by Gerard Colby
In May 1978, just weeks after a coup in Afghanistan established a communist government, Nelson and Happy flew to Iran. The Shah was shaken by riots by fundamentalist Muslim followers of Ayatollah Khomeini, then living in exile. His policies for rapid development and its accompanying radical cultural and political changes challenged traditional Muslim values. He failed to see the looming threat of a Muslim fundamentalist backlash to the urban elite’s adoption of Western lifestyles. He saw only communists and worried about their influence among the oil workers in the southwest, where Nelson’s IBEC had been working on development.
ROCKEFELLER HOLDINGS IN BRAZIL
IBEC Holdings in Brazil (1976)
Desenvolvimento e Sistemas, S.A.—Real estate development at headwaters of the São Francisco River in Minas Gerais state
Fazenda Bodoquena (IBEC—30%; Nelson, David, and Laurance Rockefeller direct holding—10%; Rockefeller total—40%)—Eighth-largest agribusiness in Brazil, including ranching and beef processing on 1,030,000-acre estate in Mato Grosso
Arbor Acres Avicultura, S.A. (100%)—Poultry breeding stock for farmers and chicken industry
ROLIBEC S.A. Corretagem de Seguros e Participações (100%)—General insurance
IBEC Ltda. (100%)—IBEC central office in São Paulo, Brazil
Brazilian Investments, Inc. (100%)—Holding company based in Delaware
ASSAI-Administração e Servicos S.A. (100%)
Contabilidade Mecantzada e Participações (COMEPA) (89.57%)
Agrobras Comercial e Industrial, S.A. (80.98%)
IBEC-Representações, Administração e Servicos Ltda. (98%)
Toledo-Bellows Equipamentos Pneumaticos S.A. (formerly Carrera Equipamenticos S.A.) (85.42%)—Pneumatic drills and hydraulic control equipment
Sementes Agroceres, S.A. (SASA) (64%)—Fourth-largest seed company in the world; hybrid cornseeds and experimentation with pasture grass, legumes, and sorghum. Hog breeding farm. Owned 4,000 acres of agricultural land for experiments and 59,000 square feet of plant and office space.
Agroceres Comercial, S.A. (99.95%)
Agroceres de Nordeste, S.A. (54%)
Sementes Norticeres, S.A.—Vegetable seed company
IBECASA Brasileira, S.A. (90%)—Subsidiary of IBEC Housing International, Inc.
San José dos Campos—4,200-unit IBEC housing project in São Paulo state by IBEC Housing International, Inc.
Makro Atacadista, S.A. (MAKRO) (34.13%)—Wholesale cash-and-carry distribution centers for small retailers
Comercial Makro Ltda. (99.9%)
Ulmak Corretagem de Seguros Ltda. (49.9%)
Brazilian Creditors and/or Stockholders in
Makro Atacadista, S.A., and/or IBEC (1976)
SHV Brasileira Participações Ltda.
Mepaso Participações Ltda.
Banco Bozzano Simonsen
Petrobrás Distribuidora S.A.
Banco de Minas Gerais
Banco Comercio e Industria de São Paulo
Banco Real
Source: IBEC 1976 10K filing with the U.S. Securities and Exchange Commission, filed April 1977.
Other Pre-1976 IBEC Holdings in Brazil
Avicultura, Comercio e Industria, S.A. (AVISCO) (20%)—Poultry breeder
Inter-American Finance and Investment Corporation (IFI, or “Interamericana”) (20%) (1951–1955)—Joint venture with Chase National Bank (31.2%) and fourteen Brazilian banks (48%)
Crescinco (100%) (1957–1968)—South America’s largest mutual fund, controlling over $200 million in assets. Investments in more than 100 Brazilian companies.
Cia. Carioca Industrial (5.3%)—Producer of vegetable oils, soap, and detergent
Cia. Empreendimentos e Administração IBEC (100%) (1957–1967)—Management firm for Crescinco
Cia. Distribuidora de Valores (CODIVAL) (100%) (1957–1967)—Sales company for Crescinco
Banco de Investimento do Brasil (BIB) (18.55%) (1967–1972)—Investment banking, underwriting, brokerage, and mutual funds (including IBEC’s formerly owned Crescinco), controlling over $400 million in assets
Brazilian Investments, Inc. (Delaware) (100%) (1957–1967)—Earlier named Crescinco Investments, Inc. (Brazil), originally a U.S.-registered subsidiary for investments in U.S. corporations operating in Brazil. A relatively small fund designed to supplement Crescinco’s Brazilian earnings with more predictable U.S. earnings and offset losses from Brazilian inflation and currency fluctuations.
Cargill Agricola e Comercial, S.A. (CACSA) (45% of common stock, 81% of preferred)—Grain-storage company joint venture with U.S.-based Cargill. In 1957 Cargill sold its interest to Continental Grain and CACSA’s name was changed to Granar Agricola e Comercial, S.A. (GRANAR) (45.41%).
IBEC-Rollins Burdick Hunter Ltda. (99%)—General insurance brokerage. Name later changed to ROLIBEC S.A. Corretagem de Seguros e Participações.
Industria Metalúrgica Forjaço, S.A. (13.86%)—Drop-forging plant in São Paulo
Regencia Companhia—Joint venture with Sears, Roebuck and Brazilian interests; men’s clothing manufacturer in São Paulo
Thela Comercial, S.A. (40%)—Importer of U.S.-made agricultural materials, supplies, and construction equipment
Early IBEC Ventures Dissolved by 1957
Emprêsa de Mecanização Agricola (EMA) (82%)—Sales of U.S.-manufactured tractors, disk plows, disk harrowers, terracers, planters, cultivators, and harvesters. Land development, including forest clearance.
Emprêsa de Combate a Pragas Agricolas (100%)
Helicopter Crop Dusting Company (HELICO) (100%)
S.A. Fomento Agro-Pecuario (SAFAB) (100%)—Hog-production company
Companies in Which IBEC’s Crescinco Mutual Fund Was a Self-described “Principal Shareholder”
Braspla, S.A., Indústria e Comèrcio de Matéria Plástica (15% of common stock, 66.66% of preferred shares)—Plastic products manufacturer, including thermoplastics, plastic bags, supplies for automotive industry, and toys under Walt Disney license agreements
Dunlop do Brasil, S.A. (preferred shares)—Tire manufacturer, with rubber plantations in Bahia.
Cia. Carioca Industrial (5.3% of common stock)—Producer of vegetable oils, with factories in São Luís (Maranhão) and São Paulo
Source: IBEC annual reports and 10K filings with the U.S. Securities and Exchange Commission; IBEC Archives, Rockefeller Archive Center.
Chase Manhattan Bank Holdings in Brazil
Banco Lar Brasileiro, S.A. (98%)—42 branches, subsidiaries, affiliates, and representative offices with activities in over 100 countries by 1982
Banco de Investimentos Lar Brasileiro, S.A. (100%)—Investment subsidiary
Fianceira Lar (100%)—Finance company
During their talks, the Shah asked his friend whether President Carter’s unwillingness to go to war in Afghanistan meant that “the Americans and the Russians have divided the world between them.”34 Nelson assured him that nothing of the sort had happened, but the Shah continued to worry about some international conspiracy for resources. So while the Rockefellers dined with the Shah, Nelson’s Pocantico manager and jack-of-all-trades, Joe Canzeri, dined with the chief of SAVAK, the Shah’s secret police.
The Rockefellers returned home to celebrate Nelson’s seventieth birthday with 400 guests at Pocantico. Shortly afterward, Nelson experienced another family tragedy. His brother John 3rd, the family’s most dedicated philanthropist, was killed in an automobile accident on a road right outside the Pocantico estate.
The shock impressed on Nelson that not much time might be left to prepare the next generation for succession to Rockefeller power or to finish his own projects. He had already changed the policies of the $209 million Rockefeller Brothers Fund and stacked the board with his influence, getting his brothers to agree to put Henry Kissinger’s aide, Nancy Hanks (a veteran of Nelson’s staff in the Eisenhower White House), and Nelson’s son Steven on the board. Nelson’s new directors then pledged $50 million in commitments to twent
y causes and institutions that the brothers had a personal tie to or had supported for many years.
Former Secretary of Health, Education, and Welfare John Gardner resigned in disgust, expressing disagreement with the “special status” enjoyed by the brothers.35 The younger Rockefellers took offense, but Nelson once again had his way. This, Nelson explained, was all part of ensuring an orderly transition from one generation to the next,36 as well as giving the brothers’ special interests a final injection of capital. At the same time, he also moved to protect the family’s largest single investment, Rockefeller Center. He rewarded Richard Rosenbaum, the man who had field generaled the Rockefeller charge at the 1976 convention to secure the nomination for Ford over Reagan, with a seat on the Center’s board.
By August, the rebellion in Iran would be swelling and the Shah’s troops wearying of firing volley after volley “point-blank” into unarmed crowds of demonstrators.
Nelson knew that the CIA station of the U.S. Embassy in Teheran was bound to be a target for demonstrations. The CIA had continued to support SAVAK’s training and operations, even after SAVAK’s brutality became public, and the CIA still relied on SAVAK for intelligence and cooperation. Then there was the link between terror against “communist” dissidents and U.S. taxpayers’ money for the Shah; dead communists supposedly assured the continuing flow of oil revenues to pay for the Shah’s debts and development schemes. David’s Chase Manhattan Bank was the Shah’s personal banker, as well as banker to the National Iranian Oil Company and joint owner of the Teheran-based International Bank of Iran. In 1977, Chase had led the consortium that lent Iranian utilities $500 million; Chase’s stake was $50 million.37 It was not only money that mattered, but plans for the future—and Nelson’s personal commitment to a man who, like himself, had a royal blood line that was only two generations old.
COLLAPSE OF THE PEACOCK THRONE
In January 1979, Nelson received a call from Henry Kissinger. His friend was worried that the Shah would perish in Khomeini’s revolution because his situation had deteriorated beyond repair. Revolutionary ferment had halted the Karkheh River Basin development project in western Iran, for which IBEC’s David Lilienthal had acted as a consultant. IBEC’s work with the Khuzestan Water and Power Authority in western Iran near the Abadan oil fields was also coming to naught. The Shah’s Industrial and Mining Development Bank reportedly had lent the Shah’s family and enterprises of its Pahlavi Foundation more than $510 million, some of it unsecured, in violation of Iranian law.38 The oil workers were on strike, and the Shah had sent in the navy to occupy the fields, reducing the country to running on less than a third of its normal oil output. Lower oil revenues meant that Iran’s creditors would soon start to suffer. And once the Shah was absent from Teheran, Iran’s substantial deposits in Chase Manhattan could be stopped and billions of dollars in assets withdrawn by a revolutionary government—unless the Shah’s presence in the United States could add weight to a court contest over rightful custody. The Shah, after all, was not just Nelson’s personal friend; he was a head of state and an ally of the United States.
Nelson called his troubleshooter, Joe Canzeri, and told him to find a home for the Shah in the United States. Near Warm Springs, Georgia, Canzeri found a hilltop mansion that could easily be secured with fencing and guards.
A week later, with the revolution raging, the Shah agreed to leave Iran, but not forever. He did not abdicate. He even decided to accept the offer of Anwar Sadat to “visit” Egypt en route to his new Rockefeller-procured home in the United States. He had been suspicious of Sadat’s offer, fearing it was President Jimmy Carter’s ploy to keep him at arm’s length, but his brother-in-law and confidant, Ambassador to the United States Ardeshir Zahedi, argued that he should not seem to be fleeing into the arms of the Americans. On January 16, his 707 arrived at Aswan airport, the Shah flying it in himself. The Sadats gave him full honors, complete with a military band and a twenty-one-gun salute. He expected to stay only a short time before proceeding to Georgia. But his brother-in-law again urged restraint. Visit King Hassan, your old friend in Morocco, he urged. The Shah did. Then fate intervened in Manhattan.
CHASE MANHATTAN BANK: A MEETING GROUND OF THE ROCKEFELLER FINANCIAL NETWORK
Corporations marked with an asterisk (*) have investments or significant business in Brazil; corporations with a dagger (†) have invested in, or have done significant business (including oil exploration) in, South America’s Amazon River basin.
Board of Directors
1970
With $11.8 billion to be invested by Chase’s Trust Department, $8 billion was left to its sole discretion, $3.8 billion shared with other investment advisers.
David Rockefeller, chairman, Chase Manhattan Bank †
Robert O. Anderson, chairman, Atlantic Richfield Company (ARCO)†
C. Douglas Dillon, chairman, U.S. & International Securities
J. Richardson Dilworth, director, Rockefeller Family & Associates; director, Chrysler Corporation*
J. K. Jamieson, chairman, Standard Oil of New Jersey (Exxon)†
Frederick Kappel, chairman, International Paper
Robert Lilley, vice president, AT&T; director, Celanese Corporation*
Jeremiah Milbank, chairman, Commercial Solvents Corporation
Charles Myers, Jr., chairman, Burlington Industries; director, U.S. Steel†; director, R.J. Reynolds Industries
C. Jay Parkinson, chairman, Anaconda*
James Perkins, former president, Cornell University
Richard R. Shinn, president, Metropolitan Life Insurance Company; director, Allied Chemical Corporation*
J. Henry Smith, president, Equitable Life Assurance Society
Whitney Stone, chairman, Stone and Webster*
John A. Swearingen, chairman, Standard Oil of Indiana (AMOCO)†
Thomas A. Wood, president, TAW International Leasing Corporation
1972
Charles Barber, chairman, American Smelting & Refining Company (ASARCO); director, South Peru Copper Corporation
1976
James H. Binger, director, Honeywell, Inc.*; director, Minnesota Mining & Manufacturing*
Willard C. Butcher, director, American Smelting & Refining Company (ASARCO); director, Firestone Tire & Rubber Company*
John T. Connor, chairman, Allied Chemical*; director, General Electric*; director, General Motors*; director, Warner-Lambert Company*
C. G. Eklund, director, Bendix Corporation*
James L. Ferguson, director, Union Carbide Corporation*
Richard H. Furlaud, chairman, Squibb Corporation*
Patricia R. Harris, director, International Business Machines (IBM)*
Theodore M. Hesburgh, president, Notre Dame University; director, Utah (Mining) International*; director, International Business Machines (IBM)*
William R. Hewlett, director, Chrysler Corporation*
Ralph Lazarus, chairman, Federated Department Stores; director, General Electric*; director, Scott Paper*
Edward T. Pratt, Jr., director, International Paper Company
J. Stanford Smith, director, General Motors*; director, International Paper Company
1980
Alexander Haig, president, United Technologies (resigned to become secretary of state)
1982
Robert Floeree, chairman, Georgia-Pacific†
Howard Kauffmann, President, Exxon†
Richard Lyman, Rockefeller Foundation
John D. Macomber, chairman, Celanese Corporation*
Donald Trautlein, chairman, Bethlehem Steel†
Selected Members of Chase Manhattan Bank’s International Advisory Board
Members from Brazil
1970
Augusto T. A. Antunes, CAEMI and ICOMI†
1977
Antonio Gallotti, president, Brazil Light and BRASCAN—
Administração Investimentos Ltda.†
1982
Paulo D. Villares, Villares Group*
&nbs
p; Members from the United States
1970
Eugene Black, former president, World Bank†
William Blackie, chairman, Caterpillar Tractor Company†
Donald C. Burnham, chairman, Westinghouse Electric*
George Champion, former Chase president and chairman
Harrison Dunning, chairman, Scott Paper*
Carl Gerstacker, chairman, Dow Chemical*
Patrick Haggerty, Chairman, Texas Instruments†
William A. Hewitt, chairman, Deere & Company†
John J. Powers, Jr., Pfizer*
Rawleigh Warner, Jr., chairman, Mobil (Standard Oil of
New York)†
1977
Henry Kissinger, former secretary of state and national security adviser and former executive studies project consultant, Goldman Sachs
1978
John Louden, Chairman of Supervisory Board, Royal Dutch Petroleum†
1982
David Rockefeller
Chairmen of the boards of American Metal Climax (AMAX);
Caterpillar†; Boise Cascade
Sources: Chase Manhattan Bank, annual reports, 1970–1982; Directory of American Firms Operating in Foreign Countries (New York: Simon & Schuster), annual, various years; Engineering and Mining Journal, November 1975; Moody’s Industrial Manual (New York: Frederic Hatch & Company) annual, 1970–1982; Who’s Who in America (Chicago: Marquis Who’s Who, Inc., 1972 and 1982 editions); U. S. Senate, 95th Cong., 2d sess., Committee on Governmental Affairs, Subcommittee on Reports, Accounting and Management, Interlocking Directorates Among the Major U.S. Corporations (Washington, D.C.: Government Printing Office, 1978).
THE LAST HURRAH