by Gerard Colby
Source: Wayne G. Broehl, Jr., United States Business Performance Abroad.
Nelson did not spell this all out in his Report on the Americas. And since he was not such a reflective man to be guided by past historical trends, he would not predict the probable failure of the “New World Order” of free trade that David’s future Trilateral Commission would struggle to achieve in the decades to come. But in 1969, he was projecting victory in the Cold War at least through an arms race too expensive for the Soviets (a strategy since his Quantico seminars in 1955) and the creation of a Dollar Zone, presaged by such regional developments as the Central American Common Market, the Caribbean Free Trade Association, the Latin American Free Trade Association, and the Andean Group and River Platte hydroelectric development negotiations then under way in South America. And the prediction that Latin America’s population would grow in the next thirty years from 250 million to 643 million people meant time was running out. To speed the free-trade process along, Nelson recommended that the Nixon administration should work through the Organization of American States (OAS) and the Inter-American Council for the Alliance for Progress (CIAP).
The fact that both organizations were headed by allies of Nelson, Galo Plaza and Carlos Sanz de Santamaría, would probably have been enough to doom Nelson’s suggestions in a Nixon White House. But there was more to Nixon’s decision to let Nelson’s report wither on the Rose Garden’s vines. Nixon perceived that most of his financial backers were not members of the tweed-and-pin-striped Eastern Establishment who thought along Nelson’s lines and already had the inside track in Latin America’s markets. Nixon’s backers were the nouveau riche of the postwar era, who still had markets to conquer from others, including older American companies and their Latin allies. Nor would Henry Kissinger’s ego take lightly the idea of a competitor in his NSC, even if that competitor might be a friend and mentor. Kissinger enjoyed his obvious domination of foreign policy over Secretary of State William Rogers; he did not relish the idea of Nelson’s experience and commanding influence overreaching him. Neither, of course, did Richard Nixon.
In the end, thanks to the Constitution, it was the president who counted in Washington, not Kissinger, and not Nelson Rockefeller. And Nixon was more concerned about the hot war in Asia and Vietnam than the Cold War in Latin America. Nixon was prepared to let Kissinger’s NSC aide, Viron Vaky, the acting assistant secretary of state for Latin America, keep house in Latin America. Affairs would drift as they had done before, in their natural corporate way, while Nelson’s Latin American tour would be relegated to the status of a public relations stunt to show unity between the liberal and conservative factions of the Republican party.2
U.S. Private Investment in Latin America (1961–1967)
Manufacturing investment by American corporations in Latin America became the largest sector of investment during this six-year period. These “runaway shops” meant a loss of jobs in the United States to sources of low-wage labor in Latin America.
Source: U.S. Department of Commerce, as cited in Nelson Rockefeller, The Rockefeller Report on the Americas, p. 92.
Lacking substance in economic policy, this unity coalesced around an unimaginative preservation of the status quo. For many Latin American countries in the aftermath of John Kennedy’s doomed push for social reform, this political policy meant accommodation with military dictatorships, whether nationalist (as in Peru) or internationalist (pro-U.S.), as in Brazil.
Members of the “new military,” Nelson insisted, were “deeply motivated” by the need for social and economic progress. “They are searching for ways to bring education and better standards of living to their people while avoiding anarchy or violent revolution. In many cases, it will be more useful for the United States to try to work with them, rather than to abandon or insult them because we are conditioned by arbitrary ideological stereotype.”3
Undoubtedly, Nelson’s attitude was taken in Brasília as a green light for more repression in Brazil. A month before the Rockefeller Report was released, the New York Times reported a shift in guerrilla tactics to urban countermeasures by the ideological heirs of Che Guevara.4 A week later, the newspaper reported that the Brazilian generals were rewriting Brazil’s constitution along the outlines of their “national security state.”
On September 1, 1969, President Costa e Silva suffered a stroke, giving his succeeding triumvirate the excuse to cut short the beginnings of political and economic reforms, like restrictions on foreign land ownership in the Amazon. Instead, his successors would tighten censorship and postpone indefinitely a return to civilian democracy. Then, while the generals were in the thick of negotiations over choosing their next presidential candidate, U.S. Ambassador Charles Elbrick was kidnapped. Under U.S. pressure, the generals had to endure the humiliation of allowing newspapers to print the rebels’ manifesto and flying fourteen political prisoners—most of whom had been tortured—to Mexico and then watch the freed ambassador describe his captors as misguided idealists.
But once Elbrick was released, vengeance came swiftly: The death penalty was officially restored in Brazil for the first time since 1891, and former Congressman Carlos Marighella, a folk hero among leftist students for organizing a guerrilla group, was killed on November 4 in an ambush laid by the military with the assistance of an agent of the CIA. The CIA had infiltrated the group in order to kill Marighella; with the approval of Henry Kissinger, it had even allowed an airliner to be hijacked by members of the group and the guerrillas to escape to Cuba, rather than risk exposing its penetration.5 To the CIA and Kissinger, more was at stake than the safety of innocent passengers: Marighella’s death succeeded in breaking the Brazilian Left’s morale. It demonstrated exactly what the police could do if, in Rockefeller’s words, they were provided with assistance and “the essential tools to do their job.”6
Yet, despite the attention Nelson attracted with his call for more arms sales to Latin America’s military, the darkest side of his report was economic, not military.
THE ECONOMICS OF DENIAL
For decades, it had been argued that radical land reform could end the stifling monopoly over the most fertile lands by exporters, return the land to a more stable balance between export and domestic agriculture, and build a home market with cheaper food that could peaceably lower the price of labor and fuel industrialization. In the absence of such basic reform, credit, the supposed elixir for every generation of Latin Americans, always turned into a poisonous cancer that engendered a huge debt. Nelson’s prescription was more of the same, extending the life of the patient (or account) by extracting fewer pounds of flesh each year and by offering the bedside manner of Pollyanna prognoses. In studying Latin America’s debt, CIAP (which Nelson would rename the Western Hemisphere Development Committee) would discover credit problems early, so that rescheduling negotiations could begin to stretch out payments. This strategy effectively would put a public inter-American agency in charge of monitoring and ensuring debt payments to private banks—banks like Chase, a leader in loans to Latin America.
If the Rockefeller Report’s section on debt payments sounded self-serving, its emphasis on beef exports was even more blatant. Although not specifically addressed in the report’s text, beef received more attention in the report’s tables and charts than did any other single commodity, including sugar, coffee, or cotton. Oil, a source of contention over ownership and high import costs in Latin America, was not even mentioned.
Nelson’s commissioned charts argued that the United States should remove restrictions on imports of processed beef from Latin America. Low-income families, he argued, would suffer if restrictions on imported supplies continued to force up the price of processed beef.7
Such humanitarian appeals notwithstanding, Nelson had a hidden conflict of interest as a major stockholder in the International Basic Economy Corporation (IBEC), a company with a large stake in Latin American beef production and exports of canned and frozen beef to the United States. Nelson, his brothers,
and Walther Moreira Salles owned the eighth-largest ranching operation in Brazil (Fazenda Bodoquena) and, through IBEC’s holding in Deltec International’s Brazilian Investment Bank and its direct board interlock with Deltec, were involved in overseeing Deltec’s vast Swift-Armour beef-processing operations in Argentina and Brazil.8
After the official release of the Rockefeller Report in October 1969, the nationalists’ floodgates that had held back American investment in the Amazon opened wide. General Emílio Garrastazú Médici, the generals’ hand-picked successor to Costa e Silva, welcomed U.S. investment to Brazil in his first statement as president.9 In response, the State Department, its Latin American division now headed by Sears, Roebuck’s Latin America chief, Charles Appleton Meyer (who had been appointed at the urging of David Rockefeller10), announced the granting of an export license for 10,000 M-16 assault rifles that had been held up by the Johnson administration since 1966. The New York Times immediately saw a connection, noting that Nelson’s report had recommended allowing the commercial sale of all modern weapons to Latin American governments for use against internal subversion.11 On December 7, one day after the Brazilian air force disclaimed any intention of purchasing the rifles, Brazilian military and police units swept across Rio de Janeiro, arresting 1,500 people in an effort to rid the city of “undesirable elements.”12
Rockefeller Interests in Latin America (1947–1972)
Includes minimum admitted Rockefeller family holding in Exxon (Standard Oil of New Jersey) of 2.2 million shares worth $156 million in 1975. Does not include Rockefeller interests (among top 10 stockholdings) in Standard Oil of California (Chevron), 3.3 million shares, and Standard Oil of New York (Mobil), 1.7 million shares, worth respectively $85 million and $63 million. (For verification of Rockefellers among top 10 stockholdings in oil companies, compare 1974 Metcalf Report to admitted Rockefeller holdings in 1974.)
Sources: IBEC annual reports; New York Times, December 4, 1974, p. 29; Standard Oil of New Jersey and Chase (National) Manhattan Bank property and branch listings in Moody’s Industrial Manual, annual, 1947–1972; Disclosure of Corporate Ownership (Metcalf Report), Subcommittees on Intergovernmental Relations, and Budgeting, Management and Expenditures. Committee on Government Operations.
“We military men today see Brazil with new eyes,” a general in Rio told a reporter. “The military can no longer separate itself from politics.” Another officer was more blunt: “Let’s not play games. We are not living in a democracy. Ours is a government of force and authority. Democracy is a word that fills the mouth. What we need is social and economic justice. And to achieve these goals, I wouldn’t be surprised if the military had to keep running things in Brazil for another decade.”13 Actually, it would be another fifteen years.
The general’s comments should not have come as a surprise. Nelson had been equally candid in his report: “Democracy is a very subtle and difficult problem for most of the other countries in the hemisphere. The authoritarian and hierarchical tradition which has conditioned and formed the cultures of most of these societies does not lend itself to the particular kind of popular government we are used to. Few of these countries, moreover, have achieved the sufficiently advanced economic and social systems required to support a consistently democratic system. For many of these societies, therefore, the question is less one of democracy or lack of it than it is simply of orderly ways of getting along.”14
In his introduction to the published edition of the Rockefeller Report, New York Times reporter Tad Szulc argued that Nelson was merely proposing a “pragmatic concept that diplomatic relations should not constitute moral approval, and that our dislike of a regime must not deprive the people of that country of the economic aid they need. He admits that the Kennedy-initiated Alliance for Progress raised expectations that could not be met, but he recognizes that through the Alliance valuable lessons were learned that can now serve as the basis for new policies.”15 If rule by terror was not what Kennedy had envisioned or what Nelson enunciated as one of the “new policies,” it became, nevertheless, the pervasive governing force that kept an entire continent in line, with Brazilian military officers playing key roles as backers of coups.
In Brasília, the new policies were taking shape. Médici’s predecessor, Costa e Silva, had parried Nelson’s politically required query about democracy by upbraiding the United States for failing to appreciate Brazil’s “sacrifices.” Nelson, impressed, had pulled out a yellow pad and begun taking notes like a schoolboy. He did not mention the charges of human rights abuses against Amazonian Indians. The omission, and Nelson’s subsequent praise for the good intentions of “many new military leaders,”16 was not lost on the new regime. Six months later, Médici’s new Interior Ministry turned General Albuquerque Lima’s legacy on its head, announcing that it was preparing a dossier to refute charges in the European press that Brazilians moving westward were slaughtering Indians for their land.17
Gone was the moral outrage expressed by Albuquerque Lima when he denounced the Service for the Protection of the Indian to the press as the “Service for the Prostitution of the Indian.” There was no genocide, explained Deputy Interior Minister Manuel Sampaio, only isolated murders resulting from the nation’s natural expansion into her frontiers. Accusations such as those of Norman Lewis of the London Sunday Times stemmed from the government’s own probe, he noted, and no government employees had yet had to stand trial.18
The Summer Institute of Linguistics, perhaps emboldened by the regime’s denials, was equally indignant. SIL’s Dale Kietzman responded to one letter of concern from an SIL supporter in 1970 by calling the reports on genocide from European investigators “pure bunk” and dismissed the killings as isolated incidents. “There have been killings in some areas, carried out by commercial interests generally.…”
The dictatorship was earnestly attempting to stop abuses, and was guilty at worst of only being tardy. “The government has reacted within its capability, but the army patrols have arrived after the fact and have not been all that helpful,” Kietzman said.
A “wide investigation” into SPI had resulted in thorough reform, Kietzman went on. “The whole system has been revamped, with the organization of an Indian Foundation [FUNAI].” As proof, he offered that “within the past year [1969], the foundation called in all missionary organizations to consult on ways in which the missions could help with the administration of education and welfare in areas where the government could not be active.” He concluded by recommending that the SIL supporter should read Indians of Brazil in the Twentieth Century.19
The SIL supporter was so impressed that he sent Kietzman’s letter to New York’s Atlas magazine, where he had first read the charges of genocide. “I now have some doubt as to the truth behind your article,”20 he wrote the editors.
The editors were not impressed. “Since the Brazilian Government itself admitted the complicity of 134 of its Indian agents, the crimes ranging from embezzlement to murder, in a March 1968 report, it is probably premature on the part of the Wycliffe Bible Translators to state that ‘government officials have never been involved in any sort of mass murder.’”21 The point the European journalists were making was that there was no indication that the accused agents had actually been brought to trial. In fact, very few were ever punished.
Instead, FUNAI’s civilian president, Dr. José de Queiroz Campos, besieged by charges that his sister had stolen material from Indian hospitals, was forced to resign.22 His successor, General Oscar Bandeira de Mello, was expansive on the rights of developers. He ran the agency with the goal of generating the highest return on its legal 10 percent cut of the income for the Indian tribal estates it managed. This modus operandi was intentionally modeled after the U.S. Bureau of Indian Affairs (BIA). Part of FUNAI’s mission, according to the congressional intent behind the 1967 law that created it, was to turn “tribal patrimony into productive assets [so that] it will be able to support them, as happens in the U.S.A.”23 This orientation, of course
, only replicated in Brazil the essential weakness of the BIA in the United States, whose tribal royalties came from corporate mining, logging, and agricultural concessions approved by the big business-oriented Department of the Interior. (In 1976, Bandeira de Mello would leave FUNAI to become a director of Sanchez Galdeano, a firm actively pursuing cassiterite deposits in the lands of Surui Indians in Rondônia.)
The regime’s mandate to FUNAI became clearer with the National Integration Plan, which resurrected the Amazon highway network proposed by the Hudson Institute. Branching west from two north-south roads—the Brasília-Belém highway (nearing completion) and the 1,000-mile Cuiabá-Santarem highway (under construction)—the 5,000-mile network envisioned by the regime would form a loop around the Amazon. This loop would be intersected by two roads, one running across the middle of the Amazon via the 3,400-mile-long Trans-Amazon Highway and the other, in the west, running south-north.
More than 50,000 families, mostly from the Northeast, were scheduled to be settled along the trans-Amazon highway system. As in the United States, the settlements were not the cause of commercial arteries, but their result. The real object of the arteries was to take minerals, lumber, and other natural resources out of the west and transport them to the east coast for foreign export or domestic manufacturing. The highways were also designed to vent social pressure mounting in the eastern states and cities that were overcrowded with landless peasants and immigrants. The historical analogy to the nineteenth-century United States was useful for the regime to light up the imaginations of investors.
Railroads and ports were also part of this plan. In Pará, a 400-mile railroad was planned to carry iron ore from U.S. Steel’s new Sierra dos Carajás mines to a new port south of Belém, at Itaqui on the island of São Luis. Likewise, Hanna Mining’s plan to build a 400-mile railway from the Agua Clara iron mines in Minas Gerais and expand terminal and port facilities at Sepetiba Bay south of Rio was revitalized. New oceangoing ports were planned for Santarém on the Amazon River, Imperatriz on the Tocantins, Altamira on the Xingu, Itaituba on the Tapajós, and Pôrto Velho on the Madeira. The selected port sites indicated a knowledge of the valuable mineral deposits nearby: bauxite near Santarém; manganese, iron, and diamonds near Imperatriz; lead and copper near Altamira; and cassiterite, an essential element in the production of tin, near Pôrto Velho and Itaituba.