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Recent revelations about Mitt Romney’s highly profitable company Bain Capital help connect the dots between offshore tax shelters, shady investors; and the role that ill-gotten gains plays in today’s casino-like finance capital.
Both the Los Angeles Times and Huffington Post published investigations in the last month showing that over a third of the $37 million raised by Romney to launch Bain Capital in the mid-1980s came from rich Latin Americans, the bulk of it from Salvadoran families linked to death squads.
An off-shore tax haven in Panama provided Bain with the secrecy needed to attract the approximately $6.5 million from the Salvadoran families in what many human rights experts would call “blood money.”
While living in El Salvador in 1989, my family fell victim to rightwing terror, so I took the news like a punch in the gut. But as a professor, I know that the generation of Americans born since 1980 has little awareness of the troubled U.S. history of aiding Central American militarism. Perhaps that is why this story has not been more widely reported. Let me explain why I use such a rude term as blood money.
The revelations took me back to November 1989 when I worked as a stringer for the New York Times and other U. S. newspapers in San Salvador. It was late at night. I sat on the floor in my bedroom over a TRS-80 laptop finishing an article about recent air force raids on urban neighborhoods in the capital. Moments after sending the file the phone rang. “You have 24 hours to leave the country or you can kiss your family good-by,” said a man in accented English.
The shadowy death squads in my articles suddenly materialized into a personal menace — someone with a gun had my toddler son and I in his crosshairs. With the airport and bus companies closed due to fighting, it was impossible to leave, so we spent a nightmarish week with my son in hiding while I pulled long hours running back and forth between him and my office in the foreign press corps — constantly on adrenaline alert with an eye on my jeep’s rear view mirror.
Earlier that year we had lost my son’s aunt to the terror. Marta Lidia “Tita” Guzman, an activist with UNADES, a group that advocated for victims from the 1986 Earthquake, disappeared a few hours after the National Police raided her office in June 1989. We never found her body. Tens of thousands died in a similar manner, killed by what Political Scientist William Stanley called “a protection-racket state.”
For me, it is grotesque to imagine that families deeply enmeshed in the operations of the “protection racket” behind Tita’s murder helped finance the rise to power of a candidate for the U.S. presidency. Far from denying the claims, Romney named and publicly thanked several Salvadoran investors for their help in a 2007 speech in Miami. U.S. officials and human rights inquiries had linked close relatives of the investors, belonging to the Poma, Duenas, de Sola and Salaverria families, to paramilitary violence by 1984 when they met with Romney. Some of their relatives were charged with directing violence personally, others with supporting it behind the scenes under cover of the extreme right wing ARENA party which orchestrated the death squads in those years.
The Times’ July 19 article cited Bain’s corporate filings in Massachusetts, as well as a 1994 expose by the Boston Globe, which calculated the Salvadorans’ investment in Bain at $6.5 million, based on writings by former Bain executive Harry Strachan who introduced Romney to the investors. The Globe quoted Romney saying Bain had checked backgrounds of individual investors (none of whom are accused of human rights crimes) but had not investigated their families. The Salon blog also reported on Romney’s recruitment of the Salvadoran investors in January.
Approximately 35,000 Salvadorans were killed, most in political murders from 1979-1984 when the violence reached genocidal levels, with dead and mutilated bodies routinely found in landfills or dumped by roadsides. In his 1992 book How Holocausts Happen Sociologist Douglas Porpora argued that, given the proportion of Salvadorans affected and the systematic nature of the violence in the early 1980s, it was justified to consider this period a Holocaust-like event.
The Reagan administration’s generous foreign aid to the military regime protected a small oligarchy of families whose wealth came from plantations dependent on cheap labor from a peasantry forcibly dispossessed of land. After the 1992 ceasefire a United Nations study blamed 85% of the civilian killings on government military and allied death squads. I documented the human toll from the Salvadoran land grabs and militarism in my 2010 book Healing the Body Politic (Rutgers University Press), which traced 25 years of resistance to the regime by rural community health organizers during and after the 12-year war.
The ARENA party later morphed from a façade for death squads into the party of big business by 1989 when it gained the presidency, ruling the country and enjoying a close alliance with U.S. administrations, until its electoral defeat in 2009. Reagan-era backing for the Salvadoran military is now seen by historians as having hurt U.S. international credibility on human rights. It is a sign of change that on President Obama’s 2011 visit to the country he honored the grave of Archbishop Oscar Romero, a beloved priest who spoke out against the murders and was assassinated by a death squad. What a throwback if a Romney victory in November were to put the United States once again at service to current and former Latin American oligarchs with bloody hands.
Although investment banking paper trails are difficult to unearth, increasingly scholars understand that genocidal regimes depend not only on military support, but also on unscrupulous financiers. In the late 1990s the public was stunned to confront evidence that German Nazis also depended upon financiers in business suits. U.S. Senate Banking Committee hearings held during the Clinton Administration produced evidence that Swiss banks had laundered Nazi gold stolen from Holocaust victims. The findings helped lead to a $1.25 billion settlement of a lawsuit by the World Jewish Congress in 2000 benefitting survivors who had long sought access to family holdings in the banks.
In 2002 Salvadoran-born torture victims successfully sued two retired Salvadoran military generals (now residents of Florida) in a U.S. federal courtroom. What a turn-around it would be if families of other Salvadorans killed by death squads used these precedents to go after the holdings of the former oligarchy invested in accounts like those of Bain Capital. But it is not only Salvadorans who should be concerned about Bain Capital-style casino finance.
How ironic that as the U.S. middle class lost ground on wages and job security in recent years, the vulture capitalism of Bain Capital, which dismantled companies and offshored U.S. jobs, thrived, generating returns of over 50% annually by the early 1990s for Romney and his Salvadoran partners.
Casino finance has long enjoyed Republican protectionism. But when the party’s candidate for president earns his wealth partnering with oligarchic families that steal from poor peasants and finance political killings, GOP claims of fiscal responsibility and family values begin to look hollow indeed.
Martyrs like Tita, Archbishop Romero, and thousands of others killed, deserve better, and so do American voters.
Sandy Smith-Nonini, PhD, is an adjunct assistant professor in the Departments of Anthropology and the Curriculum in Global Studies at the University of North Carolina, Chapel Hill.
COMING IN SEPTEMBER
A Special Memorial Issue of CounterPunch
Featuring recollections of Alexander Cockburn from Jeffrey St. Clair, Peter Linebaugh, Paul Craig Roberts, Noam Chomsky, Mike Whitney, Doug Peacock, Perry Anderson, Becky Grant, Dennis Kucinich, Michael Neumann, Susannah Hecht, P. Sainath, Ben Tripp, Alison Weir, James Ridgeway, JoAnn Wypijewski, John Strausbaugh, Pierre Sprey, Carolyn Cooke, Conn Hallinan, James Wolcott, Laura Flanders, Ken Silverstein, Tariq Ali and many others …