Confessions of an Economic Hit Man

by John Perkins

  The strike, joined by an estimated 30,000 oil workers, threatens to wreak havoc on this nation, the world’s fifth-largest oil producer, for months to come…

  In recent days, the strike has reached a kind of stalemate. Mr. Chávez is using nonstriking workers to try to normalize operations at the state-owned oil company. His opponents, led by a coalition of business and labor leaders, contend, though, that their strike will push the company, and thus the Chávez government, to collapse.6

  This was exactly how the CIA brought down Mossadegh and replaced him with the shah. The analogy could not have been stronger. It seemed history was uncannily repeating itself, fifty years later. Five decades, and still oil was the driving force.

  Chávez’s supporters continued to clash with his opponents. Several people, it was reported, were shot to death and dozens more were wounded. The next day, I talked with an old friend who for many years had been involved with the jackals. Like me, he had never worked directly for any government, but he had led clandestine operations in many countries. He told me that a private contractor had approached him to foment strikes in Caracas and to bribe military officers—many of whom had been trained at the School of the Americas—to turn against their elected president. He had turned down the offer, but he confided, “The man who took the job knows what he’s doing.”7

  Oil company executives and Wall Street feared a rise in oil prices and a decline in American inventories. Given the Middle East situation, I knew the Bush administration was doing everything in its power to overthrow Chávez. Then came the news that they had succeeded; Chávez had been ousted. The New York Times took this turn of events as an opportunity to provide a historical perspective—and also to identify the man who appeared to play the Kermit Roosevelt role in contemporary Venezuela:

  The United States… supported authoritarian regimes throughout Central and South America during and after the Cold War in defense of its economic and political interests.

  In tiny Guatemala, the Central Intelligence Agency mounted a coup overthrowing the democratically elected government in 1954, and it backed subsequent right-wing governments against small leftist rebel groups for four decades. Roughly 200,000 civilians died.

  In Chile, a CIA-supported coup helped put Gen. Augusto Pinochet in power from 1973 to 1990. In Peru, a fragile democratic government is still unraveling the agency’s role in a decade of support for the now-deposed and disgraced president, Alberto K. Fujimori, and his disreputable spy chief, Vladimiro L. Montesinos.

  The United States had to invade Panama in 1989 to topple its narco-dictator, Manuel A. Noriega, who, for almost 20 years, was a valued informant for American intelligence. And the struggle to mount an unarmed opposition against Nicaragua’s leftists in the 1980s by any means necessary, including selling arms to Iran for cold cash, led to indictments against senior Reagan administration officials.

  Among those investigated back then was Otto J. Reich, a veteran of Latin American struggles. No charges were ever filed against Mr. Reich. He later became United States Ambassador to Venezuela and now serves as assistant secretary of state for inter-American affairs by presidential appointment. The fall of Mr. Chávez is a feather in his cap.8

  If Mr. Reich and the Bush administration were celebrating the coup against Chávez, the party was suddenly cut short. In an amazing turnabout, Chávez regained the upper hand and was back in power less than seventy-two hours later. Unlike Mossadegh in Iran, Chávez had managed to keep the military on his side, despite all attempts to turn its highest-ranking officers against him. In addition, he had the powerful state oil company on his side. Petróleos de Venezuela defied the thousands of striking workers and made a comeback.

  Once the dust cleared, Chávez tightened his government’s grip on oil company employees, purged the military of the few disloyal officers who had been persuaded to betray him, and forced many of his key opponents out of the country. He demanded twenty-year prison terms for two prominent opposition leaders, Washington-connected operatives who had joined the jackals to direct the nationwide strike.9

  In the final analysis, the entire sequence of events was a calamity for the Bush administration. As the Los Angeles Times reported,

  Bush administration officials acknowledged Tuesday that they had discussed the removal of Venezuelan President Hugo Chávez for months with military and civilian leaders from Venezuela… The administration’s handling of the abortive coup has come under increasing scrutiny.10

  It was obvious that not only had the EHMs failed, but so had the jackals. Venezuela in 2003 turned out to be very different from Iran in 1953. I wondered if this was a harbinger or simply an anomaly—and what Washington would do next.

  At least for the time being, I believe a serious crisis was averted in Venezuela—and Chávez was saved—by Saddam Hussein. The Bush administration could not take on Afghanistan, Iraq, and Venezuela all at once. At the moment, it had neither the military muscle nor the political support to do so. I knew, however, that such circumstances could change quickly, and that President Chávez was likely to face fierce opposition in the near future. Nonetheless, Venezuela was a reminder that not much had changed in fifty years—except the outcome.

  CHAPTER 34

  Ecuador Revisited

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

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

  The situation in Ecuador clearly demonstrates that this was not the result of a conspiracy; it was a process that had occurred during both Democratic and Republican administrations, a process that had involved all the major multinational banks, many corporations, and foreign aid missions from a multitude of countries. The United States played the lead role, but we had not acted alone.

  During those three decades, thousands of men and women participated in bringing Ecuador to the tenuous position it found itself in at the beginning of the millennium. Some of them, like me, had been aware of what they were doing, but the vast majority had merely performed the tasks they had been taught in business, engineering, and law schools, or had followed the lead of bosses in my mold, who demonstrated the system by their own greedy example and through rewards and punishments calculated to perpetuate it. Such participants saw the parts they played as benign, at worst; in the most optimistic view, they were helping an impoverished nation.

  Although unconscious, deceived, and—in many cases—self-deluded, these players were not members of any clandestine conspiracy; rather, they were the product of a system that promotes the most subtle and effective form of imperialism the world has ever witnessed. No one had to go out and seek men and women who could be bribed or threatened—they had already been r
ecruited by companies, banks, and government agencies. The bribes consisted of salaries, bonuses, pensions, and insurance policies; the threats were based on social mores, peer pressure, and unspoken questions about the future of their children’s education.

  The system had succeeded spectacularly. By the time the new millennium rolled in, Ecuador was thoroughly entrapped. We had her, just as a Mafia don has the man whose daughter’s wedding and small business he has financed and then refinanced. Like any good Mafiosi, we had taken our time. We could afford to be patient, knowing that beneath Ecuador’s rain forests lies a sea of oil, knowing that the proper day would come.

  That day had already arrived when, in early 2003, I wound my way from Quito to the jungle town of Shell in my Subaru Outback. Chávez had reestablished himself in Venezuela. He had defied George W. Bush and had won. Saddam was standing his ground and was preparing to be invaded. Oil supplies were depleted to their lowest level in nearly three decades, and the prospects of taking more from our prime sources looked bleak—and therefore, so did the health of the corporatocracy’s balance sheets. We needed an ace in the hole. It was time to cut away our Ecuadorian pound of flesh.

  As I drove past the monster dam on the Pastaza River, I realized that here in Ecuador the battle was not simply the classic struggle between the rich of the world and the impoverished, between those who exploit and the exploited. These battle lines would ultimately define who we are as a civilization. We were poised to force this tiny country to open its Amazon rain forests to our oil companies. The devastation that would result was immeasurable.

  If we insisted on collecting the debt, the repercussions would go far beyond our abilities to quantify them. It was not just about the destruction of indigenous cultures, human lives, and hundreds of thousands of species of animals, reptiles, fish, insects, and plants, some of which might contain the undiscovered cures to any number of diseases. It was not just that rain forests absorb the deadly greenhouse gases produced by our industries, give off the oxygen that is essential to our lives, and seed the clouds that ultimately create a large percentage of the world’s fresh water. It went beyond all the standard arguments made by ecologists for saving such places, and reached deep into our souls.

  If we pursued this strategy, we would continue an imperialist pattern that had begun long before the Roman Empire. We decry slavery, but our global empire enslaves more people than the Romans and all the other colonial powers before us. I wondered how we could execute such a shortsighted policy in Ecuador and still live with our collective conscience.

  Peering through the window of the Subaru at the deforested slopes of the Andes, an area that during my Peace Corps days had been lush with tropical growth, I was suddenly surprised by another realization. It dawned on me that this view of Ecuador as a significant battle line was purely personal, that in fact every country where I had worked, every country with resources coveted by the empire, was equally significant. I had my own attachment to this one, which stemmed from those days back in the late 1960s when I lost my innocence here. However, it was subjective, my personal bias.

  Though the Ecuadorian rain forests are precious, as are the indigenous people and all the other life forms that inhabit them, they are no more precious than the deserts of Iran and the Bedouins of Yamin’s heritage. No more precious than the mountains of Java, the seas off the coast of the Philippines, the steppes of Asia, the savannas of Africa, the forests of North America, the icecaps of the Arctic, or hundreds of other threatened places. Every one of these represents a battle line, and every one of them forces us to search the depths of our individual and collective souls.

  I was reminded of a statistic that sums it all up: The income ratio of the one-fifth of the world’s population in the wealthiest countries to the one-fifth in the poorest countries went from 30 to 1 in 1960 to 74 to 1 in 1995.2 And the World Bank, the U.S. Agency for International Development, the IMF, and the rest of the banks, corporations, and governments involved in international “aid” continue to tell us that they are doing their jobs, that progress has been made.

  So here I was in Ecuador again, in the country that was just one of many battle lines but that holds a special place in my heart. It was 2003, thirty-five years after I had first arrived as a member of a U.S. organization that bears the word peace in its name. This time, I had come in order to try to prevent a war that for three decades I had helped to provoke.

  It would seem that events in Afghanistan, Iraq, and Venezuela might be enough to deter us from another conflict; yet, in Ecuador the situation was very different. This war would not require the U.S. Army, for it would be fought by a few thousand indigenous warriors equipped only with spears, machetes, and single-shot, muzzle-loaded rifles. They would face off against a modern Ecuadorian army, a handful of U.S. Special Forces advisers, and jackal-trained mercenaries hired by the oil companies. This would be a war, like the 1995 conflict between Ecuador and Peru, that most people in the United States would never hear about, and recent events had escalated the probability of such a war.

  In December 2002, oil company representatives accused an indigenous community of taking a team of its workers hostage; they suggested that the warriors involved were members of a terrorist group, with implications of possible ties to al-Qaeda. It was an issue made especially complicated because the oil company had not received government permission to begin drilling. However, the company claimed its workers had the right to perform preliminary, non-drilling investigations—a claim vehemently disputed by the indigenous groups a few days later, when they shared their side of the story.

  The oil workers, tribal representatives insisted, had trespassed on lands where they were not allowed; the warriors had carried no weapons, nor had they threatened the oil workers with violence of any sort. In fact, they had escorted the workers to their village, where they offered them food and chicha, a local beer. While their visitors feasted, the warriors persuaded the workers’ guides to paddle away. However, the tribe claimed, the workers were never held against their will; they were free to go wherever they pleased.3

  Driving down that road, I remembered what the Shuars had told me in 1990 when, after selling IPS, I returned to offer to help them save their forests. “The world is as you dream it,” they had said, and then pointed out that we in the North had dreamed of huge industries, lots of cars, and gigantic skyscrapers. Now we had discovered that our vision had in fact been a nightmare that would ultimately destroy us all.

  “Change that dream,” the Shuars had advised me. Yet here it was, more than a decade later, and despite the work of many people and nonprofit organizations, including the ones I had worked with, the nightmare had reached new and horrifying proportions.

  When my Outback finally pulled into the jungle town of Shell, I was hustled off to a meeting. The men and women who attended represented many tribes: Kichwa, Shuar, Achuar, Shiwiar, and Zaparo. Some had walked for days through the jungle, others had flown in on small planes, funded by nonprofits. A few wore their traditional kilts, face paint, and feathered headbands, though most attempted to emulate the townspeople, wearing slacks, T-shirts, and shoes.

  Representatives from the community accused of taking hostages spoke first. They told us that shortly after the workers returned to the oil company, over a hundred Ecuadorian soldiers arrived in their small community. They reminded us that this was at the beginning of a special season in the rain forests, the fruiting of the chonta. A tree sacred to indigenous cultures, its fruit comes but once a year and signals the start of the mating season for many of the region’s birds, including rare and endangered species. As they flock to it, the birds are extremely vulnerable. The tribes enforce strict policies forbidding the hunting of these birds during chonta season.

  “The timing of the soldiers couldn’t have been worse,” a woman explained. I felt her pain and that of her companions as they told their tragic stories about how the soldiers ignored the prohibitions. They shot down the birds for sport and for food.
In addition, they raided family gardens, banana groves, and manioc fields, often irreparably destroying the sparse topsoil. They used explosives in the rivers for fishing, and they ate family pets. They confiscated the local hunters’ guns and blowguns, dug improper latrines, polluted the rivers with fuel oil and solvents, sexually molested women, and neglected to properly dispose of garbage, which attracted insects and vermin.

  “We had two choices,” a man said. “We could fight, or we could swallow our pride and do our best to repair the damage. We decided it was not yet the time to fight.” He described how they had attempted to compensate for the military’s abuses by encouraging their own people to go without food. He called it a fast, but in fact it sounded closer to voluntary starvation. Old people and children became malnourished and grew sick.

  They spoke about threats and bribes. “My son,” a woman said, “speaks English as well as Spanish and several indigenous dialects. He worked as a guide and translator for an ecotourist company. They paid him a decent salary. The oil company offered him ten times as much. What could he do? Now he writes letters denouncing his old company and all the others who come to help us, and in his letters calls the oil companies our friends.” She shook her body, like a dog shaking off water. “He is no longer one of us. My son…”

  An elderly man wearing the traditional toucan-feather headdress of a shaman stood up. “You know about those three we elected to represent us against the oil companies, who died in that plane crash? Well, I’m not going to stand here and tell you what so many say, that the oil companies caused the crash. But I can tell you that those three deaths dug a big hole in our organization. The oil companies lost no time filling that hole with their people.”

  Another man produced a contract and read it. In exchange for three hundred thousand dollars, it ceded a vast territory over to a lumber company. It was signed by three tribal officials.