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Newsweek
recently ran an article on money laundering in Latin
America. It identified Nicaragua's ex-President Arnoldo
Aleman as one of a super-corrupt elite along with
Mexico's Carlos Salinas and Guatemala's Alfonso Portillo.
Portillo recently high-tailed it to Mexico. Aleman
is in gaol. But, these individuals barely reach the
ankles of their United States and European counterparts.
Corruption has a history, context and consequences
the self-censoring corporate media seldom connect.
Some
context - 1
To
put Portillo's and Aleman's fraud in context one just
has to recall the puny US$1.5 billion fines imposed
on Citigroup's Salomon Smith Barney, Credit Suisse
First Boston, Merrill Lynch, Morgan Stanley, UBS Warburg,
and Goldman Sachs, after an investigation into foreign
exchange fraud by the Attorney General of New York.
Or the multi-billion dollar tax fraud organized by
major US banks to shelter income for their super rich
clients.
More
recently in one of the United States' favorite satrapies,
the Dominican Republic,when Banco Intercontinental
? the country's second largest private bank - went
bust, the government bailed out wealthy shareholders
to the tune of US$2.2 billion, equivalent to over
60% of the country's annual budget. The New York Times
had the nerve to accuse the Dominican Republic of
being incapable of making necessary structural reforms
to the country's economy. Meanwhile under the de-regulator's
favorite regulator, Alan Greenspan, the US is currently
relieving its international creditors of tens of billions
having let the dollar fall in value by 20% over the
last year.
The
Nicaraguan variety - small cerveza in the isthmus
In
December 2003, Arnoldo Aleman, former Nicaraguan President
and strong man of the country's right wing Liberal
Alliance, was sentenced to 20 years imprisonment for
fraud. He had leeched the public finances of tens
of millions dollars during his six year presidency.
Even without his stupendous larceny, Nicaragua, unable
to sustain basic services, faced intractable socio-economic
problems.
Begun
in the war years of the 1980s, social and economic
failure deepened through misconceived neo-liberal
policies in the 1990s. That failure continues to this
day, accompanied by a profound moral failure manifest
in the endemic corruption that bedevils Nicaragua
and its Central American neighbours. The very institutions
that decry corruption are the ones that engendered
it in the first place - the IMF, the World Bank, USAID.
Corruption has become an easy excuse for these institutions
to explain away their depressing track record of failure.
Education
- now you see it, now you don't - 2
Education
is emblematic of Nicaragua's difficulties. Neo-liberal
policies have destroyed Nicaragua's education system
since the late 1980s. With the national education
system in crisis, the government has bowed to yet
more stringent "free market" medicine from
the International Monetary Fund and the World Bank.
For 2004 it is cutting back the already inadequate
education budget by over 10%.
Last
September in the northern Nicaraguan city of Esteli,
hundreds of local students protested about increased
charges imposed by the prestigious local agricultural
college (run by the local Catholic diocese). They
occupied the city's cathedral for over a week and
strung a huge banner between the twin cupolas. It
read "Un pobre no puede ser ingeniero" (a
poor person can't be an engineer). It was what the
rector of the college had told them when they protested
against the increased charges.
At
the end of 2003, only 6000 students were able to pass
the main national university admissions exams for
a total of 22,000 available places. 90% of students
failed their exams. Amid much public soul searching
in Nicaragua, the main culprits for this colossal
policy failure have escaped attention. For over a
decade, neo-liberal ideologues have ground down health,
education and social spending to levels far below
the level capable of sustaining adequate services.
Miscreants like Aleman are convenient scapegoats for
the neo-liberal failure to deliver social justice
for the 70% of Nicaraguans living in poverty
"He
may be a son of a bitch - but he's our son of a bitch"
Whether
or not he serves his sentence, as seems increasingly
unlikely, the main reason Aleman is currently behind
bars may have little to do with stealing millions
of dollars of public money. Roosevelt's reported quote
about Nicaragua's corrupt dictator Anastasio Somoza
has applied to many US clients over the years and
still applies today. The parade of corrupt US clients
is familiar by now. The US supported the Shah of Iran,
General Noriega in Panama, Saddam Hussein in Iraq,
Ceausescu in Rumania, the Duvaliers in Haiti, Ferdinand
Marcos in the Philippines, President Suharto of Indonesia,
Sese Mobutu in the Congo, Anastasio Somoza in Nicaragua,
the list is long and tedious.
US
and European government support for corruption has
a long, dishonourable historyand Aleman's debacle
is merely one of the latest chapters. Like Manuel
Noriega and Saddam Hussein, Aleman is a creature of
the United States who got too smart for his own good
and went out of control. His main crime was probably
to displease the United States government by negotiating
quotas of power with Daniel Ortega and the Sandinista
opposition party.
How
these things are done in Old Europe - 3
Aleman
may well have modelled his deeds on big names in European
politics. In Germany, Helmut Kohl and his right-wing
Christian Democratic subordinates illegally accepted
millions of dollars for political campaigning from
wealthy individuals and businesses. Much of that money
was lodged in personal accounts in Switzerland and
may have been used in private business deals. In France,
the recent conviction of Alain Juppe does little to
enhance the image of his political patron Jacques
Chirac, himself implicated in more than one corruption
case.
Chirac
enjoys immunity from prosecution as a result of a
decision in December 2000 to grant him that perk by
a commission he himself appointed. Before Chirac,
socialist President Francois Mitterand helped assure
the re-election of Germany's right wing Christian
Democrat leader - yes, that Helmut Kohl again - with
tens of millions of francs. Mitterand's fellow socialist
Edith Cresson's nepotistic ways led to the mass resignation
of the European Commission in 1999. Cresson was also
caught up in the Elf scandal in the early 1990s, being
paid over three million francs by Elf - the French
oil multinational.
A
spin off from Mitterand's help for Kohl's re-election
campaign was a favourable deal for Elf to buy the
Leuna oil refinery in the former east Germany. During
the second period of Mitterand's presidency (1988-1995),
Elf's senior managers stripped out over 305 million
euro. The company was rotten right through. Of 37
officials accused 30 were convicted.
Elf
was created by De Gaulle in 1963. Intimately linked
to structures of government in France and its former
colonies, it played a king-making role in Africa from
the start. It has been described as "a parallel
Oil Ministry". Elf was also involved in the sale
of six frigates to Taiwan under the second Mitterand
presidency involving the payment of 780 million euros
in illicit commissions - bribes. Foreign Minister
Roland Dumas was convicted in that particular scam
in 2001.
Elf
offered Europe-wide welfare for top politicians. Not
only did the company help finance Kohl's election
campaigning but also that of Felipe Gonzalez, former
Spanish Prime Minister. Inside France itself, it emerged
during legal proceedings against Elf that Mitterand
struck a deal with Elf's chief so as to spread its
political funds more equally among the rival political
parties. Before, Elf had favoured only the Gaullists.
Judicial examination of the Leuna refinery deal elicited
this memorable saying from one of the accused, Alfred
Sirven "Lobbying without cash - that doesn't
exist."
Mitterand's
successor Jacques Chirac has his own history of dodgy
transactions to explain. Despite the conviction of
his ally Alain Juppe, Chirac himself remains untouched.
To borrow Gaullist writer Andre Maurois' quote from
Montesquieu "The law is like a web, big insects
fly right through it, only the little ones get caught?"
The
Italian Job - all too human comedy - 4
When
Bettino Craxi died in Tunisia in January 2000, he
was on the run from Italian justice. Craxi had led
the centre-left coalition that ruled Italy during
the 1980s. His government was a political mafia that
was exposed after the arrest of a leading socialist
politician in Milan on corruption charges.
Craxi
had been sentenced to 27 years when he fled the country.
Silvio Berlusconi along with many other leaders of
the Italian business and political Right attended
the funeral. Now Berlusconi, worth around 10 billion
euro, has his own problems, accused of tax fraud,
bribing judges and false accounting. Last year his
parliamentary majority enabled him to pass a bill
granting him immunity so long as he remained Prime
Minister.
In
January this year that bill was ruled unconstitutional.
Berlusconi has wriggled out of numerous minor investigations
since his election in May 2001. The upcoming trial
will be an incomparably more severe and high profile
test for Italian justice. It comes when the multi-billion
dollar Parmalat scandal has shown up Europe's business
and financial culture just as Enron did for the United
States.
BCCI
- making Enron look small - 5
The
BCCI fraud that came to public light in 1991 outdoes
Enron or Parmalat several times over both in terms
of money and political reach. The CIA knew as early
as 1985 that BCCI was operating dishonestly. But it
wasn't until six years later in 1991 that the billion
dollar fraud finally washed up. The John Kerry-Hank
Brown Senate investigation into the BCCI fiasco found
that: "The professed lack of knowledge by the
CIA about the activities of its foreign intelligence
liaisons and operatives who were BCCI's major shareholders
and customers is perplexing and disturbing".
Only if you want to pretend the Reagan White House
was not deliberately using BCCI for illegal covert
deals like those in the Iran-Contra scam and funding
for Afghan mujahhedin - both involving the laundering
of huge quantities of drug money.
While
former CIA chief Bush the Elder was deeply involved
in covering for the Iran Contra gang, securing pardons
for them, Bush the Younger has benefited from the
culture of secrecy and obfuscation so effectively
created by his father's colleagues and political friends.
When George W.'s Arbusto Energy company was struggling
in the mid 1980s, he was helped by James Bath, someone
with many links to important figures in the BCCI debacle.
Then after Arbusto was taken over as Spectrum 7 by
Harken Energy in 1986, the company received more help
from Abdullah Baksh whose banker in Saudi Arabia was
a principal in BCCI, Khalid bin Mahfouz.
The
massive amount of material on the BCCI fraud is daunting.
Through it passes a phantasmagoric cast of individuals
working chicanery from Pakistan to Georgia, the Persian
Gulf to Geneva , from Little Rock to Luxembourg, London
and Washington. This may be nothing more than the
perennial double-dealing and purposeful confusion
characteristic of the capitalist financial system,
especially at its imperial edges.
But
a fundamental question comes up about George W. Bush.
According to his 1997 personal income returns he earned
271,920 dollars. In 1998 that figure swelled to 18.4
million dollars. How does a mediocre oilman build
up that kind of money in a year? Mainstream media
like Newsweek, tend not to ask that question. It's
easier to run easy copy spreading racist stereotypes
of corrupt Latin American strongmen.
Most
of the difference came from the sale of Bush's stake
in the Texas Rangers baseball team. Bush was able
to build up that stake as a result of the suspicious
sale of 212,140 shares in Harken worth around US$850,000
immediately prior to the 1991 Gulf War. Subsequently,
the Harken share price plunged to less than a quarter
of its value at the time when Bush sold.
When
Bush did sell, a typical daily trade in Harken stock
was around 1000 shares. Only months earlier, tiny
Harken's stock had soared on the basis of a quasi-miraculous
deal awarding Harken drilling rights in the state
of Bahrain while oil industry giants like Amoco were
cut dead. As the Wall Street Journal recorded, "?Harken
officials, while denying that the Bush name played
any specific role, acknowledge that having him on
their board is an asset."
Bush
only informed the Securities and Exchange Commission
8 months after the normal deadline for filing details
of the transaction - when Desert Storm, the first
Gulf War, had been and gone. Who bought Bush's stake?
Only the parties concerned know. Some speculate it
was in fact the Harvard University investment fund.
But given the secrecy involved, one's entitled to
ask whether the buyer might not have been some BCCI
player in one of the typically convoluted deals that
were BCCI's speciality. Why all the secrecy?
Corruption
works for the super rich
Elf,
BCCI, Enron - all this typical multinational double-dealing
underwrttien by major banks and investment houses,
undercuts the chances of a decent life for the great
majority but makes fortunes for a tiny corrupt elite
who hold themselves above the law. They shadow the
absurd, smug interventionists at the IMF and the World
Bank and all the other self-serving ideologues of
"free trade". For themselves they contrive
luxury, power and immunity, deliberately engineering
international economic arrangements to leave the poor
majority facing starvation, ignorance and disease
- never mind what their bogus mission statements may
say. In Europe, it's possible Chirac and Berlusconi
may have their day in court. But in the USA, it seems
Montesquieu was right.
Toni
Solo is an activist based in Central America. He can
be reached at: tonisolo52@yahoo.com
Notes
1.- "La economía de la República
Dominicana está en quiebra", La Estrella
Digital/Rebelión www,rebelion.org 29 de enero
del 2004
- "Banks Moved Billions to Shelter Income From
Taxes", Glenn R. Simpson, Wall Street Journal,
August 7th 2003
- "Reforming corrupt practices on Wall Street",
C. Gopinath, Financial Daily, Hindu Group, 30-12-2002
- "Wall Street blow as FBI arrests 47 currency
traders", James Dow, Scotsman, 20 Nov 2003
2."Dos visiones sobre el fracaso de bachilleres",
Lucia Nava, El Nuevo Diario 22nd January 2004
3. - "France: Affaire Elf, les condamnations
révèlent la corruption aux plus hauts
niveaux de l'Etat." Antoine Lerougetel, 25
Novembre 2003
- "Kohl, Craxi, Mitterrand: la corruption tranquille",
Gerard de LaLoye, GLOCAL, January 25th 2000
- "Chirac feels the heat as ally faces corruption
trial", Henry Samuel in Paris, Daily Telegraph,
September 30th 2003
- "Chirac granted immunity in corruption cases",
The Independent, 13 Dec 2002
4.- "Berlusconi to face bribery charges as
court withdraws his immunity", Peter Popham,
Independent, January 14th 2004
- "Berlusconi faces tax fraud inquiry",
Dominic Timms, June 13, 2003
- Report on Berlusconi by Sophie Arie, The Guardian,
May 6, 2003
5. - "A Report to the Committee on Foreign
Relations of the United States Senate", Senator
John Kerry and Senator Hank Brown, December 1992,
102d Congress 2d Session Senate Print 102-140
- "Tracking bin Laden's money flow leads back
to Midland, Texas", by Wayne Madsen. Original
Link: http://www.inthesetimes.com/issue/25/25/feature3.shtml
- Report in The Wall Street Journal by Thomas Petzinger
Jr., Peter Truell and Jill Abramson December 6,
1991
- Charles Lewis of the Center for Public Integrity
suggested in his book, "The Buying of the President"
2000, "The available evidence suggests that
the investor was Harvard. The university increased
its holdings in Harken around the time. No new institutional
investors appeared on the scene."
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