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Corporate Investment and Government Double-Dealing

by TONI SOLO

The United States and Britain make suitable partners. Abuse and torture at the Hola camp in Kenya in the 1950s, Fort Morbut in Aden in the 1960s and the Castlereagh interrogation centre for twenty years in Ireland remain potent symbols of British war crimes. Colonialism and torture are inseparable. In Iraq, US and British military are doing yet again what they have habitually done in the past–the colonial dirty work of governments determined to protect private business interests above all else.

Plenty has also come to light demonstrating the Bush regime’s corporate welfare for businesses like Bechtel, Halliburton and Carlyle in Iraq. The wholesale murder of civilians and widespread torture of detainees there result directly from efforts to quell resistance to control by foreign corporations of the country’s resources. It goes without saying these companies are determined to outsource onto domestic taxpayers in the US and the UK the cost of the military muscle necessary to achieve that control.

The same is true in the developing war in the Andes where the war in Colombia seems to be spreading inexorably into Ecuador and Venezuela. There, as in Iraq, Britain and Spain have faithfully supported the US. But while in Iraq the war was originally justified as part of the “war on terrorism”, the Andean war is also dressed up as part of the “war on drugs”. It is worth noting the Andean war’s relationship with big business and dubious international finance.

Tiny Anguilla–Colombia’s biggest foreign investor?1

Anguilla is a small island in the West Indies which briefly hit the news in 1969 when it tried to secede from the neighbouring British colony Nevis-St. Kitts. As with the Cayman Islands, Bermuda, the British Virgin Islands, the Bahamas, Nevis and other Caribbean islands, Anguilla provides handy offshore banking and financial services for tax-shy plutocrats, multinational corporations, Wall Street and City of London financial houses and assorted arms and drugs dealers – and very likely terrorists as well. In the first quarter of 2003 Anguilla was the largest foreign investor in Colombia at US$130m, followed by the British Virgin Islands at US$82m. Pan that out over a year and it amounts to over US$800m.

Tiny Anguilla (population 12,738 in 2003) sees little return on the investment, The main beneficiaries of capital outflows from Colombia in the same period were the United States (US$123m), Britain (US$74m), France (US$47m) and Holland (US$34m). Run that out over the year and the US and its European co-investors are extracting over US$1bn annually.

Here we are in the fiscal twilight zone of offshore banking and financial services where the transactions of corporate household names share computer printouts with the deals of murderous drugs traffickers supposedly “wanted” by the US government, like Colombian death squad leader Salvatore Mancuso. It is difficult to understand what Anguilla’s and the Birtish Virgin Islands’ involvement in Colombia means. The banking secrecy laws of these offshore centers make it impossible to discover who they are fronting for or what larger financial processes are made to work by the cash flows geared through them.

The invisible hand and the regulator’s blind eye

As economist Michael Hudson has said2 “Prestigious accounting firms and law partnerships busy themselves devising tax-avoidance ploys and creating a “veil of tiers” to provide a cloak of invisibility for the wealth built up by embezzlers, tax evaders, a few drug dealers, arms dealers and government intelligence agencies to use for their covert operations.” When the New York Attorney General Eliot Spitzer pinned convictions for dodgy offshore practices on various prestigious Wall Street financial houses with fines of a measly US$1.5bn (greater than the total annual budget of countries like Honduras or Nicaragua), it was the merest blip compared to the amount of cash handled by offshore financial centers.

Hudson argues cogently that these offshore centers are an important source of funds to finance US government debt. He dates this from the start of the Eurodollar markets by the Bank of England and British finance houses at a time when the British were looking for ways to support sterling in the 1960s and 1970s. He points to the paradox that the US and British governments who have done most to promote these offshore scams now suffer most from one of the contradictions they engender. Companies use offshore vehicles to inflate profit statements to shareholders and understate tax returns to government.

This Faustian dependence on dubious offshore hot money may or may not be a factor in British Chancellor Gordon Brown’s resistance to joining the euro. But it seems clear that Federal Reserve chairman Alan Greenspan cherishes these offshore sources of foreign exchange. They help him prop up the dollar so as to make feasible the tax-cutting scams of Republican soul-mates like Grover Norquist and arguments for unregulated “free trade”. Forget the high minded neo-liberal clap-trap about freedom. Corporations want deregulation throughout the Americas as part of US Trade Representative Robert Zoellick’s “free trade” snake-oil program so they can shift money around to beat tax regimes even faster than they do already.

More death squad for your dollar

The natural extension of this dodgy regulation-phobia has been to contract out military operations to private mercenary businesses. The effects are evident in Iraq. In Colombia, US based Dyncorp and the British based Defence Systems (a subsidiary of the US company Armorguard) have been the most notorious of these mercenary contractors. Subcontracting some military roles, mainly training, to such companies affords governments deniability in the case of abuses by allowing the mercenaries to range free from normal statutory controls that would apply to government armed forces.

These companies have been implicated in providing training to the paramilitary death-squads that repress legitimate civil dissent in Colombia under the pretext of “fighting terrorism”. The US Occidental Petroleum and Spain’s Repsol have been urged by Amnesty International to improve controls on their security arrangements in Colombia’s Arauca department. British controlled BP-Amoco’s use of contractors implicated in training local paramilitaries confirms that all these companies operate policies that tend to regard paramilitary crimes against the local population as part of the price of doing business in Colombia.3

Britain is reported to be the second largest supplier of military aid to Colombia after the US, although its convoluted arms export licensing system allows the UK government to minimize its own direct role in the arms trade. Spain recently sold Colombia over 30 heavy battle tanks. Renowned for their ability in the “war on drugs” to intercept high speed coastal launches and low flying light aircraft? Or for their astonishing capability in the “war on terrorism” to trek on foot through mountains and forests hunting guerrillas? No.

Most likely, they are for use against Venezuela. That’s if Colin Powell and the Pentagon can stop fighting long enough to remember their main job–providing imperial muscle for giant multinational corporations. As September 11th 2001 showed conclusively, defending the people of the United States is not a priority for either the Pentagon or the State Department.

Drugs and terror–through the looking glass (yawn…) one more time

The public relations nature of the “war on drugs” is readily seen from the double standards applied that are so familiar from the fictional “war on terror”. Just as Miami Cuban assassins like Orlando Bosch or Haitian mass murderers Jean Tatun and Guy Philippe are protected by the US as being OK “our” terrorists, so drugs kingpins like Salvatore Mancuso are protected as being OK “our” drugs traffickers. A brief look at the treatment meted out to other drugs traffickers confirms this.4

In April 1988, the United States Drug Enforcement Agency (DEA) and the Honduran security services illegally snatched Honduran narcotics dealer Ramon Matta Ballesteros from the Honduran capital Tegucigalpa. They abducted him to the United States where he was interrogated under torture (they burned him repeatedly with a high voltage stun gun) before being tried and convicted. He remains in prison. His abduction followed that of Mexican Humberto Alvarez Machain accused of complicity, like Matta Ballesteros in the 1985 murder of a DEA agent.

Alvarez Machain fought his case on the illegality of the abduction. He won. Ballesteros did not. Among many similar cases involving the DEA, that of Uruguayan Francisco Toscanino stands out for the horrific torture applied under DEA supervision in Brazil. While the courts condemned the use of torture in the Toscanino case, DEA torture of Matta Ballesteros was passed over. This kind of routine torture is another link with the bogus “war on terrorism”.

The anti-drugs and anti-terrorist actvities of the United States and its allies exist in symbiosis. Both are failing because both are fake. If the US is prepared to abduct individuals like Matta Ballesteros, Alvarez Machain and Francisco Toscanoni, they could just as easily snatch the drugs cartel leaders who control the Colombian paramilitaries. They do not because those individuals are key allies who deploy cut-price, twice-removed terror against armed opposition to the United States main ally in the Andes, the Colombian government.

As a group the Colombian drugs cartels and their paramilitary cohorts channel much-prized foreign exchange through offshore banking centers into US and European capital markets. That is one reason why President Uribe, with US backing, is currently trying to push through legislation to legalize the paramilitaries. Another reason is that legalizing the paramilitaries will make it easier for the US and the corrupt Venezuelan opposition to mobilise them against democratically elected President Hugo Chavez.

Wrapping up blood and guts on the way to Caracas

Trying to gather up into a manageable skein all the threads of deceit from the record of the crooked Bush regime and Tony Blair’s cabinet-full of war criminals is a bit like gathering up the viscera of a gutted, badly slaughtered animal. Blood and shit are everywhere. The dirt and slime stick.

Among the sickly, glistening reality, the fawning pooches in Downing Street try to disown the mass murder and systematic torture in Iraq along with their plutocrat butcher-handlers in the White House. These governments are never going to regulate the offshore financial centers that channel money from arms and drugs and illicit tax-evasion scams into US and British capital markets. And they’ll support drugs dealing paramilitaries along with corporate mercenary contractors as long as they need to until they can mobilise some more final solution to their energy needs.

The pending corporate-friendly “free trade” agreements with the Andean coutnries are a necessary part of that solution. But it will take a US provoked war in Venezuela to make it really final. The same perverted logic that led to the catastrophe in Iraq is at work in the Andes.

1 Colombia. Foreign Investment Report First Quarter 2003. COINVERTIR.

2 “An Insider Spills the Beans on Offshore Banking Centers”An Interview with Michael Hudson By STANDARD SCHAEFER March 25, 2004 COUNTERPUNCH,

3 -“Colombia, A Laboratory of War: Repression and Violence in Arauca” Amnesty Internatioal. 20 April 2004, – World in Action television program June 30th 1997 “BP’s Secret Soldiers”

4 NEW ENGLAND INTERNATIONAL AND COMPARATIVE LAW ANNUAL “THE UNITED STATES’ EXTRATERRITORIAL ABDUCTION OF ALIEN FUGITIVES: A DUE PROCESS STANDARD” by Anthony J. Donegan.

TONI SOLO is an activist based in Central America. Contact: tonisolo01@yahoo.com.

 

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