Fruits of the Invasion, U.S. Interests in the Dominican Republic Ten Years Later
Goff, Fred
Ten years ago this month President Lyndon Johnson ordered a military invasion of the Dominican Republic to put down the revolt aimed at reinstating the democraticallyelected former President...
...Coverage = Original amount of insurance purchased (in $000's) A = vs...
...4 ' Actually, the Peynado family's involvement began years earlier...
...14-15...
...Within five years he had solidified the legalinfrastructure for attracting foreign investors...
...Ralph Rounds, a New York attorney whose firm represented the South Puerto Rico Sugar Company...
...4 5 Today Julio Peynado continues the tradition of appropriating land from Dominicans for use by the ever-growing sugar giant...
...agribusiness giants (including Dow, International Harvester and Worthington) headed by International Minerals & Chemicals Corp...
...One of the commission's projections, relates Anderson, is that War becomes a major instrument of policy in countries of the Third World...
...Ahora, June 26, 1967, May 20, 1968...
...At the time the La Romana free zone was established in 1969, an Arthur D. Little executive explained to a group of U.S...
...companies which have made direct investments since 1965...
...Amount of the investment covered by the contract (in $000's) Original Max...
...Eshelman & Sons J.W...
...1967, p. 184 and 256...
...Not surprisingly, Walker recommended gradually selling or leasing the properties to private investors...
...Grenada had withdrawn because of a banana disease...
...The loss of access to Cuban nickel deposits (among the largest in the world) was one of the factors behind the huge Falconbridge nickel investment in the Dominican Republic...
...For a case study of how these firms benefit, see F. Goff, "Falconbridge-Made in USA," NACLA's LAER, April 1974, p. 11 ff...
...Expropriation...
...occupation army had finally secured control over the Dominican Republic, that the company's officers felt secure enough to authorize the heavy capital investment for construction of a sugar mill at La Romana - previously the Dominican cane had been shipped overnight by barge to the Guanica factory...
...This meant injecting massive amounts of economic aid, rebuilding the police and military forces and reconciling as best possible the factions within Balaguer's principal bases of support - the oligarchy and the armed forces...
...G&W, Loew's, ITT-Sheraton, Holiday Inns, Hilton, and ADELA all have hotel and resort projects under way in three different tourism regions being developed and financed by the government (with the help of large loans from the World Bank and the Inter-American Development Bank).'" A group of 40 U.S...
...See the USAID loan paper for the Cia...
...See International Finance Corp...
...The policy of relying on massive doses of foreign "aid" loans to create the infrastructure necessary to attract foreign capital has given the Dominican Republic one of the fastest growing rates of foreign debt per capita in the world...
...San Francisco Examiner & Chronicle (Sunday Travel Section), March 2, 1975...
...Gulf & Western Inds...
...A company history published in 1950, on the occasion of the firm's 50th anniversary, relates how members of a New York banking house with experience in Puerto Rico had been eyeing the possibilities of investing in sugar on that island: Before the Spanish-American War, however, there had been too much risk involved to interest American investors...
...Willson Intl...
...SPRS's history is a dramatic example of how U.S...
...WSJ, January 24, 1968...
...cit., p. 180...
...Law enforcement agents described a series of meetings held at the hotel at approximately the same time in which Morton held discussions with Lansky, Levin, Korshak and Newton Mandell, who was the general counsel of the G&W subsidiary that owned the hotel...
...The chaotic events surrounding the 1965 revolution in Santo Domingo provided an opportunity for organized crime to deepen its influence in the country...
...With sugar accounting for over half the country's export earnings, G&W produces one-third of the country's sugar (most of the rest being produced by the government sugar company...
...2 0 One final category of direct investment is banking...
...Since labor costs in the Dominican Republic are now significantly lower than those in Puerto Rico, many companies which first "ran away" to Puerto Rico have run away again to the Dominican Republic free zone...
...The company also bought Playa Bayahibe, the best beach in the area, and obtained a concession over the nearby island of Saona for development as a national park (thus becoming the major beneficiary of a June 1970 Congressional action which nullified a law dating from 1937 preventing the government from leasing small islands adjacent to the country...
...San Juan), May 1, 1970, pp...
...Thus G&W is a beneficiary of the U.S.-Balaguer strategy of integrating the Dominican and Puerto Rican economies (with the Dominican Republic serving as the agricultural base and Puerto Rico the industrial base...
...interests which stood behind the decision to intervene as seen from the perspective of a few months after the event.' Here we will try to follow up that analysis from a perspective of ten years later...
...4 Despite the coup which overthrew Bosch and abolished the 1963 Constitution, few investors felt secure enough about the island's stability to undertake major ventures due to the political turmoil between 1963 and the 1965 invasion...
...Contract = OPIC contract number (A = contract is active...
...During the U.S...
...Though the Dominican Republic was known to contain vast riches, both developed and potential, for at least 20 years U.S...
...Shortly after the U.S...
...International Commerce, September 21, 1970...
...Elsewhere we have tried to develop an analysis of the U.S...
...The day will very likely come When the Dominican Republic can be merchandised by the wholesalers and at least begin to boom, but not for a while yet...
...257 million to be spent on equipment purchases abroad over the next ten years by the government-owned facility...
...References - Fruits of the Invasion 1. See Fred Goff and Michael Locker, "The Violence of Domination: U.S...
...For that to happen they must be sold - sold by travel wholesalers...
...Then in June of 1970, looking for "areas outside the United States to expand into," according to Bluhdorn, with the whole world to choose from, G&W managed to pick out Societa Generale Immobiliare, Italy's largest real estate and construction firm...
...Hawaii produces 10 percent of all sugar consumed in the United States and the Dominican Republic nearly 6 percent (with G&W accounting for one-third of all Dominican sugar...
...Metal Litho Corp...
...By 1910, however, the company's officers faced the fact that: If the company was to continue to grow, it must find sugar lands elsewhere because of the natural limits on sugar lands and thus the ever-increasing cost of lands and leases in Puerto Rico...
...CONCENTRATION OF LAND While SPRS's land holdings on the eastern end of the island already accounted for 80 percent of the cultivated land in San Pedro de Macoris province and 60 percent in El Seibo, one of G&W's main goals in increasing sugar and agricultural production has been to buy up even more land (or contracting with more colonos, local landowners who contract with the company to grow cane and sell it to the La Romana mill...
...For a critique of tourism promotion as a "development" strategy, see Gail Grynbaum, "Tourism and Underdevelopment," NACLA Newsletter, April 1971...
...Data from the Dominican Central Bank, as cited in Del Castillo et al., La Gulf& Western en la Republica Dominicana (Santo Domingo, Editoria de la UASD, 1972), p. 190-192...
...Its value as a tourist attraction had permitted the establishment of such traditionally Syndicate-controlled activities as gambling, prostitution, and drug traffic...
...T = contract is terminated) Inv...
...for an electrical generating unit (General Electric and Westinghouse...
...Indeed, the Dominican Republic even looks like Cuba...
...Under its 30 year contract G&W's income will come exclusively from the rental of land and the buildings it will construct and own in the zone...
...direct investors, another even larger group of interests is also benefiting: this group is composed of the various ancillary institutions which help place and service the foreign investments, such as law firms, investment banks, public relations and advertising firms, insurance companies and suppliers...
...government blue-ribbon commission report looking ahead to the end of the century...
...J.W...
...G&W Annual Report, 1974, p. 14...
...In the words of Business Latin America: Only great effort by AID consultants, one of whom was openly condemned as a lobbyist in the Dominican Congress, got the Nestle deal approved...
...The largest recent export sale was under a U.S...
...The total 182,000 visitors to the Dominican Republic in 1973 is small compared to Puerto Rico's 1.6 million, the Virgin Islands' 1.3 million or Jamaica's 517,400...
...249-291...
...San Francisco Chronicle, January 8, 1975...
...Gurrentz Intl...
...5962 -T Single-unit family dwellings 8123 -T Breeding/raising Higrade hogs 8085 -A Manufacture/sale of spices 5733 -T Lumber mill 5998 -T Lumber mill 5976 -T Refurnishing hotel/motel 5977 -T Refurnishing hotel/motel 5237 -A Storage tank - fats/oils 6398 -A Falconbridge nickel complex -A Lithographic plant 7100 -A Construction Tavera Dam/power station 5636 -T General farming of milo and vegetables 5634 -T General farming of milo and vegetables -A Fish farm 5734 -T Lumber mill 7137 -A Mfg./sale of cigars, cigarettes -A Mfg./sale of dry cell batteries -A Refrigeration equipment distribution 8212 -A Mfg./sale injected mold welt footwear 6216 -A Mfg./sale of wood furniture, cabinets 5933 -A Integrated food/vegetable processing 6319 -A Integrated food/vegetable processing 7207B-A Integrated food/vegetable processing 7208 -A Integrated food/vegetable processing 8112 -A Mfg...
...Accordingly, in February 1918, Mr...
...They must have something to merchandise - package tours and options on the packages, a full range of prices and accommodations...
...4 " In 1974 G&W also bought Schrafft's candy company, a heavy user of sugar...
...in the hands of Dominicans the United States could control...
...sugar prices would affect this position significantly...
...Inversiones Daniel Construction Darlington Self-Serv...
...40 million EXIMBANK loan to the Dominican Electric Corp...
...Some U.S...
...As a result, the company purchased some 20,000 acres there in 1911 [when the Dominican Republic was under a U.S...
...A few months after the landing of American troops in 1965, Bluhdorn and his close business associate Harold Toppel, head of Pueblo Supermarkets in Puerto Rico, began purchasing shares of South Puerto Rico Sugar Co...
...See B of A, April 1972 and July 1972...
...business which are diametrically opposed to those of the Dominican people...
...See February 1975 Kidder Peabody report on G&W, p. 16...
...U.S...
...Within a year after Trujillo's assassination, the First National City Bank and Chase Manhattan Bank had opened branches in Santo Domingo...
...supermarket chain, A&P, and two of the largest U.S...
...cit., p. 180...
...prods ind...
...The two financieras are: Cia...
...Embassy report, "one of the brightest spots in Latin America...
...The U.S...
...s As in pre-Revolutionary Cuba, a regime totally dependent on U.S...
...158, 354...
...To U.S...
...IC Roughly the size of Vermont and New Hampshire, the Dominican Republic shanes the island of Hispaniola with Haiti...
...Del Castillo, op...
...Ed Reid, The Grim Reapers (New York, Bantam, 1970...
...Since Balaguer took power in 1966, between one and two The hearings also established that Lansky had used the hotel to evade police surveillance during a conference of organized crime figures which took place in Acapulco in early 1970...
...9. For example, a 9.5% interest in the $190 million Falconbridge nickel complex, a 50% interest in the $30 million Shell oil refinery...
...The fact that one of his law partners, Polibio A. Diaz, is legal counsel to President Balaguer probably makes him a more effective lobbyist for the company...
...Among Mr...
...74/82, October 31, 1974...
...This law was adopted by the military government and is still in operation...
...Overseas Private Investment Corporation (OPIC), Washington, D.C.7 THE GULF & WESTERNIZATION OF THE DOMINICAN REPUBLIC The largest single beneficiary of the U.S...
...BLA, May 29, 1969, p. 174...
...In 1962, for example, George Walker, an executive of the Mellons' Koppers Co., and other high level U.S...
...On the Grenada plantation see: BLA 1966, p. 20...
...The Washington Post, March 9, 1969, and the Wall Street Journal, March 12, 1969 (on G&W-Pan Am-Resorts...
...Carnation Milk Century 21, Polk Bros...
...For the purposes of comparison with the Company's San Juan labor costs, to the Dominican minimum wage must be added freight to and from San Juan and a variable U.S...
...A WA IC Dominican Guarante 4 Company Name Aguirre Co...
...Aguirre Co...
...2 5 A recent U.S...
...El Nacional May 22, 1971, p. 10...
...3 4 Previously Bluhdorn had been rebuffed in an attempt to acquire control of the largest U.S...
...Investigation of Conglomerate Corporations, Hearings Before Antitrust Subcommittee of House Judiciary Committee, Part 1 (On Gulf & Western Industries), July & August 1969, pp...
...In addition to producing sugar, molasses and furfural (a cane byproduct used in purifying lubricating oil and making rubber), the company grows and exports beef, winter vegetables, citrus fruits and tobacco...
...During 1974, which saw sugar prices soar 400 percent, Bluhdorn not only boosted G&W's sugar development but also attempted to increase its power in the sugar market through acquisition of a strong position in at least one other major sugar producer...
...Solon Barraclough, mimeographed evaluation of AID program in agriculture in the Dominican Republic, 1971, p. 74...
...The invasion and subsequent U.S...
...Gallagher says he passed the information along to the State Department...
...By 1903 the factory was in operation...
...Bank of Wash...
...Power and the Dominican Republic," in I...
...manufacturers the advantages of having twin plants on the two islands: "Serious consideration" should be given to having a single management run a labor-intensive raw-materials-using plant in the Dominican Republic, send semimanufactured products to Puerto Rico for finishing...
...He did not seem to feel that the fluctuation in U.S...
...government at this time in favor of Balaguer was I. Irving Davidson, long identified as an associate of organized crime figures...
...Report on Caribbean Leisurewear by PRFG Securities Corp...
...This transaction marked the beginning of a series of controversial Sindona ventures in the United States, culminating with the recent failure of the $5 billion Franklin National Bank (in which he was the largest shareholder) and a high level investigation in Italy into Sindona's business interests, including his underworld connections...
...Wall Street Journal (hereinafter abbreviated WSJ), September 28, 1971;ElSol February 13, 1971...
...IMMEDIATE U.S...
...The public record of the past decade is filled with ardent and glowing statements by G&W officials as to the unique qualifications and achievements of Balaguer as President...
...At the time Bluhdorn and Toppel began acquiring SPRS shares, the company was a relatively traditional sugar producer with nearly 270,000 acres of land (between 9 and 15 percent of the arable land in the Dominican Republic, depending on how you determine arable land, and more than all the agricultural land in Puerto Rico), mainly used for growing cane...
...The New York Times and The Wall Street Journal, June 25, 1970 (on Societa Generale).12 thousand Dominicans have been murdered by right-wing terrorist bands and police trained by the United States...
...and nostalgic travel correspondent Horace Sutton speculates that with tourism development under way in Santo Domingo, the city is "perhaps on its way to becoming a replacement for once gay Havana...
...Zachery Co...
...of Pittsburgh, mimeograph, 1974...
...C. Hitt & A. Zalduondo Honey Creek Farms Intl Import-Export of Balt...
...12The tourism boom, however, is still somewhat in the future...
...In discussing the acquisition with officers of the Chase Manhattan Bank (one of his principal creditors), Bluhdorn explained how the invasion figured in his acquisition strategy: In discussing the political risks of the company's land holdings in the Dominican Republic he [Bluhdom] indicated that they were relying on President Johnson's close association with this trouble spot and on the artificial price at which South Puerto Rico Sugar [sugar] was being sold at, as a hedge against the nationalization of this land...
...is the leading supplier [of imports] with 53.8 percent of total for 1973...
...Business Week, January 20, 1975, p. 57...
...His first step was to take advantage of the repressive conditions surrounding the invasion and occupation by U.S...
...Financiers Dominicana (AID-DLC/p-1027), U.S...
...and the U.S...
...Thomas E. Quick Philip Morris Ray-O-Vac Refripartes, Inc...
...BLA, January 18, 1968, p. 19 and May 29, 1969, p. 173...
...Eventually we worked out a theory of land titles and a land court which would clear title to land and permit immediate sugar production...
...Godfather Part III When the Cuban Revolution forced organized crime from one of its major operational bases, the Syndicate did not abandon the Caribbean area...
...It includes Vice President Nelson Rockefeller and Senate Majority Leader Mike Mansfield and is chaired by ex-Undersecretary of State Robert Murphy...
...cit., pp...
...These major steps necessitated severe repression of popular dissent - no small task since the majority of the Dominicans backed the Constitutionalists...
...It sought to expand the financial infrastructure by creating new credit sources which could channel funds to investors - such as the Tourism and Hotel Industry Development Corp., which has powers to help finance tourism investments and FIDE (the Investment Fund for Economic Development) which borrows from international aid agencies and lends to private investors...
...and Delbert Coleman, a businessman accused of stock manipulation with Korshak and others by the Securities and Exchange Commission.11 ANOTHER CUBA In justifying the 1965 invasion, President Johnson and his apologists claimed they were acting to prevent "another Cuba...
...military and economic support stands in opposition to the fundamental needs of the people...
...The three-part strategy involved: (1) creating favorable conditions for private investment, especially foreign investment, and hoping that the benefits of the resulting economic growth would trickle down to and pacify the mass of the population...
...Cia...
...adhesive 7042 -A Finance installment sale GM products 5029 -A Furfural production 5100 -A Invertible molasses 5100C-T Invertible molasses -A Cement plant -A Cattle ranch, slaughter, meat process...
...investors were initially interested in establishing light industry to penetrate the Dominican internal market - "a market delight second in the Caribbean only to Puerto Rico in terms of population, the propensity to consume durables and processed perishables" 13 - but strong resistance from local interests had greatly limited such expansion...
...Edward Rosenthal Stokely-Van Camp Stokely-Van Camp Stokely-Van Camp Stokely-Van Camp Tenna Corp...
...Horowitz et al., Latin American Radicalism (New York, Random House, 1969) pp...
...food markets in that Toppel and Bluhdorn are both major stockholders in Pueblo Supermarkets (with Toppel being board chairman...
...What is more, with 4-5 applicants for every available Company job in the Dominican, the Company has the opportunity to expand rapidly within a framework of labor peace and dedication to work...
...and international opposition, to retake the capital from the Constitutionalists and place it...
...How the country is going to service and repay this debt is a question that worries even some government economists...
...Eshelman & Sons First Natl...
...Ibid., pp...
...The next step for Washington was to create as stable a base as possible for the new government and to build an administrative structure capable of ruling the country...
...Jaragua Inc...
...La Opinion (New York) January-February 1968...
...Meanwhile, in the United States, the Dominican government has conducted a broad media campaign to attract investment, paying nearly half a million dollars to one New York public relations firm alone to conduct a promotional campaign for tourism and industrial investment...
...receivership and occupation of the Dominican Republic in the early 1900's, the National City Bank, predecessor of the First National City Bank (FNCB), had served as the country's central bank...
...Tony Roma, identified as an associate of organized crime figures in Montreal...
...239-49 (on COFINASA...
...cit, pp...
...Source: U.S...
...B = vs...
...The equivalent of the War Production Board of that period was seeking to increase production of sugar...
...It is the island's largest private employer and tax payer, the largest private landowner and is the private company most closely associated in the popular mind with the hated Balaguer regime...
...industrial corporation...
...A notable recent example was a 20 year extension of La Romana's 1953 tax exemption granted by Trujillo...
...Gulf & Western Inds...
...operate cattle ranch 8140 -A Manufacture & sale of animal feeds 8221 -A Poultry farm 1632 -A Commercial banking 1633 -A Commercial banking 1633A-A Commercial banking 5882 -A Commercial banking -A Commercial banking/expansion of branch -A Mfg/sale ind...
...The expanding tourist industry has brought alarming reports of increases in drugs, prostitution and gambling, even though there is evidence that the resorts themselves are losing money...
...These mechanisms include massive doses of economic "aid," elaborate private investment promotion schemes, training and supplies for elite counterinsurgency forces, and myriad covert activities...
...Intl...
...By agreement with the Dominican government, G&W virtually controls the customs station at La Romana, one of the busiest ports in the country...
...Adolf Berle, Jr., a New Deal lawyer and sugar executive who headed President Kennedy's Task Force on Latin America and who backed President Johnson's Dominican invasion, relates in his memoirs how this process worked...
...Conservas Casera Cia...
...An expedition sent out to explore likely sites brought back a favorable report on the undeveloped area lying north of La Romana in the Dominican Republic on the very island where Columbus first introduced sugar culture in the New World...
...SPRS), the largest private sugar company in the Dominican Republic (and the largest single private U.S...
...The architect of this $2 billion empire, Charles Bluhdorn, acquired his initial capital trading sugar and coffee...
...I was working with a first rate Dominican lawyer, Francisco Peinado [sic...
...Taking advantage of the country's attractive tourism incentives, it has developed the multimillion dollar Costasur resort complex at La Romana complete with its own jet strip, 18 hole golf course and tennis courts...
...Julio's uncle, Jacinto Peynado, was Trujillo's first puppet President and his father Francisco negotiated ,the Hughes-Peynado plan covering the termination of the Marine occupation in 1924.42 It was Julio Peynado's father, Francisco, who also helped assemble the original SPRS lands in the Dominican Republic...
...467-68...
...hundreds more are detained as political prisoners in the country's jails...
...Dept...
...Once these immediate objectives had been more or less achieved, U.S...
...Joseph Co...
...The Miami Herald, November 24, 1974...
...The most conservative estimate of new direct investment from the United States is the $220 million guaranteed by the U.S...
...5 010 To further accommodate G&W's operation (and other free zones) the government amended its industrial incentives law to exempt free zone operations from any exchange restrictions...
...3 1 The Puerto Ricans, according to Business Latin America,8 were at first reluctant to initiate any relationship with the politically volatile Dominican Republic...
...The World Bank's International Finance Corp...
...9 WHO BENEFITS...
...Jaragua Inc...
...WSJ, May 25, 1973...
...3. John Bartlow Martin, Overtaken by Events (New York, Doubleday, 1966), p. 116...
...In a further diversification G&W entered into a unique relationship with the Dominican government to become the only private manager and operator on the island of an industrial free zone...
...Cane cutting wages are kept so low that Dominicans can barely live on them and the sugar companies - enjoying their highest profits in decades - import thousands of even poorer Haitians to do this strenuous work...
...See NYT, May 26, 1974, special supplement on the Dominican Republic...
...intervention in the country's affairs has only compounded them...
...The two neighboring countries - the largest in the Caribbean - have many cultural, historical and economic similarities...
...Motors Acceptance Gulf & Western Inds...
...versus $1.17 per ft...
...3 Since acquiring SPRS, G&W has used it as a base to diversify into a wide variety of Dominican ventures...
...Many of these officials, such as Alvaro Carta, Teobaldo Rosell and Manuel de Leon are Cuban exiles, and questions have been raised about their ties to the Batista regime, CIA counter-revolutionary activities and organized crime...
...Secretaries from Trenton ahd shoe clerks from Norfolk must want desperately to come...
...Because of G&W's abusive and repressive treatment of its workers, its huge profits, its expansionist moves into wide sectors of Dominican industry, and because its investments are all in sectors in which Dominicans already have long experience, the popular parties have long been in agreement in calling for its nationalization...
...Plant is being specifically laid out for volume sewing and finishing of dresses, blouses, pants, skirts pre-designed and pre-cut in San Juan...
...s 4 However, judged by the criteria of an even distribution of the income produced and of better living conditions for the majority of the people, the country is worse off than it was ten years ago...
...3 2 G&W has an additional advantage in serving the Puerto Rican and U.S...
...See also World Bank press release No...
...4 3 The system worked out by Berle and Peynado became the Military Government's Land Registration Law of July 1, 1920...
...ownership (it was owned by a group of investors closely tied to the Rockefellers...
...At the same time the U.S...
...The Trujillo companies accounted for 63 percent of sugar production, 63 percent of cement, 73 percent of paper, 86 percent of paint, 71 percent of cigarettes, 85 percent of milk, 68 percent of wheat and flour plus the nation's only domestically-owned airline, its leading newspapers and three principal radio and television stations...
...Ambassador Hurwitch, in fact, reproved G&W's La Romana manager, Teobaldo Rosell, because he had called at a local rally for Balaguer's re-election to a third term during the 1974 presidential campaign...
...The Financial Times (London), October 10, 1974...
...Photo: Howie Epstein/LNS...
...On AGRIDOC see NYT, January 22 and April 16, 1968...
...C&H) which refines and markets all Hawaiian sugar...
...The country is too far behind...
...Rather than resolving the contradictions in the Dominican Republic, the deepening U.S...
...American Can Co...
...2) repression of dissent...
...Falconbridge nickel complex 6361 -A Milk plant 7179 -T Trading in goods and merchandise 5158 -A Bank branches/international banking 5958 -A Banking facilities -A Mortgage banking 6222 -A Reconditioning/selling appliances 7207A-A Processing & packaging food products 5792 -T Lumber mill 8008 -T Constrn...
...troops occupied the island...
...South Porto Rico Sugar Company 50th Annual Report (1950), p. 2. 28...
...Westn...
...military operations in the Caribbean serve the needs of private capital...
...By February 1966 Bluhdorn and Toppel acquired enough stock to gain seats on the company's executive committee...
...and Del Castillo, Op...
...4. Dan Kurzman, The Washington Post, May 25, 1965, as reported in I. F. Stone's Weekly, May 31, 1965...
...Conditions in the Dominican Republic today resemble many of the conditions in Cuba before the Revolution - widespread poverty, unemployment, disease, malnutrition and illiteracy...
...This represents the first of an estimated U.S...
...Article 25 restricted the right of foreigners to acquire Dominican land...
...Melvin K. Knight, The Americans in Santo Domingo (New York, Vanguard Press, 1928), p. 103...
...invasion and subsequent government policies in the Dominican Republic is unquestionably Gulf & Western Industries...
...William Johnson, "A New Era for an Old Island," Sports Illustrated, February 1, 1971, p. 40...
...For background on the collective landholding system see p. 45...
...Morrison-Knudsen Nebraska Cons...
...Pat Holt, Guatemala and the Dominican Republic, Staff Memorandum for Subcommittee on Western Hemisphere Affairs of Senate Foreign Relations Committee, December 30, 1971...
...interests in the Dominican Republic which is in process but still far from completed...
...a since abandoned United Fruit banana subsidiary, $14 million), the Elmhurst Construction Co...
...And the viability of the recent labor intensive investment strategy in the free trade zones depends on perpetuating high unemployment rather than eliminating it...
...As one expert explained in 1971: There is no authentic tourist boom - not a boom - until tens of thousands of people want to visit a place...
...In response to nationalist pressure, the government has taken minority positions in several of the largest recent foreign investments...
...Financieras are highly versatile banking institutions used to penetrate new investment markets: they locate and develop new investment prospects, distribute shares of new companies, help in opening closely-held local private firms to foreign capital and aid in the creation of capital markets where company securities can be traded, as well as provide long term loans...
...as well as a U.S.-backed repressive government which resists reforms...
...G&W Americas Corp...
...73/23, November 27, 1973...
...If established properly...
...and Del Castillo, op...
...Data is for 1973, as reported...
...NYT, February 12, 1973...
...east coast...
...For a summary of tourism investments, see G&W Americas Corp...
...Loma Corp.(Falconbrg...
...154-55...
...In all of these investments management and sales control is in the hands of the foreign companies...
...By July 1967 the absorption of SPRS was complete with G&W's formal acquisition of all SPRS shares in exchange for $61 million worth of G&W securities...
...sugar mills in Cuba in 1960, its mill was the largest one in the world under U.S...
...City Bank First Natl...
...The subject of discussion was reportedly the hotel's business, which was not particularly profitable...
...BLA, September 21, 1967, p. 302...
...The present minimum wage in the textile industry in the Dominican Republic is $0.30 per hour and the Company will pay this in La Romana...
...sic] is selling their sugar at 8 cents a pound in the U.S...
...Other free zones exist in the country, but they are administered, as is the custom in other countries, by the government...
...For once firmly entrenched in power, Trujillo had initiated a program of taking over as many of the country's productive assets as possible...
...U.S...
...Santo Domingo has increasingly taken on the look of a pre-revolutionary Havana, nurturing an environment that is almost tailor-made for the specialties of organized crime...
...Alan Howard Sources include: Hank Messick, Syndicate Abroad (New York, Macmillan, 1969...
...Tibbals-Crumley-Musson Richard Tiefer Tocomo Corp...
...Those who protest or resist the government responsible for these conditions risk imprisonment, exile and assassination...
...airstrip and San Juan, one flight hour away...
...in D. Gale Johnson, The Sugar Program (Washington, D.C., American Enterprise Institute for Public Policy Research, 1974), p. 13...
...NYT, July 27, 1974...
...Mills Nebraska Cons...
...see also Martin, op...
...Aguirre Co...
...This is the context in which we turn to G&W's rapidly expanding tourist facilities in the Dominican Republic...
...And before it got very far along in building up its financiera or private investment bank, Corporacion Financiera Asociada (COFINASA), local opposition, alarmed at the rate it was penetrating other locally-owned companies through loans and equity participation, forced it to sell off part of its interests.s 2 "After the fierce criticism of COFINASA earlier this year" reported the Financial Times of London in October 1974, G&W decided to divest itself of its shares, placing some of them in a special trust with the income to be used to maintain a new government sports complex and to support the new Pedro Henriquez Urena University in San Pedro de Macoris near La Romana...
...requested to the War Department to place me on "inactive duty" for the purpose of going to Santo Domingo in connection with land titles and the movement of the sugar crop in the island...
...En Un Tris" column, Ultima Hora, August 11, 1972...
...Calculation based on data in G&W's 1974 Annual Report and I O-K Report...
...The $185 million in loans to the Falconbridge Dominican project are insured by an OPIC guarantee issued to Loma Corp., a Delaware-based company which was set up to receive the loans and relend them to Falconbridge Dominicans...
...By December 1973 the FNCB had assets in the Dominican Republic of $70 million...
...6 The report goes on for several more pages outlining the potential export sales in each major area of the Dominican economy...
...a Tourism Promotion Law (June 1971) under which a wide gamut of tourist-related activities, from hotels to transportation services, was granted complete exemption from taxes and from import duties on goods not available locally, and guaranteed the right to repatriate capital and dividends from such investments...
...Intl...
...It represents a preliminary research framework for further work on U.S...
...Opposition to foreign investment in industry has been so great that the large AID mission on the island has switched its emphasis to tourist development, hopefully a field with fewer vested interests.14 While a relatively large number of companies have established small assembly plants in "free trade zones" set up by the government, these involve minimal investments...
...Though a little weak on training, the Balaguer administration has gone out of its way to keep labor costs low through a systematic repression of efforts to organize militant unions, to the point of sending soldiers to break up strikes and looking the other way while labor leaders are assassinated (see accompanying "Trade Union Imperialism" article...
...If development is measured by growth in production, then the Dominican Republic is a glowing "little Brazil," or, in the words of a recent U.S...
...Financier Dominicana (ADELA, Manufacturers Hanover Trust) and the Corporacion Financiers Asociada S.A.-COFINASA (G&W, Bank of America, American International Life Insurance...
...However, in an October [1969] meeting between Puerto Rico's Governor Sanchez Vilella and President Johnson, it was suggested that Puerto Rico take up the Dominican overture...
...Ten years ago this month President Lyndon Johnson ordered a military invasion of the Dominican Republic to put down the revolt aimed at reinstating the democraticallyelected former President Juan Bosch and his 1963 Constitution...
...2 1 The Bank of America entered the scene in 1968 through the purchase of an existing bank...
...By June 1973 the project came full circle when a group of Dominican banana growers, who had since developed the lands under the direction of the state-run Dominican Agrarian Institute (IAD), sold their crop to the United Fruit Co...
...B of A, May 1972...
...This country has become the best market the U.S...
...6 and 9. 27...
...In a country where over half the population makes its living in agriculture, the agrarian problem is, according to Solon Barraclough, an economist with wide experience in Latin America, "serious and growing worse...
...Gen...
...Resort International's main business at the time was, and remains, a gambling operation in the Bahamas, and numerous authorities concurred that the company was controlled by organized crime...
...Rafael L. Ruiz, "Doing Business in the Dominican Republic," (Santo Domingo, U.S...
...investors had, with few exceptions (see below), been excluded from exploiting them...
...Given G&W's murky history of association with organized crime and the use of the Caribbean-Florida entry route for illicit drug traffic into the United States, it seems quite possible that, known or unknown to top G&W executives, the corporation's operations in the Dominican Republic are used as a front for the activities of organized crime...
...7 And Balaguer has hired the prestigious Boston-based Arthur D. Little consulting firm to prepare an extensive survey of foreign investment possibilities on the island...
...a 20% interest in the $41 million Rosario gold and silver mine, and a 25% interest in G&W's $34.5 million cement plant...
...News & World Report, July 7, 1969, p. 75...
...This included the creation of an Inter-American Peace Force and a provisional government, followed by holding "elections" and the installation of Joaquin Balaguer as President...
...military invasion in April 1965, well-known Mafia figure Joe ("Bayonne Joe") Zicarelli approached Rep...
...policy toward the Dominican Republic has long been closely linked to its Cuban policy...
...Bank of Wash...
...In 1974 sugar production accounted for some 20 percent of the company's $224 million profit...
...headquartered at Vero Beach, Florida...
...The Balaguer administration, reports the Financial Times "appears to have done everything possible to help G&W despite local objections...
...but one company, Gulf and Western Industries, in particular stands out as a major beneficiary and is worth examining later in more detail...
...Ro-Search Inc...
...Coverage Inv.Amt A B C 250 1.550 800 818 1,138 1,075 2,164 4,328 1,680 1,680 500 1,000 1,700 1,000 1,323 2,646 50 3,550 f1,760 220 440 50 73 145 80 350 300 600 300 50 100 25 40 6 12 2,880 550 757 1,297 100 150 100 200 1,690 2,000 762 1,860 3,000 4,500 383 765 720 729 729 47 53 106 186 500 450 175 350 185,000 185,000 39 78 3,500 2,500 1,500 2,500 1,600 14 26 1,983 3,966 589 1,177 300 470 470 50 100 298 350 196 15 29 30 60 205 250 16 53 209 60 97 385 200 100 200 250 1.550 800 818 642 1,075 4,328 1,680 1,000 1,700 2,646 100 2,850 1,760 440 100 145 80 350 600 600 100 40 12 1,200 550 757 200 2,000 1,860 4,500 765 720 729 53 106 186 500 450 175 185,000 78 3,500 1,500 3,275 1,600 26 3,966 1,177 600 100 350 196 29 60 250 16 151 184 60 385 200 100 695 250 1.550 800 818 642 1,075 4,328 850 60 900 2,646 100 8,000 1,260 100 145 80 350 600 600 100 40 12 180 20,000 300 100 1,690 1,110 620 4,500 765 720 729 53 106 186 500 450 185,000 78 3,500 1,500 2,525 1,000 26 3,966 1,177 600 100 350 196 29 60 250 8 30 162 60 385 100 695 Key: Date = Fiscal Year coverage first issued (65-70 indicates coverage issued between 1965 and 1970...
...G&W's sugar production must also be viewed in a larger context...
...Should Dominican wages rise in relation to wages elsewhere, the jobs would vanish as the shops ran away to cheaper labor havens...
...Acapulco Towers was run by "Moe" Morton, not as a regular hotel but as a private club for himself and his friends...
...10-K Reports for Amfac and C. Brewer & Co...
...The big investments now on the drawing boards are in tourism...
...Other companies benefit from the fact that the Dominican development strategy relies heavily on producing for export markets - shipping companies (the island has no merchant marine) and foreign marketers, such as sugar brokers, banana distributors and food wholesalers...
...economic interests and their representatives in Washington began to move towards reaping the fruits of all this effort...
...De Junco & Cruz Co...
...3 3 In addition, Bluhdorn is the largest stockholder (22 percent) in Bohack which operates 120 supermarkets in New York...
...import tax...
...More recently, AGRIDOC, a consortium of U.S...
...Bluhdorn and his associates denied any and all knowledge of organized crime figures connected with G&W properties, but Illinois and Federal law enforcement officials presented evidence of precisely such a connection...
...When Pan Am stockholders threatened to fight and called for a thorough investigation, G&W backed away from the original deal, though it still owns Resorts International stock...
...Dominican plant capacity (140 machines) compares with the 125 sewing machines the Company presently operates in its San Juan facilities . . The initial total fixed investment of the company in the Dominican Republic will be limited to about $80,000, comprising mainly the 140 easily-movable sewing machines, plus an estimated $35,000 in two-week inventories, so its political exposure is narrowly reduced...
...interests: U.S...
...American Can Co...
...Within the semblance of stability brought about by this strategy, U.S...
...Corp...
...Bank of America Bank of America Brown & Root, Inc...
...cit., pp...
...Ultima Hora August 31, 1972, p. 6. 42...
...For an analysis of the Falconbridge investment, see the three articles on this company in the April 1974 issue of NACLA's LAER...
...G&W was also an early supporter of Balaguer...
...It is between Cuba and Puerto Rico, southeast of Florida.6 ^10...
...8. BLA, 1970, p. 6; International Commerce, September 21, 1970, p. 25...
...Del Castillo et al., op...
...press release No...
...The most notable ingredients included an Investment Incentives Law (1968) which extended generous tax and duty exemptions to new investments, particularly those geared to production for export markets, placed no restrictions on foreign ownership, and created two agencies to deal with incentives...
...5. Business Latin America (hereafter abbreviated BLA), September 14, 1972, p. 2901...
...OPIC) through June 1974 (see chart...
...cit., chapter 4. 53...
...Overseas Private Investment Corp...
...The obvious immediate beneficiaries of the government's open-door policy toward foreign capital are those U.S...
...troops to smash the highly combative trade union at La Romana, the Sindicato Unido (see "Trade Union Imperialism...
...For examples of the newspaper campaign see the special supplements on the Dominican Republic inserted in the New York Times (hereafter abbreviated NYT) on October 3, 1971, January 28, 1973, and May 26, 1974...
...However, the net effect of the U.S...
...Los Angeles Times, July 8 and 15 and August 25, 1970 (on Illinois Racing Board hearings...
...This giant conglomerate, built up since 1958 through the acquisition of over 100 other companies, is today the 79th largest U.S...
...Falconbridge Nickel complex 7221 -A Retail supermarket & cafeteria -A Operation of retail supermarket 6258 -T Estab...
...Presently the S.R.S...
...Given G&W's controlling interest in the Madison Square Garden Corp., which has reportedly attracted the interest of underworld elements, who live from the gambling industry associated with horse racing and other sports events connected with Garden holdings, it is not surprising for G&W to occasionally mix with organized crime figures...
...These conditions changed when the American army landed on July 25, 1898 at Guanica Bay, near where the company's Guanica factory now stands...
...The first prominent such figure was Levin, who bought into G&W in early 1968 and became an important associate of Bluhdorn until his (Levin's) death in 1971...
...to acquire and develop seven miles of waterfront at Macao on the east coast.16 Alfa International of Miami is teaming up with the Dominican government to develop a $150 million tourist city at Manzanillo on the northwest coast.17 A group of U.S...
...Armco Steel Corp...
...In terms of a social infrastructure, capitalist investment seeks a plentiful, well trained, cheap and docile labor force...
...Trujillo acquired the NCB branches in 1941 and used them to establish the first state-owned commercial bank in the country, the Banco de Reservas...
...food supplies distributed by CARE and two other private agencies.s6 The emphasis on attracting foreign capital, which tends to be capital intensive rather than labor intensive, has aggravated the unemployment problem - estimated at 50 percent in some sectors of the capital...
...By January 1974 these three banks had established 16 branches in the country...
...Aguirre Co...
...for marketing abroad...
...G&W's corporate connection with organized crime surfaced briefly in 1969 when a congressional investigation of the conglomerate revealed it had worked out an agreement with Resorts International for the purchase of a substantial amount of stock in Pan American Airlines...
...has in the Caribbean or Central America...
...Adolph A. Berle, Navigating the Rapids, Edited by B. B. Berle and T. B. Jacobs (New York, Harcourt Brace Jovanovich, 1973), p. 5. For Berle's backing of the invasion see The Christian Science Monitor, November 1, 1965...
...Embassy report, "Doing Business in the Dominican Republic," describes the potential the growing Dominican trade has for U.S...
...44 million), the Grenada Co...
...Embassy, August 1974), pp...
...Banana marketers, for example, have included the United Fruit Co., Standard Fruit & Steamship, Bud Antle of Salinas, California, and Banana Supply of Miami...
...In addition, the 1963 nationalist and reformist Constitution written under the Bosch government obstructed a foreign takeover of Dominican assets, whether they belonged to the state or not...
...2 2 5 In addition to U.S...
...Robert D. Crassweller, Trujillo (New York, Macmillan, 1966), p. 166...
...In July they moved in an aggressive new manager - a Cuban exile named Teobaldo Rosell, who had managed sugar mills in pre-revolutionary Cuba - to begin implementing their plans...
...These are minimum figures...
...Grenada plantation by Nebraska Consolidated Mills (now ConAgra) in 1965, while U.S...
...Chase Manhattan Bank Chase Manhattan Bank Chase Manhattan Bank City Wide Refrigeratn...
...We will look at the beneficiaries of the invasion first as a whole...
...Morton's friends who stayed at the hotel during a two-week period in late February and early March of 1969 were: Meyer Lansky, reputed financial chief of organized crime in the United States...
...invasion in 1965 provided the opportunity to expand SPRS to an even more extensive exploitation of the Dominican Republic...
...The first step was to acquire privileged access to the country's natural, industrial and human resources and to its internal market...
...Since the loss of U.S...
...Article 28 required large landholders to sell that portion of their lands above a maximum fixed by law, with excess holdings to be distributed to the landless peasantry...
...3 1 According to Business Week, "Bluhdom, reflecting his early career as a commodity trader, takes an especially active interest in the food and agricultural products group whose principal product is sugar...
...XV (Events of December 1962...
...and a new Mining Code (1971) which led Business Latin America to conclude that "the Dominican Republic seems to be willing to remove whatever obstacles stand in the way of increasing mining investment...
...Article 19, for example, provided for profit sharing by workers in both agricultural and industrial enterprises...
...meatpackers, Swift and Armour.3s (G&W's Dominican food production is supplemented by the company's citrus, vegetable and beef production on 63,000 acres in Florida and the recent acquisition of 150,000 acres of farm and cattle land in Paraguay...
...It was blocked from establishing a mortgage bank to finance the housing construction industry...
...War, Revolution & Insurrection...
...stake in the country has also built up, both in economic and diplomatic terms...
...Mills Oceanography Maricult...
...Company in San Juan...
...Sidney Korshak of Chicago and Los Angeles, who is a labor relations "consultant" reportedly associated with organized crime interests...
...Ahora, October 31, 1966, p. 8. 47...
...2 4 One of the major beneficiaries of the increased number of tourists (from 28,000 arrivals in 1966 to 182,000 in 1973) has been Pan Am, which carried approximately half the passengers arriving in Santo Domingo...
...In July 1970, top G&W executives were asked to appear before the Illinois Racing Board, then investigating ties between a G&W-controlled company, Chicago Thoroughbred Enterprises, and organized crime...
...When Washington cut Cuba's sugar quota in July 1960 the Dominican Republic replaced Cuba as the chief Western Hemisphere supplier of sugar to the United States under the beneficial quota arrangement...
...Over the last ten years the social tensions have increased, and, in the words of Pat Holt, head of the Senate Foreign Relations Committee's staff, who visited the island in 1971, "change seems inevitable, and it is likely to be more radical - and possibly more violent - for having been postponed...
...travel correspondents are portraying the Dominicans as docile and highly receptive to foreign visitors: Here there are taxi drivers who smile, hotel employees who laugh and policemen who direct traffic with elegant hand gestures and are quick to offer aid...
...Though based in Canada, Falconbridge is U.S.-controlled (by Superior Oil Co...
...That's a key advantage over a twin plant in the United States.49 An investment analyst's report on Caribbean Leisurewear, one of the first tenants in G&W's free zone, details how this twin plant arrangement can work: Rental [of the company's 16,500 square feet of space] is at a favorable $0.72 per ft...
...City Bank First Natl...
...Nevertheless, the G&W appointed managers of Cofinasa remain in their jobs and many Dominicans doubt that G&W no longer has an interest in the company.' 3 The paper estimates that G&W's current stake in the country is about $200 million, making it the largest single foreign investor...
...City Bank First Natl...
...auto antenna cables for export 5112 -T Mortgage financing 5650 -T Growing/packing bananas 5113 -T Mortgage financing 5478 -A Processed milk & byproducts 5843 -A Confectionary products 5096 -T Leasing autos/buses/trucks 5153 -T Poultry farm 5860 -T Electric power generating plant Original Max...
...C= vs...
...Waiters and shopkeepers are doggedly friendly and difficult to arouse to anger.19 * One of the more criticized agribusiness investments involved the acquisition of the 32,000 acre United Fruit Co...
...With the opening of the island to private foreign investment another banking institution made its appearance - the financiera or private investment bank...
...The second heaviest area of foreign investment has been in the food and agriculture sector: expanding sugar and molasses production at Gulf & Western's La Romana mill, production of fruits, vegetables and meat (especially for export), and food processing (a Nestle/Carnation milk plant, American Can and Stokely Van Camp canning operations, and Philip Morris' acquisition of the largest private tobacco company).* U.S...
...The Mob" (2 parts), Life, September 1 and 8, 1967...
...AGRIDOC)," University of California, Berkeley, 1969, unpublished typescript, 44 pp...
...1969, p. 173...
...For very helpful information on this and other G&W diversification moves, see Del Castillo et al., op...
...the operation could qualify for income tax exemption under Puerto Rican law...
...Still a further diversification was the acquisition of a controlling interest in a new $34.5 million cement company, Cementos Nacionales, which will supply some 50 percent of the booming construction industry and thus compete with the government-owned Fabrica Dominicana de Cemento, the only other cement factory in the country...
...Las Vegas gambling figures Dean Shendel, Moe Dalitz and Hyman Segal...
...investment there...
...WSJ, December 14, 1967;San Juan Star, January 28, 1975...
...Nebraska envisioned raising some winter fruits and vegetables but mainly sorghum for shipment to its large mills in Puerto Rico for processing into cattle feed...
...If they were to nationalize the company and sell at world prices (between one and two cents) quite naturally the Dominican Republic Government would not come out nearly so well...
...47 In the capital, Santo Domingo, G&W acquired the 200 room Hotel Hispaniola (and casino) from the government (an old Trujillo property) and refurbished it, while on the seafront 100 yards away it is building a new 250 room luxury hotel...
...Forbes, March 1, 1973...
...strategy have shown many reform-minded Dominicans who previously viewed Washington as an ally - Bosch himself being the most prominent example - that the State Department and Pentagon merely reflect the interests of U.S...
...Ibid., p. 140...
...Entrprs...
...6 On the ideological front Balaguer has sought to create the impression among Dominicans that a critical ingredient for development is foreign capital...
...industrialists visited Santo Domingo to study the former Trujillo properties and advise the Dominican government on what to do with them...
...Soon after his death in 1961 his family was banished from the island and his properties were taken over by the state...
...One of the prime agents for purchasing lands - both for agriculture and for incorporation into a national park G&W will run as a tourist attraction on the eastern end of the island - is Julio Peynado, a well-connected Dominican attorney whose principal client is G&W...
...The purchase of 10.5% of SGI stock marked the beginning of a long and intimate association with the man who controlled SGI, the mysterious Sicilian banker Michele Sindona, who at the same time purchased a 50% interest in a subsidiary of Paramount Pictures Corp., which is, in turn, a G&W subsidiary...
...Cuba's strategic location for the trans-shipment of drugs into the United States implied the need to acquire new bases of operation in the area, or to expand old ones following the island's loss...
...investors led by Terry Sanford (ex-Governor of North Carolina and now president of Duke University) and Harry C. Robbins, a North Carolina real estate developer, have joined with Elmhurst Construction Co...
...More than a billion pounds of goods leave La Romana by sea and air destined for the United States every year, with much of this traffic coordinated from G&W's Americas Corp...
...investors, these companies were plums ripe for the picking...
...With Washington forced to accept a socialist Cuba and apparently on the verge of re-establishing relations, the question naturally arises: what effect will this have on the 1965 Constitutionalist Women's Militia (Photo: Ahora magazine...
...The largest of these investments are in the * At the time of Trujillo's death in 1961, foreign investment in the island, according to the Central Bank, totalled some $150 million, with nearly $120 million accounted for by:the South Puerto Rico Sugar Co...
...labor leaders, labor mediators and business executives have invested half a million dollars in the 15,000 acre Punta Cana resort and tobacco plantation.'" While racial violence and anti-American sentiment are scaring tourists from some of the Caribbean islands which enjoyed/suffered the tourist boom of the '60's, U.S...
...Land figures from data supplied by Alan Howard...
...invasion and subsequent Washington policies toward the Dominican Republic has been to create rather than prevent "another Cuba...
...ss The Wall Street Journal reports that one out of every four Dominicans depends on U.S...
...Its food production is aimed mainly at export markets in Puerto Rico and the U.S...
...With Puerto Rico under the wing of the American government, and in a preferred position under its tariff system, opportunities on the island appeared more attractive...
...G&W was partners with Philip Levin, who was also a G&W director, in the Acapulco Towers Hotel in the Mexican resort town...
...This food chain accounts for 41 percent of supermarket sales in Puerto Rico and operates 69 supermarkets on the U.S...
...Since 1965 two major financieras have been established in Santo Domingo, both with foreign participation (including Bank of America, Manufacturers Hanover Trust, ADELA and Gulf & Western...
...But G&W seems to have developed more than a coincidental pattern of relations with men suspected of being key channels through which illegitimate funds from organized crime activities are pumped into legitimate business enterprises...
...City Bank H.B...
...This study was originally prepared for the April 1975 seminar in New York sponsored by the Dominican Republic 10th Anniversary Committee...
...Darlington Self-Serv...
...Within five months of his inauguration Balaguer had approved a new Constitution which omitted those sections of the 1963 Constitution so objectionable to private economic interests...
...At the time, Berle was a recent Harvard Law School graduate who had enlisted in the Signal Corps during World War I.] In March 1918 [during the Marine occupation] I landed in Santo Domingo City and went to work on clearing the land titles for the South Puerto Rico Sugar Company and any other company that A view of the G & W hotel at La Romana (Photo: Howie Epstein/LNS).9 would produce more sugar and export it to the United States...
...Miami Herald, July 1, 1973, p. 87...
...See also the following issues of NACLA 's Latin America & Empire Report on the Dominican Republic: April 1974, April 1971 and November 1970...
...See, for example, Norman Gall, "Santo Domingo, The Politics of Terror," The New York Review of Books, July 22, 1971...
...The draft study, called "The Future World Environment," was prepared by a commission selected jointly by Presidents Nixon and Ford and Senate and House leaders...
...An ominous note is sounded in a Jack Anderson column describing a recent confidential U.S...
...The big wholesalers .like American Express and Diners Club and Thomas Cook and the airlines must promote a country...
...WSJ, September 7, 1971...
...OBJECTIVES In its military occupation, Washington faced the immediate problem of how, with the least amount of domestic (U.S...
...Fuller Co...
...BLA, November 27, 1969, p. 382...
...The Christian Science Monitor, March 14, 1967...
...fertilizer) also failed to implement .a much-touted project to develop 200,000 acres of ex-Trujillo land after intense public criticism of the terms of the investment...
...Thus, one of the major objectives which Balaguer's foreign "advisers" began pushing as soon as he assumed the presidency in 1966 was the creation of a favorable investment climate for foreign capital...
...Cornelius Gallagher (D-NJ), then a member of the House Foreign Affairs Committee, with the suggestion that Joaquin Balaguer, then in exile in the United States, would make a good president of the Dominican Republic...
...Article 23 prohibited large land holdings...
...and the Dominican Republic Government gets one-half of this...
...ConDate tract Proiect Descriotion 65-70 65-70 65-70 65-70 65-70 65-70 65-70 65-70 1972 65-70 65-70 1971 65-70 65-70 1974 65-70 1971 65-70 1971 1971 1974 65-70 1972 1972 1964 1964 1964 65-70 1974 1974 65-70 65-70 65-70 65-70 1974 1974 65-70 1972 1971 65-70 65-70 65-70 65-70 65-70 65-70 1974 65-70 65-70 65-70 1974 65-70 1971 1974 1974 1973 65-70 65-70 65-70 1971 1971 1972 65-70 65-70 65-70 65-70 65-70 65-70 65-70 65-70 5853 -T Land development/agriculture products 5854 -T Land development/agriculture products 5855 -T Land development/agriculture products 6239 -T Agricultural development 6190 -A Can assembly plant 6295 -A Can assembly plant 6427 -A Nickel mining (Falconbridge complex) 6299 -A Commercial banking 8143 -A Finance company expansion 7032 -T Constrn...
...and (3) not touching (for example, through tax or land reforms) the interests of the coalition put together as the main base of local support for the Balaguer government...
...4 6 DIVERSIFICATION OUT OF AGRICULTURE Soon after acquiring SPRS, G&W began using its base in the Dominican Republic to diversify out of agriculture...
...It is estimated that between 65 and 85 percent of the entire economy eventually ended up in his hands...
...Company management estimates that the resulting total effective Dominican labor cost of, say, $0.50-$0.70 per hour, is still in the range of one-half to one-third of that in Puerto Rico...
...customs receivership] .2 However, it was not until 1917, one year after the U.S...
...interventions occur, most likely in the Caribbean, possibly in Latin America (with) military units of 40,000 or larger, resembling occupation armies.6" Developing a strategy to deal with this possibility is one of the primary tasks facing Dominican revolutionaries...
...3 9 Amfac and Brewer together own 58 percent of California and Hawaiian Sugar Co...
...6. Susanne Jonas, "Trade Union Imperialism," NACLA's LAER, April 1975...
...Export-Import Bank helped G&W finance this venture and the Dominican government acquired a 25 percent share.51 When the conglomerate tried to move into financing, however, stiff local opposition prevented it from carrying out its full plans...
...Local G&W administrators make no secret of their support for Balaguer...
...of State, May 19, 1972...
...policy-makers began implementing a long range strategy for keeping the lid on the island and extracting the benefits gained through the invasion...
...By early 1975, G&W held a 22 percent interest in Amfac, Hawaii's largest sugar manufacturer, and also held a smaller interest in C. Brewer & Co., the second largest Hawaiian producer...
...east coast...
...Inconvertibility...
...Del Castillo et al., op...
...8 While nationalist pressures do not allow him to sell off the old Trujillo properties, Balaguer has followed a strategy of not expanding the state-owned sector, of allowing competing private companies to be established (in the production of cement and milk, for example) and of allowing foreign interests to lease others - especially hotels...
...Vero Beach, Florida) promotional pamphlet "The Dominican Republic" produced in 1974 to commemorate the World Amateur Golf Championships at its La Romana resort...
...In return it will pay the government $30,000 per year plus 5 percent of the gross income from the zone.4" The tenants in the zone - some 18 U.S...
...City Bank First Natl...
...3 However, these plans to denationalize the Dominican productive assets were stymied in 1963 by the seven month Bosch administration which intended to use the income from state properties to partially finance its social reforms...
...San Francisco Chronicle, November 4, 1970...
...Using dummy corporations and purchasing agents, the company is gaining an even tighter hold on land in the eastern region...
...How will Washington react when change does come...
...2. Hispanic American Report Vol...
...The Balaguer government sought to improve the physical infrastructure for accommodating new investment through a large scale public works program (financed mainly through loans from international aid agencies) which included improvement of roads, expansion of electric power production, dam construction, and expansion of airports...
...Gulf & Western Inds...
...Ahora May 9, 1966...
...companies at present - are attracted by the large pool of extremely low cost and non-unionized labor available for assembling and manufacturing imported components and raw materials which are then re-exported, mainly to Puerto Rico and the United States...
...3 6 As a result, the company is undertaking a "major expansion program" to develop more sugar acreage both in the Dominican Republic and Florida, where it has smaller cane holdings...
...it was "the natural filming ground" for scenes about Cuba in Paramount's (a G&W subsidiary) Godfather, Part II...
...S. Prakash Sethi, "Agro-Industrial Development Co...
...There is planned a direct, bulk air freight, link between industrial park's 6,000 ft...
...7. "Bank of America's Man-on-the-Spot Report: Dominican Republic" (Hereinafter abbreviated B of A), August 1971, p. 2. The New York public relations firm was Sontheimer & Co...
...its frank intention, according to Melvin Knight in his classic history of the period, Americans in Santo Domingo, was to "destroy collective holdings"" which was "just what the sugar people had wanted for years...
...14 million), the General Telephone & Electronics Corp.'s Dominican Telephone subsidiary ($13 million), Alcoa (bauxite mine, $13 million) and four oil importing and distributing companies, Esso, Shell, Texaco and Sinclair ($20 million).1 0 4 mining sector, with the two major ones being the $190 million Falconbridge Nickel complex and the $41 million Rosario Resources gold and silver mine (under construction and not included in the OPIC figures...
...In June 1967, management of this $2 million project was assumed by Aguirre Co., a Boston-based Puerto Rican ex-sugar-producer-turned-real-estate-developer, which gave up the project to the Dominican Government in May 1970...
...Business Week, January 20, 1975, p. 56...
...Chase Manhattan Bank ad in publication of the American Chamber of Commerce of the Dominican Republic...
...See, for example, "Denuncia Venta Terrenos," La Noticia, December ,1973...
...Jose A. Moreno, "Class Domination, Repression and Economic Penetration in the Dominican Republic: 1966-1973," (Univ...
...2 now paid by the A 10-year-old Haitian boy cuts cane for Gulf & Western at wages so low even poverty-stricken Dominicans refuse to work for them...
...4 and 5. 29...
...I.S...
...cit., chapter 4. 52...
...Another person involved in lobbying the U.S...
...construction and engineering companies have also profited: for example, the prime contracts for the two largest projects since 1965, the Falconbridge complex and the $40 million Tavera dam, were Brown and Root and Morrison-Knudsen respectively...
...And what is the effect of having the Cuban example of development next door to the Dominican Republic...
...B of A, February 1973...
...Since the Cuban Revolution came to power in 1959, Washington has developed sophisticated methods for dealing with political instability in the Third World and particularly in Latin America...
...is the leading market [for exports] with 66.4 percent share in 1973...
...Jaime A. Vicens Warner-Lambert Pharm...
...BLA, 1967, p. 392...
Vol. 9 • April 1975 • No. 3
