process A p p l i e d to Forecasting, Part I â&#x20AC;&#x201D;- Economic Development" and " A Markov Process A p p l i e d to Forecasting, Part II â&#x20AC;&#x201D; T h e D e m a n d for Electricity," The Institute of Electrical a n d Electronics Engineers, Conference Papers C 73 4 7 5 - 1 (July 1973) and C 74 146-7 (January 1974)! respectively; J o h n M . Perkins and N a d i p u r a m R. Prasad, " A M o d e l for Describing Direct and Indirect Interrelationships Between the Economy and the Environment," C o n s u l t i n g Engineer,

April

1973; E d w i n Vennard, J o h n M . Perkins, and Robert C. Ender, "Electric D e m a n d from Interconnected Systems," T A P P I J o u r n a l (Technical Association of the Pulp and Paper Industry), 28th Conference E d i t i o n , 1974; J o h n M . Perkins et al., "Iranian Steel: Implications for the Economy and the D e m a n d for Electricity" and " M a r k o v M e t h o d A p p l i e d to Planning," presented at the Fourth Iranian Conference o n Engineering, Pahlavi U n i versity, Shiraz, Iran, M a y 12-16,1974; and Economic t i o n s : A C o l l e c t i o n of Technical

Papers

Theories

and Applica-

with a Foreward by J o h n M . Perkins

(Boston: Chas. T. M a i n , Inc., 1975). 3. J o h n M . Perkins, "Colonialism in Panama Has N o Place i n 1 9 7 5 , "

E v e n i n g G l o b e , O p - E d page, September 4 . G r a h a m Greene, G e t t i n g to Know

Boston

19,1975.

the General

(New York: Pocket Books,

the General

(New York: Pocket Books,

1984), p p 8 9 - 9 0 . 5. G r a h a m Greene, G e t t i n g to Know 1984).

Chapter 18. Iran's King of Kings 1. W i l l i a m Shawcross, The Shah's

L a s t R i d e : The Fate

of a n A l l y (New York:

Simon and Schuster, 1988). For more about the Shah's rise to power, see H . D . S. Greenway, " T h e Iran Conspiracy," New York

Review

September 23, 2 0 0 3 ; Stephen K i n z e r , v l / / the Shah's

Men: A n American

Coup

a n d the Roots

of M i d d l e East

Books,

T e r r o r (Hoboken, N J : J o h n Wiley &

Sons, Inc., 2003). 2. For more about Y a m i n , the Flowering Desert project, and Iran, see John Perkins, S h a p e s h i f t i n g (Rochester, V T : Destiny Books, 1997).

234

Confessions of an Economic Hit Man

Chapter 20. The Fall of a King 1. For more about the Shah's rise to power, see H . D . S . Greenway, " T h e Iran Conspiracy" New Y o r k Review

September 2 3 , 2 0 0 3 ; Stephen

of Books,

Kinzer, A l l t h e S h a h ' s M e n : A n A m e r i c a n Coup

a n d t h e Roots

of M i d d l e

E a s t T e r r o r (Hoboken, N J : John Wiley & Sons, Inc., 200,3). 2. See T I M E magazine cover articles on the Ayatollah Ruhollah Khomeini, February

12,1979,

January

7,1980, and

August

17,1987-

Chapter 21. Colombia: Keystone of Latin America 1. Gerard Colby and Charlotte Dennet, T h y W i l l Be Done, A m a z o n : N e l s o n Rockefeller

T h e Conquest

of t h e

a n d E v a n g e l i s m i n t h e Age of O i l (New York:

HarperCollins, 1995), p 381.

Chapter 24, Ecuador's President Battles Big Oil 1. For extensive details on SIL, its history, activities, and association with the oil companies and the Rockefellers, see Gerard Colby and Charlotte Dennet, T h y W i l l Be Done,

T h e Conquest

of t h e A m a z o n : N e l s o n Rockefeller

and

E v a n g e l i s m i n t h e Age of O i l (New York: HarperCollins, 1995); Joe Kane, Savages

(New York: Alfred A . Knopf, 1995) (for information on Rachel

Saint, pp 85,156, 227). 2. J o h n D . Martz, P o l i t i c s a n d P e t r o l e u m i n E c u a d o r (New Brunswick and Oxford: Transaction Books,

1987),

272.

3. JosĂŠ Carvajal Candall, "Objetivos y Politicas de C E P E " (Quito, Ecuador: Primer Seminario,

1979), p

88.

Chapter 26. Ecuador's Presidential Death 1. John D . M a r t z , P o l i t i c s a n d P e t r o l e u m i n E c u a d o r (New Brunswick and O x ford: Transaction Books, 1987), p 272. 2. Gerard Colby and Charlotte Dennet: T h y W i l l Be Done, A m a z o n : N e l s o n Rockefeller

a n d E v a n g e l i s m i n t h e Age

T h e Conquest

of t h e

of O i l (New York,

HarperCollins, 1995), p 813. 3. J o h n D . Martz, P o l i t i c s a n d P e t r o l e u m i n E c u a d o r (New Brunswick and O x ford: Transaction Books, 1987), p 303. 4. John D . Martz, P o l i t i c s a n d P e t r o l e u m i n E c u a d o r (New Brunswick and O x ford: Transaction Books, 1987), pp 381, 4 0 0 .

Chapter 27. Panama: Another Presidential Death 1. G r a h a m Greene, G e t t i n g to K n o w t h e General

(New York: Pocket Books,

1984), p 11. 2. George Shultz was secretary of the Treasury and chairman of the Council on Economic Policy under N i x o n - F o r d , 1972-1974, executive president or president of B e c h t e l , 1974-1982, secretary of state under Reagan-Bush, 1982-1989; Caspar Weinberger was director of the Office of Management and Budget and secretary of Health, Education, and Welfare under N i x o n -

Notes

235

Ford, 1973-7-5, vice president and general counsel of Bechtel Group, 1975-80, secretary of defense under Reagan-Bush, 1980-87. 3. D u r i n g the 1973 Watergate hearings, in his testimony before the U.S. Senate, John Dean was the first to disclose U.S. plots to assassinate Torrijos; in 1975,

at Senate inquiries into the CIA, chaired by Senator Frank C h u r c h ,

additional testimony and documentation of plans to kill both Torrijos and Noriega were presented. See, for example, Manuel Noriega with Peter Eisner, T h e M e m o i r s o f M a n u e l N o r i e g a , A m e r i c a ' s P r i s o n e r (New York: R a n d o m House, 1997), p 107

Chapter 28. My Energy Company, Enron, and George W. Bush 1. For additional information on IPS, its wholly-owned subsidiary Archbald Power Corporation, and former C E O John Perkins, see Jack M . Daly and Thomas J . Duffy, " B u r n i n g Coal's Waste at Archbald," C i v i l E n g i n e e r i n g , July 1 9 8 8 ; Vince Coveleskie, "Co-Generation Plant Attributes Cited," T h e S c r a n t o n T i m e s , October 1 7 , 1 9 8 7 ; Robert Curran, "Archbald Facility D e d i cated," S c r a n t o n T r i b u n e , October 1 7 , 1 9 8 7 ; "Archibald Plant W i l l T u r n Coal Waste into Power," C i t i z e n s Voice,

Wilkes-Barre, P A , June 6,1988;

"Liabilities to Assets: C u l m to Light, Food," editorial, C i t i z e n ' s

Voice,

Wilkes-Barre, P A , June 7,1988. 2. Joe Conason, " T h e George W . Bush Success Story" H a r p e r s M a g a z i n e , February 2 0 0 0 ; Craig Unger, "Saving the Saudis," V a n i t y F a i r . October 2003, p 165. 3. Craig Unger, "Saving the Saudis," V a n i t y F a i r , October 2003, p 178. 4. See George Lardner Jr. and Lois Romano, " T h e Turning Point After Coming U p Dry," W a s h i n g t o n Post,

July 30,1999; Joe Conason, " T h e George W .

Bush Success Story," H a r p e r s M a g a z i n e , February 2 0 0 0 ; and Sam Parry, " T h e Bush Family Oiligarchy â&#x20AC;&#x201D; Part Two: The T h i r d Generation," http://www.newnetizen.com/presidential/bushoiligarchy.htm

(accessed

April 19, 2002). 5. This theory took on new significance and seemed ready to fall under the spotlight of public scrutiny when, years later, it became clear that the highly respected accounting firm of Arthur Andersen had conspired with E n r o n executives to cheat energy consumers, E n r o n employees, and the American public out of billions of dollars. T h e impending 2003 Iraq war pushed the spotlight away. D u r i n g the war, Bahrain played a critical role in President George W. Bush's strategy.

Chapter 29. I Take a Bribe 1. J i m Garrison, A m e r i c a n E m p i r e : G l o b a l L e a d e r or Rogue

Power?

(San F r a n -

cisco: Berrett-Koehler Publishers, Inc., 2004), p 38.

Chapter 30. The United States Invades Panama 1. M a n u e l Noriega with Peter Eisner, T h e M e m o i r s o f M a n u e l N o r i e g a , A m e r i c a ' s P r i s o n e r (New York: R a n d o m House,

236

Confessions of an Economic Hit Man

1997),

p 56.

2. David Harris, S h o o t i n g the Moon: U n l i k e Any Other,

Ever

3. David Harris, S h o o t i n g the Moon: U n l i k e Any

Other,

Ever

The T r u e Story

The T r u e S t o n / of a n A m e r i c a n M a n h v n t

(Boston: Little, Brown and Company, 2 0 0 1 ) , p 43.

4. M a n u e l Noriega with Peter Eisner, The Memoirs ica's

Prisoner

of a n A m e r i c a n M a n h v n t

(Boston: Little, Brown and Company, 2 0 0 1 ) , p 31-34.

of M a n u e l N o r i e g a ,

Amer-

(New York: R a n d o m House, 1 9 9 7 ) , p 212; see also Craig

Unger, "Saving the Saudis," V a n i t y F a i r , October 2003, p 165. 5. Manuel Noriega with Peter Eisner, The Memoirs ica's

Prisoner

of M a n u e l N o r i e g a ,

6 . See www.famoustexans.com/georgebush.htm,

p 2.

7 M a n u e l Noriega with Peter Eisner, The Memoirs icas

Prisoner

of M a n u e l N o r i e g a ,

U n l i k e Any Other,

Ever

The T r u e Stoiy

10. David Harris, S h o o t i n g the Moon: U n l i k e Any Other.

Ever

p 3.

The Tme Story

of M a n u e l N o r i e g a ,

Prisoner

of M a n u e l N o r i e g a ,

Amer-

(New York: R a n d o m House, 1997), p 211.

13. Manuel Noriega with Peter Eisner, The Memoirs ica's

Amer-

(New York: R a n d o m House, 1997), p 248.

12. M a n u e l Noriega with Peter Eisner, The Memoirs Prisoner

of a n A m e r i c a n M a n h u n t

(Boston: Little, Brown and Company, 2001), p 4.

11. M a n u e l Noriega with Peter Eisner, The Memoirs

ica's

of a n A m e r i c a n M a n h u n t

(Boston: Little, Brown and Company, 2001), p 6.

9. www.famoustexans.com/georgebush.htm,

Prisoner

Amer-

(New York: R a n d o m House, 1 9 9 7 ) , p 5 6 - 5 7

8. David Harris, S h o o t i n g the Moon:

ica's

Amer-

(New York: R a n d o m House, 1997), p 114.

of M a n u e l N o r i e g a

.Amer-

(New York: R a n d o m House, 1997), p xxi.

Chapter 31. An EHM Failure in Iraq 1. Morris Barrett, " T h e Web's W i l d World," T I M E , A p r i l 2 6 , 1 9 9 9 , p 62.

Chapter 32. September 11 and its Aftermath for Me, Personally 1. For more about the Huaoranis, see Joe Kane, Savages

(New York: Alfred A .

Knopf, 1 9 9 5 ) .

Chapter 33. Venezuela: Saved by Saddam 1. "Venezuela o n the B r i n k " editorial, Nexv 2. The R e v o l u t i o n W i l l Not Be Televised,

York

Times,

December 18,2002.

directed by K i m Bartley and

D o n n a c h a O'Briain (in association with the Irish F i l m Board, 2003). See

www.chavezthefihn.com.

3. "Venezuelan President Forced to Resign," Associated Press, A p r i l 1 2 , 2002. 4. Simon Romero, "Tenuous Truce in Venezuela for the State and its O i l Cornpan)'," New York

Times,

A p r i l 24, 2002.

5. Bob Edwards, "What Went Wrong with the O i l D r e a m i n Venezuela," National Public Radio, M o r n i n g E d i t i o n , July 8, 2003.

Notes

237

6. (ringer T h o m p s o n , "Venezuela Strikers Keep Pressure on Chavez and O i l Exports," New York

Times.

December 3 0 , 2 0 0 2 . Corpo-

7. For more on the jackals and other types o f hit men, see: P. W . Singer,

r a t e W a r r i o r s : The R i s e o f t h e P r i v a t i s e d M i l i t a r y I n d u s t r y (Ithaca N Y and L o n d o n : Cornell University Press, 2003); James R. Davis, Fortune's r i o r s : P r i v a t e Armies

and the New W o r l d Order

War-

(Vancouver and Toronto:

Douglas & Mclntyre, 2 0 0 0 ) ; Felix I. Rodriguez and John Weisman, Shadow

W a r r i o r : The CLA Hero

of 10O

U n k n o w n Battles

(New York: S i m o n

and Schuster, 1 9 8 9 ) . 8. T i m Werner,

Coup by A n y Other Name," N e w York

T i m e s , A p r i l 14,

9 . "Venezuela Leader Urges 2 0 Years for Strike Chiefs," Associated

Press,

2002.

Feb-

ruary- 2 2 , 2 0 0 3 . 1 0 . Paul Richter, " U . S . H a d Talks on Chavez Ouster," Los Angeles

Times,

April

17, 2 0 0 2 .

Chapter 34. Ecuador Revisited 1. Chris Jochnick, "Perilous Prosperity," New I n t e r n a t i o n a l i s t , June 2001, http://www.newint.org/issue335/perilous.htm. 2 . United Nations. H u m a n Development

Report

(New York: United Nations,

1999).

3. For additional information o n the hostage situation, see A l a n Zi be l, " N a tives Seek Redress for Pollution," O a k l a n d T r i b u n e , December 10, 2 0 0 2 ; Hoy

(Quito, Ecuador daily newspaper) articles of December 10-28, 2 0 0 3 ;

"Achuar Free Eight O i l Hostages," E l Commercio

(Quito daily newspaper),

December 16, 2002 (also carried by Reuters): " E c u a d o r : O i l F i r m Stops W o r k because Staff Seized, Demands Government Action," and "Sarayacu â&#x20AC;&#x201D; Indigenous Groups to Discuss Release o f K i d n a p p e d O i l M e n , " E l U n i verso

(Guayaquil, Ecuador, daily newspaper), http://www.eluniverso.com,

December 24, 2002; and J u a n Forero, "Seeking Balance: Growth vs. Culture in the Amazon," New York

Times,

December 10, 2 0 0 3 . Current, updated

information about Ecuador's A m a z o n i a n people is available at the Pachamama Alliance Web site: http://ww vv.pachamama.org. r

Chapter 35, Piercing the Veneer 1. National debt statistics from the Bureau o f the Public Debt, reported at www.publicdebt.treas.gov/opd/opdpenny.htm; national income statistics from the W o r l d Bank at wwvv.worldbank.org/data/databytopic/GNIPC.pdf. 2. Elizabeth Becker and Richard A . O p p e l , " A N a t i o n at War: Reconstruction. U.S. Gives Bechtel a M a j o r Contract in Rebuilding Iraq," New York A p r i l 18, 2003,

Times,

http://w"vvw.n)'times.com/2003/04/l8/international/

worldspeciaVl8REBU.html.

3. Richard A . O p p e l with Diana B. Henriques, " A Nation at War: T h e C o n tractor. Company Has Ties i n Washington, and to I r a q , " N e w York A p r i l 18, 2003,

worldspecial/lSCONT.html.

238

Times,

http://www.mtimes.com/2003/04/18/international/

Confessions of an Economic Hit Man

http://rnoneyxnn.corn/2003/04/17/news/companies/war-bechtel/ index.htm.

Epilogue 1. Energy Information Administration, reported i n U S A T o d a y , M a r c h 1, 2004, p 1.

Notes

INDEX

Bechtel Group, Inc.,

73-74,160,164,

1 7 3 , 213, 214-215

Afghanistan, 9 6 - 9 7 , 2 1 1 Agoyan hydroelectric plant, xix

bin Laden, Osama,

A I D S medicines, xii

bin Laden family, 9 7 - 9 8

96-97,183,194

A l l e n , E t h a n , 147

British Petroleum (later BP), 18

Allende, Salvador, 78

British V i r g i n Islands, 147

al-Qaeda, 206, 211

Bunau-Varilla, Philippe, 5 9 Bush, George H . W „ 59,

A m a z o n , xvii-xx, 210

79,168

bin L a d e n family and, 9 8

A m e e n , M i c h a e l , 166

United Fruit Company, 7 2 - 7 3 , 2 0 9

A m i n , Idi, 9 6

"wimp factor," 1 7 5 , 1 8 4

Amoco, 1 6 6

Bush, George W., 7 9 , 1 6 6

antipollution laws, 164

Arbusto, 165-166

Arab-Israeli war, 82

rallying o f support for U.S.

Arbenz, Jacob, 7 2 - 7 3

activities, 198

Arbusto, 165-166

Venezuelan activities, 1 9 9

Arias, Arnulfo, 59

Bush administration (George H . W.),

Arias family, 1 7 9

173-174

A r m a s , Carlos Castillo, 7 3

Bush administration (George W.),

A s h l a n d O i l Company, 185-186

201,

A s i a n Development Bank, 3 7

213-214

Bush family, 2 0 9

assassinations H u g o Spadafora, 1 7 4

Jaime Roídos, ix, 156

Canal Treaty, 5 9 , 1 0 2 - 1 0 3 , 1 5 4 - 1 5 5 ,

O m a r Torrijos, ix, 158-161

158- 1 6 1 . See also

Panama

Canal Zone, 61, 64, 6 5 . See

also

Panama

Baer, Robert, 9 4

Carlyle G r o u p , 9 8

Bahasa Indonesia, 38

Carter, Jimmy, 102,118-119,154,

Bahrain, 166

159- 160,168

Baker, James A . , I l l , 98

Carvajal, José, 144-145

banking industry

Casey, W i l l i a m J., 174

Asian Development Bank, 3 7

Chas. T. M a i n , Inc. ( M A I N ) . See

Chase Bank, 1 9 4

MAIN

Inter-American Development

Chase Bank, 194

Bank, 74

Chavez, Hugo, xx, 1 9 5 , 1 9 7 - 2 0 2 , 204.

Panama, 63