Beautiful Horizons

Tunisia

Michael Totten is back from his trip to Tunisia with some great photos. Check it out here.

Riggs and Pinochet - The Latest

Here's a roundup of the latest in the English language press regarding the Pinochet-Riggs Bank investigation.

The Miami Herald reports that his traditional allies have been distancing themselves from Pinochet:

The revelation of the Riggs bank accounts, found by U.S. officials who investigated the bank's records, appears to have been the final straw that has silenced traditional supporters in Chile and left the general isolated.

Even the previously loyal head of the army, Gen. Juan Emilio Cheyre, declared that the Riggs accounts were a personal matter and the military would cooperate with investigators.

Pinochet is left with a small group of defenders that includes his family, close friends and lawyers.

His youngest son, Marco Antonio, went on radio to declare his father's innocence, saying the money had come from 60 years of hard work and political donations.

The explanation was greeted largely with disbelief, and further undermined by Marco Antonio's earlier claims that his father held no such foreign bank accounts. [my emphasis]

If you are going to lie, remember to be consistent.

Hugh O'Shaughnessy in The Observer cites the Senate report on Riggs

It reports that it 'opened at least six accounts and issued several certificates of deposit (CDs) for Augusto Pinochet, former President of Chile, while he was under house arrest in the United Kingdom and his assets were the subject of court proceedings ... altered the names of his personal accounts to disguise their ownership; transferred $1.6m from London to the United States while Pinochet was in detention and the subject of a court order to attach his bank accounts... and delivered over $1.9m in cashiers' checks to Pinochet in Chile to enable him to obtain substantial cash payments from banks in that country.'

and points out that Pinochet's salary in his final year as Commander of Chile's armed forces was a whopping $10,057 adding to the mystery as to how he could accumulate so much money in such a short time.

CNN is reporting that Judge Baltasar Garzón, whose investigation of Pinochet lead to his arrest in London in 1998, is being urged to seek charges against Riggs Bank for its efforts in concealing Pinochet's assets when Garzón had issued an order freezing those assets:

Judge Garzon in 1998 issued an arrest warrant for Pinochet, along with an order freezing his assets. He was expected to rule this week on the new request, said the lawyer, Juan Garces.

Garces told CNN that if Garzon agrees to proceed, it could result in the Spanish government formally asking the U.S. Department of Justice to press charges against Riggs Bank and its top executives allegedly involved in the money laundering.

"Pinochet 1 was about torture and crimes against humanity," Garces said, referring to earlier unsuccessful efforts to try Pinochet for genocide and torture. "Pinochet 2 is about the money the criminal made and hid.

"It's the same case, in two facets, and in both, the key is international judicial cooperation," Garces said.

The last word I'll leave to MercoPress:

"With a General’s income there is no way you can accumulate that money", said Edmundo Pérez-Yoma, Defence minister of the previous Chilean coalition government. "The image and standing of the Chilean Armed Forces has been greatly affected" insisted Mr. Perez-Yoma.

"Almost everybody believed that in spite of its excesses and defects Mr. Pinochet government was rather clean, almost corruption free, and if this proves to be not true, one of the last myths will have disappeared."

As I've said before, I don't expect Pinochet to ever do time, but I will be content if his place in history continues to be revealed to be as monstrous as the man was and is.

There's a Nickname Much Better Than Dubya

There's a nickname for the president I can get behind: The Enemy of Thoughtfulness.

Hat tip to Holden guest blogging for Atrios.

Riggs Bank - The African Angle

One aspect of the sleaze that appears to have engulfed Riggs Bank that I neglected to mention is their support for the corrupt regime of Equatorial Guinea.

Edward at Obsidian Wings also has an excellent post on the subject.

As for me I'm really beginning to think that one of nature's cruelest tricks is a summer cold. Back tomorrow.

Tina Rosenberg on Nicaragua

Tina Rosenberg is one of the keenest observers on foreign affairs and the New York Times is lucky to have her.

In yesterday's paper she took a look at the state of Nicaragua during the Sandinista years and now and places a plague squarely on both houses. First, the Sandinistas:

The contras' war and the American blockage of international loans wrecked the economy and diverted what money there was from schoolbooks to guns. Nicaragua, one of the world's poorest countries, was attacked by a superpower, and the Sandinistas responded with repression.

But the war was not entirely to blame. Brought to power by a guerrilla insurrection, the Sandinistas arrived with a siege mentality that confused opposition with betrayal and revenge with justice. Followers of Mr. Somoza went before kangaroo courts. Newspaper reports on protests were censored. This was before Mr. Reagan ordered covert aid for the contras in December 1981.

The Sandinistas' determination to lower the price of food meant that farmers could buy beans more cheaply than growing them. So they didn't grow them, leading to a rationing system that created corruption and speculation. Capital and skilled people emigrated. Phrases like the "workers' state'' raised expectations of higher pay and farm credits that the revolution could not afford. The Sandinistas quickly outlawed strikes and peasants' land invasions. All Latin American revolutions will end up like ours, Mr. Carrión had said, and he was right, although for a larger reason than he believed.

Now for the post-Sandinista leaders:

The Sandinistas have been gone since 1990. But three-quarters of the population lives on less than $2 a day, and inequality has soared. More than a third of school-age children do not attend school. The government spends $19 per person annually on education today - half of what the Sandinistas spent when I lived there. Land reform, which had created Latin America's most egalitarian pattern of ownership, has been eroded - in part because small holders cannot get credit and are forced to sell.

Nicaragua depends on the whims of the world coffee market and the hurricane season, and both have been cruel. The poor state of health, education and political institutions all undermine the economy. But the Sandinistas had all these problems, while the successor governments have not suffered from war, American vetoes of their international loans and capital flight. They have also not cared about the poor.

The revolution left one ironic legacy. In 1990, President Daniel Ortega lost a landslide election to Violeta Chamorro and recognized his defeat, permitting for the first time in Nicaragua's history the bourgeois democracy the Sandinistas so scorned. Nicaragua now has no internal spies or censorship. It has regular, meaningful elections. But most Nicaraguans are still waiting for their revolution.

Especially when Somoza-like corruption can still exist. Yes Alemán was tried and convicted, but Nicaragua, the second poorest country in the Americas (only Haiti is poorer) is US$100 million poorer for having had him as president.

Saving Money Creates Unusual Alliances

Despite the general antipathy Argentina and Brazil have for each other on the football pitch, according to Andrés Oppenheimer the two nations are considering using the same facilities for their consulates in Boston:

Brazil's ambassador to the United States, Roberto Abdenur, and his Argentine counterpart, José Octavio Bordón, went to the State Department to seek permission to open a joint consulate in Boston as a way to save money on real estate, security costs and personnel.

Argentina had closed its consulate in Boston because of budget cuts. And Brazil had closed its consulate in Hamburg, Germany, for the same reason. So the two governments -- which lead the Mercosur trade agreement of South American countries -- recently decided to invite one another to share the consular facilities where they no longer had a diplomatic presence.

''We're not talking about a joint diplomatic mission, but of two consulates within the same facilities,'' Brazil's ambassador to Washington told me in a telephone interview. ``It's a pilot project. If it goes well, we will try to take advantage of similar opportunities elsewhere.''

Read the article. Oppenheimer has some other good ideas in there as well.

Who'd Have Thought

Who'd have thought that Celia Cruz, the, for so many years, living embodiment of the heart and soul of Cuban music )who died last year) and an uncompromising foe of Fidel Castro was banned from visitng the US because she was suspected of being a communist?

In fact, the singer known affectionately as Celia to generations of Cuban exiles was at least twice refused an artist's visa to visit America in the 1950s, according to a recently declassified U.S. document that described her as a "well-known communist singer and stage star."

It was an era before Fidel Castro was in power, a time when McCarthyism and the Red scare bred a Hollywood blacklist. The U.S. Congress was consumed by communism, and federal agents were hunting communists, real and imagined, in government and show business.

Just when you think that something from the McCarthy era is the ultimate in silliness, something else comes along to take its place.

Brazil Wins the Copa America Championship

Congratulations to Brazil for winning the Copa America today by beating Argentina on penalty kicks. Mércia is very happy, especially given the fact that it was Argentina they beat.

The Planned Construction of BR-163

The Economist has a very interesting article about the planned construction of a super highway from Cuiabá, the capital of the state of Mato Grosso near the Bolivian border to Santarém, a port on the Amazon.

Boy does this leave me with mixed feelings and for the following reasons:

1.) Brazil has had a history of creating huge, Pharaonic projects some of which have been successful (the Itaipu Dam) and some of which have been massive failures (the TransAmazonica Highway).

2.) The environmental concerns.

3.) The possibility of corruption in the construction.

I'm very much of the sentiments expressed here:

"On the one hand [it] will bring development," says Cícero Pereira da Silva Oliveira, head of the union of rural workers in Trairão, a settlement 380km south-west of Santarém. "On the other it will bring ruin to the region—more land grabbing, more drug trafficking. Total violence will arrive."

The article as in keeping with The Economist's really covers a lot of the bases. Here are a few relevant facts:

1.) Brazil is now the world's largest producer of soybeans.

2.) Mato Grosso, a state quite far from any port is fast becoming one of the major players in this area.

3.) The ports of Santos and Paranaguá in the states of São Paulo and Paraná, respectively are incredibly busy.

4.) One of Brazil's major markets for soya is China.

5.) Soya will get to China a lot quicker and cheaper from Santarém in the Amazon than from either Santos or Paranaguá.

That all seems to me to mean that there are large and powerful forces that will benefit from the establishment of this road. One hopes that the NGO's cited in the article will be able to keep their feet to the fire to protect the environment and the citizens. It certainly seems as if it is up to them when you read something like this:

IBAMA, the federal issuer of environmental licences, is hardly in better shape. Flávio Montiel, its director of environmental protection, says that "IBAMA today doesn't have the means to supervise" but contends that things are improving. After seeing its budget for policing Brazil's forests slashed to a derisory 17m reais this year, it has received an emergency infusion of funds.

Everyone I know who has ever had dealings with IBAMA (including my brother-in-law who is a game warden for the state of Minas Gerais) has always made the argument to me that they are probably one of Brazil's most effective and fair regulatory agencies. Why they are being starved for cash is a mystery to me.

Discussion on Money Laundering in Light of Riggs Bank/Pinochet Affair

The Miami Herald runs a twice weekly (Wednesday and Saturday) Latin America Advisor in conjunction with the Inter-American Dialogue. It's worth reading and worth noting that some of the Riggs Bank activities took place after the passage of the "Patriot" Act. As one commenter noted: "Any foreign bank indulging in such practices would immediately lose its license to operate in the United States. "

Marcela Sánchez makes the argument that independent money transmitters commonly found in large immigrant neighborhoods have done a much better job of regulating their activities than banks have:

Ironically, banks could learn something from those hundreds of non-bank licensed money transmitters that send billions around the world from small and inconspicuous offices in immigrant and ethnic communities. Even before the Patriot Act, licensed money transmitters began to regulate themselves and today they are second to none among financial institutions in knowing their clients and reporting questionable activities to authorities.

Ever since the mid-1990s, federal authorities suspected that transmitters were vulnerable to criminal activity, particularly money laundering. In order to survive and thrive in a rapidly expanding market -- and to avoid prosecution -- transmitters got ahead of the curve.

Banks, on the other hand, have lacked some of these "incentives" to reform, making the eternal struggle in tracking and prosecuting illegal activity in the form of international financial transactions today a very unbalanced operation of questionable efficacy.

"The whole regulatory system has a serious problem of uneven application of laws and regulations," said Charles Intriago, a former federal prosecutor who now runs moneylaundering.com. While dozens of small money transmitters have been penalized, prosecuted or suffered forfeitures, he said no securities dealer of any significant size or any U.S. bank in 13 years has been prosecuted. As long as they receive a "Get Out of Jail Free" card every time, banks won't take enforcement seriously, he added.

I agree. With any illegal financial activity fines don't deter the perpetrators. All they have to do is add them to the cost of doing business. Failure to obey the laws (and especially as in the case of Riggs, what appears to be actively seeking to skate around the laws) should result in jail time for those responsible; stiff jail time at that.