Dear President Faust:
I am writing you concerning a grave matter. It could embroil Harvard in an international scandal. Given your institution´s golden reputation, the contradiction would be seismic.
What makes the impossible possible:
Our universe is one of contradictions, contrasts. Predator/prey, hot/cold, positive/negative, matter/anti-matter: the list goes on and on.
Claude Lévi-Strauss attributed the origin of human thought to the existence of opposites. “The insistence on order is at the base of the thinking we call primitive, but only because it is at the base of all thinking...Any classification is better than chaos.” Classification, in turn, depends on opposites: “Any classification proceeds by means of contrasting pairs. Classification stops the moment there are no more contrasts possible.”*
A case in point: Midas, the king of Greek mythology, turned everything he touched into gold. If our universe is characterized by contrasts, it follows that somewhere -- even if only in mythology -- there is someone who converts all the gold he touches into dirt.
We located Anti-Midas Man. He really exists, and in a most unlikely place. A contrast, if there ever was one...
President Faust, you have on your staff a fugitive from justice: Jamil Mahuad, President of Ecuador, 1998-2000. Harvard´s web site lists him as a senior research fellow at the law school.
Last October, the Ecuadorian Government renewed its request for Mahuad´s extradition for corruption. (For an introductory English language article on the extradition effort, go to Ecuadortimes.net. For more detailed reports (in Spanish), go to El Universo.)
Mahuad will no doubt claim he is the victim of political persecution. That allegation is standard modus operandi for Ecuadorian fugitives, e.g., bankers Roberto and William Isaias, who were sentenced to 8 years imprisonment for embezzling hundreds of millions of dollars during the 1998-9 Ecuadorian bank crisis (more to follow), are safely ensconced in Coral Gables, Florida; Galo Lara, a convicted accomplice to a horrendous murder of three people, is seeking "political asylum" in Panama; Pedro Delgado, former head of Ecuador´s National Bank, is requesting "political asylum" in Miami; Delgado has confessed publicly** to fraud.
The list goes on -- like the list of contrasts.
Tragically for Ecuador, Mahuad´s brief administration was not brief enough. He is responsible for the 1998-9 bank crisis in which thousands of Ecuadorians were financially ruined. Here is Wikipedia´s cogent summary:
The 1998–99 Ecuador banking crisis resulted in about 70% of the country's financial institutions closing. In 1999, economic activity decreased by 7–8% and the currency depreciated by 195%.[clarification needed] Per-capita income in US dollar terms plummeted by 32% during the year. Unemployment increased from 9% to 17% and underemployment increased from 49% to 55%. 1.6 billion dollars of Government of Ecuador funds were used to bail out banks that failed as a result of corrupt practices and mismanagement ... In March 1999, the government froze bank deposits to avoid hyperinflation. By the end of 1999, President Mahuad's approval rating had dropped to 9%. Unresolved economic, financial and political problems led to massive protests that resulted in his departure from office on January 22, 2000.
(For more in English on Ecuador´s bank crisis, see my article posted February 25, 2013: "Guillermo Lasso: The Big Surprise." For supplementary information in Spanish, click here.)
In sum, the facts of Mahuad´s disastrous administration are overwhelming, well-known, and they speak for themselves.
My "Big Surprise" article highlighted how Mahuad manipulated the bank crisis to perpetrate one of the biggest financial scams of all times:
It is 1999. You are an Ecuadorian. After a one-week bank holiday, you get up early, hop in the car and speed to your friendly neighborhood bank to take out money for food and rent. You see a line of people and discover [that President Mahuad imposed a]
"freeze of bank deposits ... Time deposits and repurchase agreements were locked for at least one year and saving deposits in excess of US$500 and one half of checking account balances were frozen for six months ... "
You look in your empty wallet, then ... you look in it again. You don´t believe it -- it can´t be true.
But wait -- The Big Surprise had only just begun:
"The vast majority of bank deposits only began to be returned to their owners a year later, when the sucre was replaced by the dollar as the official currency of Ecuador. The exchange rate of the refund was 25.000 sucres per dollar -- whereas at the moment the deposits were frozen, the exchange rate was 10.350 sucres per dollar. In other words, the deposits of the public were pulverized and the ´freezing of deposits´ in reality represented a transfer of about $2,500,000,000 from the depositors to the banks and to the creditors of the banks who were frequently the same bankers."***
And so, when the bankers finally gave you your money back, it was less than half of what you had given them. The banks were not robbed -- the banks were the robbers. This screwball, quirky turn of events in Ecuador was right out of a play by theater-of-the-absurd dramatist Eugene Ionesco.
Hundreds of thousands of "little people" were economically destroyed. Planeloads and boatloads of them were forced to leave their country to search a livelihood in New Jersey, Madrid and points beyond...
They weren´t the only ones who had to leave. President Jamil Mahuad hightailed it out Ecuador where today he is a wanted man.
Mahuad shows no remorse whatsoever for thousands of lives he ruined. In his famous "I Apologize But" interview (March 2012) he is a veritable babbling brook about life at Harvard: he lives alone in a two bedroom rented apartment on the 20th floor of an upscale building; he drives a Toyota Sienna van 2006, chocolate-colored, second-hand with GPS; he says Violeta Parra´s "Gracias a la vida" is the theme song of his life; he is in love -- Anita, 48-year-old dentist. Just when you thought you had seen everything, the interview tosses in something about the Dalai Lama and starting a line of aromatherapy products.
His mother, Rosita, who we learn knitted a grey sweater for him, unconsciously but acutely summed up her son: white soul. He is movie screen; anybody can -- in fact did -- act out whatever they like on its blank surface. His perpetual "open smile" (Rosita) serves as glitter to catch and reflect all projections. In short, the grey sweater fits perfectly.
By now, President Faust, you may be wondering what is rapidly becoming the Eighth Wonder of the world:
Incompetence or corruption?
Readers of my book The Source of Terrorism: Middle Class Rebellion will spot immediately the game Mahuad is playing -- and is caught in: incomcruption. This remarkable socio-economic phenomenon has spread like ragweed throughout post-Clinton America.
Source (chapter 9) concluded that incompetence and corruption
are transforming themselves from fraternal into identical twins. Shakespeare caught the drift:
We came into the world like brother and brother;
And now let’s go hand in hand, not one before another.
-- "The Comedy of Errors," Act V, Scene 1 --
As for distinguishing incompetence from corruption, with time that distinction is becoming less and less important -- indeed, possible...
Incompetence or corruption? The billions and billions of bailout dollars handed out by the Bush and Obama governments to major corporations has finally created, by sheer volume alone, a definitive answer:
Incompetence or corruption, it makes no difference.
If you read the Mahuad interview, do not be misled by his techno-metro economics jabberwocky. The sum total of his knowledge of money, banking and income is this: if you know in advance that a currency is going to be devalued, you can make a lot of money. Congratulations, President Mahuad: you have attained the level of the average18-year-old Antioch student.
Incredibly, Mahuad´s corrupt practices were not limited to the banking crisis.
As president, Mahuad signed an agreement that absolved Texaco/Chevron of all future legal liability for polluting Ecuador´s Amazon area. With the stroke of a pen, Mahuad thus became Chevron´s Ecuador hand. Befitting a white soul, his idea of negotiating was a white flag.
The evidence is incontestable (even by Chevron) that its drilling in Ecuador created one of the biggest environmental disasters in world history. It is estimated that in1964-1990, the company dumped over 18 billion gallons of highly toxic waste water into the rainforest. Today, over 900 unlined waste pits containing 5.6 million cubic liters of sludge continue to contaminate ground water and soil. I cannot leave this subject without noting that hundreds of Ecuadorians died from cancer attributable to Texaco/Chevron pollution.
Such horrific results are inevitable wherever a president´s mysterious inner essence is a cliché: Go with the flow; the trend is your friend.
A bitter, decades-long Ecuador v. Chevron lawsuit is not only alive but very much kicking. (President Faust, for more information on the lawsuit and ecological disaster, please consult your alumnus Jonathan Shefftz; he worked on the case as an expert witness.) Ecuador´s highest court recently ruled in favor of Ecuador but halved the amount demanded in damages to $9.5 billion. Chevron announced it will not pay. The Ecuadorian Government launched a public relations/educational campaign, "The Dirty Hand of Chevron." Internationally, it is picking up momentum.
Jamil Mahuad no doubt wants you to believe the Chevron Affair is past history; after all, more than a decade has passed since he signed the agreement handing Chevron everything it wanted. Actually, not even Mahuad believes the "old news" argument; his ex-Minister of Government, Vladimir Álvarez, is busy testifying on behalf of Chevron.
We come to the proverbial bottom line:
What happens, President Faust, if Ecuador´s extradition request is approved? The entire world could be treated to the spectacle of a fleet of U.S. Marshals descending on your law school, handcuffing Mahuad, carting him off in a tinted-window van.
What will be your reply to the Harvard student body when they ask why Harvard provided safe haven to a man who is arguably the most corrupt president in Latin American history?
What will be your response to the torrent of emails and telephone calls from bewildered alumni and worried members of your Board of Overseers?
And what will you tell the New York Times, the Washington Post, "60 Minutes" and the BBC if they note that Chevron is among Harvard´s big financial donors -- an acknowledged half million dollars**** -- then look you in the eye: did Chevron pay for Mahuad´s refuge -- "Gracias a los $500,000" -- or was his benefactor a banker crony? Is Harvard for sale?
One thing is clear: times are changing. With increasing worldwide exposure of Ecuador´s "Dirty Hand of Chevron" campaign coupled with a renewed push for Mahuad´s extradition, Harvard faces a new road ahead. It is paved with double and triple-bottomed boxes.
I hope you will consider the appropriate action, President Faust:
You/him: here, all classification stops. We have reached the bottom of the contradiction. Insistence on order has been fulfilled. No more contrasts are possible.
Thomas Belvedere, Ph.D.
P.S. I worked for Robert Kennedy in 1965 on The President´s Committee on Juvenile Delinquency and Youth Development. What fortifies me in writing you this letter is the knowledge that Robert -- who was above all else a decent person -- never would have tolerated Mahuad.
Post Script, December 20: Several readers asked how Mahuad got a job at Harvard. The I Apologize But interview says that after Mahuad was driven from power, he went to Peru. "He remained in that country several weeks. He was invited to Harvard for a lecture. The proceedings against [him ] prolonged his stay indefinitely." That´s all, folks.
Never let it be said that Mahuad never created anything. What we have here is not a failure to communicate but an entirely new literary genre: a fairy tale for adults. If you believe Mahuad´s story, try it on your friendly neighborhood 15-year-old. She/he will set you straight.
*(« l exigence d’ordre est à la base de la pensée que nous appelons primitive, mais seulement pour autant qu’elle est à la base de toute pensée […]. Tout classement est supérieur au chaos […]. ») (« tout classement procède par paires de contrastes : on s’arrête seulement de classer quand vient le moment ou il n’est plus possible d’opposer. ») Claude Lévi-Strauss, La Pensée sauvage, Plon, Paris, 1962, pp. 22, 28, 260. My translation.
**Fake diplomas are a national sport in Ecuador. Mahuad´s comments posted on Harvard´s blog "Program on Negotiation" are too banal to qualify as acceptable scholarship; I taught 20-year-olds who had more insight. I hope Harvard will investigate the Ph.D. ("Doctor en Jurisprudencia por la Pontificia Universidad Católica del Ecuador, 1979") Mahuad claims to hold. (Note: full information on my Ph.D. is available on request).
***"La gran mayoría de depósitos solo comenzaron a devolverse un año después, una vez adoptada la dolarización, a un tipo de cambio de 25.000 sucres por dólar, mientras que al momento de congelamiento, el tipo de cambio era de 10.350 sucres por dólar. En otras palabras, los depósitos del público se pulverizaron y el ´congelamiento´ de cerca de 2.500 milliones de dólares de los depositantes a los bancos y a los deudores de la banca, estos últimos frecuentemente los mismos banqueros." Rafael Correa, Ecuador: de Banana Republic a la No República, Random House, 2011, pp. 78-9. My translation.
****Did Mahuad sell out his country for a baked potato at the palace?
Without Mahuad´s signature, Chevron would not have a legal leg to stand on in its pollution defense. Thanks to the latest court decision, we can now put a value on Mahuad´s services rendered to Chevron: at least $9.5 billion. If Chevron paid Harvard to take Mahuad on board, then the cost to Chevron of his services = $500,000.
Corrupt CEOs, elected officials and bureaucrats around the globe will find that hypothetical cost/benefit analysis to be, well, intriguing.