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A Game As Old As Empire

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Builds on the shocking picture of worldwide economic corruption first presented in John Perkins' Confessions of an Economic Hit Man

• Features a dozen chapters detailing contemporary examples of how the economic hit man game is played around the globe

John Perkins’ controversial and bestselling exposé, Confessions of an Economic Hit Man, revealed for the first time the secret world of economic hit men (EHMs). But Perkins’ Confessions contained only a small piece of this sinister puzzle. The full story is far bigger, deeper, and darker than Perkins’ personal account revealed. Here other EHMs, journalists, and investigators join Perkins to tell their own stories, providing the first probing and expansive look into this pervasive web of systematic corruption.

With chapters spotlighting how specific countries around the globe have been subverted, A Game As Old As Empire uncovers the inner workings of the institutions behind these economic manipulations. The contributors detail concrete examples of how the “economic hit man game” is still being played: an officer of an offshore bank hiding hundreds of millions of dollars in stolen money, IMF advisers slashing Ghana’s education and health programs, a mercenary defending a European oil company in Nigeria, a consultant rewriting Iraqi oil law, and executives financing warlords to secure supplies of coltan ore in Congo. Together they show how this system of corruption and plunder operates in real life, and reveal the price that the rest of the world must pay as a result.

Most important, A Game As Old As Empire connects the dots, showing how the various pieces of this system come together to create the world’s first truly global empire.

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1 Global Empire: The Web of Control

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1 Steven Hiatt outlines the pervasive web of control—financial, political, and
military—that sustains today’s global empire.

A never-ending accumulation of property must be based on a never-ending accumulation of power. —Hannah Arendt

In June 2003, after declaring “Mission accomplished!” in the wake of Operation Iraqi Freedom, George W. Bush told cheering West Point cadets that America has “no territorial ambitions. We don’t seek an empire.” Meanwhile, neoconservative pundits like Niall Ferguson and Charles Krauthammer were encouraging him to do precisely that: to “make the transition from informal to formal empire” by acknowledging America’s actual role in the world and accepting the reality that “political globalization is a fancy word for imperialism.”1 Had the post-postwar world—the new order emerging since the Berlin Wall came down in 1989—turned full circle to a new Age of Empire?

The victory of the Allies in 1945, confirming the right of peoples to self-determination in their Atlantic Charter declaration, seemed to signal the end for the world’s colonial empires. Colonized peoples in Asia, Africa, and the Middle East had seen the armies of Britain, France, and the Netherlands defeated in 1940-41, and knew that the European imperial powers now had neither the military nor the financial resources to enforce their rule for long. Moreover, the two strongest powers, the U.S. and the Soviet Union, seemed to stand on the anti-imperialist side. The U.S. had long pursued an “open door” policy advocating formal independence for developing countries. The Soviet Union had denounced imperialism since its birth in 1917, and the communist movement it led had wide appeal in parts of the colonial world as a result.

 

2 Selling Money—and Dependency: Setting the Debt Trap

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2 An ambitious regional bank and a young banker peddle loans to developing
countries to finance dubious projects—leaving ordinary citizens to pay
the bills.

It is an odd business, selling money door to door at the edge of the civilized world. It is odder still when money comes not from out of the anonymous depths of the Eurocurrency market—some dark relay through Nassau, Hong Kong, or Zurich—but from the savings accounts of Americans living in Ohio. Those Americans, like Americans everywhere, are just beginning to realize that their money is no longer being used to build the house next door.

I used to sell their money for a living. I used to travel the world for a medium-sized Midwestern bank with $5 billion in assets. Along the way, I was engaged in some of the startling “business as usual” banking practices that have begun to plague the world financial system.

• • •

It is 1978. Thanks to the venal, repressive regime of President Ferdinand Marcos of the Philippines, I am safely and happily roosting in one of Manila’s best hotels, the Peninsula. I am about to set in motion a peculiar and idiosyncratic process that will result in a $10 million loan to a Philippine construction company, a bedfellow of the Marcos clan—a loan that will soon go sour. I am unaware that any of this is going to happen as I enter the lobby of the Peninsula on my way to dinner, still trying to digest the live octopus that a Taiwanese bank served me last night and attempting to remember exactly what it was they wanted and why they had gone to so much trouble.

 

3 Dirty Money: Inside the Secret World of Offshore Banking

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3 Offshore banking havens enable the extraction of $500 billion a year from
the Third World–a flow of dirty money that has become essential to
global elites.

Kuala Lumpur, July 1985: Maybe it was the heat, or perhaps the Guinness and Courvoisier had dulled my senses, but something about what the man next to me was saying didn’t quite add up. I was sitting with the chief finance officer of one of Malaysia’s largest investment cooperatives, the Koperatif Serbaguna Malaysia; he was a live-wire character and leading light in the Malaysian Chinese Association. I had spent the morning talking with his team and the cooperative’s board about the extraordinary growth of its deposit and investment activity. They had gone to great lengths to impress me. After our meeting we took the elevator to the sumptuous penthouse of their downtown office block, where they served me a feast of king prawns and other dishes, washed down with stout and French brandies.

But as lunch progressed and the atmosphere became increasingly relaxed, my neighbor seemed most interested in my childhood roots, thousands of miles away on the island of Jersey, one of Britain’s Channel Islands. He was especially fascinated by Jersey’s role as an offshore tax haven.

 

4 BCCI’s Double Game: Banking on America, Banking on Jihad

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4 How the U.S. used an offshore bank to run guns, finance Islamic jihadists,
and launder money. How its Saudi sheikh owners and American insiders
defrauded depositors of over $10 billion. And how they all got away with it.

CIA Director Robert Gates called it the “Bank of Crooks and Criminals International.” It was a cozy partner of arms merchants and drug traffickers. And of Third World dictators and the CIA. It was part of the entourage of the Bush family and other Washington influentials. Its biggest shareholders were Saudi and United Arab Emirates sheikhs. A grand jury would call money laundering BCCI’s “corporate strategy,” and the money it stole—somewhere between $9.5 billion and $15 billion—made its twenty-year heist the biggest bank fraud in history. Most of it was never recovered. The George H. W. Bush administration, in power when this massive fraud was discovered, went after the bank halfheartedly and only after indictments by New York District Attorney Robert Morgenthau. But its investigation never touched the offshore system that operates in some seventy financial centers around the world where the owners of bank accounts and companies are kept secret from law enforcers. And it never touched the Persian Gulf moneymen who ran the BCCI criminal enterprise. Here’s how the Bush family and its allies used and then protected the world’s most criminal bank.

 

5 The Human Cost of Cheap Cell Phones

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5 Civil war in Congo has cost 4 million lives over the past ten years—strife
fueled by Western multinationals seeking cheap supplies of coltan and
other minerals.

Goma’s hospital compound has one tent for rape victims awaiting surgery and one for victims recovering from surgery. In the pre-op area, I held a month-old girl who was entranced by the dim electric light hanging from the ridgepole. She arched her back and waved her arms, straining to encounter this exciting new world and oblivious of the atrocity that had created her life.

The mother told me her baby’s name was Esther. Clasping her breasts, she said she had no milk. She did not tell me what operation she was waiting for. Perhaps her rapist(s) had caused a fistula, penetrating the wall between her rectum and vagina with penises, guns, or machetes. Hundreds of other injuries are possible. We had seen pictures of women who had been shot in the vagina, who had had salt rubbed in their eyes until they were blind (and thus could not identify their assailants), who had been burned or had limbs amputated after being raped.

 

6 Mercenaries on the Front Lines in the New Scramble for Africa

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6 Private armies are increasingly part of corporate operations in the Third
World. How one officer found himself defending Shell’s grab for oil against
the people of the Niger Delta.

“I like Nigeria. I like the pulse of Africa. It is very stimulating. I will miss it.”1 Nigel Watson-Clark always had a flair for excitement and a challenge. For twelve years, he saw active military service as a British Royal Marine, but he also had a passion for skydiving. A British national skydiving coach, he spent six years competing in championships.

Like many ex-service personnel, after leaving the Marines he took a variety of jobs, such as running a sky-diving school in Spain and working as a close protection officer—more commonly known as a personal bodyguard—in the UK. One of his friends worked on maritime security, and so Watson-Clark ended up working with Chevron in Angola. Then, in 2002, a job in Nigeria came up.

For the next three and half years, he coordinated the security needs of Shell in a strategic offshore oil field. His official job was security liaison officer for the Echo Alpha Field. His main concern was protecting Shell’s orange-colored floating oil platform, the Sea Eagle, some seven miles offshore.2 He was stationed on a dedicated 250-foot-long security vessel called the Liberty Service that was owned by a subsidiary of the American company Tidewater. Based in Louisiana, Tidewater owns the world’s largest fleet of vessels serving the oil and gas industry.3

 

7 Hijacking Iraq’s Oil Reserves: Economic Hit Men at Work

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7 It’s all about the oil. Production sharing agreements being forced on Iraq
will cost the Iraqi people hundreds of billions of dollars. Greg Muttitt
takes a look at the men behind the hit.

A year before he became vice president, Dick Cheney, CEO of Halliburton, outlined the U.S. strategic landscape in an era of constrained oil supplies: “By 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from? … While many regions of the world offer great oil opportunities, the Middle East, with two-thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies.”1

Cheney’s problem was that the prize has been beyond the reach of Western oil majors since the 1970s, when most Middle Eastern countries nationalized their oil industries. Saudi Arabia remains out of bounds to foreign oil company investment. Iran’s constitution forbids foreign control of the country’s oil. The Kuwaiti government has been trying to bring foreign companies into its northern oil fields but has consistently been blocked by its parliament. Iraq, with 10 percent of the world’s reserves, seemed to be the easiest to turn around. And if Iraq could be reopened to multinationals, perhaps its neighbors could be pressured to follow suit.

 

8 The World Bank and the $100 Billion Question

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8 The World Bank has pushed debt-led economic development, and hundreds
of billions of dollars in Bank loans were supposed to bring progress to the
developing world. Where did the money go?

Fostering a culture of lending without regard for results, the management of the World Bank has built a wall of misinformation around its lending operations, creating the illusion that all is well in the world of development. They have created the myth that they are at the “cutting edge” of development, while they hide the appalling number of failures within the Bank’s portfolio—failures that enrich the governing elites of the Third World, while creating mountains of debt that cannot be repaid. Singing their own praises, they lead the Bank ever farther from its primary mission, ignoring their professional and fiduciary obligations as they advance their individual careers, while the people they have promised to help continue to live in poverty.

The International Bank for Reconstruction and Development (IBRD):

 

9 The Philippines, the World Bank, and the Race to the Bottom

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9 The World Bank made the Philippines a test case in its loan-based, exportled
development strategy—and the results were dictatorship, poverty, and
a crushing debt burden.

The early 1970s. The Vietnam War is in the headlines daily. Mass demonstrations are rocking the world. Policy makers think in terms of the domino effect in the bitter struggle between communism and capitalism. In the Philippines, strongman Ferdinand Marcos holds power, but there’s a growing insurgency in the countryside. In the eyes of the United States and the World Bank, Marcos is the only thing standing between one more country falling to the Reds in the Cold War. Direct aid is one way to keep him in power. The other and more potent means: World Bank loans, with their oversight and conditionalities. With an American always the president of the Bank, the United States got what it wanted—with disastrous results for the Philippines. But this time, thanks to whistle-blowers inside the World Bank, we can get an insider’s view of how the development game is played and why the results are usually far different from official rhetoric.

 

10 Exporting Destruction

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10 Export credit agencies have quietly become some of the biggest and
dirtiest players in the EHM game, financing arms sales, nuclear power
plants, and environmental disasters.

Imagine the following fantasy set in a dystopic future: The industrialized countries decide to create ruthless agencies whose only goal is national economic aggrandizement. These agencies keep most information on their activities secret—not just from the public that pays for them through taxes but often from their own national legislatures and ministries as well. Their job is to enrich their countries’ corporations by making it easier for poor countries to buy their products and services, with little regard for the environmental and social disruption such purchases may cause.

They ignore international environmental conventions, and the various UN meetings and summits on sustainable development of the past fifteen years may just as well have occurred on another planet. They support nuclear power plants, massive arms purchases, and huge white elephant schemes no private bank alone or international development agency will touch. Their financing enables the forced displacement of millions of poor people worldwide. They support half of all new greenhouse gas-emitting energy-intensive infrastructure being built in the developing world, with total disregard for the impacts on climate. And to facilitate all this, they subsidize billions of dollars of bribes annually, undermining democracy and development by corrupting governments and businesses in poor countries.

 

11 The Mirage of Debt Relief

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11 G8 debt relief programs will cut less than 1 percent of the $3.2 trillion that developing countries still owe—and their harsh terms will exact additional hardship. What’s next for the debt relief campaign?

We should have known that it was high time to study the fine print when veteran rock stars Bono and Bob Geldof, film stars Angelina Jolie and George Clooney, liberal comedian Al Franken, U.S. Treasury Secretary John Snow, World Bank President Paul Wolfowitz, and the UK’s Gordon Brown and Tony Blair all lined up on the same side of the field to cheer the G8’s July 2005 decision to provide “$40 billion of debt relief” to poor, heavily indebted developing countries.

One might have expected self-effacing politicians like Brown and Blair to hail the agreement. Indeed they did, calling it “an historic breakthrough…. The most comprehensive statement that finance ministers have ever made on issues of debt, development, health, and poverty.” But while many activists were more restrained, Sir Bob and Bono, the debt-relief campaign’s most prominent leaders, were also quick to declare victory. After months of mass mobilization by the Live 8/“End Poverty Now” campaign—including ten free concerts, 3 billion viewers, 30 million e-mails and faxes, and 250,000 marchers in Gleneagles, Scotland—they seemed unwilling to acknowledge the huge gap that remains between the G8 accord and the amount of debt relief and aid actually needed to “end poverty now.”

 

12 Global Uprising: The Web of Resistance

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12 There are alternatives—and people around the world are helping to
build them every day. Antonia Juhasz finds an agenda for hope in the
global justice movement.

Elvira, a garment worker in the Philippines, shares her dream of a better life with Ellen Augustine in chapter 9 of this book. Elvira imagines “a society where basic needs are provided, there is enough food, there is housing for everyone, all children can go to school, hospitals are for everybody, and there is a job for everyone—a job that helps people to develop their potential as human beings.”

Thus far our authors have largely focused on uncovering the many obstacles placed in front of Elvira, and all of us, in our quest for these basic necessities of life. They have also exposed the people and institutions committed to constructing and maintaining those obstacles. But knowledge truly becomes power only when you, the reader, feel inspired to take action for both Elvira and yourself. This concluding chapter is dedicated to spotlighting the many people, movements, and institutions that are not only eliminating obstacles but actually helping establish the just and equitable society of Elvira’s dream.

 

Appendix

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A Game As Old As Empire is a companion volume to John Perkins’ Confessions of an Economic Hit Man (San Francisco: Berrett-Koehler, 2004), which should be your first stop on this list if by chance you’ve picked up this book without having previously read Confessions. This section lists key resources—books, articles (many available online), Web sites, and radio shows—that you can use to find out more about the issues covered in this book and to learn about new developments. Explore areas that interest you and let these resources of hope guide you to new ones—and to taking action yourself as part of the global web of resistance.

Global Empire and the Web of Control

Ali, Tariq. The Clash of Fundamentalisms: Crusades, Jihads and Modernity. London: Verso, 2002. See his Web site, www.tariqali.org/, for more information.

Bacevich, Andrew J. American Empire: The Realities and Consequences of U.S. Diplomacy. Cambridge, Mass.: Harvard University Press, 2002.

Bello, Walden. Dilemmas of Domination: The Unmaking of the American Empire. New York: Metropolitan, 2005. A volume in Metropolitan’s valuable American Empire Project, www.americanempireproject.com/.

 

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