Citizen Staff Writer
By C.T. REVERE
ctrevere@tucsoncitizen.com
As U.S. Rep. Jim Kolbe, R-Ariz., wraps up a three-day visit to tsunami-ravaged areas of south Asia, the author of a best-selling exposé on America’s foreign aid – and the former Tucsonan who hired him as an “economic hit man” – caution that the humanitarian effort there could become an exercise in corporate and political greed.
John Perkins, whose tell-all book “Confessions of an Economic Hit Man” is a controversial New York Times best seller, and former Tucson Electric Power Co. president Einar Greve say their past careers in foreign aid operations warn of the possibility that American loans to rebuild the devastated south Asia nations will bankrupt the countries while making U.S. corporations richer.
“We’re going to end up giving a lot of money, and my concern is that the money will go toward things that will make American construction companies very rich and will not help the people who are most in need,” said Perkins. “We’ve got to make sure we don’t use this terrible tragedy as a way to line our own pockets. Foreign aid is very badly needed right now, but what will we do later on? A lot of schools and hospitals will no doubt be rebuilt, but it’s no good unless there are teachers and health workers to work in them.”
Perkins’ book recounts his career as a government-recruited private economic consultant who helped the United States cripple the economies of Third World nations in the guise of foreign aid, making them beholden to a government he says uses foreign assistance for “empire-building.”
Kolbe, who chairs the powerful House Appropriations subcommittee responsible for allocating foreign aid dollars through the U.S. Agency for International Development, refused to discuss the accusations Perkins makes in his book, which is No. 5 on the Times’ best-seller list for business books. Several requests for comment from USAID also were unanswered.
Tucsonan Jack Binns, a former ambassador to Honduras, said Perkins’ story doesn’t mirror his experience as a career State Department administrator who worked extensively with USAID throughout Latin America and Europe.
But Binns and Greve both agree with Perkins that foreign aid efforts should be scrutinized for potential abuses.
USAID has so far pledged $350 million to provide relief to the survivors of the Dec. 26 tsunamis that swept the coasts of 11 nations on the Indian Ocean, killing more than 157,000 people to date.
Kolbe, a Tucson Republican, arrived in south Asia on Saturday and planned to spend three days monitoring the work being done with American dollars.
The first phase of relief is under way, with USAID, the military and the American people providing assistance for shelter, food, water and medicine, Kolbe said.
The more costly phase will be to rebuild damaged infrastructure, which Kolbe plans to assess.
“That takes some time to assess the amount of the damage that’s done, what it’s going to cost to repair bridges and roads and water systems and wastewater treatment systems and everything else that’s been damaged,” Kolbe told reporters last week.
According to Perkins, that’s how the United States has traditionally put developing nations over a barrel and made them beholden to U.S. interests.
From 1971 until 1981, Perkins worked for the international consulting firm Charles T. Main, where he said his job was to make grossly inflated forecasts for how U.S.-funded engineering and construction projects would boost the economies of underdeveloped nations.
Working with greedy and often despotic leaders, Perkins would persuade nations to accept enormous loans from U.S. banks, including the World Bank and the International Monetary Fund, knowing the debt would cripple their economies, he said.
American contractors, including Halliburton and Bechtel, both involved in the reconstruction of Iraq, would receive the contracts, keeping most of the money in the United States, he said.
When recipients couldn’t repay the loans, they would surrender such assets as oil and mineral rights, and the United States would take control of their economies, said Perkins, who worked in Ecuador, Panama, Iran and other places.
“I think this empire we’ve created is every bit the equivalent of the British Empire we fought more than 200 years ago if you are living in Ecuador or places like that,” said Perkins, who lives in Florida and now runs a nonprofit company that he said works to protect nations he once exploited.
The man who hired Perkins at Charles T. Main – former TEP executive Greve – said his story is accurate.
“I would say that, allowing for some author discretion, basically his story is true,” Greve said during a phone interview from his Santa Barbara, Calif., home. “What John’s book says is, there was a conspiracy to put all these countries on the hook, and that happened. Whether or not it was some sinister plot or not is up to interpretation, but many of these countries are still over the barrel and have never been able to repay the loans.”
Greve, who resigned as president of TEP in 1989 amid an insider stock-trading scandal, said he knew of many projects foisted upon developing nations in the name of foreign aid that were pure “boondoggles.”
“I knew of projects that were financed by USAID and World Bank that should never have been built,” he said. “There was nobody who believed some of these projects would help their economies, but the receiving countries just wanted money to build something. If it turned out to be a lemon, it really didn’t deter them.”
Binns, who was appointed as ambassador to Honduras by President Carter before Ronald Reagan replaced him with John Negroponte in 1981, disputed the allegations that foreign aid is routinely used to bankrupt struggling nations.
“I can say that his depiction of things is wildly exaggerated, at least in my experience,” Binns said. “Some infrastructure projects in some countries have not produced the desired benefit, and I think the American taxpayers ought to look at all U.S. programs with skepticism and scrutiny, but I think he’s all wet.”
Perkins said he began working on his book two decades ago but succumbed to bribes and coercion to not reveal what he’d done for a living.
After the 9/11 attacks on America and the war in Iraq, he finished the project as a way to explain why both happened.
The attacks, he said, were the result of hatred the United States has fostered with its foreign policy. Iraq was invaded, and Saddam Hussein ousted because he refused to comply with U.S. wishes, as the Saudi Arabian royal family had three decades ago.
“The problem is that most people don’t know what’s going on. They think foreign aid is always altruistic,” he said. “When Americans really understand what’s going on in the world and what our tax dollars are for, they’ll demand change, and they’ll get change.”