(John Perkins) - \"Confessions of an Economic

Confessions of an Economic Hit Man John Perkins

BERRETT-KOEHLER San a BK

PUBLISHERS, INC.

Francisco Currents

book

Copyright (o 2 0 0 4 by John Perkins A l l rights reserved. N o part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the p u b lisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed "Attention: Permissions Coordinator," at the address below. Berrett-Koehler Publishers, Inc., 235 Montgomery- Street, Suite 650, San Francisco, C A 94104-2916 Tel: (415) 288-0260 Fax: (415) 362-2512 w w . b k c o n n e c t i o n . c o m ORDERING INFORMATION QUANTITY SALES.

Special discounts are available on quantity purchases by corpora-

tions, associations, and others. For details, contact the 'Special Sales Department" at the Berrett-Koehler address above. I N D I V I D U A L S A L E S . Berrett-Koehler publications are available through most bookstores. They can also be ordered direct from Berrett-Koehler: Tel: (800) 929-2929: Fax: (802) 864-7626; www.bkcomiection.com ORDERS FOR COLLEGE TKXTBOOK/COURSE ADOPTION

USK.

Please contact Berrett-

Koehler: Tel: (800) 929-2929; Fax: (802) 864-7626. O R D E R S B Y U.S. T R A D E B O O K S T O B E S A N D W H O L E S A L E R S .

Please

Contact

Publishers Group West, 1700 Fourth Street, Berkeley, C A 94710. Tel: (510) 528-1444; Fax: (510) 528-3444. Berrett-Koehler and the B K logo are registered trademarks of Berrett-Koehler Publishers, Inc. Printed in the U n i t e d States of A m e r i c a Berrett-Koehler books arc printed on long-lasting acid-free paper. W h e n it is available, we choose paper that has been manufactured by environmentally responsible processes. These may include using trees grown in sustainable forests, incorporating recycled paper, m i n i m i z i n g chlorine i n bleaching, or recycling the energy produced at the paper mill. LIBRARY OF CONGRESS CATALOOING-IN-FUBLICATION DATA

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.

[B]

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"

3

12

2

Indonesia: Lessons for a n E H M

4

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

5

Selling M y Soul

P A R T II:

20 23

28

1971-1975

6

M y Role as Inquisitor

7

Civilization o n T r i a l

8

Jesus, Seen Differently

9

Opportunity of a Lifetime 5 2

37 42 47

10

Panama's President a n d H e r o

11

Pirates i n the Canal Zone 6 3

12

Soldiers a n d Prostitutes

13

Conversations w i t h the General

14

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

58

67 71

76

15

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

16

Pimping, and Financing Osama bin Laden vii

PART M i : 1975-T981 17

P

18

Iran's K i n g of Kings

19

Confessions of a Tortured A l a n

20

T h e Fall of a K i n g

21

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

22

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

23

T h e Deceptive Resume

24

Ecuador's President Battles B i g O i l

25

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

26

Ecuador's Presidential Death

27

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

28

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

29

I Take a Bribe

30

The U n i t e d States Invades Panama

31

A n E H M Failure i n Iraq

32

September 11 and its Aftermath for M e , Personally

33

Venezuela: Saved by S a d d a m

34

Ecuador Revisited

35

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

of

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 — 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 — 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,

x

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 — 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 — 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 — 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

3

4

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 — their mansions, yachts, a n d private jets — 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 — 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 — 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 — 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 — 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 — 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

3

4

5

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 — over $375 b i l l i o n per year as of 2 0 0 4 — 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

Prologue

xix

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.

xx

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 — a n d this is a very large caveat —- 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?

Prologue

xxi

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

3

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

4

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

5

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

6

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

7

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 — w h i c h i n those days was deemed a certainty by m e n i n his position —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 — 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.

8

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

9

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 — 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 — 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

10

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

11

CHAPTER

2

"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

12

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"

13

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

14

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"

15

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,

16

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"

17

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

18

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 — including the N S A — 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 "

19

CHAPTER

3

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,

20

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 — 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.

1

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

21

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 — perhaps the only time I felt threatened b y her — 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

22

Part 1:1963-1971

CHAPTER

4

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 — J a v a , S u m a tra, Borneo, Sulawesi — 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

23

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.

24

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

25

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 — 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 — 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

26

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

27

CHAPTER

5

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 — wives of U.S. o i l a n d construction company executives — 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

28

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 — 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

29

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

30

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

31

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 — H o w a r d , Charlie, Claudine, A n n , Einar, U n c l e Frank — 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

32

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

33

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.

37

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

:m

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 — even my translator k n e w only that I could recite a few stock phrases — 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

39

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

40

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

41

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

42

w o m e n pointed at a small fire. "Very fresh meat," she laughed. "Just cooked." Then the music started — 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 — 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

43

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

44

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 — 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 — especially its leader, the U.S. — 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

45

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 — soul, a belief i n higher powers — 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.

46

Part II: 1971-1975

CHAPTER

8

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

47

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

48

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

49

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

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

50

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

51

CHAPTER

9

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

52

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 — 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

53

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 — a n d m y a n x i ety — 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

54

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

55

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.

56

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

57

CHAPTER

10

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 disaster—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

58

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 — 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

59

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

4

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 — 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 — 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

60

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

61

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 — 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 —"Omar's ideal is freedom; the missile is not invented that can k i l l an i d e a l ! " — 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.

62

Part li: 1971-1975

CHAPTER

11

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.

63

"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.

64

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 — 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 — the supermarkets, barbershops, beauty salons, restaurants, a l l of t h e m — 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."

66

Part II: 1971-1975

CHAPTER

12

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 — 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

68

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 — 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 — " 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."

70

Part il: 1971-1975

CHAPTER

13

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 Hidráulicos y Electrificación, 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

71

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 -

72

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 — 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

73

"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

74

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 — 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 — 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

75

CHAPTER

14

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

76

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 inflationär}' 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 — 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 — connections on Beacon

Entering a N e w and Sinister Period in Economic History

77

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

78

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

79

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.

80

Part ii: 1971-1975

CHAPTER

15

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.

81

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 — 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 — 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.

82

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 — big corporations, international banks, a n d government — 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

2

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 — 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

83

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 — a n d extremely profitable — 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 — t o burden this country w i t h debts it could never repay— 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

85

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

86

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 — the total a n d immediate transformation of an entire nation on a scale never before witnessed — 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

87

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

88

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

89

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 — i f necessary — 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

90

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 — 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.

4

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 — 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 — 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

91

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 — 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.

92

Part II: 1971-1975

CHAPTER

16

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 — p i m p i n g — an illegal activity i n Massachusetts, and so the m a i n problem was figuring out

93

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

94

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 — all experienced i n i n t e r n a tional projects — 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

95

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.

3

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

96

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 — after the dual shocks of the Iranian revolution and the Soviet war i n Afghanistan — 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.

6

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

97

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

98

Part II: 1971-1975

PART III: 1975-1981

CHAPTER

17

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.

101

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

102

Part III: 1975-1981

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

Panama Canal Negotiations and G r a h a m Greene

103

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 — 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

104

Part III: 1975-1981

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 benefit—but rather to use foreign aid to truly help his people — 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 day— 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

Panama Canal Negotiations and G r a h a m Greene

105

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 — 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.

106

Part III: 1975-1981

"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 — 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

Panama Canal Negotiations and Graham Greene

107

CHAPTER

18

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 — 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

108

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 — 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.

Iran's K i n g of Kings

109

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

110

Part III: 1975-1981

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

Iran's K i n g of Kings

111

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."

112

Part III: 1975-1981

CHAPTER

19

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."

113

" 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

114

Part III: 1975-1981

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

Confessions of a Tortured M a n

115

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 — 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.

116

Part III: 1975-1981

CHAPTER

20

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 — particularly its backing of Israel, of corrupt leaders, a n d of despotic governments — 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

117

early fifties, w h e n you overthrew Mossadegh. Y o u thought it very clever back then — as d i d I. B u t now it returns to haunt you — 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

118

Part 111:1975-1981

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.

The Fall of a K i n g

119

CHAPTER

21

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 — 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

120

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 Simón Bolívar were victorious over Spanish royalists at the pivotal Battle of Boyacá, 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

Columbia: Keystone of Latin A m e r i c a

121

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 — coffee, bananas, textiles, emeralds, flowers, o i l , a n d cocaine — 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.

122

Part III: 1975-1981

Paula h a d long b l o n d hair and striking green eyes — 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 -— 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

C o l u m b i a : Keystone of Latin A m e r i c a

12.3

CHAPTER

22

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

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

125

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.

126

Part III: 1975-1981

"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 — Occidental, I think. H e was protesting drilling on indigenous lands, i n the forests of a tribe facing extinction—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 — 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

American Republic versus Global Empire

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

128

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 — 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

129

"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 résumé 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."

130

Part IN: 1975-1981

CHAPTER

23

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 Hidráulicos y Electrificación; 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

132

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 .[.>-.-clpn';?ul planning, economic forecasting, energy . i . - m ^ l ioieeasting. marketing studies, plant siting. T

] 1i

n analysis, economic

i

i tal

and

feasib:hty

studies,

impact

studies,

eraionuf

ti i t t planning and management consulting. In - j ^ i - i o n . many projects have involved training clients .¡i :|ic tier-

K

i il

Forecasting Studies Mr Perkins lias been in charge o f a project

design l

i

t

J

i i

i up

energy

packages

and quantifying

economic

development

and econometric

i

for the and

2) evaluating environmental and

L r T ic impacts o f projects, and 3)

applying

models to national and

i omic planniriL'. I ining F

\_ ? L in

MAIN.

i d managing

M r . Perkins spent

three

a construe:lioii

materials

H i also conducted studies o f the feasibility i J it

er.edu

Marketing Studies Feasibility Studies Site Selection Studies Economic Impact Studies Investment Pia rutin e Fuel Supply Studies Economic Development Phrming Training Programs Project Managcmen'.

rador conducting marketing studies and

a i/iig i

piogram

demand

between

production,

M.irkov u

computet

tu ti,

.fi-rev

C R E D E N T I A L S

techniques developed, bv M r . Perkins and

u s stall.

and

savings

cooperatives

Ecuador. E D U

CATION

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

Allocation Planning Management Consulting Clients served: o

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

o

Asian Development

o

Boise Cascade Corporation

o

City Service Corporation

o

Dayton Power & Light Company

o

General Elevine C o m p a r s

o

Government or' Kuwait

o

American Economic Association Society for Inte-nationa!

Development

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

1

" A Mae i o Approach to Energy Forecasting '

instituto

de

Recursos

Hidráulicos

y

Electrificación, I'anumj o

Inter-American Development

Bank

o

In ternaLionai

Reconstruction

English. Spanish PROFESSIONAL AFFILIATIONS

Rank

Bank

for

and

Development o

Ministry of Energy. Iran

o

New Y o r k Times

o

Power Aufhority o f the State of New Y o r k

n

Pemsahaan U m u n Ljstrik Negara, Indonesia

o

South Carolina Electric and Gas Company

ù

Te e h n ic ai

A s soc ia 11 on

« >T" the Pul p

and Pa pe r

Industry o

Union Camp Co-puiatior.

o

U . S . Treasury D e p t . . Kingdom o f Saudi Arabia

1

" A Model fur Describing the Direct and Indirect Interrelationships between the Economy and the Eiivironmen f "Electric Energy from Interconnected Sv stems" " M a r k o v Method Applied to P l a n n i n g "

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

r

r

" ~ 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 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

1

;

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