Perkins John. The Secret History of the American Empire: Economic Hit Men, Jackals, and the Truth about Global Corruption

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Discontents, with me to Tibet. Late in the afternoon, I took a walk

by myself through the winding streets of Lhasa. I arrived at an

area that bustled with pedestrians. Farther along, I came to a small

park and sat down on an old wooden bench to bask in the fading

sunshine.

Flipping through Stiglitz's book, I once again marveled at how

closely his critiques resembled my own in Confessions. He wrote

from an academic perspective while mine was a personal

narrative; yet many of our conclusions were identical. For

example, while I described how I had created falsely optimistic

economic forecasts (or developing countries, he wrote:

To make its (the IMF's) programs seem to work, to make the

numbers "add up," economic forecasts have to be adjusted.

Many users of these numbers do not realize that they are not

like ordinary forecasts; in these instances GDP forecasts are

not based on a sophisticated statistical model, or even on the

best estimates of those who know the economy well, but are

merely the numbers that have been negotiated as part of an

IMF program.

I laid the open book across one knee and watched a cluster of

soldiers stroll past. Stiglitz sometimes referred to the "old

dictatorships

of national elites." His comments got me to thinking that the

Chinese occupation of Tibet was a whole lot more honest than the

usurpation of power by what Stiglitz defined as the "new

dictatorships of international finance." The Chinese, like the

Romans, Spanish, and British before them, had openly conquered

Tibet. Nothing subtle about it. Traditional empires might frame

their actions in noble terms—advancing civilization, stimulating

economic growth, lighting the way for progress—but there was

no question that they were colonizers intent on colonizing. The

corporatocracy, on the other hand, by using tools like the IMF and

the World Bank, backed up by the CIA and jackals when

necessary, was practicing a new form of conquest, imperialism-

through-subterfuge. When you conquered with armies, everyone

knew you were conquering. When you conquered with EHMs,

you could do it secretly. This raised a question I was beginning to

ask myself frequently about the toll such a concealment took on a

democracy that presupposes an informed electorate. If voters were

ignorant of their leaders' most important tools, could a nation

claim to be a democracy?

The Quiet Giant

On June 22, 2004, we flew out of Tibet, heading toward our

next stop, Nepal. I had to admit to a sense of relief. In an odd sort

of way, I felt that I was leaving one of those funny mirrors that

make you look very fat or very skinny. Chinese Tibet was a

distorted image of so much of the world where I had served as an

EHM—distorted, but nevertheless a reflection.

It was a crystal clear day. The pilot banked so close to Mount

Everest that I spied a funnel of snow swirling, like a white twister,

between two massive glacial ridges. It struck me as a fitting

symbol for our destination. The world's only Hindu kingdom, a

country dwarfed by two giants, India and China—both of which

coveted Nepal's water and its hydroelectric potentials—this was a

land spinning in turmoil. Maoist rebels launched a campaign to

establish a "People's Republic of Nepal" in 1996. The king

responded by declaring war on the Communists. Crown Prince

Dipendra shot and killed his father, King Birendra, and other

members of the royal family in June 2001. Although he also shot

himself, rumors abounded that he was a Chinese agent. Civil

strife erupted and the new king, Gyanendra, declared martial law,

dissolved the government, and deployed the military in another

round of attacks against the Maoists. By the time we arrived, an

estimated 10,000 people had died in the war ;ind 100,000 to

150,000 had been made homeless.

For our group, this would be a short visit, a sort of transition

back into the developed world. As our bus rushed through the

streets of Kathmandu, Sheena announced that she was gifting us

this last night with reservations at the Dwarika's Hotel, a

luxurious, lop-of-the-line, world-class hotel. The bus exploded

with cheers.

75THE SECRET HISTORY OF THE AMERICAN

EMPIRE

Dwarika's did not disappoint. Straight out of Kipling, it was

elegant and picturesque; it was also a relic of colonial empires

that reminded me of places where I had stayed during my EHM

days.

Most of our group embarked on a final shopping trip to a

nearby market our guides considered safe. I remained at the hotel.

I needed time to make this transition and to reflect on the

experiences of Tibet. I sat in my room and typed out a few notes.

Then I went downstairs and wandered through the lush gardens.

They had an uncanny resemblance to the ones in the Hotel

Intercontinental Indonesia. I could not help reminiscing about the

geisha I had mistaken for an oil executive's wife. I sat down on a

wrought-iron settee and recalled that night when, disconsolate at

her absence, I walked across the Jakarta footbridge and ended up

in a restaurant with those two women. They said something that

impressed me profoundly. It had stuck with me all these years:

This is the biggest resource grab in history. The stakes are

huge. Should we be surprised that men are willing to risk

everything to control it? They'll cheat and steal. Build ships

and missiles, and send thousands—hundreds of thousands—of

young soldiers to die for oil.

Here we were, a quarter of a century later, the Vietnam War

was long over, and we now were fighting a new one in Iraq. Men

and women were dying for the same reason—the biggest resource

grab in history. The Emperor—the corporatocracy—was richer

than ever. And most Americans had no clue.

Asia, it seemed to me, was emblematic of this new approach

to empire building. The old methods had not brought the expected

outcomes in Vietnam, but the new methods had worked in

Indonesia and so many other countries. Yet even when policies

appeared to fail, business leaders were rewarded handsomely; the

Asian "IMI

;

crisis" caused destitution and death, but in the end the

corporatocracy emerged victorious, controlling the Indonesian

government

76THE QUIET GIANT

and most of the others that had been burned by IMF and

World Bank policies. Although Vietnam was a military failure,

American corporations profited from weapons sales, expanded

markets, and labor pools; they surfaced with innovative models

for sweatshop production and outsourcing. The corporatocracy

even found ways to take advantage of natural disasters.

My thoughts kept returning to China, the quiet giant lurking in

the background. Tibet highlighted the fact that although China

had employed the military approach, it had also observed the new

techniques of empire building closely; its EHMs and jackals had

learned from our mistakes.

Historically, China has eschewed the route taken by classical

colonial powers. It has not sent its armies to distant countries, but

has focused instead on regions it considered as part of its territory,

including Tibet and Taiwan. In this regard, China is imitating the

United States.

When Thomas Jefferson commissioned Lewis and Clark to

explore the lands west of the Mississippi, he sent a message that

the entire continent was subject to our jurisdiction—our

equivalent of Tibet and Taiwan. The Louisiana Purchase,

annexation of Texas, and acquisition of Alaska were justified in

this context. The idea of Manifest Destiny was later interpreted as

reaching beyond North America. It was applied to islands in the

Caribbean and Pacific and also as an excuse for invading Mexico,

Cuba, and Panama and then later for interfering in the politics of

other Latin American nations. Washington tried to avoid overt

actions that were outright violations of the founders' principles;

nevertheless, one administration after another bought into the

secret methods of empire building; each learned from the

successes and mistakes of its predecessors. Now, it seemed, China

was outsmarting Washington.

Long after I returned from that trip to Tibet and Nepal, I

discovered that I was not alone in making this comparison. On

September 18, 2006, the day before an important World Bank

meeting in Singapore,

77THE SECRET HISTORY OF THE AMERICAN

EMPIRE

The New York Times published an article that carried the

headline "China Competes with West in Aid to Its Neighbors."

Times reporter Jane Perlez asserted that China, which is one of the

World Bank's biggest customers, "is quietly shaking up the aid

business in Asia, competing with the bank at its own game."

Using Cambodia, Laos, Myanmar, and the Philippines as

examples, the article stated that "China's loans are often more

attractive than the complicated loans from the West." Perlez listed

a number of reasons for this, including the fact that Beijing does

not attach environmental and social standards or penalties for

corruption as conditions to its loans. Significantly, the article

zeroed in on the policy that more than any other has allowed

EHMs to take jurisdiction over so many countries; Chinese

requirements, Ms. Perlez observed, "rarely include the extra

freight of expensive consultants, provisions that are common to

World Bank projects."

Of the four regions discussed in this book, Asia's challenges

seem less threatening—and more manageable—to most

Americans. Our psyches are ingrained with images from the

Korean and Vietnam Wars; while these did not result in military

victories, they ended in ways that allowed our lives to go on as

usual, and they provided a tremendous impetus to the U.S.

economy. Our respect for Japanese engineering and ingenuity

encourages us to purchase cars, TVs, and computers from them.

Our stores overflow with merchandise produced in many Asian

nations. When we dial an 800 number we are likely to talk with

someone in Asia. Even the military threats—primarily from China

and North Korea—seem old-fashioned in a manner that is oddly

comforting because it recalls the Cold War, which we won. We

may fear atomic weapons but, unlike suicide bombers, we have

dealt successfully with nuclear pressures for more than half a

century. Perhaps most important of all, Asians have accepted our

capitalistic model, one that advocates top-down control, collusion

between big business and government, rampant materialism, and

the belief that nature's abundance exists to be exploited by the

relatively few.

Latin America is different. Just when we thought we had

tamed it, ridding ourselves of the Allendes, the Noriegas, and the

Sandinistas, when we anticipated the end of Castro, we discover

that a quiet revolution is sweeping the region. And it is aimed at

us. The Latins are defying the American Empire. In the process,

they are exposing our secret history.

As I pondered the lessons offered by these two regions—Asia

and Latin America—I was haunted by the words of the old

Tibetan man I met beside the glacier; in describing the invaders of

his land as "nomad killers" he had echoed a Guatemalan

industrialist. These two people lived on opposite sides of the

globe; one was impoverished, the other wealthy; one exploited

and the other the exploiter, and yet they understood something

vital about the world their children were inheriting. The

Guatemalan had bragged that the bodyguards who protected

him—and me—were "Maya killers."

PART 2:

LATIN AMERICA

Hired Guns in Guatemala

The elevator door opened. Three men stood inside. Unlike

Pepe and me, they were not wearing business suits. They were

dressed casually in slacks and sweaters. One wore a leather

jacket. What got ray attention, though, were the guns. All three

carried AK-47S.

"An unfortunate necessity in Guatemala these days," Pepe ex-

plained. He ushered me toward the waiting elevator. "At least for

those of us who are friends of the United States, friends of democ-

racy. We need our Maya killers."

I had flown from Miami to Guatemala City the day before and

checked into the city's most luxurious hotel. It was one of those

few occasions when Stone and Webster Engineering Corporation

(SWEC) asked me to do something for them, other than refraining

from writing about EHM. Pepe Jaramillo (not his real name) had

signed a contract with SWEC agreeing to help the company

develop privately owned power plants in his country. He was one

of the most powerful members of a small group of rich elites who

have controlled the country since the time of the Spanish con-

quest. Pepe's family owned industrial parks, office buildings,

housing complexes, and huge agricultural estates that exported to

the United States. The important thing from SWEC's perspective

was t hat he had the political clout necessary to get things done in

Guatemala.

I had first visited Guatemala as an EHM in the mid-1970s. My

job was to convince the government to accept a loan for

improving its electric sector. Then, in the late 1980s, I was invited

to join the hoard of directors of a nonprofit organization that

helped Mayan communities organize microcredit banks and other

grassroots

83THE SECRET HISTORY OF THE AMERICAN

EMPIRE

endeavors aimed at pulling themselves out of poverty. Over

the years, I had become very familiar with the tragic violence that

had torn this country apart during the latter half of the twentieth

century.

Guatemala had been the heart of the Mayan civilization that

flourished for roughly a thousand years. That civilization already

had entered a period of collapse that many anthropologists

attribute to its failure to cope with the environmental damage

caused by the growth of its spectacular urban centers, when the

conquistadors invaded in 1524. Soon Guatemala became the seat

of the Spanish military authority in Central America, a position

that lasted until the nineteenth century and resulted in frequent

clashes between Mayan and Spanish populations.

By the end of the 1800s, a Boston-based company, United

Fruit, had beaten the Spanish at their own game and established

itself as one of the most powerful forces in Central America. It

ruled supreme and essentially unchallenged until the early 1950s

when Jacobo Arbenz ran for president on a platform that echoed

the ideals of the American Revolution. He declared that

Guatemalans ought to benefit from the resources offered by their

land; foreign corporations would no longer be permitted to exploit

the country and her people. His election was hailed as a model of

the democratic process throughout the hemisphere. At the time,

less than 3 percent of Guatemalans owned 70 percent of the land.

As president, Arbenz implemented a comprehensive land reform

program that posed a direct threat to United Fruit's Guatemalan

operations. The company feared that if Arbenz succeeded he

would set an example others might follow throughout the

hemisphere, and perhaps the world.

United Fruit launched a major public relations campaign in the

United States; it convinced the American public and Congress

that Arbenz had turned Guatemala into a Soviet satellite and that

his land reform program was a Russian plot to destroy capitalism

in Latin America. In 1954, the CIA orchestrated a coup. American

84HIRED GUNS IN GUATEMALA

planes bombed the capital city; the democratically elected

president was overthrown and replaced by a brutal right-wing

military dictator, Col. Carlos Castillo Armas.

The new government immediately reversed the land reform

process, abolished taxes paid by the company, eliminated the

secret ballot, and jailed thousands of Castillo's critics. A civil war

erupted in 1960, pitting the antigovernment guerrilla group known

as the Guatemalan National Revolutionary Union against the

United States-supported army and right-wing death squads. The

violence intensified throughout the 1980s, resulting in the

slaughter of hundreds of thousands of civilians, mostly Mayas.

Many more were jailed and tortured.

In 1990 the army massacred civilians in the town of Santiago

Atitlan, located near the high-altitude Lake Atitlan, renowned as

one of the most beautiful spots in Central America. Although just

one of many massacres, this one made international headlines

because it happened in a place popular among foreign tourists.

According to eyewitness reports, it began when a group of Mayas

marched to the gates of the military base. One of their neighbors

had been abducted by the army and, fearing that he would join the

ranks of the thousands officially classified as "disappeared," they

demanded his release. The army opened fire on the crowd.

Although exact numbers are disputed, dozens of men, women,

and children were seriously wounded and killed.

My trip to visit Pepe Jaramillo came shortly afterward, in

1992. He wanted SWEC to partner with him and obtain World

Bank financing. I knew that the Mayas believe the earth is a living

spirit and that places where steam gushes from the land are

considered sacred. I suspected that any attempts to construct a

power plant over geothermal springs would result in violence.

Based on the United Fruit experience—as well as more recent

ones I was intimately familiar with in Iran, Chile, Indonesia,

Ecuador, Panama, Nigeria, and Iraq—I believed that if a U.S.

company like SWEC called for help in a place like Guatemala,

the CIA would show up. The violence would escalate. The

Pentagon might send in the marines. I already had enough blood

on my conscience; I was determined to do everything I could to

prevent more mayhem.

A car had picked me up at my hotel that morning and driven

me into the circular driveway of one of Guatemala City's more

impressive modern buildings. Two armed doormen ushered me