The New Confessions of an Economic Hit Man

by John Perkins

  After that, I had pretty much dropped out of the picture, but Bill and Lynne drove forward with incredible determination. Two of the most dedicated, selfless, and effective people I’ve ever met, they did make it happen. By the time I had my postoperative mind-set change, in 2005, the Pachamama Alliance was doing more than just helping the Achuar; its offspring, Fundación Pachamama, an Ecuadorian nonprofit, was committed to keeping oil companies off lands inhabited by many other indigenous nations. The Awakening the Dreamer symposium — a four-hour program that includes inspirational videos — was going viral and soon would reach more than eighty countries.

  I called Bill and Lynne and told them I’d like to become more involved in the organization. They embraced the idea enthusiastically.

  Soon I was back in Ecuador. The Fundación Pachamama office in Quito was buzzing. During the past decade, the country had suffered many political upheavals — eight presidents in ten years. Now a very different type of politician had emerged.

  His name was Rafael Correa. He came from a lower-middle-class family and acknowledged that, when he was five years old, his father had served a prison sentence for drug smuggling. He said that although he did not condone such illegal activities, he understood that people like his father were “desperate to feed their families.”

  He won a scholarship to a Catholic university in Guayaquil, then to one in Belgium, where he earned a master’s degree in economics. Afterward, he attended the University of Illinois, where he received a PhD in economics.

  This new presidential candidate was very much a man of the world. Handsome, intelligent, and charismatic, he spoke English, French, and Quechua in addition to his native Spanish. His wife was Belgian, and he was very familiar with both European and American politics. He understood the dangers of the system he faced when he advocated a platform of reforms that included reining in big oil and protecting the rain forests.1

  As I read Correa’s platform, leading up to the 2006 elections, I was reminded of another Ecuadorian, my former client, President Jaime Roldós. I was stricken with deep remorse when I recalled the times I’d assured him that oil would help his country pay down the debts incurred by the military dictators who had preceded him. I’d assured him that defaulting on World Bank loans was not an option, that he needed to strike the deal Texaco wanted. He hadn’t listened. Instead, he’d demanded a share of Texaco’s revenues and had insisted that the company implement environmental protection measures similar to those required in the United States.

  Sitting in my Quito hotel room, I watched a film of the stirring speech Roldós had given at the soccer stadium in Quito in May 1981. He had urged his people to see their country as “heroic,” a world leader in the struggle for liberty and freedom from all forms of oppression. At the end of that speech, the last words he spoke in public stirred my heart: “Viva la patria!” (Long live the homeland!). I was overcome with grief and guilt, looking at the footage of his private plane after it crashed and took him to his death.

  Less than three months after Roldós’s death, one of my other clients, Panama’s Omar Torrijos, had been assassinated in exactly the same way.

  Now, here was Correa, a candidate who openly invoked the memory of Jaime Roldós. Citing Confessions of an Economic Hit Man, Correa said that he had been approached by EHMs and was very aware of the threat posed by jackals.

  Bill, Lynne, Daniel, and I decided that together we would lead annual trips for major supporters of the Pachamama Alliance. We would take them to Kapawi, an ecotourist lodge the Achuar had built in their rain forest as part of their commitment to our partnership.

  The journey to Achuar territory involves a spectacular drive from Quito to the airstrip in Shell, a steamy frontier outpost and military base hacked out of the jungle to service the oil company whose name it bears. The road is both tortuous and breathtaking. It descends nearly eight thousand feet, from the top of the Andes into the rain forest. Sheer cliffs, punctuated by cascading waterfalls and brilliant bromeliads, rise up on one side. On the other side, the earth drops abruptly into a deep abyss, where the Pastaza River snakes its way toward the Atlantic Ocean, more than three thousand miles away.

  While driving this road, I often think back to the first time I arrived in this part of the world, and of how much things have changed. In 1968, Texaco had only just discovered petroleum in Ecuador’s Amazon. Today, oil accounts for roughly half of the country’s export earnings. A trans-Andean pipeline, built shortly after my first visit, has since leaked more than half a million barrels of oil into the fragile rain forest — more than twice the amount spilled by the Exxon Valdez.2 A $1.3 billion, three-hundred-mile pipeline constructed by an EHM-organized consortium had promised to make Ecuador one of the world’s top ten suppliers of oil to the United States.3 Vast areas of rain forest had fallen, macaws and jaguars had all but vanished, three Ecuadorian indigenous cultures had been driven to the verge of collapse, and pristine rivers had been transformed into flaming cesspools.

  In recent years, supported by Fundación Pachamama, the indigenous nations had begun to fight back. On May 7, 2003, American lawyers, led by my friend Steven Donziger and representing more than thirty thousand Ecuadorian people, filed a $1 billion lawsuit against ChevronTexaco. The suit asserted that between 1971 and 1992 the oil giant dumped into open holes and rivers more than four million gallons per day of toxic wastewater contaminated with oil, heavy metals, and carcinogens, and that the company left behind nearly 350 uncovered waste pits that continue to kill both people and animals.4

  A dramatic symbol of change along the Quito–Shell road is a mammoth gray wall that rears up from the Pastaza River. Its dripping concrete seems totally out of place, completely unnatural and incompatible with the landscape. This is the Agoyan hydroelectric project, which fuels the industries that make a handful of Ecuadorian families wealthy.

  Every time I drive by Agoyan, I have to face the fact that it is just one of the projects developed through my efforts. Because of the way such projects were financed, by the time Correa decided to run for president, Ecuador was devoting a large share of its national budget to paying off its debts. The International Monetary Fund had assured Ecuador that the only way to end this cycle was by selling the vast sea of petroleum beneath its rain forests to the oil companies.

  Rafael Correa promised to change all that if he was elected president.

  He won with nearly 60 percent of the vote.

  As soon as he took office, in 2007, Correa set about fulfilling his campaign promises. He refused to pay many of Ecuador’s debts, proclaiming that they had been signed by CIA-supported military dictators who had been bribed by EHMs (a fact I knew only too well was true). He closed the United States’ largest military base in Latin America, withdrew support for the CIA’s war on rebels in neighboring Colombia, ordered Ecuador’s central bank to divert to domestic projects funds that had been invested in the United States, oversaw the rewriting of the constitution to make his country the first in the world to codify the inalienable rights of nature (a threat to the bottom lines of big business), and joined ALBA, an alternative to Washington’s plan to increase US hegemony through its Free Trade Area of the Americas.

  But the most courageous of Correa’s actions was his renegotiation of oil contracts. He insisted that the companies could no longer base Ecuador’s share of oil revenues on “profits” — an all-too-common arrangement between big oil and economically developing countries, which historically has cheated these countries through creative accounting. Instead, the oil would belong to Ecuador, and the companies could only collect a fee for each barrel they produced.

  The EHMs were dispatched. They offered the president and his cronies bribes — both legal and illegal — if he’d just back off. He refused.

  Then, Honduran president Manuel Zelaya fell to a jackal coup.

  That coup had a huge impact on all of Latin America — and especially on President Correa.

  CHAPTER 37

  Honduras: The CI
A Strikes

  I flew to Panama in 2009, right after the democratically elected Honduran president Manuel Zelaya was overthrown in a coup. I wanted to meet with Panama’s movers and shakers and with people who had hands-on experience in Latin American politics.

  I talked with business, government, and nongovernmental organization (NGO) leaders from Argentina, Colombia, Guatemala, Panama, and the United States. I also talked with teachers, taxi drivers, waiters, shopkeepers, and union activists. Most were convinced that the coup happened because Zelaya had advocated a 60 percent increase in the minimum wage, which had infuriated two US companies, Chiquita Brands International (formerly United Fruit) and Dole Food Company.

  As the sun set behind the ships waiting at anchor to enter the Panama Canal, I sat at an outdoor cafe with “Joel,” a Panamanian businessman who agreed to talk with me anonymously. He wanted to hear about my experiences with Omar Torrijos, a hero of his, who had died when Joel was in fifth grade. The knife of guilt plunged deep that afternoon. Joel said that he and his friends, like most of Latin America, had known that the plane crash that had killed Torrijos was a CIA assassination, and they had hated the United States.

  “But things changed,” he said. “Just like you forgave Japan and Germany, we forgave you.” Then he dropped his eyes to his beer glass. “Now, this thing in Honduras . . . well, it triggers memories, old resentments.” He went on to explain that a friend of his from the IMF had been dispatched to Honduras to convince Zelaya to change his policies. He described that friend as “right out of your book. He tried it all. Offered World Bank loans, to load the country with more debt and build projects that would make lots of dough for Zelaya and his friends. When that didn’t work, the fear tactics . . .” He toyed with his glass. “Zelaya should’ve listened. He didn’t. So what you call the ‘jackals’ went to work.” His eyes met mine. “At least they didn’t kill Zelaya. Torrijos should’ve had it so good.” He gave me a disingenuous smile. “But this wasn’t just about Honduras. American CEOs know that if Honduras’s hourly wage rate rises, so will that of all the other Latin American countries. Honduras, along with Haiti, sets the minimum wage benchmark. No one will go below that benchmark.”

  We talked about the many liberal policies introduced in Honduras during the three and a half years of Zelaya’s presidency. These included subsidies for small farmers, free education and meals for poor children, a reduction in interest rates on bank loans to homeowners and local businesses, and free electricity for people who could not afford to pay for it, as well as the increase in the minimum wage. These policies paid off; Honduras enjoyed a nearly 10 percent decline in the poverty level.

  Joel looked out at the anchored ships. “Memories may be short in the United States,” he said. “But not in Latin America. We haven’t forgotten that your president, Teddy Roosevelt, stole” — he pointed — “those lands, back in 1903, so he could build a canal for those ships. We haven’t forgotten the role your corporations and Washington have played in politics all over this continent. Your government, your former secretary of state, Henry Kissinger, finally admitted to coups and assassinations they adamantly denied for years. We always knew what is now public record, that Guatemala’s democratically elected president, Jacobo Arbenz, was toppled in 1954 by the CIA because he opposed United Fruit, and that the coup that brought down Chile’s democratically elected president, Salvador Allende, in 1973 was initiated by ITT [International Telephone and Telegraph, one of the most powerful global corporations at that time] and was executed by the CIA.” He waved his arms toward the ships. “We haven’t forgotten Grenada, or Haiti, or the Argentine and Brazilian CIA-installed dictators, or Guatemala, Nicaragua, or El Salvador. We haven’t forgotten Torrijos or Roldós or the 2002 failed attempt to take out President Chávez.” He peered at me. “Need I go on?”

  I told him that I knew that history, adding, “It’s the reason I write what I do, and why I’m here in Panama now.”

  “Just one more thing,” he said. “You know, of course, that the Honduran coup was led by General Romeo Vásquez, another graduate from your infamous CIA school.”

  “The School of the Americas.”

  “Yes, or as Torrijos called it, the School of the Assassins.” He pointed at the Canal. “It used to be located over there, in the Canal Zone. Until Torrijos kicked it out. Now it’s someplace in the US.”

  “Fort Benning, Georgia,” I said.

  Later that night, in my hotel room, I went online and read a number of reports in Spanish that confirmed what the Panamanian businessman had told me. A 60 percent increase in the Honduran minimum wage would have had a huge impact on every corporation that operated mines, owned hotels, stores, and restaurants, or sold goods made in factories and sweatshops anywhere on the continent. The reports reminded me of the words spoken by that seismologist I’d dined with during my first week as a Peace Corps volunteer, back in 1968, words that had stuck in my mind ever since: “We own this country.”

  The mainstream US press, which is owned by the corporatocracy, limited its reporting about Honduras to accusations that the coup was triggered by Zelaya’s attempts to introduce constitutional changes that would allow him to run for another presidential term. He had promoted a constitutional referendum, but according to everything I read and heard in Panama and through the online Spanish-language media, the coup had little to do with constitutional reform and everything to do with the deposed president’s determination to raise the minimum wage.

  When I returned from Panama to the United States, I discovered that although the mainstream media ignored the real story, it was available in English. England’s Guardian announced:

  Two of the Honduran coup government’s top advisers have close ties to the US secretary of state. One is Lanny Davis, an influential lobbyist who was a personal lawyer for President Bill Clinton and also campaigned for Hillary. . . . The other hired gun for the coup government that has deep Clinton ties is [lobbyist] Bennett Ratcliff.1

  Democracy Now! reported that Chiquita was represented by the Washington law firm Covington & Burling; that President Obama’s attorney general, Eric Holder, had been a Covington partner and a defender of Chiquita when the company was accused of contracting “assassination squads” in Colombia; and that, during the trial, Chiquita admitted to hiring organizations listed by the US government as terrorist groups. Chiquita was found guilty in a Colombian court and agreed to pay a $25 million fine. When Democracy Now!’s Amy Goodman interviewed Manuel Zelaya on May 21, 2011, the former president said (translated):

  The conspiracy began when I started to join what is ALBA, the Latin American nations with Bolivarian Alternative. So, a dirty war at the psychological level was carried out against me. Otto Reich [former US ambassador to Venezuela and assistant secretary of state for Latin American Affairs] started this. The [US] ex–Under Secretary of State Roger Noriega, Robert Carmona, and the Arcadia Foundation, created by the CIA, they associated themselves with the right wing, with military groups, and they formed a conspiracy. They argued that I was a Communist and that I was attacking the security of the hemisphere.2

  In December 2009, I asked Howard Zinn what he thought the coup against Zelaya meant for Ecuador. “Well,” he mused, “if I were Correa, I’d be worried that I’d be next.”

  It was prophetic.

  Howard died of a heart attack on January 27, 2010, at the age of eighty-seven, and did not live to witness the attempted coup against Ecuadorian president Rafael Correa on September 30, 2010. It was led by a graduate of the School of the Americas and had all the markings of the CIA. However, unlike other Latin American coups, it was instigated by the police rather than by the military. A pitched battle in the streets of Quito pitted the police against the military. The soldiers prevailed. Correa retained power.

  Many observers believe that the failed coup was a warning, not a bona fide attempt to depose the president. Whatever the truth, Correa almost immediately reversed his policies toward big oil. He announced that
he would auction off huge blocks of the rain forest to the oil companies.

  I thought of Howard often during those days. I would have loved to hear his opinions about the events in Ecuador. His wit and humor always made calamitous news more palpable. In losing him, the world had lost a brilliant thinker — a sage observer of history and an acute interpreter of its lessons. I’d lost a friend and mentor, a great inspiration. I renewed my commitment to follow his inspiration.

  CHAPTER 38

  Your Friendly Banker as EHM

  Over the next year, as Ecuador prepared to auction off its precious forests to oil companies, I wrote several blogs condemning Correa’s decision. Among the responses I received was one, in late 2011, from an executive at a Chase bank near where I lived in South Florida.

  “You rant and rage,” he wrote, “about the horrible things happening in places like Ecuador. What about here, in your own country?” His e-mail ended with an invitation to an early dinner.

  I joined him on the veranda of the River House in Palm Beach Gardens. Our table had a view of the Intracoastal Waterway and the parade of multimillion-dollar yachts heading south to spend the winter in the Keys.

  “I read Confessions and I follow your blogs,” the banker said, while the waiter carefully poured wine into his glass, “and I have to wonder why you didn’t expose the things we bankers do right here at home. We use the same tools as you EHMs — on our own folks.” He proceeded to tell me that in recent years bankers had convinced clients to purchase houses that were beyond their means. “A young newlywed couple comes in,” he said, “and asks for a mortgage on a $300,000 home. We convince them to buy a $500,000 one.” He swished the wine in his glass and studied the residue. “We say, ‘You may have to tighten your belt a little, but soon your house will be worth a million dollars.’” He shook his head sadly. “They’ve been told to trust their banker. Used to be that people in my position would try to talk prospective debtors down, not up. We were supposed to do everything to avoid foreclosures. But that all changed.”