Point of View

Bain's questionable Salvadoran connection

August 24, 2012 

Recent revelations about Mitt Romney’s highly profitable company, Bain Capital, help connect the dots between offshore tax shelters and shady investors, and the role that ill-gotten gains play in today’s casino-like finance capital.

The Los Angeles Times reported last month 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. A tax haven in Panama provided Bain with the secrecy needed to attract the investors.

While living in El Salvador, my family fell victim to right-wing terror in 1989, so I took the news like a punch in the gut. But as a professor, I know many Americans today have little memory of this troubled era when U.S. funds propped up Central American militarism.

The revelations took me back to November 1989 when I worked as a stringer for The New York Times in the capital. It was late. I sat on the floor in my bedroom over a TRS-80 laptop finishing an article about recent air force raids on urban neighborhoods. Moments after I sent the file, the phone rang. “You have 24 hours to leave the country or you can kiss your family good-bye,” 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 me in his crosshairs. With the airport closed due to fighting, it was impossible to leave, so we spent a nightmarish week in hiding while I pulled long hours running between my son and my office in the foreign press corps, constantly on adrenaline alert with an eye on my jeep’s rearview mirror.

Earlier that year, we lost my son’s aunt to the terror. Marta Lidia “Tita” Guzman, an activist with 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.

For me, it is grotesque that the families that could have been 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 through the extreme right-wing ARENA party, which orchestrated the death squads in those years.

The LA 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. That was based on writings by former Bain executive Harry Strachan, who introduced Romney to the investors. The Globe quoted Romney as saying that Bain had checked backgrounds of individual investors (none of whom is accused of human rights crimes) but had not investigated their families.

Approximately 35,000 Salvadorans were killed, most in political murders, during the early 1980s. 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 cease-fire, a United Nations study blamed 85 percent 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.”

The ARENA party 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 hurting U.S. credibility on human rights. It is a sign of change that on President Barack Obama’s 2011 visit to the country, he honored the grave of Archbishop Oscar Romero, a popular orator assassinated by a death squad.

How ironic that as our 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 percent 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 Salvadoran oligarchs, GOP claims of fiscal responsibility and family values begin to look hollow indeed.

Martyrs like Tita and Archbishop Romero deserve better, and so do American voters.

Sandy Smith-Nonini is an adjunct assistant professor in the Department of Anthropology and the Curriculum in Global Studies at UNC-Chapel Hill.

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