The New Confessions of an Economic Hit Man

by John Perkins

  http://cadtm.org/FG-Hemisphere-vulture-fund-s

  www.bbc.com/news/business-18894874

  www.jubileeusa.org/vulturefunds/vulture-fund-country-studies.html

  A team of complex system theorists at the Swiss Federal Institute of Technology in Zurich identifies a “super-entity” of a mere 147 gigantic transnational corporations that control 40 percent of global operating revenues. Most of these are financial institutions, according to the research. The scientists describe the map of economic power as a “bow tie,” with a strongly concentrated core.

  www.newscientist.com/article/mg21228354.500-revealed-the-capitalist-network-that-runs-the-world.html#.VYzJhqYyFLj

  http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

  2012

  Investigative journalist Greg Palast exposes the seedy connections between the oil industry, the banking industry, and governmental agencies in his book Vultures’ Picnic: In Pursuit of Petroleum Pigs, Power Pirates, and High-Finance Carnivores (New York: Plume, 2012). The book reveals “how environmental disasters like the Gulf oil spill, the Exxon Valdez, and lesser-known tragedies such as Tatitlek and Torrey Canyon are caused by corporate corruption, failed legislation, and, most interestingly, veiled connections between the financial industry and energy titans.” Palast condemns the International Monetary Fund, the World Bank, the World Trade Organization, and central banks as “puppets for big oil.”

  www.gregpalast.com/vulturespicnic

  Following the one-year anniversary of the start of Occupy Wall Street, Bloomberg reports that “in 2010, the top 1 percent of US families captured as much as 93 percent of the nation’s income growth, according to a March paper by Emmanuel Saez, a University of California at Berkeley economist who studied Internal Revenue Service data.”

  www.bloomberg.com/news/articles/2012-10-02/top-1-got-93-of-income-growth-as-rich-poor-gap-widened

  Indian political activist Arundhati Roy argues that corporate philanthropy is just another method of control and influence, in her article “Capitalism: A Ghost Story,” published in Outlook India. From the article: “As the IMF enforced Structural Adjustment, and arm-twisted governments into cutting back on public spending on health, education, childcare, development, the NGOs [nongovernmental organizations] moved in. The Privatisation of Everything has also meant the NGO-isation of Everything. As jobs and livelihoods disappeared, NGOs have become an important source of employment, even for those who see them for what they are. . . . [T]he corporate or Foundation-endowed NGOs are global finance’s way of buying into resistance movements, literally like shareholders buy shares in companies, and then try to control them from within.”

  www.outlookindia.com/article/capitalism-a-ghost-story/280234

  The Libor scandal reveals “a widespread plot by multiple banks — most notably Deutsche Bank, Barclays, UBS, Rabobank, and the Royal Bank of Scotland — to manipulate [Libor] interest rates for profit starting as far back as 2003. In 2015, investigations continued to implicate major institutions, exposing them to civil lawsuits and shaking trust in the global financial system.” A former trader for Morgan Stanley suggests that “the misreporting of Libor rates may have been common practice since at least 1991.”

  www.cfr.org/united-kingdom/understanding-libor-scandal/p28729

  www.informath.org/media/a72/b1.pdf

  ProPublica launches a series of reports called Buying Your Vote: Dark Money and Big Data. Initial investigations focus on campaign spending during the 2012 presidential election. Ongoing investigations through 2015 include reports on the rise of super PACs, the “Kochtopus” (the purportedly vast and shadowy network of institutions financed by the Koch brothers), and loopholes in campaign finance laws. Collectively, these reports illustrate the frightening influence of corporate lobbying on public policy.

  www.propublica.org/series/buying-your-vote

  Global Justice Now releases a briefing that describes how UK aid “is being used to encourage private sector involvement in developing countries, whether this is in the form of supporting pro-market policies or directly channeling aid money through companies.” The briefing includes mention of £11 billion in UK aid support for the World Bank’s creation of “special economic zones” in Bangladesh, including “export processing zones,” which “are essentially onshore tax havens for multinational companies.” According to this report, new special economic zones would restrict trade union activities and freedom of association.

  www.globaljustice.org.uk/sites/default/files/files/resources/supporter_briefing_print.pdf

  An internal review by the World Bank for nine of its projects shows that the bank systematically underestimates the number of people who will be adversely affected by its development initiatives: “The number of affected people turned out to be, on average, 32 percent higher than the figure reported by the bank before approving the initiatives, understating the number of people affected by the nine projects by 77,500.” A 1994 internal review examined 192 projects and found that “the real number of affected people averaged 47 percent higher than previously estimated.”

  http://projects.huffingtonpost.com/worldbank-evicted-abandoned/india-uncounted

  2013

  A New York Times DealBook article, “How Mandela Shifted Views on Freedom of Markets,” by Andrew Ross Sorkin, reveals how, during Mandela’s trip to Davos for a meeting of the World Economic Forum, proponents of the EHM system convinced Nelson Mandela to open up South Africa’s markets, fueling growing inequality in South Africa from 1993 to the present. Mandela’s decision allowed international corporations to stake major claims in South African companies, Sorkin reports. “Barclays, for example, acquired Absa, South Africa’s largest consumer bank, in 2005. Iscor, the country’s largest steel maker, was sold to Lakshmi Mittal’s LNM in 2004. Industrial and Commercial Bank of China bought a big stake in Standard Bank, South Africa’s largest financial services company, in 2008. And Massmart, a South African supermarket chain, sold a majority stake to Walmart in 2011.”

  http://dealbook.nytimes.com/2013/12/09/how-mandela-shifted-views-on-freedom-of-markets/?_r=1

  JPMorgan Chase reaches a $13 billion settlement with the US Justice Department and purportedly admits that “it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown.”

  www.globalresearch.ca/jpmorgan-chase-engaged-in-mortgage-fraud-the-securitization-fraud-that-collapsed-the-housing-market/5371764

  Corporations’ influence in Washington: The New York Times reports on a bill that was allegedly written, essentially, by Citigroup: “One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentially Citigroup’s, according to e-mails reviewed by the New York Times. The bill would exempt broad swathes of trades from new regulation.”

  http://dealbook.nytimes.com/2013/05/23/banks-lobbyists-help-in-drafting-financial-bills/?_r=2

  Inclusive Development International, the International Accountability Project, the Bank Information Center, and Habitat International Coalition–Housing and Land Rights Network submit a report to the World Bank Safeguards Review titled Reforming the World Bank Policy on Involuntary Settlement. The report states that the price being paid by people affected by the World Bank’s approach to forced evictions “is unconscionably high. Large-scale resettlement has been shown — time and again — to be an exceedingly difficult activity to do in a manner that upholds human rights, and one that results in extreme poverty and injustice for affected people.”

  www.mediafire.com/view/yjluyteklkm7wfo/Reforming%20the%20World%20Bank%20Policy%20on%20Involuntary%20Resettlement.pdf

  Global Justice Now releases a report titled Banking While Borneo Burns: How the UK Financial Sector Is Bankrolling Indonesia’s Fossil Fuel Boom. The report analyzes the finance behind the Indonesian fossil fuel industry, which has had devastating social, economic, and environmental effects on Indonesia’s
people and land. Findings draw a direct link between “the equity issues, syndicated loans and flotations” of the UK financial sector and the “evictions, deforestation and climate change on the ground.” A second report by the same organization focuses on a single project: “BHP Billiton is planning to build a series of massive coal mines that would destroy primary rain forest, deprive indigenous peoples of their customary land, and pollute water resources relied on by up to 1 million people.”

  www.globaljustice.org.uk/sites/default/files/files/resources/banking_while_borneo_burns_0.pdf

  www.globaljustice.org.uk/sites/default/files/files/resources/indo-met_project_factsheet_lowrez.pdf

  Global Justice Now releases a briefing on coal exploitation in the Cerrejón mine in Colombia. Expansion of the mine has led to human rights abuses (including the destruction of villages and the exploitation of cheap labor), and the coal that is extracted “is almost exclusively for export to rich countries.” The briefing calculates that the three owners of the mine (BHP Billiton, Anglo American, and Xstrata) have been financed by British banks, investors, and pension funds (including Barclays, HSBC, Lloyds, and the Royal Bank of Scotland) to the tune of approximately £25 billion since 2009.

  www.globaljustice.org.uk/sites/default/files/files/resources/cerrejon_media_briefing.pdf

  Global Justice Now releases a briefing titled Web of Power: The UK Government and the Energy-Finance Complex Fuelling Climate Change. The report reveals that “one third of ministers in the UK government are linked to the finance and energy companies driving climate change.” The size and entrenched nature of the “energy-finance complex” is driven home with staggering numbers: £900 billion (the value of fossil fuel shares on the London Stock Exchange; higher than the GDP of all of sub-Saharan Africa) and £170 billion (the value of bonds and share issues underwritten by the top five UK banks from 2010 to 2012; “more than 11 times the amount the UK contributed in climate finance for developing countries”).

  www.globaljustice.org.uk/sites/default/files/files/resources/web_of_power_media_briefing.pdf

  In “HRC and the Vulture Fund: Making Third World Poverty Pay for LGBT Rights,” human rights activist and scholar Scott Long examines the ugly source of a $3 million donation to the Human Rights Campaign, the largest US gay organization. The donation comes from two big contributors to the Republican Party; one is Paul Singer, who runs a vulture fund that supposedly “makes profits from the debt incurred by Third World countries . . . and from the misery it causes their citizens.” Long examines what could be called the insidious nature of vulture funds and their effects: “Vulture funds operate by buying up a country’s distressed debt just as the original lenders are about to write it off — usually, as the Guardian describes it, when the country ‘is in a state of chaos. When the country has stabilised, vulture funds return to demand millions of dollars in interest repayments and fees on the original debt.’” According to Jubilee USA, “As of late 2011, 16 of 40 Heavily Indebted Poor Countries (HIPC) surveyed by the International Monetary Fund were facing litigation in 78 individual cases brought by commercial creditors. Of these, 36 cases have resulted in court judgments against HIPCs amounting to approximately $1 billion on original claims worth roughly $500 million.”

  http://paper-bird.net/2013/11/04/hrc-and-the-vulture-fund-making-third-world-poverty-pay-for-lgbt-rights

  www.theguardian.com/global-development/2011/nov/15/vulture-funds-jersey-decision

  www.jubileeusa.org/ourwork/vulturefunds.html

  ProPublica launches a series of investigative reports into Goldman Sachs and the Federal Reserve Bank of New York, using audio recordings made secretly by then–Fed examiner Carmen Segarra. Segarra claims she was fired for refusing to assert the validity of Goldman Sachs’s conflict-of-interest policy, despite facing pressure, among other disagreements. The “Fed tapes” investigation (ongoing through 2015) reveals a damning history of the Fed’s “deference” to Wall Street.

  www.propublica.org/series/fed-tapes

  James S. Henry, a senior adviser to the Tax Justice Network and author of The Blood Bankers (New York: Four Walls Eight Windows, 2003), discusses how tax havens and offshore banking cripple developing nations in a TEDx-RadboudU talk.

  https://www.youtube.com/watch?v=znYA0yIQMq0

  2014

  Eurodad releases a report titled Going Offshore: How Development Finance Institutions Support Companies Using the World’s Most Secretive Financial Centres. From the executive summary: “Developing countries lose billions of dollars every year through tax avoidance and evasion. Tax havens play a pivotal role in this by providing low or no taxation and by promising secrecy, allowing businesses to dodge taxes and remain largely unaccountable for their actions. Development Finance Institutions (DFIs) are government-controlled institutions that, as this report shows, often support private sector projects that are routed through tax havens, using scarce public money. By supporting projects in this way, DFIs are helping to reinforce the offshore industry as they are providing income and legitimacy.”

  www.eurodad.org/goingoffshore

  Eurodad releases a report titled Hidden Profits: The EU’s Role in Supporting an Unjust Global Tax System 2014. The report compares each country “with its fellow EU member states on four critical issues: the fairness of their tax treaties with developing countries; their willingness to put an end to anonymous shell companies and trusts; their support for increasing the transparency of economic activities and tax payments of transnational companies; and their attitude towards letting the poorest countries get a seat at the table when global tax standards are negotiated.” Findings include evidence that “practices which facilitate tax dodging by transnational corporations and individuals are widely used, in some cases so governments can claim to be ‘tax competitive.’ This is creating a ‘race to the bottom’ — meaning that many countries are driving down standards to try to attract transnational corporations to their countries. Some of the countries that have been most successful in attracting companies — Ireland, Luxembourg and the Netherlands — are also currently under investigation by the European Commission for making competition-distorting arrangements with transnational companies behind closed doors.”

  www.eurodad.org/hiddenprofits

  Global Justice Now releases a report titled Carving Up a Continent: How the UK Government Is Facilitating the Corporate Takeover of African Food Systems. The report describes how UK aid monies purported to “support improvements to agriculture and food security in Africa . . . are in fact geared towards helping multinational companies to access resources and bringing about policy changes to facilitate those countries’ expansion in Africa.” The report reveals evidence that “the pro-corporate approach of [such] initiatives . . . is likely to exacerbate hunger and poverty through increased land-grabbing, insecure and poorly paid jobs, the privatisation of seed and a focus on producing for export markets rather than to feed local populations.”

  www.globaljustice.org.uk/sites/default/files/files/resources/carving_up_a_continent_report_web.pdf

  Martin Gilens, a professor of politics at Princeton University, and Benjamin Page, a professor of decision making at Northwestern University, publish an article in Perspectives and Politics demonstrating evidence that “economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence.”

  http://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf

  WikiLeaks releases documents revealing that Australian prime minister Tony Abbott is moving forward with “secret trade negotiations aimed at bringing about radical deregulation of Australia’s banking and finance sector.” As the Sydney Morning Herald reports, “Highly sensitive details of the Trade in Services Agreement (TiSA) negotiations . . . show Australian trade negotiators are working on a financial services agenda t
hat could end the Australian government’s ‘four pillars’ banking policy and allow foreign banks much greater freedom to operate in Australia. It could also see Australians’ bank account and financial data freely transferred overseas, and allow an influx of foreign financial and information technology workers.”

  www.theage.com.au/federal-politics/political-news/secret-deal-bank-freeforall-20140619-3ah2w.html

  Big bank traders are exposed for manipulating foreign exchange rates; evidence against them includes chat groups called the Bandits’ Club, the Mafia, and the Cartel, in which they apparently brag about rate fixing. As reported by CNN: “Citigroup, Barclays, JPMorgan Chase, and Royal Bank of Scotland were fined more than $2.5 billion by the US after pleading guilty to conspiring to manipulate the price of dollars and euros. The four banks, plus UBS, have also been fined $1.6 billion by the Federal Reserve, and Barclays will pay regulators another $1.3 billion to settle related claims. The first four banks operated what they described as ‘The Cartel’ from as early as 2007, using online chat rooms and coded language to influence the twice-daily setting of benchmarks in an effort to increase their profits.”

  www.forbes.com/sites/leoking/2015/05/21/forex-barclays-citi-ubs-jpmorgan-online-chat-instant-messenger

  http://money.cnn.com/2015/05/20/investing/ubs-foreign-exchange

  A report by Dr. Theodore Downing, president of the International Network on Displacement and Resettlement, finds that the Kosovo Power Project’s proposed forced displacement of more than seven thousand Kosovars “to make way for an open pit lignite mine” does not comply “with the international involuntary resettlement standards . . . that must be met for the project to obtain international financing.” Nonetheless, development of the Kosovo Power Project has been spearheaded by the World Bank, which “misdirected the Kosovo agencies and lawmakers into preparing a noncompliant legal, policy, and institutional scaffolding to guide the anticipated displacement.”