Korea-US Trade Agreement: The Hidden History

Posted on October 12, 2011 by Tim Shorrock

The U.S. Congress last week gave final approval to a South Korean-U.S. trade agreement (KORUS) despite strong opposition from the labor movement and a handful of organizations on the political left. The pact was approved along with treaties with Panama and Columbia – but those agreements pale against KORUS, which is the largest trade deal passed since NAFTA was signed by President Clinton in 1994. It so enthralled South Korean President Lee Myung-bak, a former top executive with Hyundai and the country’s most conservative leader in a decade, that he proclaimed the beginning of a new “economic alliance” during his visit to Washington. An excited President Obama told Korean reporters it was a “win accord” that will create jobs, expand opportunity “and give benefits to both countries.” Yadda yadda yadda – we’ve heard it all before.

In fact, KORUS represents a major victory for U.S. multinational corporations, banks and financial institutions, which have lobbied intensively for the pact for more than half a decade. It’s also a major setback for Korean and American unions. Both (with the exception of the U.S. United Auto Workers) saw that KORUS, like NAFTA, was above and beyond an investment agreement designed to improve conditions and decrease risk for foreign capital while doing nothing to improve labor rights (dismal in both South Korea and the United States, as recognized by the Korean Confederation of Trade Unions) or lift the general conditions of workers and consumers in either country. Now that the AFL-CIO has failed to convince a Democratic president and Senate to oppose it, it remains to be seen if South Korea’s labor-led opposition can muster the strength to defeat the treaty in Seoul. We shall see.

Over the next fews days we’ll be hearing a lot about the potential impact of the Korean agreement on U.S. employment, some of it exaggerated, some of it downright mendacious. At the same time, the opposition to KORUS from elements of the so-called left was – with few exceptions – based on shrill, dogmatic nationalism and filled with terrible caricatures of Korea, North and South. While “leftist” talk show hosts such as MSNBC’s Dylan Ratigan spewed falsehoods about the introduction of North Korean “slaves” into global trade, he and other opponents of the agreement portrayed South Korean workers as enemies of America who are out to steal our jobs. You’d never know from their literature that South Korean workers too opposed KORUS, for many of the same reasons as their American counterparts. That absence of solidarity from the discussion is a very sad commentary on the U.S. left.

But what you won’t hear much about, from either right or left, is how this treaty is the culmination of decades of efforts by the U.S. government and its corporate sector to force open the South Korean market, all the while maintaining an enormous military and security presence in that country. This essay, published in 2007 by Foreign Policy In Focus, seeks to tell that story – which dates back to the earliest days of the Cold War – by focusing on four key moments in recent history (KORUS being the last) when the United States used its enormous political and economic clout to intervene in South Korea on behalf of U.S. corporate and financial interests and their Korean (and sometimes Japanese) allies in business.

It’s the hidden history of KORUS, and will be elaborated upon in greater depth over the next few weeks on this blog. It’s based upon a lifetime of reporting from and writing about Korea, where I lived as a child and visited often as a journalist and as a labor and human rights activist during the 1980s. My conclusion is simple: solidarity, and not crude nationalism, should define our opposition to US-Korea free trade and any other NAFTA-like agreement.

Raw Deal Between Washington and Seoul

The South Korean-U.S. free trade agreement (KORUS) cannot be seen apart from U.S.-South Korean security ties, the presence in South Korea of more than 30,000 U.S. troops and a 50-year economic relationship that has been heavily weighted towards American interests. From this perspective, KORUS is the fourth attempt by the United States to force its economic will on South Korea over the past half-century.

First U.S. Intervention

The first U.S. attempt to alter the Korean economic landscape began in the late 1950s, when three U.S. administrations sought to wean South Korea from US economic aid and push the Korean government back into an economic alliance with Japan. The arrogance of the policy was stunning. Japan had not only colonized Korea, it had rebuilt its own economy by supplying U.S. forces with steel, munitions, and automobiles during the Korean War.

The war left the two Koreas divided roughly where they had been when the country was split in 1945, with heavy industry in the North and agriculture in the South. The North, however, quickly recovered, and under the Stalinist policies of Kim Il Sung, rebuilt an industrial economy that remained ahead of the South’s until the early 1970s. In South Korea, under the autocratic rule of the U.S.-backed Syngman Rhee, the economy stagnated. Unwilling to accept permanent division, Rhee continually called for a “march north” to unify Korea under his rule and refused to consider any economic plan that would solidify the division. By the late 1950s, having tired of Rhee, the U.S. government began to apply strong pressures on his government to cut U.S. aid and accept foreign – particularly Japanese – investment.

In 1961, Park Chung Hee, a general who had been trained by the Japanese Imperial Army, seized power in Seoul. Over the next few years, as the United States escalated the war in Vietnam, the pressure on Park to liberalize the economy increased. The pivotal move came in 1965, when Park’s government, under immense pressure from Washington, signed a normalization treaty with Japan. Washington saw the treaty as a way for Japan to support South Korea – and the U.S. strategic position in Asia – at a time when the United States was pouring aid and military forces into Vietnam. But Koreans were outraged, and Park had to declare martial law and keep the opposition out of parliament to get it passed.

The normalization treaty became the cornerstone for South Korea’s entry into the world market. As part of the deal, Japan pledged over $800 million in reparation payments to Seoul. Most of that money came in the form of direct Japanese investments and loans, which financed the first phase of the South Korean export-led economy. Japanese corporations invested heavily in South Korean electronics, textiles and steel, thus transferring many of their labor-intensive production to Korea while keeping the high-tech industries in Japan.

The Korean companies that entered these industries grew rapidly into conglomerates, called chaebol (like their Japanese counterparts, they too profited from U.S. military orders – this time in Southeast Asia). By the mid-1980s, seven chaebol controlled nearly 80% of the value of the country’s exports. The Korean economy was also a very profitable market for U.S. multinationals. U.S. electronics, clothing, and plywood companies established plants in Korean export-processing zones. And during the period of rapid growth, South Korea became a bonanza for U.S. corporations selling oil, nuclear technology, weapons, and farm products. Companies such as Bechtel, Westinghouse, General Motors, and Gulf Oil created lucrative joint ventures with Hyundai, Samsung, and other chaebol. The so-called Korean “export miracle” was born.

But the miracle had a significant weak spot: repression. To keep wages low and Korean exports competitive, the Park government imposed draconian controls on unions and labor organizing. Workers who protested conditions were physically abused and often jailed. Students and intellectuals who criticized the government were subjected to harsh treatment, including torture and long prison sentences. By the late 1970s, political unrest reached a peak.

In 1979, hundreds of garment workers occupied the headquarters of the opposition party to protest working conditions and the suppression of union rights. The protests soon spread to other cities, and were joined by students, intellectuals and ordinary citizens sick of dictatorship. That triggered a political crisis for the ruling elite. In October 1979, believing that Park’s death would head off violent revolution, the head of the Korean intelligence service assassinated the Korean president. The Carter administration, fearful that South Korea was in danger of becoming “another Iran,” tried to broker a compromise between the dissident movement and the Korean military. But that attempt failed, and in May 1980, another general, Chun Doo Hwan, seized power in a violent military coup. That set the stage for America’s second intervention in the Korean economy.

Second Intervention: The NICs

Under Chun’s iron rule, South Korea’s industries were reorganized to improve their competitiveness, and chaebol were forced to concentrate on only one or two industries. Hyundai, for example, focused on automobiles and ships, while Samsung put its energies into electronics. Labor unions were placed under even tighter control, and industrial unions were banned altogether. By the mid-1980s, Korean exports were growing rapidly again. But with U.S. manufacturing in deep decline and textile and steel mills closing throughout the industrial heartland, Asian imports became a serious political problem in Washington.

Democrats in Congress were especially angry over the trade imbalance with the four newly industrialized countries (NICs) in Asia that had embraced export-led development: South Korea, Taiwan, Hong Kong, and Singapore. By 1986, nearly 25% of the US trade deficit was with those four economies. To force the NICs to open their doors to American imports, the Democrats threatened protectionist measures, such as a 25% surcharge on imports championed by Rep. Richard Gephardt (D-MO). Fearing that a working class backlash could help Democrats win the White House in 1988, the Reagan administration, led by Treasury Secretary James Baker, stepped in. “I will not stand by and watch American businesses fail because of unfair trading practices abroad,” declared Reagan.

In 1986, just a few years after the Reagan administration was hailing South Korea as a model Third World nation, Baker led an aggressive campaign against South Korea and the Asian NICs. At one point, David Mulford, one of Baker’s top aides, launched a blistering attack on the NICs as wild “tigers” who were upsetting the peace and stability of the global economy. “Tigers live in the jungle and by the law of the jungle,” he said.

To “tame” the voracious NICs, the Reagan administration imposed quotas on South Korean steel exports and cancelled tariff-free entry for many of its products. In another unilateral move, Baker also began using Section 301 trade powers, which gave the president discretionary authority to investigate foreign trade practices, against Korean imports. By 1987, the Reagan administration was negotiating with South Korea to lift its barriers to US telecommunications, pharmaceuticals, agricultural goods, tobacco, and services. Within a few years, South Korea had diverted many of its exports toward Europe and other Asian countries.

Inside South Korea, where anti-American feeling was high because of Reagan’s support for the dictatorial Chun regime, these actions smacked of arrogance and hypocrisy. For one thing, they seemed to violate the Cold War agreement between the U.S. and its Asian allies, which allowed the United States to retain troops on their territory in return for unimpeded access to the U.S. market. For decades, U.S. exporters of chemicals, nuclear power, oil and grain had enjoyed monopoly access to the Korean market. The United States had used its military leverage to keep those markets open and looked aside at human rights violations to keep trade flowing.

The most egregious incident occurred in 1980, after hundreds of Koreans were killed during an uprising against Chun’s military rule in the southwestern city of Kwangju. Within a month of this massacre, the Carter administration, fearing that the unrest could upset the flow of U.S. exports, agreed to provide $600 million in export credits to the Chun government so it could buy a set of reactors from Bechtel and Westinghouse. And during the summer of 1980, as Chun intensified his police state, U.S. diplomats scurried around New York literally begging U.S. banks to continue lending to South Korea. By the end of the 1980s, the Reagan administration’s pressures on South Korea had deepened Korean anger at the United States. But this time, government officials and businessmen shared the sentiment.

The 1997 Financial Crisis

In 1988, after weeks of pro-democracy demonstrations that brought millions of people into the streets, Chun agreed to step down from the presidency and allow direct elections for the first time in nearly 20 years. With the military now on the sidelines, South Korea finally became a democracy. Unions, repressed for decades, began organizing like wildfire, and soon South Korea had one of the most dynamic labor movements in the world. In 1997, the democratic movement reached its pinnacle of success when Kim Dae Jung, the longtime leader of its opposition movement, was elected president. But Kim soon faced another economic crisis that sparked the third U.S. intervention in the Korean economy.

Starting in the early 1990s, the United States and the World Bank embarked on a global campaign to urge developing countries, particularly the fast-growing economies of Asia, to quicken the opening of their capital markets and scrap rules that had previously closed their financial sectors to full participation by U.S. and European banks. During the Clinton administration, Treasury Secretary Robert Rubin, the former CEO of Goldman Sachs, pushed for freer movements of capital while simultaneously pressing to win opportunities to U.S. banks, investment funds, and insurance companies. Encouraged by the U.S. Treasury and the IMF, Asian governments enticed foreign investors with high interest rates and a fixed rate of exchange, which protected investors against the risk of devaluations that could erode the value of their investments. By the late 1990s, billions of dollars from overseas investors and mutual funds were pouring into the region.

The Asian countries, however, weren’t prepared to regulate the flow of foreign capital. In Southeast Asia, much of the money went into badly planned real estate projects; in South Korea it was directed into automobile, steel, and semiconductor factories built just as global markets were contracting. In 1996, prices for key Asian exports began to fall precipitously. In Korea, the price for semiconductor chips, which were responsible at one point for half of the country’s exports, dropped by 50%. The bubble was about to burst. The Asian financial crisis began in Thailand when the government devalued its currency to protect the economy against speculators. Panicked foreign investors began to convert their investments into dollars, precipitating a crash in the stock market. Global confidence in the region plummeted as investors fled the entire region. Both Thailand and South Korea ran out of cash to pay interest owed to foreign banks.

Fearing that the “contagion” would spread to Brazil and other countries and seriously erode U.S. exports, the U.S. Treasury and the IMF intervened in Asia with the largest bailouts in world history – more than $100 billion. In Korea, the U.S. Treasury used the bailout as leverage to press for an end to all barriers on foreign banks and investment funds. For the first time in Korean history, foreign banks were allowed to buy 100% control of Korean financial institutions.

The IMF intervention thus allowed the United States to force changes that it had been unable to complete in four decades of trade negotiations. Bankrupt Korean companies were forced to sell assets at fire-sale prices to foreign, mostly U.S., banks and investment funds. Under the new policies, large U.S. banks and investment funds, such as Texas Pacific and the Carlyle Group, became major investors in the Korean economy. As hundreds of thousands of Korean workers lost their jobs in mass layoffs, US banks and investment funds counted their profits. Among the funds making a killing were several union-controlled pension funds.

The latest intervention

Now, under KORUS, U.S. corporations backed by the U.S. government want to launch their fourth intervention in South Korea’s economy. Currently, U.S.-Korean trade, which totaled $78.3 billion in 2006, runs heavily in Seoul’s favor, with the United States running a $14 billion deficit with its partner, mostly in automobiles, auto parts and electronics. U.S. proponents of the FTA say the pact will rectify that imbalance by expanding auto, beef, and film exports to South Korea and creating a “stable” legal framework for U.S. investors operating in Korea.

Free-traders also argue that, with China beginning to dominate East Asia, an FTA with South Korea will help the United States maintain US influence in the region. Charlene Barshefsky, Clinton’s former trade representative, wrote recently that the US-Korean FTA is “one of the steps necessary to respond to a transformed landscape” in Asia. “Robust engagement with Asia is critical if we are to retain unencumbered economic access to the region and if we are to reinvigorate our central role in the Pacific, our network of relationships and American influence there,” she said.

South Korean economists who favor the treaty believe an FTA will solidify a security alliance weakened by recent disputes between Bush and Roh over North Korea’s nuclear program and the future of U.S. troops in Korea. “I am very sure that the enhancement of the economic partnership and the deepening of economic integration between the two countries will contribute towards strengthening their security alliance,” Il Sakong, the CEO of the Institute for Global Economics and a former adviser to the Chun government, said recently. Mickey Kantor, who preceded Barshefsky as trade representative and is himself an investor in South Korea, believes that U.S.-Korean strategic ties guarantee that the FTA will be approved. “The idea that we would turn down a trade agreement with Korea on any basis, given the sensitive political arrangements in that area, and their neighbors to the north, is somewhat daunting,” he told The New York Times. “There’ll be legitimate pressure to try and get something done here, regardless of the provisions of the agreement.”

The security relationship between Seoul and Washington, as well as the sheer size of the proposed FTA, has placed the deal at the top of the U.S. trade agenda. The leadership in South Korea, too, has placed a high priority on the FTA, despite what had been strong links between the ruling party and civil movements, including unions. In this fourth attempt by the United States to reshape the South Korean economy, however, Seoul is in a much stronger position. It was able to extract important concessions such as keeping rice and educational services out of the agreement. This relative strength gives the leadership in Seoul the illusion that it is getting a good deal.

Despite these push factors, the FTA faces considerable obstacles, not least the skepticism of the U.S. Congress, which has passed free trade agreements over the years by ever-narrowing margins. Congressional opponents are worried about insufficient labor and environmental provisions in the pact. Free-trade opponents, both in Korea and the United States, realize that the pact is not so much between two countries as between two sets of multinational corporations. It would also deepen South Korea’s dependence on the United States at a time when it is just beginning to find its own way in East Asia. After 50 years of U.S. intervention in Korean affairs, it’s time for the citizens of both countries to reject the policies of corporate globalization by creating a new relationship based on a mutual interest in global justice, democracy, economic stability, and human rights. To make that happen, let’s let our leaders know that U.S. national security interests can no longer be the dominant factor in U.S.-Korean relations.

Posted in Korea | 1 Comment

Some thoughts on the #OccupyDC and #October2011 actions

Posted on October 9, 2011 by Tim Shorrock

I’ve been around the left for a long time and have participated in dozens, probably hundreds, of actions in Washington over the years. Suddenly last week it looked like we were about to have another major convergence – the DC version of the Occupy Wall Street movement in New York (#OccupyDC) with the October 2011 “Stop the Machine” movement focused primarily on ending war and funding human needs. From the spontaneous beginnings earlier this week of the former, it began to be clear that the two encampments would be separate. It pretty much stayed that way all week, causing confusion with both demonstrators and the media. And therein lies a problem.

The protests in New York City that captured the attention of the nation had an immediate and central focus: the crimes of the country’s largest banks that created the current financial mess and have been coddled and protected by the U.S. government and the Obama administration from investigations and prosecutions. The DC movement that came into being in response was similarly focused and organized. It borrowed much of the style of the New York protests, including the wonderful “peoples’ voice” method of public speaking, where one person’s words are amplified, line by line, by the surrounding crowd. It occupied McPherson Square, smack in the middle of downtown DC. The Stop the Machine crowd made its camp at Freedom Plaza on Pennsylvania Avenue, just across the street from the Washington, D.C., city government building and halfway between the White House and the Capitol (some good pics of the gathering are posted here).

On Friday, I couldn’t stay away from the twin encampments anymore, so I packed my ukelele and a bunch of song lyrics plus some water and headed down in the Metro. With all the talk of revolution and uprisings on the Internet and Twitter, the trains were remarkably quiet. There was absolutely no sign at all that DC was a scene of protest, and the train was filled mostly with the city’s working class, shuffling up and down between DC and its Virginia and Maryland suburbs. Not a good sign, I thought. I finally saw glimpses of protest at Metro Center in the form of T-shirts worn by people who’d just been at Freedom Square: “No Oil from Tar Sands,” “Stop the Drone Wars,” etc.

I then wandered into the Freedom Plaza encampment. The last of that afternoon’s speakers were on stage, apparently representatives from Native American groups that had expressed support. But the square was otherwise quiet; in every corner, the organizers had set up space for about a dozen meetings on everything from media to labor organizing. It was all very sedate. And seemed almost devoid of spontaneity. I could see this was the established left. In the center of the square, for example, was the Code Pink encampment, and its ubiquitous spokesperson Medea Benjamin sat in a large couch holding court, chatting on the phone and tapping on her laptop. Most everyone in the square looked to be around my age and generation. Stop the Machine is well-organized, almost to the minute, and clearly The Old Left. It’s where all the stalwarts who’ve been around for years to their talking: Ralph Nader was the big draw on Saturday, for example.

I didn’t feel like sitting in on any of the Freedom Plaza meetings, so I strode around strumming my ukelele and singing old Wobblie songs and one of my all-time favorites, Bob Dylan’s “Masters of War.” People on the edges responded well, wanting more. At one point I ran into a small group of people from Wisconsin who were part of a Vets for Peace delegation. They pulled out kazoos and played along. Then a young woman, clad in a bikini top and shorts, came over and asked me if she could dance. Of course, I said, and she did. That was a high point of the afternoon for me – singing “you fasten all the triggers/for the others to fire/while you sit back and watch/while the death counts gets higher” and other great verses while my young comradette danced along and the grizzled vets blew on their kazoos.

As we were playing, suddenly a crowd of about 20 people from the OccupyDC encampment marched through the plaza, trying to recruit people to their march to the IMF. Nobody joined, and they walked on to their destination (which had been the topic of considerable discussion on the OccupyDC website forums – you can find my comment under “Tim” in the segment).

A bit later I came upon some drummers and jammed with them for a while. That caught the attention of the otherwise desultory crowd, and a few demonstrators came over to dance and join in. A TV crew from Germany filmed us. We were making some great music; but alas, the organizers on stage had other ideas. To fill the time while they waited for the next round of speakers, and apparently not even seeing that some people were enjoying themselves, they began blasting heavy metal (I’m sure it was politically correct heavy metal though) to the point that it impossible to play or talk any more. I put down my instrument and kept walking – and was grabbed by the German crew and interviewed.

By that point, the Very Important Meetings were breaking up, but nothing seemed to be happening. So I decided to head over to McPherson Square just north of the White House to see what was happening there. On my way, I met up with the IMF marchers, whose numbers had grown considerably, on K Street. They marched on the sidewalk, chanting loudly, and spilled a little into the street. They were surrounded by cops, lights flashing and sirens bleeping. There were lots of kids playing guitars (even a couple more ukeleles). I joined in; it was nice to finally be in an actual demonstration.

Back at McPherson I took in the scene. In contrast to the Old Left at Freedom Plaza, this was mostly the young: students, youthful activists, hippies. There was a semblance of organization – food tables, water and medicine booths – but none of the rigid time schedules and controlled messages on display at Pennsylvania Avenue. Here also there was lots of people clearly new to politics and the left, but they wanted a voice and were in DC to speak out and to learn. The mood seemed far more spontaneous and celebratory than the staid gathering at Freedom Plaza I’d just walked through.

And there was lots of music and spirit. As I’d done at the other encampment, I strolled around strumming and singing. But here people picked up on the music and joined in. One guy started beating on spoons for rhythm. Another kid carrying a Martin guitar joined in. Then a black kid with dreadlocks and an Anonymous mask walked by and heard the words – “Masters of War” again. He joined in. I gave him the words, which I’d printed out on a sheet, and asked him to read each line (that’s us in the picture above). And as he did, I sang in response. Pretty soon we had a fantastic “peoples’ voice” version of the song going. It sounded very powerful, and we did it again and again. As we wound down, that night’s “peoples’ assembly” began, in part to discuss the next day’s activities (which included a march to the Egyptian Embassy in solidarity with Egyptian activists in town – a suggestion made at the assembly by several participants).

In a nutshell, I’d characterize the split in the Occupy DC movement as between the Old Left and the New Left. I’d like to see more unity between the two – and I think it’s a crying shame the two couldn’t have come together for one big encampment. According to my friend Bob, there was a good march on Saturday from one occupation to the other, which was a positive step. At same time, each group has a lot to learn from the other. It’s important, as the Old Left group is, to be focused on U.S. foreign policy and the wars abroad that are bleeding the country and killing so many innocents. But it’s also important, as the Newer Left is, to be sp0ntaneous and open and (to my eyes anyway) more joyous. We need new faces, new ideas, new voices, new actions – not the same old same old.

And a postscript: Saturday afternoon I saw this headline on the local newspaper in Frederick, Maryland, a semi-rural community about 25 miles north of DC: “Bank of America cuts 20 local jobs.”

Twenty employees at the Bank of America home loans office at 5300 Westview Drive will lose their jobs beginning Nov. 7.Scott Wallace, manager of the Dislocated Workers Service Unit, Maryland Department of Labor, Licensing and Regulation, said the state was notified on Sept. 27 of the personnel cuts.

“They are the only cuts in Maryland by Bank of America,” Wallace said Friday. Bank of America said it is cutting 30,000 jobs in the next two years.

This is happening everywhere, folks, and these are the people our movement has to reach. These weeks in DC and elsewhere around the country are exciting times for activists – but we in the broader peace, antiwar, labor and economic justice movement have our work cut out for us. Demonstrating against drones or demanding that rich, corrupt bankers go to jail is all good; but winning a majority is part of the long slog ahead. Let’s make it happen – singing all the way!

Posted in Archives | 2 Comments

Michael Moore on “Here Comes Trouble,” the Left, the Wall Street protests – and Ralph Nader

Posted on October 4, 2011 by Tim Shorrock

A report on Michael Moore’s first stop on his “living room” book tour – in which I ask him something about Nader I’ve been burning to know for years.

Last Friday I had the good fortune to be invited to Michael Moore’s first stop on his national “living room” reading tour, in which he is promoting his new book Here Comes Trouble to local journalists and activists in cities around the country. My invite came from Mike Elk, the labor beat reporter for In These Times and other publications, who often cross-posts his stories on Moore’s website. Early that morning, he sent out several dozen invitations to his DC friends and colleagues, and it looked like all of them showed up in his back yard in the old hippie/leftie enclave of Mount Pleasant in northwest Washington.

That's me, in the front in the hat.

Most of them were 20- or 30-somethings, and Moore, myself and my girlfriend were by far the oldest ones there. We were joined by Moore’s security posse, which included three beefy-looking guys said to be former SEALs (one of whom stationed himself in the kitchen all night), and a retinue of assistants and advisers – chief among them Moore’s sister, Anne. A Washington-based reporter for the Irish Times, at the event to write a profile on Moore, paid close attention and typed on her laptop throughout. After a somewhat awkward entrance to the back porch and a great shifting of seats, lights, and places to stand, Moore picked up his book. “OK, boys and girls, time for your bedtime story,” he began with a chuckle.

It wasn’t your ordinary reading. Moore immediately began riffing on remarks from the crowd, which by the time he began had ingested large quantities of beer and wine. He talked of how he got into filmmaking through his friend Kevin Rafferty, who made an incredible movie in the 1980s called Atomic Cafe that documented the culture that grew up around nuclear weapons during the Cold War (see the film in its entirety here). Rafferty had told this otherwise serious story with humor and wit, something Moore had never seen before in a documentary. At the time, Moore had just been fired by Mother Jones magazine because of differences over the U.S. war in Nicaragua and was working in DC for Ralph Nader. He sought out Rafferty, who taught him “the technical work” that goes into filmmaking. One of the most important lessons he learned, Moore recalled, was Rafferty’s interest in catching what you see “in your peripheral vision. Because sometimes what you’re looking for is in the margins.” I totally agree – and have found that’s as true for filmmaking as it is for any kind of journalism.

Mike Elk & Michael Moore

Moore then read from the last chapter of Here Comes Trouble. It’s a hilarious account of his accidental discovery about Rafferty’s heritage during the sparsely-attended inauguration of President George H.W. Bush in January 1989 (“there was nobody there,” he laughed, something I can attest to as a witness to the event). Rafferty, it turned out, was Bush’s nephew, and therefore George W. Bush’s first cousin. Ah, the ironies: the story got a long, good laugh, including from Moore himself. “Couldn’t believe it: his uncle was Bush!”

From there the talk shifted here and there, touching on everything from his relationship with Michael Bloomberg – who once invited Moore to the White House Correspondents Dinner on behalf his eponymous news service – to what young activists can possibly do in these times of political and economic crisis. At one point, he took the time to ask everyone in the audience who they were and what they did. He spoke proudly about how many of his colleagues from his classic show TV Nation - who learned their filmmaking ropes from Moore just like he learned them from Rafferty – had gone on to work as producers and writers on such shows as 30 Rock, The Daily Show, The Late Show with David Letterman and Real Time with Bill Maher (where Moore appeared on September 24).  Prodded by one despairing activist to speak “not as the Messiah” but as himself on the possibility of political change, he insisted optimistically that “it will happen,” and spoke of the hope he’d witnessed that week at the Occupy Wall Street protests in New York. Later, he expanded on those thoughts with the Irish reporter, telling her “we live in a liberal country” – a theme he hammered on this week in an interview on MSNBC’s Hardball with Chris Matthews. And, asked what he wanted to concentrate on next, he said: “I want to talk about fundamental core issues.” Excellent, I thought; but now I had some questions.

Michael and Me

I first met Michael Moore in 1984 in San Francisco, at a house of a mutual friend who worked for the Center for Investigative Reporting. He was giving a talk and slide-show on Nicaragua, where he had just spent a few weeks reporting for his paper, The Michigan Voice. Our host had two media passes to the 1984 Democratic Convention, which was going on that week. That evening, about ten of us made our way to the Moscone Center and used the passes to get all of us onto the floor one by one (security wasn’t anything like it is today). All I remember is standing in a cramped hall and hearing Ted Kennedy give a rousing speech just before the convention nominated Walter Mondale as its candidate to challenge Ronald Reagan (he got creamed). Years later, in 2002, Moore used my investigative article for The Nation on the Bush-connected Carlyle Group in his research for his great film Fahrenheit 9/11. So we’ve had a connection for a while.

But there was another connection I had to ask him about. When I first met Moore in 1984, I has just been fired by Ralph Nader from his magazine Multinational Monitor for attempting to organize a union in his shop and taking a more radical line on foreign policy, labor and economics than Nader was comfortable with at the time. The career-altering episode also involved red-baiting and political cowardice and revealed to me the true face of one part of the Washington “left” – and, of course, of Nader himself).

So I was more than a little startled to hear Moore, at the beginning of his talk, describe how he came to Washington in 1985 at the request of Nader and the Monitor to do some reporting on NAFTA and Mexican workers (all told, he ended up working for Nader for about two years). During that time, he fondly recalled, he spent a lot of time in Mount Pleasant,  which was (and still is) a haven for the small army of low-wage activists who work for Nader groups and other “public interest” organizations.

Well, I had to pipe up. I informed Moore that I, too, was living here at the time, after being fired from the Monitor. I filled him in on some of the details of Nader’s obscene campaign against me after my firing, which included trying to get me arrested and a ludicrous lawsuit against me, my fired colleagues and a supporter from the Institute for Policy Studies (they dropped their lawsuit in return for us dropping our unfair labor practices complaint with the National Labor Relations Board). Moore listened intently, and said yes, he’d heard about  the incident.

Later on, after the crowd had dispersed, I asked him if he had ever been informed by Nader and his people about the Monitor purge. After all, it wasn’t that much different than his firing from Mother Jones. No, he hadn’t, he said. I guess they managed to keep the news from him – which was not easy because it had been widely reported, including in the Washington Post a few months before he arrived in DC (download a PDF of the story here: Editors Claim Firing by Nader Based on Unionization Attempt, June 28, 1984).

Moore told me he wasn’t surprised by my story, and went on to describe his own dismal encounter with Nader after Moore received a big advance from Doubleday for a book he wanted to write about GM and the auto industry. That apparently didn’t sit well with Nader, who, in a fit of jealousy, confronted Moore about the advance and told him in a fit of anger to leave. “I never forgot that,” Moore said.

But Moore’s primary message about these incidents and other personal setbacks he heard about was that the left needs to stop attacking itself and turn its passion on its real enemies: the Republican Party and the big banks and corporations that run the country and fund the right. When a rather inebriated woman got into a tirade about how she’d recently been fired and what she should do about it, he replied “move on. Learn from it and move on.” If he hadn’t been canned from Mother Jones or kicked out of the Nader organization, he said, he’d never have made his first film, Roger & Me. And pointing at me, he said: “And if he’d never been fired, he’d never have gone on to be a business journalist or write a book.” Which was true – I went on after my experience to learn the reporting trade as a business and labor journalist, and in 2008 published my first book – SPIES FOR HIRE: The Secret World of Intelligence Outsourcing. And now I work for one of the biggest public-sector unions in the country – another experience that grew directly out of my contacts with the DC labor movement during and after my days with Nader.

As for Nader, Moore said, despite his foibles, we on the left should never lose sight that he’s responsible for helping democratize and humanize America through his campaign for auto safety, the environment and consumer rights, and his role in founding Public Citizen and other organizations. When I remarked that my experience with Nader during the 1980s was colored in part by Nader’s conservatism on foreign policy during the Cold War, Moore replied that Nader had begun to change in the late 1980s. He described how Nader, without any publicity, had funded Amy Goodman, Moore and others to visit the Middle East during the first Intifada to learn “what was really happening with the Palestinians.” That’s true, I replied, and I remembered too that he’d funded the journalist Allen Nairn in his quest to investigate the sordid ties between the U.S. military and the dictatorial Suharto regime in Indonesia. And yeah, Public Citizen – which now has no formal connection to Nader – is finally a union shop; all it took was 20 years. All good – but those gestures have never been enough for me to change my mind about the guy.

Still, I agree with Moore on looking beyond Nader’s failures as an activist and political leader – even his quixotic campaigns for the presidency in 2000 and 2004 (Moore backed him in the first run but literally begged him not to repeat the performance four years later). And yes, the left does “eat its young.” But it – we – also need to be clear-eyed and honest about our failures and misdeeds and not to overlook such things as union-busting at public interest organizations or cowardice in the face of the right. A broad coalition for a more democratic and equitable America, and against corporate greed, demands both respect for our differences as well as honesty about our failures. Without a full apparaisal of our stengths and weaknesses, we are bound to remain divided and powerless. We must speak truth to power, no matter who’s in control.

In the end, I think Michael Moore’s message of hope, courage, forgiveness and activism is the perfect antidote for the Plutocracy in our country right now – though I do think he’s a little over-optimistic on America as a “liberal” nation. But as I tweeted after his “living room” reading, he’s as real in person as he appears on the media – and funny, direct, personable, respectful, curious and always hopeful. Thanks, Michael, for all that you do! And Ralph, if you want to make the peace sometime, I’m ready if you are. But a little apology might be in order first.

Washington, D.C./October 4, 2011

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Blackwater/Xe’s BAE connection

Posted on September 15, 2011 by Tim Shorrock

Blackwater, the notorious mercenary company now known as “Xe,” has a new Chief Operating Officer (COO) – Charles (Chuck) Thomas, formerly of the British-owned defense and intelligence contractor BAE Systems Inc. According to today’s press release from Blackwater owner USTC Holdings LLC,

Thomas joined Xe on September 6, 2011, retired as a Major General in the U.S. Army, where he held the position of Chief of Staff, Headquarters, U.S. Army Training and Doctrine Command from 1998 to 2001; Commanding General, U.S. Army Intelligence Center and School and Ft. Huachuca from 1994 to 1998; Deputy Chief of Staff, Intelligence, U.S. Army Europe from 1993 to 1994; Vice Director of Intelligence for the Chairman, Joint Chiefs of Staff from 1991 to 1993 and Director of the Joint Intelligence Center, U.S. Central Command in the first Gulf War; and many other leadership positions throughout his military career. He is based at the company’s new headquarters office in Arlington, Va.

Now that’s a pretty deep intelligence background – perfect for a company that is involved in some of the CIA’s most covert operations in Pakistan and elsewhere. It might take a while for reporters to figure out what this appointment means in the long run. So in the meanwhile let’s take a look at some Twitter postings today from an informed source on all things covert to explain a little about Thomas’ past and how his past jobs will enhance Blackwater’s role in the U.S. wars in the Middle East, North Africa and elsewhere on the planet (the author of these tweets asked to remain anonymous and I will respect that request).

Thomas at Xe is very bad. For a multitude of reasons. Chief among them, his vast knowledge base in compartmentalization…For starters, Thomas was STO on the Joint Staff under Cheney and Powell.  What does that mean? STO, or special technical operations officers, manage and “oversee” — heh — Special Access Programs, of the legal & extra-legal variety…The dude ran pretty much every military intelligence element at every echelon…He ran the Army’s intel schoolhouse at Huachuca…Then, he assumes command of TRADOC and the predecessor to what is now Human Terrain System (Note: see my Daily Beast article on HTS here)…In summation: Chuck Thomas brings to BW/Xe vast experience in blended operations, special collection and a solid grounding in STO.

It’s also important to understand the role of BAE itself in U.S. intelligence. I wrote quite a bit about the company’s contracts with the CIA and other agencies in my book Spies for Hire, and here’s an excerpt that was first published in CorpWatch in 2007. Note especially BAE’s extensive work for the CIA, with which Blackwater/Xe is closely identified:

BAE’s services to U.S. intelligence — including the CIA and the National Counter-Terrorism Center — are provided through a special unit called the Global Analysis Business Unit. It is located in McLean, Virginia, a stone’s throw from the CIA. The unit is headed by John Gannon, a 25-year veteran of the CIA who reached the agency’s highest analytical ranks as deputy director of intelligence and chairman of the National Intelligence Council. Today, as a private sector contractor for the intelligence community, Gannon manages a staff of more than 800 analysts with security clearances. (Note: since this was written, Gannon has moved up in BAE to president of the company’s Intelligence and Security division).

A brochure for the Global Analysis unit distributed at GEOINT 2007 – a conference sponsored by the National Geospatial-Intelligence Agency and its contractors – explains BAE’s role and, in the process, underscores the degree of outsourcing in U.S. intelligence. “The demand for experienced, skilled, and cleared analysts – and for the best systems to manage them – has never been greater across the Intelligence and Defense Communities, in the field and among federal, state, and local agencies responsible for national and homeland security,” BAE says. The mission of the Global Analysis unit, it says, “is to provide policymakers, warfighters, and law enforcement officials with analysts to help them understand the complex intelligence threats they face, and work force management programs to improve the skills and expertise of analysts.”

At the bottom of the brochure is a series of photographs illustrating BAE’s broad reach: a group of analysts monitoring a bank of computers; three employees studying a map of Europe, the Middle East and the Horn of Africa; the outlines of two related social networks that have been mapped out to show how their members are linked; a bearded man, apparently from the Middle East and presumably a terrorist; the fiery image of a car bomb after it exploded in Iraq; and four white radar domes (known as radomes) of the type used by the NSA to monitor global communications from dozens of bases and facilities around the world.

The brochure may look and sound like typical corporate public relations. But amid BAE’s spy talk were two phrases strategically placed by the company to alert intelligence officials that BAE has an active presence inside the U.S.. The tip-off words were “federal, state and local agencies,” “law enforcement officials” and “homeland security.” By including them, BAE was broadcasting that it is not simply a contractor for agencies involved in foreign intelligence, but has an active presence as a supplier to domestic security agencies, a category that includes the Department of Homeland Security (DHS), the FBI as well as local and state police forces stretching from Maine to Hawaii.

So there you have it. Thomas brings all his intelligence experience, both in government and at BAE, into Blackwater/Xe. The revolving door turns one more time. And the business of war goes on. When will we ever learn?

Update: Blackwater hires disgraced AIG “Compliance Czar” Suzanne Folsom as first chief regulatory/compliance officer and deputy general counsel.

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The other 9/11: Chile, 1973

Posted on September 12, 2011 by Tim Shorrock

It still pisses me off that the AFL-CIO has never apologized for working with the CIA and the Nixon administration to bring down the socialist government of Salvador Allende in Chile in 1973.

This article, published in The Nation in 2002, remains current as far as AFL-CIO complicity in Chile goes (although the federation’s Solidarity Center still receives a big chunk of government money, its operations have greatly improved since the late 1990s and generally reflect the will of U.S. unions). As a writer and a trade unionist, I ask my labor leadership to take a hard look at its past actions and express contrition for one of the worst crimes of the Cold War – the destruction of Chilean democracy).

September 11, in 1973, was the day Chilean President Salvador Allende was overthrown in a bloody military coup that ended a brief experiment in democratic socialism and took the lives of Allende and thousands of Chilean workers, students and political activists. Today, many trade unionists remain haunted by the knowledge that their own federation, the AFL-CIO, played a key role in the US campaign, led by the Nixon Administration and the Central Intelligence Agency, to destabilize Chile in the years before the coup. From 1971 to 1973, the AFL-CIO’s American Institute for Free Labor Development (AIFLD), one of four US-government-funded labor institutes created during the cold war, channeled millions of dollars to right-wing unions and political parties opposed to Allende’s socialist agenda. That aid helped finance the revolt by Chile’s professional class and fanned the flames of social unrest that provided the pretext for Gen. Augusto Pinochet’s violent crackdown and the justification for his seventeen-year dictatorship.

According to documents I unearthed in the AFL-CIO’s archives, AIFLD’s program in Chile was closely coordinated with the US Embassy and dovetailed with one of the CIA’s key aims in Chile: to split the Chilean labor movement and create a trade union base of opposition to Allende, who was viewed as dangerously anti-American and a pawn of the Soviet Union. The campaign’s political agenda was summarized in a 1972 cable in the archives from Robert O’Neill, AIFLD’s representative in Chile, to AFL-CIO headquarters in Washington.

Chile, O’Neill proudly told his superiors, had become the site of “the first large-scale middle class movement against government attempts to impose, slowly but surely, a Marxist-Leninist system.”

To read the full article, which also probes “Labor’s Cold War” in Venezuela, Japan and South Korea, click here.

UPDATE: An excellent look at “The Other September 11″ published in, of all places, Forbes Magazine.

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