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The New Confessions of an Economic Hit Man

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Shocking Bestseller: The original version of this astonishing tell-all book spent 73 weeks on the New York Times bestseller list, has sold more than 1.25 million copies, and has been translated into 32 languages.

New Revelations: Featuring 15 explosive new chapters, this expanded edition of Perkins's classic bestseller brings the story of economic hit men (EHMs) up to date and, chillingly, home to the US. Over 40 percent of the book is new, including chapters identifying today's EHMs and a detailed chronology extensively documenting EHM activity since the first edition was published in 2004.

Former economic hit man John Perkins shares new details about the ways he and others cheated countries around the globe out of trillions of dollars. Then he reveals how the deadly EHM cancer he helped create has spread far more widely and deeply than ever in the US and everywhere else—to become the dominant system of business, government, and society today. Finally, he gives an insider view of what we each can do to change it.

Economic hit men are the shock troops of what Perkins calls the corporatocracy, a vast network of corporations, banks, colluding governments, and the rich and powerful people tied to them. If the EHMs can't maintain the corrupt status quo through nonviolent coercion, the jackal assassins swoop in. The heart of this book is a completely new section, over 100 pages long, that exposes the fact that all the EHM and jackal tools—false economics, false promises, threats, bribes, extortion, debt, deception, coups, assassinations, unbridled military power—are used around the world today exponentially more than during the era Perkins exposed over a decade ago.

The material in this new section ranges from the Seychelles, Honduras, Ecuador, and Libya to Turkey, Western Europe, Vietnam, China, and, in perhaps the most unexpected and sinister development, the United States, where the new EHMs—bankers, lobbyists, corporate executives, and others—“con governments and the public into submitting to policies that make the rich richer and the poor poorer.”

But as dark as the story gets, this reformed EHM also provides hope. Perkins offers a detailed list of specific actions each of us can take to transform what he calls a failing Death Economy into a Life Economy that provides sustainable abundance for all.

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1 Dirty Business

ePub

When I graduated from business school in 1968, I was determined not to participate in the Vietnam War. I had recently married Ann. She too opposed the war and was adventurous enough to agree to join the Peace Corps with me.

We first arrived in Quito, Ecuador, in 1968. I was a twenty-three-year-old volunteer assigned to develop credit and savings cooperatives in communities deep in the Amazon rain forest. Ann’s job was to teach hygiene and child care to indigenous women.

Ann had been to Europe, but it was my first trip away from North America. I knew we’d fly into Quito, one of the highest capitals in the world — and one of the poorest. I expected it to be different from anything I’d ever seen, but I was totally unprepared for the reality.

As our plane from Miami descended toward the airport, I was shocked by the hovels along the runway. I leaned across Ann in the middle seat and, pointing through my window, asked the Ecuadorian businessman in the aisle seat next to her, “Do people actually live there?”

 

2 An Economic Hit Man Is Born

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It began innocently enough.

I was an only child, born into the middle class in 1945. Both my parents came from three centuries of New England Yankee stock; their strict, moralistic, staunchly Republican attitudes reflected generations of puritanical ancestors. They were the first in their families to attend college — on scholarships. My mother became a high school Latin teacher. My father joined World War II as a Navy lieutenant and was in charge of the armed guard gun crew on a highly flammable merchant marine tanker in the Atlantic. When I was born, in Hanover, New Hampshire, he was recuperating from a broken hip in a Texas hospital. I did not see him until I was a year old.

He took a job teaching languages at Tilton School, a boys’ boarding school in rural New Hampshire. The campus stood high on a hill, proudly — some would say arrogantly — towering over the town of the same name. This exclusive institution limited its enrollment to about fifty students in each grade level, nine through twelve. The students were mostly the scions of wealthy families from Buenos Aires, Caracas, Boston, and New York.

 

3 “In for Life”

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In legal parlance, MAIN would be called a closely held corporation; roughly 5 percent of its two thousand employees owned the company. These were referred to as partners or associates, and their position was coveted. Not only did the partners have power over everyone else, but also they made the big bucks. Discretion was their hallmark; they dealt with heads of state and other chief executive officers who expected their consultants, like their attorneys and psychotherapists, to honor a strict code of absolute confidentiality. Talking with the press was taboo. It simply was not tolerated. As a consequence, hardly anyone outside MAIN had ever heard of us, although many were familiar with our competitors, such as Arthur D. Little, Stone & Webster, Brown & Root, Halliburton, and Bechtel.

I use the term competitors loosely, because in fact MAIN was in a league by itself. The majority of our professional staff was engineers, yet we owned no equipment and never constructed so much as a storage shed. Many MAINers were ex-military; however, we did not contract with the Department of Defense or with any of the military services. Our stock-in-trade was something so different from the norm that during my first months there even I could not figure out what we did. I knew only that my first real assignment would be in Indonesia, and that I would be part of an eleven-man team sent to create a master energy plan for the island of Java.

 

4. Indonesia: Lessons for an EHM

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In addition to learning about my new career, I spent time reading books about Indonesia. “The more you know about a country before you get there, the easier your job will be,” Claudine had advised. I took her words to heart.

When Columbus set sail in 1492, he was trying to reach Indonesia, known at the time as the Spice Islands. Throughout the colonial era, it was considered a treasure worth far more than the Americas. Java, with its rich fabrics, fabled spices, and opulent kingdoms, was both the crown jewel and the scene of violent clashes among Spanish, Dutch, Portuguese, and British adventurers. The Netherlands emerged triumphant in 1750, but even though the Dutch controlled Java, it took them more than 150 years to subdue the outer islands.

When the Japanese invaded Indonesia during World War II, Dutch forces offered little resistance. As a result, Indonesians, especially the Javanese, suffered terribly. Following the Japanese surrender, a charismatic leader named Sukarno emerged to declare independence. Four years of fighting finally ended on December 27, 1949, when the Netherlands lowered its flag and returned sovereignty to a people who had known nothing but struggle and domination for more than three centuries. Sukarno became the new republic’s first president.

 

5. Saving a Country from Communism

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I had a romantic vision of Indonesia, the country where I was to live for the next three months. Some of the books I read featured photographs of women in brightly colored sarongs, Balinese dancers, shamans blowing fire, and warriors paddling long dugout canoes in emerald waters at the foot of smoking volcanoes. Particularly striking was a series on the magnificent black-sailed galleons of the infamous Bugi pirates, who still sailed the seas of the archipelago, and who had so terrorized early European sailors that they returned home to warn their children, “Behave yourselves, or the Bugimen will get you.” Oh, how those pictures stirred my soul.

The history and legends of that country represent a cornucopia of larger-than-life figures: wrathful gods, Komodo dragons, tribal sultans, and ancient tales that, long before the birth of Christ, had traveled across Asian mountains, through Persian deserts, and over the Mediterranean to embed themselves in the deepest realms of our collective psyche. The very names of its fabled islands — Java, Sumatra, Borneo, Sulawesi — seduced the mind. Here was a land of mysticism, myth, and erotic beauty; an elusive treasure sought but never found by Columbus; a princess wooed yet never possessed by Spain, by Holland, by Portugal, by Japan; a fantasy and a dream.

 

6. Selling My Soul

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Our eleven-man team spent six days in Jakarta registering at the US Embassy, meeting various officials, organizing ourselves, and relaxing around the pool. The number of Americans who lived at the Hotel InterContinental amazed me. I took great pleasure in watching the beautiful young women — wives of US oil and construction company executives — who passed their days at the pool and their evenings in the half dozen posh restaurants in and around the hotel.

Then Charlie moved our team to the mountain city of Bandung. The climate was milder, the poverty less obvious, and the distractions fewer. We were given a government guesthouse known as the Wisma, complete with a manager, a cook, a gardener, and a staff of servants. Built during the Dutch colonial period, the Wisma was a haven. Its spacious veranda faced tea plantations that flowed across rolling hills and up the slopes of Java’s volcanic mountains. In addition to housing, we were provided with eleven Toyota off-road vehicles, each with a driver and translator. Finally, we were presented with memberships to the exclusive Bandung Golf and Racquet Club, and we were housed in a suite of offices at the local headquarters of Perusahaan Umum Listrik Negara, the government-owned electric utility company.

 

7 My Role as Inquisitor

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Our contracts with the Indonesian government, the Asian Development Bank, and USAID required that someone on our team visit all the major population centers in the area covered by the master plan. I was designated to fulfill this condition. As Charlie put it, “You survived the Amazon; you know how to handle bugs, snakes, and bad water.”

Along with a driver and translator, I visited many beautiful places and stayed in some pretty dismal lodgings. I met with local business and political leaders and listened to their opinions about the prospects for economic growth. However, I found most of them reluctant to share information with me. They seemed intimidated by my presence. Typically, they told me that I would have to check with their bosses, with government agencies, or with corporate headquarters in Jakarta. I sometimes suspected that some sort of conspiracy was directed at me.

These trips were usually short, not more than two or three days. In between, I returned to the Wisma in Bandung. The woman who managed it had a son a few years younger than me. His name was Rasmon, but to everyone except his mother he was Rasy. A student of economics at a local university, he immediately took an interest in my work. In fact, I suspected that at some point he would approach me for a job. He also began to teach me Bahasa Indonesia.

 

8. Civilization on Trial

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“I’m taking you to a dalang,” Rasy beamed. “You know, the famous Indonesian puppet masters.” He was obviously pleased to have me back in Bandung. “There’s a very important one in town tonight.”

He drove me on his scooter through parts of his city I did not know existed, through sections filled with traditional Javanese kampong houses, which looked like a poor person’s version of tiny tile-roofed temples. Gone were the stately Dutch Colonial mansions and office buildings I had grown to expect. The people were obviously poor, yet they bore themselves with great pride. They wore threadbare but clean batik sarongs, brightly colored blouses, and wide-brimmed straw hats. Everywhere we went we were greeted with smiles and laughter. When we stopped, children rushed up to touch me and feel the fabric of my jeans. One little girl stuck a fragrant frangipani blossom in my hair.

We parked the scooter near a sidewalk theater where several hundred people were gathered, some standing, others sitting in portable chairs. The night was clear and beautiful. Although we were in the heart of the oldest section of Bandung, there were no streetlights, so the stars sparkled over our heads. The air was filled with the aromas of wood fires, peanuts, and cloves.

 

9. Opportunity of a Lifetime

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Indonesia was a test for me in so many ways, and still more tests awaited me in Boston.

I went to the Prudential Center headquarters first thing in the morning, and while I was standing with dozens of other employees at the elevator, I learned that Mac Hall, MAIN’s enigmatic, octogenarian chairman and CEO, had promoted Einar to president of the Portland, Oregon, office. As a result, I now officially reported to Bruno Zambotti.

Nicknamed “the silver fox” because of the color of his hair and his uncanny ability to outmaneuver everyone who challenged him, Bruno had the dapper good looks of Cary Grant. He was eloquent and he held both an engineering degree and an MBA. He understood econometrics and was vice president in charge of MAIN’s electrical power division and most of our international projects. He also was the obvious choice to take over as president of the corporation when his mentor, the aging Jake Dauber, retired. Like most MAIN employees, I was awed and terrified by Bruno Zambotti.

 

10. Panama’s President and Hero

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I landed at Panama’s Tocumen International Airport late one night in April 1972, during a tropical deluge. As was common in those days, I shared a taxi with several other executives, and because I spoke Spanish, I ended up in the front seat beside the driver. I stared blankly out the taxi’s windshield. Through the rain, the headlights illuminated a billboard portrait of a handsome man with a prominent brow and flashing eyes. One side of his wide-brimmed hat was hooked rakishly up. I recognized him as the hero of modern Panama, Omar Torrijos.

I had prepared for this trip in my customary fashion, by visiting the reference section of the Boston Public Library. I knew that one of the reasons for Torrijos’s popularity among his people was that he was a firm defender of both Panama’s right of self-rule and its claims to sovereignty over the Panama Canal. He was determined that the country under his leadership would avoid the pitfalls of its ignominious history.

Panama was part of Colombia when the French engineer Ferdinand de Lesseps, who had directed construction of the Suez Canal, decided to build a canal through the Central American isthmus, to connect the Atlantic and Pacific oceans. Beginning in 1881, the French undertook a mammoth effort that met with one catastrophe after another. Finally, in 1889, the project ended in financial disaster — but it had inspired a dream in Theodore Roosevelt. During the first years of the twentieth century, the United States demanded that Colombia sign a treaty turning the isthmus over to a North American consortium. Colombia refused.

 

11. Pirates in the Canal Zone

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The next day, the Panamanian government sent a man to show me around. His name was Fidel, and I was immediately drawn to him. He was tall and slim and took an obvious pride in his country. His great-great-grandfather had fought beside Bolívar to win independence from Spain. I told him I was related to Tom Paine, and I was thrilled to learn that Fidel had read Common Sense in Spanish. He spoke English, but when he discovered I was fluent in the language of his country, he was overcome with emotion.

“Many of your people live here for years and never bother to learn it,” he said.

Fidel took me on a drive through an impressively prosperous sector of his city, which he called the New Panama. As we passed modern glass-and-steel skyscrapers, he explained that Panama had more international banks than any other country south of the Rio Grande.

“We’re often called the Switzerland of the Americas,” he said. “We ask very few questions of our clients.”

 

12. Soldiers and Prostitutes

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After a juicy steak and a cold beer, we left the restaurant and drove down a dark street. Fidel advised me never to walk in this area. “When you come here, take a cab right to the front door.” He pointed. “Just there, beyond the fence, is the Canal Zone.”

He drove on until we arrived at a vacant lot filled with cars. He found an empty spot and parked. An old man hobbled up to us. Fidel got out and patted him on the back. Then he ran his hand lovingly across the fender of his car.

“Take good care of her. She’s my lady.” He handed the man a bill.

We took a short footpath out of the parking lot and suddenly found ourselves on a street flooded with flashing neon lights. Two boys raced past. The one behind, the larger of the two, was pointing a stick at the other and making the sounds of a man shooting a gun. The smaller one slammed into Fidel’s legs, his head reaching barely as high as Fidel’s thigh. He stepped back.

“I’m sorry, sir,” he gasped in Spanish.

 

13. Conversations with the General

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The invitation was completely unexpected. One morning during that same 1972 visit, I was sitting in an office I had been given at the Instituto de Recursos Hidráulicos y de Electrificación, Panama’s government-owned electric utility company. I was poring over a sheet of statistics when a man knocked gently on the frame of my open door. I invited him in, pleased with any excuse to take my attention off the numbers. He announced himself as the general’s chauffeur and said he had come to take me to one of the general’s bungalows.

An hour later, I was sitting across the table from General Omar Torrijos. He was dressed casually, in typical Panamanian style: khaki slacks and a short-sleeved shirt buttoned down the front, light blue with a delicate green pattern. He was tall, fit, and handsome. He seemed amazingly relaxed for a man with his responsibilities. A lock of dark hair fell over his prominent forehead.

He asked about my recent travels to Indonesia, Guatemala, and Iran. The three countries fascinated him, but he seemed especially intrigued with Iran’s king, Mohammad Reza Shah Pahlavi. The shah had come to power in 1941, after the British and Soviets overthrew his father, whom they accused of collaborating with Hitler.1

 

14. Entering a New and Sinister Period in Economic History

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As chief economist, I not only was in charge of a department at MAIN and responsible for the studies we carried out around the globe, but I also was expected to be conversant with current economic trends and theories. The early 1970s were a time of major shifts in international economics.

During the 1960s, a group of countries had formed OPEC, the cartel of oil-producing nations, largely in response to the power of the big refining companies. Iran was also a major factor. Even though the shah owed his position and possibly his life to the United States’ clandestine intervention during the Mossadegh struggle — or perhaps because of that fact — the shah was acutely aware that the tables could be turned on him at any time. The heads of state of other petroleum-rich nations shared this awareness and the paranoia that accompanied it. They also knew that the major international oil companies, known as the Seven Sisters, were collaborating to hold down petroleum prices — and thus the revenues they paid to the producing countries — as a means of reaping their own windfall profits. OPEC was organized in order to strike back.

 

15 The Saudi Arabian Money-Laundering Affair

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In 1974, a diplomat from Saudi Arabia showed me photos of Riyadh, the capital of his country. Included in these photos was a herd of goats rummaging among piles of refuse outside a government building. When I asked the diplomat about them, his response shocked me. He told me that they were the city’s main garbage disposal system.

“No self-respecting Saudi would ever collect trash,” he said. “We leave it to the beasts.”

Goats! In the capital of the world’s greatest oil kingdom. It seemed unbelievable.

At the time, I was one of a group of consultants just beginning to try to piece together a solution to the oil crisis. Those goats led me to an understanding of how that solution might evolve, especially given the country’s pattern of development over the previous three centuries.

In the eighteenth century, Muhammad ibn Saud, a local warlord, joined forces with fundamentalists from the ultraconservative Wahhabi sect. It was a powerful union, and during the next two hundred years the Saud family and their Wahhabi allies conquered most of the Arabian Peninsula, including Islam’s holiest sites, Mecca and Medina.

 

16 Pimping, and Financing Osama bin Laden

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From the start, Prince W. let me know that whenever he came to visit me in Boston, he expected to be entertained by a woman of his liking, and that he expected her to perform more functions than those of a simple escort. But he most definitely did not want a professional call girl, someone he or his family members might bump into on the street or at a cocktail party. My meetings with Prince W. were held in secret, which made it easier for me to comply with his wishes.

“Sally” lived in the Boston area. I knew the prince would be attracted to her blond hair and blue eyes. Her husband, a United Airlines pilot who traveled a great deal both on and off the job, made little attempt to hide his infidelities. It seemed to me that Sally had a cavalier attitude about her husband’s activities. She appreciated his salary, the plush Boston condo, and the benefits a pilot’s spouse enjoyed in those days. She agreed to meet Prince W. on one condition: she insisted that the future of their relationship depended entirely upon his behavior and attitude toward her.

 

17 Panama Canal Negotiations and Graham Greene

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Saudi Arabia made many careers. Mine was already well on the way, but my successes in the desert kingdom certainly opened new doors for me. By 1977, I had built a small empire that included a staff of around twenty professionals headquartered in our Boston office, and a stable of consultants from MAIN’s other departments and offices scattered across the globe. I had become the youngest partner in the firm’s hundred-year history. In addition to my title of Chief Economist, I was named manager of Economics and Regional Planning. I was lecturing at Harvard and other venues, and newspapers were soliciting articles from me about current events.1 I owned a sailing yacht that was docked in Boston Harbor next to the historic battleship Constitution, “Old Ironsides,” renowned for subduing the Barbary pirates not long after the Revolutionary War. I was being paid an excellent salary, and I had equity that promised to elevate me to the rarefied heights of millionaire well before I turned forty. True, my marriage had fallen apart, but I was spending time with women on several continents.

 

18 Iran’s King of Kings

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Between 1975 and 1978, I frequently visited Iran. Sometimes I commuted between Latin America or Indonesia and Tehran. The Shah of Shahs (literally, “King of Kings,” his official title) presented a completely different situation from that in the other countries where we worked.

Iran was oil rich, and like Saudi Arabia, it did not need to incur debt in order to finance its ambitious list of projects. However, Iran differed significantly from Saudi Arabia in that its large population, though predominantly Middle Eastern and Muslim, was not Arabic. The people were also Shiite, not Sunni; most Iranian women did not wear veils — in fact, some even sported miniskirts. In addition, the country had a history of political turmoil — both internally and in its relationships with its neighbors. Therefore, we took a different approach: Washington and the business community joined forces to turn the shah into a symbol of progress.

We launched an immense effort to show the world what a strong, democratic friend of US corporate and political interests could accomplish. Never mind his obviously undemocratic title or the less obvious fact of the CIA-orchestrated coup against the democratically elected premier who preceded him; Washington and its European partners were determined to present the shah’s government as an alternative to those in Iraq, Libya, China, Korea, and other nations where a powerful undercurrent of anti-Americanism was surfacing.

 

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