Part VI: 1981-Present
excerpted from the book
Confession of an Economic Hit
by John Perkins
Berrett-Koehler Publishers, SF,
In November 1980, Carter lost the U.S. presidential election to
Ronald Reagan. The Panama Canal Treaty he had negotiated with
Torrijos, and the situation in Iran, especially the hostages held
at the U.S. Embassy and the failed rescue attempt, were major
However, something subtler was also happening.
A president whose greatest goal was world peace and who was dedicated
to reducing U.S. dependence on oil was replaced by a man who believed
that the United States' rightful place was at the top of a world
pyramid held up by military muscle, and that controlling oil fields
wherever they existed was part of our Manifest Destiny. A president
who installed solar panels on White House roofs was replaced by
one who, immediately upon occupying the Oval Office, had them
Carter may have been an ineffective politician,
but he had a vision for America that was consistent with the one
defined in our Declaration of Independence. In retrospect, he
now seems naively archaic, a throwback to the ideals that molded
this nation and drew so many of our grandparents to her shores.
When we compare him to his immediate predecessors and successors,
he is an anomaly. His world-120 view was inconsistent with that
of the EHMs.
Reagan on the other hand was most definitely
a global empire builder, a servant of the corporatocracy. At the
time of his election, I found it fitting that he was a Hollywood
actor, a man who had followed orders passed down from moguls,
who knew how to take direction. That would be his signature. He
would cater to the men who shuttled back and forth from corporate
CEO offices to bank boards and into the halls of government. He
would serve the men who appeared to serve him but who in fact
ran the government - men like Vice President George H. W. Bush,
Secretary of State George Shultz, Secretary of Defense Caspar
Weinberger, Richard Cheney, Richard Helms, and Robert McNamara.
He would advocate what those men wanted: an America that controlled
the world and all its resources, a world that answered to the
commands of that America, a U.S. military that would enforce the
rules as they were written by America, and an international trade
and banking system that supported America as CEO of the global
Early in 1981, the Roldós administration formerly presented
his new hydrocarbons law to the Ecuadorian Congress. If implemented,
it would reform the country's relationship to oil companies. By
many standards, it was considered revolutionary and even radical.
It certainly aimed to change the way business was conducted. Its
influence would stretch far beyond Ecuador, into much of Latin
America and throughout the world.'
The oil companies reacted predictably
-they pulled out all the stops. Their public relations people
went to work to vilify Jaime Roldós, and their lobbyists
swept into Quito and Washington, briefcases full of threats and
payoffs. They tried to paint the first democratically elected
president of Ecuador in modern times as another Castro. But Roldós
would not cave in to intimidation. He responded by denouncing
the conspiracy between politics and oil - and religion. He openly
accused the Summer Institute of Linguistics of colluding with
the oil companies and then, in an extremely bold -perhaps reckless
- move, he ordered SIL out of the country.
Only weeks after sending his legislative
package to Congress and a couple of days after expelling the SIL
missionaries, Roldós warned all foreign interests, including
but not limited to oil companies, that unless they implemented
plans that would help Ecuador's people, they would be forced to
leave his country. He delivered a major speech at the Atahualpa
Olympic Stadium in Quito and then headed off to a small community
in southern Ecuador.
He died there in a fiery helicopter crash,
on May 24, 1981.
The world was shocked. Latin Americans
were outraged. Newspapers throughout the hemisphere blazed, "CIA
Assassination!" In addition to the fact that Washington and
the oil companies hated him, many circumstances appeared to support
these allegations, and such suspicions were heightened as more
facts became known. Nothing was ever proven, but eyewitnesses
claimed that Roldós, forewarned about an attempt on his
life, had taken precautions, including traveling in two helicopters.
At the last moment, one of his security officers had convinced
him to board the decoy copter. It had blown up.
Despite world reaction, the news hardly
made the U.S. press.
Osvaldo Hurtado took over as Ecuador's
president. He reinstated the Summer Institute of Linguistics and
their oil company sponsors. By the end of the year, he had launched
an ambitious program to increase oil drilling by Texaco and other
foreign companies in the Gulf of Guayaquil and the Amazon basin.
Omar Torrijos, in eulogizing Roldós,
referred to him as "brother." He also confessed to having
nightmares about his own assassination; he saw himself dropping
from the sky in a gigantic fireball. It was prophetic.
I was stunned by Roldós's death, but perhaps I should not
have been. I was anything but naive. I knew about Arbenz, Mossadegh,
Allende - and 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 had concluded, after our phenomenal
success in Saudi Arabia, that such wantonly overt actions were
things of the past. I thought the jackals had been relegated to
zoos. Now I saw that I was wrong. I had no doubt that Roldós's
death had not been an accident. It had all the markings of a CIA-orchestrated
assassination. I understood that it had been executed so blatantly
in order to send a message. The new Reagan administration, complete
with its fast-draw Hollywood cowboy image, was the ideal vehicle
for delivering such a message. The jackals were back, and they
wanted Omar Torrijos and everyone else who might consider joining
an anti-corporatocracy crusade to know it.
But Torrijos was not buckling. Like Roldós,
he refused to be intimidated. He, too, expelled the Summer Institute
of Linguistics, and he adamantly refused to give in to the Reagan
administration's demands to renegotiate the Canal Treaty.
Two months after Roldós's death,
Omar Torrijos's nightmare came true; he died in a plane crash.
It was July 31, 1981.
Latin America and the world reeled. Torrijos
was known across the globe; he was respected as the man who had
forced the United States to relinquish the Panama Canal to its
rightful owners, and who continued to stand up to Ronald Reagan.
He was a champion of human rights, the head of state who had opened
his arms to refugees across the political spectrum, including
the shah of Iran, a charismatic voice for social justice who,
many believed, would be nominated for the Nobel Peace Prize. Now
he was dead. "CIA Assassination!" once again headlined
articles and editorials.
People everywhere mourned the death of this man who had earned
a reputation as defender of the poor and defenseless, and they
clamored for Washington to open investigations into CIA activities.
However, this was not about to happen. There were men who hated
Torrijos, and the list included people with immense power. Before
his death, he was openly loathed by President Reagan, Vice President
Bush, Secretary of Defense Weinberger, and the Joint Chiefs of
Staff, as well as by the CEOs of many powerful corporation.
The military chiefs were especially incensed
by provisions in the Torrijos-Carter Treaty that forced them to
close the School of the Americas and the U.S. Southern Command's
tropical warfare center. The chiefs thus had a serious problem.
Either they had to figure out some way to get around the new treaty,
or they needed to find another country that would be willing to
harbor these facilities - an unlikely prospect in the closing
decades of the twentieth century. Of course, there was also another
option: dispose of Torrijos and renegotiate the treaty with his
Among Torrijos's corporate enemies were
the huge multinationals. Most had close ties to U.S. politicians
and were involved in exploiting Latin American labor forces and
natural resources - oil, lumber, tin, copper, bauxite, and agricultural
lands. They included manufacturing firms, communications companies,
shipping and transportation conglomerates, and engineering and
other technologically oriented corporations.
The Bechtel Group, Inc. was a prime example
of the cozy relationship between private companies and the U.S.
government. I knew Bechtel well; we at MAIN often worked closely
with 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 and Caspar Weinberger, who despised Torrijos because
he brazenly courted a Japanese plan to replace Panama's existing
canal with a new, more efficient one. Such a move not only would
transfer ownership from the United States to Panama but also would
exclude Bechtel from participating in the most exciting and potentially
lucrative engineering project of the century.
Torrijos stood up to these men, and he
did so with grace, charm, and a wonderful sense of humor. Now
he was dead, and he had been replaced by a protégé,
Manuel Noriega, a man who lacked Torrijos's wit, charisma, and
intelligence, and a man who many suspected had no chance against
the Reagans, Bushes, and Bechtels of the world.
I was personally devastated by the tragedy.
I spent many hours reflecting on my conversations with Torrijos.
Late one night, I sat for a long time staring at his photo in
a magazine and recalling my first night in Panama, riding in a
cab through the rain, stopping before his gigantic billboard picture.
"Omar's ideal is freedom; the missile is not invented that
can kill an ideal!" The memory of that inscription sent a
shudder through me, even as it had on that stormy night.
I could not have known back then that
Torrijos would collaborate with Carter to return the Panama Canal
to the people who rightfully deserved to own it, or that this
victors along with his attempts to reconcile differences between
Latin American Socialists and the dictators, would so infuriate
the Reagan-Bush administration that it would seek to assassinate
him. I could not have known that on another dark night he would
be killed during a routine flight in his Twin Otter, or that most
of the world outside the United States would have no doubt that
Torrijos's death at the age of fifty-two was just/ one more in
a series of CIA assassinations.
The idea of reducing our oil dependence fell by the wayside. Reagan
was deeply indebted to the oil companies; Bush had made his own
fortune as an oilman. And most of the key players and cabinet
members in these two administrations were either part of the oil
industry or were part of the engineering and construction companies
so closely tied to it. Moreover, in the final analysis, oil and
construction were not partisan; many Democrats had profited from
and were beholden to them also.
... What was going on in the energy field
was symbolic of a trend that was affecting the whole world. Concerns
about social welfare, the environment, and other quality-of-life
issues took a backseat to greed. In the process, an overwhelming
emphasis was placed on promoting private businesses. At first,
this was justified on theoretical bases, including the idea that
capitalism was superior to and would deter communism. Eventually,
however, such justification was unneeded. It was simply accepted
a priori that there was something inherently better about projects
owned by wealthy investors rather than by governments. International
organizations such as the World Bank bought into this notion,
advocating deregulation and privatization of water and sewer systems,
communications networks, utility grids, and other facilities that
up until then had been managed by governments.
As a result, it was easy to expand the
EHM concept into the larger community, to send executives from
a broad spectrum of businesses on 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, and the largest markets. They were
ruthless in their approach. Like the EHMs who had gone before
them -like me, in Indonesia, in Panama, and in Colombia -they
found ways to rationalize their misdeeds. And like us, they ensnared
communities and countries. They promised affluence, a way for
countries to use the private sector to dig themselves out of debt.
They built schools and highways, donated telephones, televisions,
and medical services. In the end, however, if they found cheaper
workers or more accessible resources elsewhere, they left. When
they abandoned a community whose hopes they had raised, the consequences
were often devastating, but they apparently did this without a
moment's hesitation or a nod to their own consciences.
The modern international financial system was created near the
end of World War II, at a meeting of leaders from many countries,
held in Bretton Woods, New Hampshire -my home state. The World
Bank and the International Monetary Fund were formed in order
to reconstruct a devastated Europe, and they achieved remarkable
success. The system expanded rapidly, and it was soon sanctioned
by every major U.S. ally and hailed as a panacea for oppression.
It would, we were assured, save us all from the evil clutches
But I could not help wondering where all
this would lead us. By the late 1980s, with the collapse of the
Soviet Union and the world Communist movement, it became apparent
that deterring communism was not the goal; it was equally obvious
that the global empire, which was rooted in capitalism, would
have free reign. As Jim Garrison, president of the State of the
World forum, observes:
Taken cumulatively, the integration of
the world as a whole, particularly in terms of economic globalization
and the mythic qualities of "free market" capitalism,
represents a veritable "empire" in its own right...
No 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 World
Bank, the International Monetary Fund, or the arbitrations of
the World Trade Organization, those international financial institutions
that, however inadequate, still determine what economic globalization
means, what the rules are, and who is rewarded for submission
and punished for infractions ...
... Noriega was ... saddled with a U.S. president who suffered
from an image problem, what journalists referred to as George
H. W. Bush's "wimp factor." This took on special significance
when Noriega adamantly refused to consider a fifteen-year extension
for the School of the Americas. The general's memoirs provide
an interesting insight:
As determined and proud as we were to
follow through with Torrijos's legacy, the United States didn't
want any of this to happen. They wanted an extension or a renegotiation
for the installation [School of the Americas], saying that with
their growing war preparations in Central America, they still
needed it. But that School of the Americas was an embarrassment
to us. We didn't want a training ground for death squads and repressive
rightwing militaries on our soil.
Perhaps, therefore, the world should have
anticipated it, but in fact the world was stunned when, on December
20, 1989, the United States attacked Panama with what was reported
to be the largest airborne assault on a city since World War II.
It was an unprovoked attack on a civilian population. Panama and
her people posed absolutely no threat to the United States or
to any other country. Politicians, governments, and press around
the world denounced the unilateral U.S. action as a clear violation
of international law.
Had this military operation been directed
against a country that had committed mass murder or other human
rights crimes - Pinochet's Chile, Stroessner's Paraguay, Somosa's
Nicaragua, D'Aubuisson's El Salvador, or Saddam's Iraq, for example
- the world might have understood. But Panama had done nothing
of the sort; it had merely dared to defy the wishes of a handful
of powerful politicians and corporate executives. It had insisted
that the Canal Treaty be honored, it had held discussions with
social reformers, and it had explored the possibility of building
a new canal with Japanese financing and construction companies.
As a result, it suffered devastating consequences. As Noriega
I want to make it very clear: the destabilization
campaign launched by the United States in 1986, ending with the
1989 Panama invasion, was a result of the U.S. rejection of any
scenario in which future control of the Panama Canal might be
in the hands of an independent, sovereign Panama - supported by
Japan... Shultz and Weinberger, meanwhile, masquerading as officials
operating in the public interest and basking in popular ignorance
about the powerful economic interests they represented, were building
a propaganda campaign to shoot me down.
David Harris, a contributing editor at the New York Times Magazine
and the author of many books, has an interesting observation.
In his 2001 book Shooting the Moon, he states:
Of all the thousands of rulers, potentates,
strongmen, juntas, and warlords the Americans have dealt with
in all corners of the world, General Manuel Antonio Noriega is
the only one the Americans came after like this. Just once in
its 225 years of formal national existence has the United States
ever invaded another country and carried its ruler back to the
United States to face trial and imprisonment for violations of
American law committed on that ruler's own native foreign turf.
We shall never know many of the facts about the invasion, nor
shall we know the true extent of the massacre. Defense Secretary
Richard Cheney claimed a death toll between five hundred and six
hundred, but independent human rights groups estimated it at three
thousand to five thousand, with another twenty-five thousand left
homeless. Noriega was arrested, flown to Miami, and sentenced
to forty years' imprisonment; at that time, he was the only person
in the United States officially classified as a prisoner of war.
The world was outraged by this breach
of international law and by the needless destruction of a defenseless
people at the hands of the most powerful military force on the
planet, but few in the United States were aware of either the
outrage or the crimes Washington had committed. Press coverage
was very limited. A number of factors contributed to this, including
government policy, White House phone calls to publishers and television
executives, congresspeople who dared not object, lest the wimp
factor become their problem, and journalists who thought the public
needed heroes rather than objectivity.
One exception was Peter Eisner, a Newsday
editor and Associated Press reporter who covered the Panama invasion
and continued to analyze it for many years. In The Memoirs of
Manuel Noriega: America's Prisoner, published in 1997, Eisner
The death, destruction and injustice wrought
in the name of fighting Noriega -and the lies surrounding that
event -were threats to the basic American principles of democracy...
Soldiers were ordered to kill in Panama and they did so after
being told they had to rescue a country from the clamp of a cruel,
depraved dictator; once they acted, the people of their country
(the U.S.) marched lockstep behind them.
... I found myself asking the same question over and over: How
many decisions - including ones of great historical significance
that impact millions of people - are made by men and women who
are driven by personal motives rather than by a desire to do the
right thing? How many of our top government officials are driven
by personal greed instead of national loyalty? How many wars are
fought because a president does not want his constituents to perceive
him as a wimp?
... the emerging role of the corporate executive-as EHM. A whole
new class of soldier was emerging on the world scene, and these
people were becoming desensitized to their own actions. I wrote:
Today, men and women are going into Thailand,
the Philippines, Botswana, Bolivia, and every other country where
they hope to find people desperate for work. They go to these
places with the express purpose of exploiting wretched people
- people whose children are severely malnourished, even starving,
people who live in shantytowns and have lost all hope of a better
life, people who have ceased to even dream of another day. These
men and women leave their plush offices in Manhattan or San Francisco
or Chicago, streak across continents and oceans in luxurious jetliners,
check into first-class hotels, and dine at the finest restaurants
the country has to offer. Then they go searching for desperate
Today, we still have slave traders. They
no longer find it necessary to march into the forests of Africa
looking for prime specimens who will bring top dollar on the auction
blocks in Charleston, Cartagena, and Havana. They simply recruit
desperate people and build a factory to produce the jackets, blue
jeans, tennis shoes, automobile parts, computer components, and
thousands of other items they can sell in the markets of their
choosing. Or they may elect not even to own the factory themselves;
instead, they hire a local businessman to do all their dirty work
These men and women think of themselves
as upright. They return to their homes with photographs of quaint
sites and ancient ruins, to show to their children. They attend
seminars where they pat each other on the back and exchange tidbits
of advice about dealing with the eccentricities of customs in
far-off lands. Their bosses hire lawyers who assure them that
what they are doing is perfectly legal. They have a cadre of psychotherapists
and other human resource experts at their disposal to convince
them that they are helping those desperate people.
The old-fashioned slave trader told himself
that he was dealing with a species that was not entirely human,
and that he was offering them the opportunity to become Christianized.
He also understood that slaves were fundamental to the survival
of his own society, that they were the foundation of his economy.
The modern slave trader assures himself (or herself) that the
desperate people are better off earning one dollar a day than
no dollars at all, and that they are receiving the opportunity
to become integrated into the larger world community. She also
understands that these desperate people are fundamental to the
survival of her company, that they are the foundation for her
own lifestyle. She never stops to think about the larger implications
of what she, her lifestyle, and the economic system behind them
are doing to the world - or of how they may ultimately impact
her children's future.
The Reagan and Bush administrations were determined to turn Iraq
into another Saudi Arabia. There were many compelling reasons
for Saddam Hussein to follow the example of the House of Saud.
He had only to observe the benefits they had reaped from the Money-laundering
Affair. Since that deal was struck, modern 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 in the world: state-of-the-art
desalinization plants, sewage treatment systems, communications
networks, and electric utility grids.
Saddam Hussein undoubtedly was aware that
the Saudis also enjoyed special treatment when it came to matters
of international law. Their good friends in Washington turned
a blind eye to many Saudi activities, including the financing
of fanatical groups - many of which were considered by most of
the world to be radicals bordering on terrorism - and the harboring
of international fugitives. In fact, the United States actively
sought and received Saudi Arabian financial support for Osama
bin Laden's Afghan war against the Soviet Union. The Reagan and
Bush administrations not only encouraged the Saudis in this regard,
but also they pressured many other countries to do the same -
or at least to look the other way.
The EHM presence in Baghdad was very strong
during the 1980s. They believed that Saddam eventually would see
the light, and I had to agree with this assumption. After all,
if Iraq reached an accord with Washington similar to that of the
Saudis, Saddam could basically write his own ticket in ruling
his country, and might even expand his circle of influence throughout
that part of the world.
It hardly mattered that he was a pathological
tyrant, that he had the blood of mass murders on his hands, or
that his mannerisms and brutal actions conjured images of Adolph
Hitler. The United States had tolerated and even supported such
men many times before.
Iraq was extremely important to us, much more important than was
obvious on the surface. Contrary to common public opinion, Iraq
is not simply about oil. It is also about water and geopolitics.
Both the Tigris and Euphrates rivers flow through Iraq; thus,
of all the countries in that part of the world, Iraq controls
the most important sources of increasingly critical water resources.
During the 1980s, the importance of water - politically as well
as economically - was becoming obvious to those of us in the energy
and engineering fields. In the rush toward privatization, many
of the major companies that had set their sights on taking over
the small independent power companies now looked toward privatizing
water systems in Africa, Latin America, and the Middle East.
In addition to oil and water, Iraqis situated
in a very strategic location. It borders Iran, Kuwait, Saudi Arabia,
Jordan, Syria, and Turkey, and it has a coastline on the Persian
Gulf. It is within easy missile-striking distance of both Israel
and the former Soviet Union. Military strategists equate modern
Iraq to the Hudson River valley during the French and Indian War
and the American Revolution. In the eighteenth century, the French,
British, and Americans knew that whoever controlled the Hudson
River valley controlled the continent. Today, it is common knowledge
that whoever controls Iraq holds the key to controlling the Middle
What we had previously considered U.S. corporations were now truly
international, even from a legal standpoint. Many of them were
incorporated in a multitude of countries; they could pick and
choose from an assortment of rules and regulations under which
to conduct their activities, and a multitude of globalizing trade
agreements and organizations made this even easier. Words like
democracy, socialism, and capitalism were becoming almost obsolete.
Corporatocracy had become a fact, and it increasingly exerted
itself as the single major influence on world economies and politics.
During the 1973 OPEC oil embargo, petroleum prices skyrocketed
and Venezuela's national budget quadrupled. The EHMs went to work.
The international banks flooded the country with loans that paid
for vast infrastructure and industrial projects and for the highest
skyscrapers on the continent. Then, in the 1980s, the corporate-style
EHMs arrived. It was an ideal opportunity for them to cut their
fledgling teeth. The Venezuelan middle class had 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 in the sweatshops
Then oil prices crashed, and Venezuela
could not repay its debts. In 1989, the IMF imposed harsh austerity
measures and pressured Caracas to support the corporatocracy in
many other ways. Venezuelans reacted violently; riots killed over
two hundred people. The illusion of oil as a bottomless source
of support was shattered. Between 1978 and 2003, Venezuela's per
capita income plummeted by over 40 percent.
As poverty increased, resentment intensified.
Polarization resulted, with the middle class pitted against the
poor. As so often occurs in countries whose economies depend on
oil production, demographics radically shifted. The sinking economy
took its toll on the middle class, and many fell into the ranks
of the poor.
The new demographics set the stage for
Chavez - and for conflict with Washington. Once in power, the
new president took actions that challenged the Bush administration.
Just before the September ii attacks, Washington was considering
its options. The EHMs had failed; was it time to send in the jackals?
Then 9/11 changed all priorities. President
Bush and his advisers focused on rallying the world community
to support U.S. activities in Afghanistan and an invasion of Iraq.
On top of that, the U.S. economy was in the middle of a recession.
Venezuela was relegated to a back burner.
... Afghanistan, Iraq, and Venezuela ... each had undergone traumatic
political turmoil and ended up with leaders who left a great deal
to be desired (a cruel and despotic Taliban, a psychopathic Saddam,
and an economically inept Chavez), yet in no case did the corporatocracy
respond by attempting to solve the deeper problems of these countries.
Rather, the response was simply to undermine leaders who stood
in the way of our oil policies. In many respects, Venezuela was
the most intriguing case because, while military intervention
had already occurred in Afghanistan and appeared inevitable in
Iraq, the administration's response to Chavez remained a mystery.
As 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 [d in the way of the corporatocracy's march to global empire.
By December 2002, the situation in both Venezuela and in Iraq
reached crisis points. The two countries were evolving into perfect
counterpoints for each other. In Iraq, all the subtle efforts
-both the EHMs and the jackals - had failed to force Saddam to
comply, and now we were preparing for the ultimate solution, invasion.
In Venezuela, the Bush administration was bringing Kermit Roosevelt's
Iranian model into play. As the New York Times reported,
Hundreds of thousands of Venezuelans filled
the streets here today to declare their commitment to a national
strike, now in its 28th day, to force the ouster of President
The strike, joined by an estimated 30,000
oil workers, threatens to wreak havoc on this nation, the world's
fifth-largest oil producer, for months to come...
In recent days, the strike has reached
a kind of stalemate. Mr. Chavez is using non-striking workers
to try to normalize operations at the state-owned oil company.
His opponents, led by a coalition of business and labor leaders,
contend, though, that their strike will push the company, and
thus the Chavez government, to collapse.
This was exactly how the CIA brought down
Mossadegh and replaced him with the shah. The analogy could not
have been stronger. It seemed history was uncannily repeating
itself, fifty years later. Five decades, and still oil was the
On January 4, 2003, Chavez's supporters
clashed with his opponents. Two people were shot to death and
dozens more were wounded. The next day, I talked with an old friend
who for many years had been involved with the jackals. Like me,
he had never worked directly for any government, but he had led
clandestine operations in many countries. He told me that a private
contract( had approached him to foment strikes in Caracas and
to bribe military officers - many of whom had been trained at
the School of the Americas -to turn against their elected president.
He had turned down the offer, but he confided, "The man who
took the job know what he's doing.
That same month, January 2003, saw crude
oil prices rise to big levels and American inventories close to
a twenty-six-year low. Given the Middle East situation, I knew
the Bush administration was doing everything in its power to overthrow
Chavez. Then cam the news that they had succeeded; Chavez had
been ousted. The N York Times took this turn of events as an opportunity
to provide historical perspective - and also to identify the man
who appeared to play the Kermit Roosevelt role in contemporary
The United States... supported authoritarian
regimes throughout Central and South America during and after
the Cold War in defense of its economic and political interests.
In tiny Guatemala, the Central Intelligence
Agency mounted a coup overthrowing the democratically elected
government in 1954, and it backed subsequent rightwing governments
against small leftist rebel groups for four decades. Roughly 200,000
In Chile, a CIA-supported coup helped
put Gen. Augusto Pinochet in power from 1973 to 1990. In Peru,
a fragile democratic government is still unraveling the agency's
role in a decade of support for the now-deposed and disgraced
president, Alberto K. Fujimori, and his disreputable spy chief,
The United States had to invade Panama
in 1989 to topple its narco-dictator, Manuel A. Noriega, who,
for almost 20 years, was a valued informant for American intelligence.
And the struggle to mount an unarmed opposition against Nicaragua's
leftists in the 1980s by any means necessary, including selling
arms to Iran for cold cash, led to indictments against senior
Reagan administration officials.
Among those investigated back then was
Otto J. Reich, a veteran of Latin American struggles. No charges
were ever filed against Mr. Reich. He later became United States
Ambassador to Venezuela and now serves as assistant secretary
of state for inter-American affairs by presidential appointment.
The fall of Mr. Chavez is a feather in his cap.
If Mr. Reich and the Bush administration
were celebrating the coup against Chavez, the party was suddenly
cut short. In an amazing turnabout, Chavez regained the upper
hand and was back in power less than seventy-two hours later.
Unlike Mossadegh in Iran, Chavez had managed to keep the military
on his side, despite all attempts to turn its highest-ranking
officers against him. In addition, he had the powerful state oil
company on his side. Petróleos de Venezuela defied the
thousands of striking workers and 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 had been persuaded to betray
him, and forced many of his key opponents out of the country.
He demanded twenty-year prison terms for two prominent opposition
leaders, Washington-connected operatives who had joined the jackals
to direct the nationwide strike.
In the final analysis, the entire sequence
of events was a calamity for the Bush administration. As the Los
Angeles Times reported,
Bush administration officials acknowledged
Tuesday that they had discussed the removal of Venezuelan President
Hugo Chavez for months with military and civilian leaders from
Venezuela... The administration's handling of the abortive coup
has come under increasing scrutiny.
It was obvious that not only had the EHMs
failed, but so had the jackals. Venezuela in 2003 turned out to
be very different from Iran in 1953. I wondered if this was a
harbinger or simply an anomaly and what Washington would do next.
At least for the time being, I believe
a serious crisis was averted in Venezuela - and Chavez was saved
- by Saddam Hussein. The Bush administration could not take on
Afghanistan, Iraq, and Venezuela all at once. At the moment, it
had neither the military muscle nor the political support to do
so. I knew, however, that such circumstances could change quickly,
and that President Chavez was likely to face fierce opposition
in the near future. Nonetheless, Venezuela was a reminder that
not much had changed in fifty years - except the outcome.
In the years since I first went there [Ecuador], in 1968, this
tiny country 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 paying off
its debts - instead of to helping the millions of its citizens
who are officially classified as dangerously impoverished.'
The situation in Ecuador clearly demonstrates
that this was not the result of a conspiracy; it was a process
that had occurred during both Democratic and Republican administrations,
a process that had involved all the major multinational banks,
many corporations, and foreign aid missions from a multitude of
countries. The United States played the lead role, but we had
not acted alone.
During those three decades, thousands
of men and women participated in bringing Ecuador to the tenuous
position it found itself in at the beginning of the millennium.
Some of them, like me, had been aware of what they were doing,
but the vast majority had merely performed the tasks they had
been taught in business, engineering, and law schools, or had
followed the lead of bosses in my mold, who demonstrated the system
by their own greedy example and through rewards and punishments
calculated to perpetuate it. Such participants saw the parts they
played as benign, at worst; in the most optimistic view, they
were helping an impoverished nation.
Although unconscious, deceived, and -
in many cases - self-deluded, 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 world has ever witnessed. No one had to go out and seek men
and women who could be bribed or threatened - they had already
been recruited by companies, banks, and government agencies. The
bribes consisted of salaries, bonuses, pensions, and insurance
policies; the threats were based on social mores, peer pressure,
and unspoken questions about the future of their children's education.
The system had succeeded spectacularly.
By the time the new millennium rolled in, Ecuador was thoroughly
entrapped. We had her, just as a Mafia don has the man whose daughter's
wedding and small business he has financed and then refinanced.
Like any good Mafiosi, we had taken our time. We could afford
to be patient, knowing that beneath Ecuador's rain forests lies
a sea of oil, knowing that the proper day would come.
A few pundits were already questioning why Bush attacked Iraq
rather than funneling all of our resources into pursuing al-Qaeda
in Afghanistan. Could it be f that from the point of view of this
administration - this oil family establishing oil supplies, as
well as a justification for construction contracts, was more important
than fighting terrorists?
In the final analysis, the global empire depends to a large extent
on the fact that the dollar acts as the standard world currency,
and that the United States Mint has the right to print those dollars.
Thus, we make loans to countries like Ecuador with the full knowledge
that they will never repay them; in fact, we do not want them
to honor their debts, since the nonpayment is what gives us our
leverage, our pound of flesh. Under normal conditions, we would
run the risk of eventually decimating our own funds; after all,
no creditor can afford too many defaulted loans. However, ours
are not normal circumstances. The United States prints currency
that is not backed by gold. Indeed, it is not backed by anything
other than a general worldwide confidence in our economy and our
ability to marshal the forces and resources of the empire we have
created to support us.
The ability to print currency gives us
immense power. It means, among other things, that we can continue
to make loans that will never be repaid - and that we ourselves
can accumulate huge debts. By the beginning of 2003, the United
States' national debt exceeded a staggering $6 trillion and was
projected to reach $7 trillion before the end of the year -roughly
$24,000 for each U.S. citizen. Much of this debt is owed to Asian
countries, particularly to Japan and China, who purchase U.S.
Treasury securities (essentially, IOUs) with funds accumulated
through sales of consumer goods - including electronics, computers,
automobiles, appliances, and clothing goods - to the United States
and the worldwide market.
As long as the world accepts the dollar
as its standard currency, this excessive debt does not pose a
serious obstacle to the corporatocracy. However, if another currency
should come along to replace the dollar, and if some of the United
States' creditors (Japan or China, for example) should decide
to call in their debts, the situation would change drastically.
The United States would suddenly find itself in a most precarious
In fact, today the existence of such a
currency is no longer hypothetical; the euro entered the international
financial scene on January 1, 2002 and is growing in prestige
and power with every passing month. The euro offers an unusual
opportunity for OPEC, if it chooses to retaliate for the Iraq
invasion, or if for any other reason it decides to flex its muscles
against the United States. A decision by OPEC to substitute the
euro for the dollar as its standard currency would shake the empire
to its very foundations. If that were to happen, and if one or
two major creditors were to demand that we repay our debts in
euros, the impact would be enormous.
... I could not help but wonder how many ... people knew, as I
did, that Saddam would still be in charge if he had played the
game as the Saudis had. He would have his missiles and chemical
plants; we would have built them for him, and our people would
be in charge of upgrading and servicing them. It could be a very
sweet deal - even as Saudi Arabia had been.
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 everything
to do with us. And that, of course, explains why we have such
difficulty listening to the real story. We prefer to believe the
myth that thousands of years of human 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
humankind, 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
who excel at stoking the fires of economic growth should be exalted
and rewarded, while those born at the fringes are available for
This concept and its corollary are used
to justify all manner of piracy -licenses are granted to rape
and pillage and murder innocent people in Iran, Panama, Colombia,
Iraq, and elsewhere. EHMs, jackals, and armies flourish for as
long as their activities can be shown to generate economic growth
- and they almost always demonstrate such growth. Thanks to the
biased "sciences" of forecasting, econometrics, and
statistics, if you bomb a city and then rebuild it, the data shows
a huge spike in economic growth.
The real story is that we are living a
Things are not as they appear. NBC is owned by General Electric,
ABC by Disney, CBS by Viacom, and CNN is part of the huge AOL
Time Warner conglomerate. Most of our newspapers, magazines, and
publishing houses are owned - and manipulated - by gigantic international
corporations. Our media is part of the corporatocracy. The officers
and directors who control nearly all our communications outlets
know their places; they are taught throughout life that one of
their most important jobs is to perpetuate, strengthen, and expand
the system they have inherited.
... this book ... is a confession, pure and simple. It is the
confession of a man who allowed himself to become a pawn, an economic
hit man; a man who bought into a corrupt system because it offered
so many perks, and because buying in was easy to justify; a man
who knew better but who could always find excuses for his own
greed, for exploiting desperate people and pillaging the planet;
a man who took full advantage of the fact that he was born into
one of the wealthiest societies history has ever known, and who
also could pity himself because his parents were not at the top
of the pyramid; a man who listened to his teachers, read the textbooks
on economic development, and then followed the example of other
men and women who legitimatize every action that promotes global
empire, even if that action results in murder, genocide, and environmental
destruction; a man who trained others to follow in his footsteps.
It is my confession.
of an Economic Hit Man
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