Thy Will Be Done

by Gerard Colby

  Of all of these firms, Light was the giant. The largest private company in Brazil, Light provided Brascan with 77 percent of its net income.31 In 1972, when Light’s net utility income increased by 24 percent ($87 million) in one year, Brascan took all that it could from Light under the military regime’s profits-remittance law. This lucrative relationship underscored the vested interest of Brascan’s major stockholders in Brazil’s industrialization and in increasing Brazil’s hydroelectric-power capacity.

  Besides Gallotti, Augusto T. A. Antunes was Brascan’s only Brazilian director. Six Americans, however, sat on Brascan’s board, four of whom represented firms with a stake in Brazil.32

  Rockefeller-Hanna Mining Ties in Brazil (1960–1972)

  Sources: Jean Bernet, Interinvest Guide-Brazil and International Capital (Rio de Janeiro: Interinvest Editora e Distribuidora Ltda., 1973), cited in Shelton H. Davis and Robert O. Mathews, The Geological Imperative, p. 31; various annual reports of companies on chart; Edie Black and Fred Goff. “The Hanna Industrial Complex,” Latin America Report, North American Congress on Latin America, 1969.

  The targeting of Brazil’s Amazon region by American multinational corporations became more obvious after April 1971, when the regime’s National Department of Mineral Production outlawed all individual prospecting in Rondônia. More than 2,000 Brazilian prospectors were expelled, while 1,500 others opted for jobs with large companies. American firms moved into Rondônia, using Brazilian fronts, like MISBA, a joint venture of Companhia Espirito Santo de Mineração (owned by the Patiño family of Bolivia and their Brazilian ally Antonio Sanchez Galdeano) and J. Peter Grace’s W. R. Grace & Company, and Companhia Brasileira de Metalurgía e Mineração (CBMM), owned jointly by Lewis Harder’s Molybdenum Corporation33 and União Banco, controlled by Rockefeller ally Moreira Salles.34

  By now, South America’s frontier meant almost as much to Nelson and David as the American West did to their grandfather. John, Senior, had also been enamored by the myth of the endless frontier, with its promise of rare minerals, oil, and vast grazing lands for cattle. This myth had much to do with Americans’ traditional presumptions about a symbiosis between their prosperity and their democracy, and of each being tied to their ability to expand into new frontiers, to freely trade and invest in the world, to exploit natural resources and develop the land, and to demand “open doors” to all markets. This was the essence of the frontier thesis in American history, linking practical economic need to a sense of national purpose: promoting democracy and pursuing happiness through the American ideal of a genocide-less frontier that never actually existed.

  Of all Senior’s grandsons, Nelson had caught this pioneering fever for frontier development the most. Nelson’s initial postwar investments in Brazil had grown into a financial, industrial, commercial, real estate, mining, and ranching empire. IBEC now had more than 130 wholly owned or partially owned subsidiaries, and more of them were in Brazil than in any other country. Nelson’s shared control over Deltec International’s BIB was accompanied by the appearance on Deltec’s board of Richard J. Kleberg, Jr., a friend of Nelson and a supporter of the 1964 coup35 whose King Ranch ran a huge cattle operation in Brazil jointly with Deltec, and Augustín E. Edwards, publisher of Chile’s El Mercurio newspaper chain. Edwards was the Chilean connection to Rockefeller and CIA operations in Brazil. His newspapers had been covertly funded by the CIA and ITT since 1964, when the Johnson administration decided to intervene in Chile to prevent the election of Senator Salvador Allende as president. The Special Group set up a special Chile electoral committee that included then-Assistant Secretary of State Thomas Mann and J. C. King’s successor as the chief of the CIA’s Western Hemisphere Division, Desmond Fitzgerald. “CIA money represented as private money was passed to the Christian Democrats through a private businessman,” the U.S. Senate Intelligence Committee later reported, to defame Allende and to help the Christian Democrats’ candidate, Eduardo Frei, get elected. The businessman was Augustín Edwards.36

  Four years later, Edwards was at it again. John McCone, having left the CIA for ITT, offered the CIA $2 million to finance another effort to stop Allende’s election. To undermine Allende’s support in the countryside, the field of rural education had been sowed by Nelson through an earlier overhaul of Chile’s rural school system. After an initial survey for AIA by Galo Plaza, the Rockefeller Brothers Fund financed, from 1962 to 1965, model schools to demonstrate what a “modern” curriculum taught in new schools could do for the next generation of Chile’s Indian peasants. This prevocational program, called Plan Victoria, was adopted by the new Frei government in 1965 with AID money and continued AIA oversight.37 Its purpose was billed by AIA as a humanitarian response to the 1960 earthquake in Chile, but the participation of the Chilean Development Corporation and a specific instruction to AID revealed years later by U.S. Ambassador Edward Korry was more telling: ending the economic and political isolation of Indian villages and absorbing them into Chile’s urban-based corporate-dominated national economy and state, while strengthening Christian Democratic support among peasants and undermining support for critics like Allende.38

  At the same time, AIA promoted the founding of Rural Youth Clubs, backed by the government and the Inter-American Rural Youth Committee. Nelson sat on this committee with OAS Agricultural Chief Armando Samper and four former presidential collaborators with the Rockefellers: Galo Plaza (Ecuador and now OAS), Kubitschek (Brazil), Figueres (Costa Rica), and Gonzalez Videla (Chile).39

  But by 1970, time had run out in Chile for slow reforms; CIA and AID “labor and ‘community development’ projects were deemed [by the CIA] rather unsuccessful in countering the growth of strong leftist sentiment and organization among workers, peasants and slum-dwellers,” the Senate Intelligence Committee later reported.40

  THE CHILEAN CONNECTION

  Allende’s impending victory at the ballot box inspired Augustín Edwards to fly to Washington for a meeting with Nixon officials arranged by PepsiCo’s Donald Kendall. Besides owning Chile’s largest newspaper chain, largest granary, and largest chicken farm, Edwards owned Pepsi’s bottling operation in Chile.

  Equally important were Edwards’s ties to the Rockefellers. In 1964, David Rockefeller had hosted Edwards and other top corporate executives at his Fifth Avenue office, where the first anti-Allende plot was hatched.41 By the late 1960s, Edwards was president of the Chilean branch of IBEC. Not surprisingly, it was Nelson’s former adviser, Henry Kissinger, who met with Edwards and Kendall on September 15, 1970, just a week after Allende won a plurality in the election.42 Edwards had good reason to be worried: Foreign-dominated consumer-goods industries, in which IBEC was a leader, would be one of the first areas nationalized by Allende’s government.

  Nelson, as a member of the Nixon’s Foreign Intelligence Advisory Board, was aware of the anti-Allende policy in the Nixon White House. The National Security Council’s Special Group (called the 40 Committee during the Nixon administration) was chaired by Kissinger. This committee had overseen the CIA’s use of journalist-agents at El Mercurio to place almost daily anti-Allende editorials and disinformation in Edwards’s newspapers.

  “I don’t see why we need to stand by and watch a country go Communist due to the irresponsibility of its own people,” Kissinger told a June 1970 meeting of the Special Group. On September 14, the National Security Council resolved to take action. The next day, as Kissinger breakfasted with Edwards, Nixon ordered CIA Director Richard Helms to organize a military coup to prevent Allende’s accession to the presidency.43 “Make the economy scream,” Nixon told Helms. An anti-Allende campaign in Edwards’s newspapers* would be complemented by a Brazil-like women’s March of Empty Pots, strikes, cutbacks in U.S. economic aid, and the lowering of Chile’s bond rating in global financial markets.

  To precipitate the coup that would cost Allende and thousands of Chileans (including Mapuche Indians) their lives, Kissinger rebuilt the “country team” in Chile. Ray Warren, a former crony of J.
C. King and a veteran of CIA operations in Guatemala (during the year of the coup of 1954), Colombia (where he was embassy consul during the military campaign against the peasant republics), Bolivia, and Chile itself, was made CIA station chief in the U.S. Embassy in Santiago.

  Nathaniel M. Davis, who presided over the CIA’s “pacification” campaigns in Guatemala during the late 1960s as ambassador, became the new ambassador. Black (false) propaganda, identical to that used in Brazil to frighten and mobilize the military, alleged a plot by Allende to behead the army high command, notwithstanding the fact that it was the CIA that encouraged the assassination of Chile’s chief of staff, General René Schneider, a supporter of Chile’s constitutional succession.

  In 1973, leaving behind a postcoup Chile gripped by murder and terror, Davis would return to Washington to head the U.S. Foreign Service, while his predecessor, Edward Korry, would later charge that some of the business leaders of David Rockefeller’s Council of the Americas had collaborated with the CIA in covert political action in Chile. “We have never been,” answered a council officer, “nor will we ever be, involved in covert or political action in any country.”44

  The Brazilian junta, meanwhile, would strengthen its ties to the Chilean military. Even before the coup that killed Allende, Brazil’s military regime would leave its imprint on other coups in the region. In August 1971, Brazil’s Second Air Land Brigade was stationed in Mato Grosso, allegedly to back up the CIA’s smuggling of arms and equipment into Bolivia’s neighboring Santa Cruz state. There the Brazilian consulate would be charged with helping coordinate the coup that toppled Bolivia’s left-leaning nationalist president, General Juan José Torres. Brazilian generals were also reportedly in close contact with the Uruguayan military leaders before their overthrow of the civilian government in Montevideo in June 1973. Three months later, rumors persisted of Brazilian troops having been stationed along Bolivia’s border with Chile during the coup against Allende; there, too, Brazilian troops were said to be part of a contingency plan for intervention if the Chilean military had faltered.

  To Brazil’s military, it seemed, had fallen the task of policing a piece of a new world order that reached continental scale.

  THE COLD WAR: SPEARHEAD OF UNRESTRAINED IDEOLOGY

  The Cold War doctrine of counterinsurgency had brought U.S. policy full circle, blurring means and ends: Development was necessary for order, and order was necessary for development.

  David Rockefeller had explained the first half of this thesis from an exclusively corporate interpretation of development in 1963. He had called upon President Kennedy to shift foreign economic aid away from government-to-government aid. Such aid allowed governments in underdeveloped countries to fund publicly owned enterprises that competed with privately owned (often American-controlled) companies. Local government aid, in turn, encouraged political independence from Washington and greater national sovereignty—including nationalization of American holdings.

  David wanted Kennedy to proclaim a shift in foreign-aid policy toward private entrepreneurs, both American and allied local investors, on the grounds that private enterprise per se was the basis of political freedom:

  “The first requirement is that the governments—and, as far as possible, the people—of Latin America know that the U.S. has changed its policy, so as to put primary stress on improvement in the general business climate as a prerequisite for social development and reform.”45

  But David went beyond the classical liberal argument of the market basis for individual liberty. He extended it to suggest that U.S. policy should not merely prefer private enterprise, but should oppose public enterprise and its creation out of private corporations, no matter what the public’s grievances or the corporation’s crimes. David wanted a general U.S. policy that discouraged all nationalizations. He wanted to set up rules that not only extended to corporations abroad an extraterritorial imperial right to assert the U.S. Constitution’s guarantee of fair compensation to persons when property is seized, but also included “indemnification,” a much broader legal term that encompassed legal exemption from liabilities or penalties incurred by one’s actions.46

  David and his corporate allies feared “possible changes in the rules of the game.” To soothe corporate jitters in corporate boardrooms and securities exchanges, the “obstacles” that a developing nation usually erected to protect its infant industries, small farms, and working-class’s buying power had to be done away with. These obstacles included, in David’s words, “over valued and multi-valued exchange systems, complex import controls with high and highly variable tariffs, quotas and other forms of trade restriction, price controls and highly unpredictable budgetary practice.” Multinational corporate ideology had not yet advanced to the point of asserting that these protections were “outmoded” in their global marketplace, but this would be the next step.

  Six years later, after Kennedy’s skepticism was history and the Republicans had won back the White House they would occupy for all but four years during the next quarter century, it was left to Nelson Rockefeller to explain what this new world order would require in Latin America: accepting U.S.-trained or U.S.-allied military rulers as the agents of change. “A new type of military man is coming to the fore,” Nelson wrote in his Report on the Americas, “and often becoming a major force for constructive social change in the American republics. Motivated by increasing impatience with corruption, inefficiency, and a stagnant political order, the new military man is prepared to adapt his authoritarian tradition to the goals of social and economic progress.”47

  If Brazil set the example on the right side of the question of how the Nixon administration should deal with the Third World’s militarized nationalism, Peru set the example on the left side. And again it was the Rockefeller brothers who provided the lesson and guided policy. In June 1969, while Nelson was in Brazil, Humberto Cortina, a Cuban exile and veteran of the Bay of Pigs, finished behind-doors negotiations with the Peruvian generals over their nationalization of Standard Oil’s refinery and oil holdings. Nelson’s IBEC, which had investments in about twenty firms in Peru, had taken the initiative to urge the Nixon administration to hold off enforcing the Hickenlooper Amendment to cut off aid to Peru. During the Cold War, when the Soviet Union was poised as an alternative source of aid, such a cutoff was subtly threatened, rather than actually implemented. The Peruvian junta led by General Velasco Alvarado should not be goaded, Nelson’s aides had warned; Cortina, the Peruvian representative of David Rockefeller’s Council for Latin America, should be given time to work out “new rules” for negotiating compensation. The Rockefeller strategy proved wise. In June, Cortina relayed the good news of “very satisfactory” results to David, who thanked him for “saving Peru.”48

  Four months later, both sides of the nationalization question—the Brazilian model and the Peruvian model—were encompassed within Nelson’s concept of a “new military.” It mattered little that Nelson’s claim for the “progressive” character of these regimes rested on a false assertion: that Latin American officer corps were no longer an elite but a “middle class,” the supposed bedrock of capitalist development and democracy championed in American political science textbooks. In fact, the percentage of lower-class youths entering army careers had actually declined between 1941 and 1966. And there was little that was “new” about the class origin of most officers: In 1941, 80 percent of all military cadets came from middle-class families; by 1966, the figure was 85 percent, only a 5 percent increase over twenty-five years.49 With fewer men from poor backgrounds, the military of Latin America was even less representative of Brazil’s vast majority of poor peasants. What was new were the social engineering concepts that these men had learned from U.S.-sponsored “civic action” courses in the United States, the Panama Canal Zone’s schools, and Brazil’s Escola Superior de Guerra, the Higher War College. The latter was founded in 1949 with Pentagon assistance to teach the higher sciences of counterinsurgency, strong centralized governm
ent, and “national planning.”50

  To Nelson, military aid was part of the more general concept of foreign aid that advanced “nation-building.” This was not a new idea. Rockefeller Brothers Fund reports had been urging this approach since the late 1950s, and many of their recommendations had been adopted by the Kennedy and Johnson administrations. But Kennedy’s leaning toward basic social reforms and political liberalism had sent counterinsurgency down a different—and to the Rockefeller brothers, wrong—path, leaving a legacy of democratic baggage in the Johnson administration that even Thomas Mann’s Realpolitik could not throw off. Now, however, Nelson had put things back on track, parrying charges of cynicism by elevating Realpolitik as a new theory of development. He answered claims that he had been frightened to the Right by the riots that confronted him during his Latin American tour by writing his report in a calm tone, channeling his sense of urgency into firm, tough prose.

  The policy goal was the same one he had pursued for three decades: the incorporation of Latin America into an economic “unity” of the Western Hemisphere with the United States as its leader. Development would take place within this broader continental scheme, rather than nationally or bilaterally. Order would be along the model of Indirect Rule that Britain used in the Commonwealth. The developed nations, as Adolf Berle had warned the OAS Association, should not be forced to defend their control over the destinies of “developing” nations through the direct rule of a colonial “empire.” Both Senior and Junior had taught Nelson that power was most efficiently exercised quietly and out of sight through subtle, indirect means. And, as the Vietnam War had taught belatedly, if economic power was not enough to control the pace and direction of progress of peoples suffering from the pains of debt and poverty, hunger and disease, and marines were needed, it was better that these marines were indigenous than American.