Confessions of an Economic Hit Man

I had researched Guatemala, and I understood Torrijos’s meaning. United Fruit Company had been that country’s political equivalent of Panama’s canal. Founded in the late 1800s, United Fruit soon grew into one of the most powerful forces in Central America. During the early 1950s, reform candidate Jacobo Arbenz was elected president of Guatemala in an election hailed all over the hemisphere as a model of the democratic process. At the time, less than 3 percent of Guatemalans owned 70 percent of the land. Arbenz promised to help the poor dig their way out of starvation, and after his election he implemented a comprehensive land reform program.

“The poor and middle classes throughout Latin America applauded Arbenz,” Torrijos said. “Personally, he was one of my heroes. But we also held our breath. We knew that United Fruit opposed these measures, since they were one of the largest and most oppressive landholders in Guatemala. They also owned big plantations in Colombia, Costa Rica, Cuba, Jamaica, Nicaragua, Santo Domingo, and here in Panama. They couldn’t afford to let Arbenz give the rest of us ideas.”

I knew the rest: United Fruit had launched a major public relations campaign in the United States, aimed at convincing the American public and congress that Arbenz was part of a Russian plot and that Guatemala was a Soviet satellite. In 1954, the CIA orchestrated a coup. American pilots bombed Guatemala City and the democratically elected Arbenz was overthrown, replaced by Colonel Carlos Castillo Armas, a ruthless right-wing dictator.

The new government owed everything to United Fruit. By way of thanks, the government reversed the land reform process, abolished taxes on the interest and dividends paid to foreign investors, eliminated the secret ballot, and jailed thousands of its critics. Anyone who dared to speak out against Castillo was persecuted. Historians trace the violence and terrorism that plagued Guatemala for most of the rest of the century to the not-so-secret alliance between United Fruit, the CIA, and the Guatemalan army under its colonel dictator.²

“Arbenz was assassinated,” Torrijos continued. “Political and character assassination.” He paused and frowned. “How could your people swallow that CIA rubbish? I won’t go so easily. The military here are my people. Political assassination won’t do.” He smiled.

“The CIA itself will have to kill me!”

We sat in silence for a few moments, each lost in his own thoughts. Torrijos was the first to speak.

“Do you know who owns United Fruit?” he asked.

“Zapata Oil, George Bush’s company—our UN ambassador.” I said.

“A man with ambitions.” He leaned forward and lowered his voice. “And now I’m up against his cronies at Bechtel.”

This startled me. Bechtel was the world’s most powerful engineering firm and a frequent collaborator on projects with MAIN. In the case of Panama’s master plan, I had assumed that they were one of our major competitors.

“What do you mean?”

“We’ve been considering building a new canal, a sea-level one, without locks. It can handle bigger ships. The Japanese may be interested in financing it.”

“They’re the Canal’s biggest clients.”

“Exactly. Of course, if they provide the money, they will do the construction.”

It struck me. “Bechtel will be out in the cold.”

“The biggest construction job in recent history.” He paused. “Bechtel’s loaded with Nixon, Ford, and Bush cronies.” (Bush, as U.S. ambassador to the UN, and Ford, as House Minority Leader and Chairman of the Republican National Convention, were well-known to Torrijos as Republican powerbrokers.) “I’ve been told that the Bechtel family pulls the strings of the Republican Party.”

This conversation left me feeling very uncomfortable. I was one of the people who perpetuated the system he so despised, and I was certain he knew it. My job of convincing him to accept international loans in exchange for hiring U.S. engineering and construction firms appeared to have hit a mammoth wall. I decided to confront him head-on.

“General,” I asked, “why did you invite me here?”

He glanced at his watch and smiled. “Yes, time now to get down to our own business. Panama needs your help. I need your help.”

I was stunned. “My help? What can I do for you?”

“We will take back the Canal. But that’s not enough.” He relaxed into his chair. “We must also serve as a model. We must show that we care about our poor and we must demonstrate beyond any doubt that our determination to win our independence is not dictated by Russia, China, or Cuba. We must prove to the world that Panama is a reasonable country, that we stand not against the United States but for the rights of the poor.”