April 14, 2004
Bolivia's new government recently filed a lawsuit against giant Enron. The disgraced energy company has cast a shadow all the way down into Latin America.
Allegations of shady activity by Enron helped topple the government of President Gonzalo Sanchez de Lozada. Sanchez was essentially acting as Enron's servant.
The U.S. government was involved in helping Enron in Bolivia. The Overseas Private Investment Corporation gave a loan (later rescinded) to Enron for activities there. So did the Inter-American Development Bank, another taxpayer backed institution, which approved a $132 million loan for an Enron gas pipeline in Bolivia a year after Enron had filed for bankruptcy here in the United States.
Bolivians watched as their president courted this corrupt company and allowed it to build a gas pipeline through the Chiquitano Forest, which was until then the last intact dry tropical forest in the world. Indigenous groups pleaded with international lenders to protect the forest and their communities. They warned that the pipeline's proximity to a dormant gold mine, owned by the then-president himself, could result in the mine's reopening, which would cause further environmental destruction of their lands.
Still the pipeline went through.
The Bolivian Congress has been investigating these and other irregularities on the part of Enron. Public prosecutors have now filed a legal case against the company and are seeking reimbursement of $130 million that the government paid for the corporation to build a gas pipeline to Brazil.
Although the infamous energy firm filed for bankruptcy in the United States in November 2001, its international assets, including those in Bolivia, have remained separate and are now being transferred to a rebuilt Enron, under the name of Prisma Energy.
Recent events in Bolivia have shown that measures to turn public goods into private interests are unacceptable to the people, who will go to great lengths to block them. After they were charged higher prices for their newly privatized drinking water when the Bechtel Corporation took over their water supplies, Bolivians marched in the streets and stopped the corporation from trying to deny them one of their basic rights.
The U.S. government should take this opportunity to more closely scrutinize the policies and practices of U.S. companies and the U.S.-backed international financial institutions in places such as Bolivia.
They should start by demanding promptly the findings of pending investigations of Enron's deals, and they should launch their own examination of the company's taxpayer-backed operations overseas.
Congress should not be providing an unnecessary government subsidy to private corporations operating overseas, a subsidy that is all the more outrageous given the cuts in public services that most Americans are facing today. Ending the trend would not only save taxpayers money, it would also help the United States gain greater respect from our southern neighbors.
Nadia Martinez is Latin America coordinator with the Sustainable Energy and Economy Network, a project of the Institute for Policy Studies in Washington, D.C. (www.seen.org) and a Foreign Policy In Focus analyst. She can be reached at pmproj@progressive.org.