The New Confessions of an Economic Hit Man

by John Perkins

  Omar Torrijos and I honored our secret agreement. I made sure that our studies were honest and that our recommendations took into account the poor. Although I heard grumbling that my forecasts in Panama were not up to their usual inflated standards, and even that they smacked of socialism, the fact was that MAIN kept winning contracts from the Torrijos government. These contracts included a first: to provide innovative master plans that involved agriculture along with the more traditional infrastructure sectors. I also watched from the sidelines as Torrijos and Jimmy Carter set out to renegotiate the Canal treaty.

  The Canal negotiations generated great interest and great passions around the world. People everywhere waited to see whether the United States would do what most of the rest of the world believed was the right thing — allow the Panamanians to take control — or would instead try to reestablish our global version of Manifest Destiny, which had been shaken by our Vietnam debacle. For many, it appeared that a reasonable and compassionate man had been elected to the US presidency at just the right time. However, the conservative bastions of Washington and the pulpits of the religious right rang with indignation. How could we give up this bulwark of national defense, this symbol of US ingenuity, this ribbon of water that tied South America’s fortunes to the whims of US commercial interests?

  During my trips to Panama, I became accustomed to staying at the Hotel Continental. However, on my fifth visit I moved across the street to the Hotel Panama because the Continental was undergoing renovations and the construction was very noisy. At first, I resented the inconvenience — the Continental had been my home away from home. But the expansive lobby where I sat in the Hotel Panama, with its rattan chairs and paddle-bladed wooden ceiling fans, was growing on me. It could have been the set of Casablanca, and I fantasized that Humphrey Bogart might stroll in at any moment. I set down the copy of the New York Review of Books in which I had just finished reading a Graham Greene article about Panama and stared up at those fans, recalling an evening almost two years earlier.

  “Ford is a weak president who won’t be reelected,” Omar Torrijos had predicted during that evening in 1975 at a private club in Panama City. He was speaking to a group of influential Panamanians. I was one of the few foreigners who had been invited to the elegant old club. “That’s the reason I decided to accelerate this Canal issue. It’s a good time to launch an all-out political battle to win it back.”

  The speech inspired me. I returned to my hotel room and scratched out a letter that I eventually mailed to the Boston Globe. Back in Boston, an editor responded by calling me at my office to request that I write an op-ed piece. I knew that it was a risky thing to do, but I felt strongly about the Canal issue, and, looking back, I see that it helped me deal with a growing sense of frustration over my job. Furthermore, I told myself that Torrijos would appreciate it, and I might use it to help MAIN get more business in Panama.

  “Colonialism in Panama Has No Place in 1975” took up nearly half the page opposite the editorials in the September 19, 1975, edition.

  The 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 would result from turning more control over to the Panamanians.” I referenced a study conducted by the Inter-oceanic Canal Commission, which concluded that “traffic could be halted for two years by a bomb planted — conceivably by one man — in the side of Gatun Dam,” a point General Torrijos himself had publicly emphasized. And third, “the present situation is creating serious problems for already-troubled United States–Latin American relations.” I ended with the following:

  The best way of assuring the continued and efficient operation of the Canal is to help Panamanians gain control over and responsibility for it. In so doing, we could take pride in initiating an action that would reaffirm commitments to the cause of self-determination to which we pledged ourselves 200 years ago. . . .

  Colonialism was in vogue at the turn of the century (early 1900s) as it had been in 1775. Perhaps ratification of such a treaty can be understood in the context of those times. Today it is without justification. Colonialism has no place in 1975. We, celebrating our bicentennial, should realize this, and act accordingly.3

  Writing that piece was a bold move on my part, especially since I had recently been made a partner at MAIN. Partners were expected to avoid the press, and certainly to refrain from publishing political diatribes on the editorial pages of New England’s most prestigious newspaper. I received through interoffice mail a pile of nasty, mostly anonymous notes stapled to copies of the article. I was certain that I recognized the handwriting on one as that of Charlie Illingworth. My first project manager had been at MAIN for over ten years (compared to less than 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 Commie really a partner in our firm?”

  Bruno summoned me to his office and said, “You’ll get loads of grief over this. MAIN’s a pretty conservative place. But I want you to know I think you’re smart. Torrijos will love it; I do hope you’re sending him a copy. Good. Well, these jokers here in this office, the ones who think Torrijos is a Socialist, really won’t give a damn as long as the work flows in.”

  Bruno had been right — as usual. Now it was 1977, Carter was in the White House, and serious Canal negotiations were under way. Many of MAIN’s competitors had taken the wrong side and had been turned out of Panama, but our work had multiplied. And I was sitting in the lobby of the Hotel Panama, having just finished reading an article by Graham Greene in the New York Review of Books.

  The article, “The Country with Five Frontiers,” was a gutsy piece that included a discussion of corruption among senior officers in Panama’s National Guard. The 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 CIA will.” The clear implication was that the US intelligence community was determined to undermine the wishes of President Carter and, if necessary, would bribe Panama’s military chiefs into sabotaging the treaty negotiations.4 I could not help but wonder if the jackals had begun to circle Torrijos.

  I had seen, in the “People” section of Time or Newsweek, a photograph of Torrijos and Greene sitting together; the caption indicated that the writer was a special guest who had become a good friend. I wondered how the general felt about this novelist, whom he apparently trusted, writing such a critique.

  Graham Greene’s article raised another question, one that related to that day in 1972 when I had sat across a coffee table from Torrijos. At the time, I had assumed that Torrijos knew the foreign aid game was there to make him rich while shackling his country with debt. I had been sure he knew that the process was based on the assumption that men in power are corruptible, and that his decision not to seek personal benefit — but rather to use foreign aid to truly help his people — would be seen as a threat that might eventually topple the entire system. The world was watching this man; his actions had ramifications that reached far beyond Panama and would therefore not be taken lightly.

  I had wondered how the corporatocracy would react if loans made to Panama helped the poor without contributing to impossible debts. Now I wondered whether Torrijos regretted the deal he and I had struck that day — and I wasn’t quite sure how I felt about those deals myself. I had stepped back from my EHM role. I had played his game instead of mine, accepting his insistence on honesty in exchange for more contracts. In purely economic terms, it had been a wise business decision for MAIN. Nonetheless, it had been inconsistent with what Claudine had instilled in me; it was not advancing the global empire. Had it now unleashed the jackals?

  I recalled thinking, when I left Torrijos’s bungalow that day, that Latin American history is littered with dead heroes. A system based on corrupting public figures does not take kindly to publi
c figures who refuse to be corrupted.

  Then I thought my eyes were playing tricks. A familiar figure was walking slowly across the lobby. At first, I was so confused that I believed it was Humphrey Bogart, but Bogart was long deceased. Then I recognized the man ambling past me as one of the great figures in modern English literature, author of The Power and the Glory, The Comedians, Our Man in Havana, and the article I had just set down on the table next to me. Graham Greene hesitated a moment, peered around, and headed for the coffee shop.

  I was tempted to call out or to run after him, but I stopped myself. An inner voice said he needed his privacy; another warned that he would shun me. I picked up the New York Review of Books and was surprised a moment later to discover that I was standing in the doorway to the coffee shop.

  I had breakfasted earlier that morning, and the maitre d’ gave me an odd look. I glanced around. Greene sat alone at a table near the wall. I pointed to the table beside him.

  “Over there,” I told the maitre d.’ “Can I sit there for another breakfast?”

  I was always a good tipper; the maitre d’ smiled knowingly and led me to the table.

  The novelist was absorbed in his newspaper. I ordered coffee and a croissant with honey. I wanted to discover Greene’s thoughts about Panama, Torrijos, and the Canal affair but had no idea how to initiate such a conversation. Then he looked up to take a sip from his glass.

  “Excuse me,” I said.

  He glared at me — or so it seemed. “Yes?”

  “I hate to intrude. But you are Graham Greene, aren’t you?”

  “Why, yes indeed.” He smiled warmly. “Most people in Panama don’t recognize me.”

  I gushed that he was my favorite novelist and then gave him a brief life history, including my work at MAIN and my meetings with Torrijos. He asked if I was the consultant who had written an article about the United States getting out of Panama. “In the Boston Globe, if I recall correctly.”

  I was flabbergasted.

  “A courageous thing to do, given your position,” he said. “Won’t you join me?”

  I moved to his table and sat there with him for what must have been an hour and a half. I realized as we chatted how very close to Torrijos he had grown. He spoke of the general at times like a father speaking about his son.

  “The general,” he said, “invited me to write a book about his country. I’m doing just that. This one will be nonfiction — something a bit off the line for me.”

  I asked him why he usually wrote novels instead of nonfiction.

  “Fiction is safer,” he said. “Most of my subject matter is controversial. Vietnam. Haiti. The Mexican Revolution. A lot of publishers would be afraid to publish nonfiction about these matters.” He pointed at the New York Review of Books, where it lay on the table I had vacated. “Words like those can cause a great deal of damage.” Then he smiled. “Besides, I like to write fiction. It gives me much greater freedom.” He looked at me intensely. “The important thing is to write about things that matter. Like your Globe 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 much as he impressed the poor and dispossessed. Equally obvious was Greene’s concern for his friend’s life.

  “It’s a huge endeavor,” he exclaimed, “taking on the Giant of the North.” He shook his head sadly. “I fear for his safety.”

  Then it was time for him to leave.

  “Must catch a flight to France,” he said, rising slowly and shaking my hand. He peered into my eyes. “Why don’t you write a book?” He gave me an encouraging nod. “It’s in you. But remember, make it about things that matter.” He turned and walked away. Then he stopped and came back a few steps into the restaurant.

  “Don’t worry,” he said. “The general will prevail. He’ll get the Canal back.”

  Torrijos did get it back. In that same year, 1977, he successfully negotiated new treaties with President Carter that transferred the Canal Zone and the Canal itself over to Panamanian control. Then the White House had to convince the US Congress to ratify it. A long and arduous battle ensued. In the final tally, the Canal treaty was ratified by a single vote. Conservatives swore revenge.

  When Graham Greene’s nonfiction book Getting to Know the General came out many years later, it was dedicated “To the friends of my friend, Omar Torrijos, in Nicaragua, El Salvador, and Panama.”5

  CHAPTER 18

  Iran’s King of Kings

  Between 1975 and 1978, I frequently visited Iran. Sometimes I commuted between Latin America or Indonesia and Tehran. The Shah of Shahs (literally, “King of Kings,” his official title) presented a completely different situation from that in the other countries where we worked.

  Iran was oil rich, and like Saudi Arabia, it did not need to incur debt in order to finance its ambitious list of projects. However, Iran differed significantly from Saudi Arabia in that its large population, though predominantly Middle Eastern and Muslim, was not Arabic. The people were also Shiite, not Sunni; most Iranian women did not wear veils — in fact, some even sported miniskirts. In addition, the country had a history of political turmoil — both internally and in its relationships with its neighbors. Therefore, we took a different approach: Washington and the business community joined forces to turn the shah into a symbol of progress.

  We launched an immense effort to show the world what a strong, democratic friend of US corporate and political interests could accomplish. Never mind his obviously undemocratic title or the less obvious fact of the CIA-orchestrated coup against the democratically elected premier who preceded him; Washington and its European partners were determined to present the shah’s government as an alternative to those in Iraq, Libya, China, Korea, and other nations where a powerful undercurrent of anti-Americanism 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 his White Revolution, which involved an extensive agenda for socioeconomic reforms. The power of OPEC grew during the 1970s, and the shah became an increasingly influential world leader. At the same time, Iran developed one of the most powerful military forces in the Muslim Middle East.1

  MAIN was involved in projects that covered most of the country, from tourist areas along the Caspian Sea in the north to secret military installations overlooking the Strait of Hormuz in the south. Once again, the focus of our work was to forecast regional development potentials and then to design electrical generating, transmission, and distribution systems that would provide the all-important energy required to fuel the military, industrial, and commercial growth that would realize these forecasts.

  I visited most of the major regions of Iran at one time or another. I followed the old caravan trail through the desert mountains, from Kirman to Bandar ‘Abbas, and 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 had been crowned. In the process, I developed a genuine love for this land and its complex people.

  On the surface, Iran seemed to be a model example of Christian–Muslim cooperation. However, I soon learned that tranquil appearances may mask deep resentment.

  Late one evening in 1977, I returned to my hotel room to find a note shoved under my door. I was shocked to discover that it was signed by a man named Yamin. I had never met him, but he had been described to me during a government briefing as a famous and most subversive radical. In beautifully crafted English script, the note invited me to meet him at a designated restaurant. However, there was a warning: I was to come only if I was interested in exploring a side of Iran that most people “in [my] position” never saw. I wondered whether Yamin knew what my true position was. I realized that I was taking a big risk; how
ever, I could not resist the temptation to meet this enigmatic figure.

  My taxi dropped me off in front of a tiny gate in a high wall — so high that I could not see the building behind it. An Iranian woman ushered me in and led me down a corridor illuminated by ornate oil lamps hanging from a low ceiling. At the end of this corridor, we entered a room that dazzled like the interior of a diamond, blinding me with its radiance. When my eyes finally adjusted, I saw that the walls were inlaid with semiprecious stones and mother-of-pearl. The restaurant was lighted by tall white candles protruding from intricately sculpted bronze chandeliers.

  A tall man with long black hair, wearing a tailored navy blue suit, approached and shook my hand. He introduced himself as Yamin, in an accent that suggested he was an Iranian who had been educated in the British school system, and I was immediately struck by how little he looked like a subversive radical. He directed me past several tables where couples sat quietly eating, to a very private alcove; he assured me that we could talk in complete confidentiality. I had the distinct impression that this restaurant catered to secret rendezvous. Ours, quite possibly, was the only non-amorous one that night.

  Yamin was very cordial. During our discussion, it became obvious that he thought of me merely as an economic consultant, not as someone with ulterior motives. He explained that he had singled me out because he knew I had been a Peace Corps volunteer and because he had been told that I took every possible opportunity to get to know his country and to mix with its people.

  “You are very young compared to most in your profession,” he said. “You have a genuine interest in our history and our current problems. You represent our hope.”