Bank of America in Guatemala

Under pressure from church shareholders to explain its alleged lending to Guatemalan human rights violators, the Bank of America in early September released a report on its loan policy to that Central American country.

The four-page report, entitled "Implementation of Bank America's international policies in Guatemala," claims that the bank adheres to a policy which "seeks to improve the human condition."

However, the bank's Guatemalan portfolio reads like a "Who's Who" of human rights violators.

New documentation - including a list of the Bank's corporate accounts in Guatemala - has been obtained by Bank Watch, a San Francisco-based organization opposed to the bank's lending policies in Guatemala. These documents confirm that Bank of America - the largest commercial bank in the United States - has loans outstanding or credit lines open to the following businesses led by notorious death squad supporters.

• Productos de Kenaf, or "PROKESA" as it is called, is a privatelyheld corporation that has an account with the Bank of America. Fred Sherwood, an American and long-time resident of Guatemala, is the general manager of PROKESA and one of its few stockholders.

  Six people were killed at PROKESA in the first half of 1980, for union organizing, reported Prensa Libre, a daily Guatemalan paper. "Why should we be worried about the death squads?" Sherwood said in a recent CBS documentary. "They're bumping off the Commies, our enemies... the death squads? I'm all for it."

• El Salto. This Bank of America-supported plantation is owned by Roberto Alejos Arzu, the founder of the Guatemalan Freedom Foundation. The "Freedom" Foundation is an ultra-right wing organization that lobbies in Washington for the resumption of military aid to Guatemala and for the deletion of human rights restrictions on aid.

  Ten workers were killed at El Salto during labor disputes in 1980, according to Prensa Libre. One union activist was machine-gunned shortly after leaving the plantation.

• Pantaleon. This large sugar plantation also receives Bank of America funds. It its owned by the Herrera family, one of the richest in Guatemala. A dozen workers were killed at Pantaleon during the labor strikes of 1980, the Guatemalan press reported.

• Hotel Camino Real is a luxury hotel owned by Edward Carette, who belongs to the Amigo del Pais, an exclusive club of rightwing Guatemalan businessmen and professionals. He has lobbied extensively in Washington for the resumption of military aid to the government of Guatemala.

  In 1979, an engineer employed at the hotel was killed for labor organizing, according to informed sources. Hotel Camino Real appears on Bank of America's list of corporate accounts.

• Technica Universal is a company that imports and services agroindustrial products. Its president, Juan Maegli, is a key member of the Amigos del Pais, and was one of the founders of Mano Blanco, Guatemala's most feared death squad.

In a recent Canadian documentary, Maegli was quoted as saying: "We definitely shoot Communists in Guatamala." Technica Universal also gets Bank of America funding.

While Bank of America insists in its recent report to shareholders that its general corporate policy of "independence from local politics" has "kept the bank in Guatemala on a course clear of any political involvement," these accounts tell a different story.

What is more, Bank of America provides direct support to Guatemala's military government by having accounts with the Republic of Guatemala itself, the Ministry of Telecommunications and the Institutio de Prevision Militar, a retirement fund for army officers.

"BankAmerica has never felt that it was either moral or practical to withhold flows of capital and credit to the people of a country - flows that they need for their development - simply because, in addition to all the rest of their problems, they have a nondemocratic government," says the bank's Guatemalan report.

This rationale contains two basic flaws. First, Bank of America in Guatemala - like commercial banks that lend to South Africa or Chile - does not provide capital and credit "to the people," but only to a small segment of the populace: the very segment with the most money and power.

Second, these funds do not go for the people's "development." By and large, the wealthy Guatemalan businessmen who receive loans from Bank of America engage only in a certain kind of economic activity, one that is large-scale and export-oriented, not small-scale and aimed at serving the needs of "the people" of Guatemala.

The majority of Guatemalans don't need a fancier Hotel Camino Real; they don't need more massive agricultural plantations supplying products to the U.S. market. Their needs are simple: food and land. These the Bank of America does not help them obtain.

Bank of America began operating in Guatemala one year after the U.S.-backed military coup in 1954. Guatemala has one of the worst human rights records in the world, according to Amnesty International. Much as it may wish to say otherwise, Bank of America cannot excuse itself from its share of responsibility for maintaining the current repressive character of Guatemalan life.

Rebecca Bogdan is a member of Bank Watch, a San Francisco-based research group.