The New Confessions of an Economic Hit Man

by John Perkins

After studying JECOR extensively, David Holden and Richard Johns state, “It was the most far-reaching agreement of its kind ever concluded by the US with a developing country. It had the potential to entrench the US deeply in the Kingdom, fortifying the concept of mutual interdependence.”

My job was to develop forecasts of what might happen in Saudi Arabia if vast amounts of money were invested in its infrastructure, and to map out scenarios for spending that money. In short, I was asked to apply as much creativity as I could to justifying the infusion of hundreds of millions of dollars into the Saudi Arabian economy, under conditions that would include US engineering and construction companies.

understood, of course, that the primary objective here was not the usual — to burden this country with debts it could never repay — but rather to find ways that would assure that a large portion of petrodollars found their way back to the United States. In the process, Saudi Arabia would be drawn in, its economy would become increasingly intertwined with and dependent upon ours, and presumably it would grow more Westernized and therefore more sympathetic to and integrated with our system.

Those goats begged to be replaced by something more appropriate for this desert kingdom that craved entry into the modern world.

Rather than simply exporting crude oil, the economists were urging these countries to develop industries of their own, to use this oil to produce petroleum-based products they could sell to the rest of the world at a higher price than that brought by the crude itself.

The goats, of course, were merely an entry point. Oil revenues could be employed to hire US companies to replace the goats with the world’s most modern garbage collection and disposal system, and the Saudis could take great pride in this state-of-the-art technology.

Under this formula, money would be earmarked to create an industrial sector focused on transforming raw petroleum into finished products for export. Large petrochemical complexes would rise from the desert, and around them, huge industrial parks. Naturally, such a plan would also require the construction of

thousands of megawatts of electrical generating capacity, transmission and distribution lines, highways, pipelines, communications networks, and transportation systems, including new airports, improved seaports, a vast array of service industries, and the infrastructure essential to keep all these cogs turning.

and — in most cases, for countries outside the ring of OPEC — would arrange World Bank or other debt-ridden methods for financing them. The global empire would be well served.

It was obvious that the Saudis had no intention of putting their own people to work at menial tasks, whether as laborers in industrial facilities or in the actual construction of any of the projects.

The Saudis might manage others, but they had no desire or motivation to become factory and construction workers.

This prospect created an even greater new stratagem for development opportunities. Mammoth housing complexes would have to be constructed for these laborers, as would shopping malls, hospitals, fire and police department facilities, water and sewage treatment plants, electrical, communications, and transportation networks — in fact, the end result would be to create modern cities where once only deserts had existed. Here, too, was the opportunity to explore emerging technologies in, for example, desalinization plants, microwave systems, health care complexes, and computer technologies.

Saudi Arabia was a planner’s dream come true, and also a fantasy realized, for anyone associated with the engineering and construction business. It presented an economic opportunity unrivaled by any in history: an economically developing country with virtually unlimited financial resources and a desire to enter the modern age in a big way, very quickly.

In fact, the magnitude of the job — the total and immediate transformation of an entire nation on a scale never before witnessed — meant that even had historical data existed, it would have been irrelevant.

My job was simply to describe a series of plans (more accurately, perhaps, “visions”) of what might be possible, and to arrive at rough estimates of the costs associated with them.

I

always kept in mind the true objectives: maximizing payouts to US firms and making Saudi Arabia increasingly ...

Almost all the newly developed projects would require continual upgrading and servicing, and they were so highly technical as to assure that the companies that originally develope...

work, I began to assemble two lists for each of the projects I envisioned: one for the types of design-and-construction contracts we could expect, and another for long-term service and management agreements. MAIN, Bechtel, Brown & Root, Halliburton, Stone & Webster, and many other...

The modernization of this oil-rich kingdom would trigger adverse reactions. For instance, conservative Muslims would be furious; Israel and other neighboring countries would feel threatened. The economic development of this nation was likely to spawn the growth of another industry: protecting the Arabian Peninsula.

Their presence would require another phase of engineering and construction projects, including airports, missile sites, personnel bases, and all of the infrastructure associated with such facilities.

It prodded one of the vice presidents to coin a phrase we often used after that, referring to the kingdom as “the cow we can milk until the sun sets on our retirement.”

Despite the knowledge that our competitors were also involved, we all assumed that there was enough work to go around.

that those consultants who came up with the approaches that were finally implemented would receive the choicest contracts. I took it as a personal challenge to create scenarios that would make it

to the design-and-construct stage.

It represented an innovative approach to creating lucrative work in countries that did not need to incur debts through the international banks.

Moreover, given human nature, we felt that the leaders of such countries would likely be motivated to try to emulate Saudi Arabia.

Under this evolving plan, Washington wanted the Saudis to guarantee to

maintain oil supplies and prices at levels that could fluctuate but that would always remain acceptable to the United States and our allies.

In exchange for this guarantee, Washington would offer the House of Saud an amazingly attractive deal: a commitment to provide total and unequivocal US political and — if necessary — military support, thereby ensuring their continued existence as the rulers of their country.

The condition was that Saudi Arabia would use its petrodollars to purchase US government securities; in turn, the interest earned by these securities would be spent by the US Department of the Treasury in ways that enabled Saudi Arabia to emerge from a medieval society into the modern, industrialized world. In other

words, the interest compounding on billions of dollars of the kingdom’s oil income would be used to pay US companies to fulfill the vision I (and presumably some of my competitors) had come up with, to convert Saudi Arabia into a modern industrial power. Our own US Department of the Treasury would hire us, at Saudi expense, to build infrastructure projects and even entire cities throughout the Arabian Peninsula.

Although the Saudis reserved the right to provide input regarding the general nature of these projects, the reality was that an elite corps of foreigners (mostly infidels, in the eyes of Muslims) would determine the futu...

The Saudis, rolling in cash, would deliver hundreds of millions of dollars to Treasury, which held on to the funds until they were needed to pay

vendors or employees. This system assured that the Saudi money would be recycled back into the American economy. . . . It also ensured that the commission’s managers could undertake whatever projects they and the Saudis agreed were useful without having to justify them to Congress.

Whoever the envoy was, his first job was to remind the royal family about what had happened in neighboring Iran when Mossadegh tried to oust British petroleum interests.

I have no doubt that they were left with the distinct impression that either they could accept our offer and thus gain assurances that we would support and protect them as rulers, or they could refuse — and go the way of Mossadegh.

This was not as easy as it appeared at first. Prince W. professed himself a good Wahhabi and insisted that he did not want to see his country follow in the footsteps of Western commercialism. He also claimed that he understood the insidious nature of what we were proposing. We had, he said, the same objectives as the crusaders a millennium earlier: the Christianization of the Arab world.

Europe’s medieval Catholics claimed their goal was to save Muslims from purgatory; we claimed that we wanted to help the Saudis modernize. In truth, I believe the crusaders, like the corporatocracy, were primarily seeking to expand their empire.

Religious beliefs aside, Prince W. had one weakness — for beautiful blonds.

Yet, it played a role in structuring this historic deal, and it demonstrates how far I would go to complete my mission.

From the start, Prince W. let me know that whenever he came to visit me in Boston, he expected to be entertained by a woman of his liking, and that he expected her to perform more functions than those of a simple escort.

She agreed to meet Prince W. on one condition: she insisted that the future of their relationship depended entirely upon his behavior and attitude toward her.

was a good tipper, and I managed to persuade waiters in some of the most posh restaurants in Boston to provide me

with blank receipts; it was an era when people, not computers, filled out receipts.

Prince W. grew bolder as time went by. Eventually, he wanted me to arrange for Sally to come and live in his ...

These women were given contracts for some specified period of time, and when the contract expired, they went home to very substantial bank accounts.

“In the early 1970s, when the petrodollars started flooding in, enterprising Lebanese began smuggling hookers into the kingdom for the princes.

Prince W. was a complex person. Sally satisfied a corporeal desire, and my ability to help the prince in this regard earned me his trust.

am not familiar with the details of what went on between my fellow EHMs and the other key Saudi players. All I know is that the entire package was finally approved by the royal family. MAIN was rewarded for its part with one of the first highly lucrative contracts, administered by the US Department of the Treasury.