The Problematic Past of German Corporations in Latin America

By Elizangela Valarini and Friederike Elias

Lúcio Bellentani is 72 years old. From 1964 to 1972 he worked at Volkswagen plant in São Paulo. Like his father, he was a member of the Communist Party and also very active in the labour union. By his account, he was 28 years old when he felt two machine gun barrels in his back while working. That was 1972. He was immediately handcuffed and taken directly to a room of the security department of the company, where he was later picked up by the political police. Bellentini was then taken from the VW plant to DOPS (Departamento de Ordem Política e Social) where he, by his own account, had been to regular torture in the first four months. According to Bellentani, he was then transferred to the OBAN (Operação Bandeirantes) torture center and later imprisoned, where he spent another two years of his life.

Source: Pixabay

Cooperation with the military dictatorship

According to a study by Christopher Kopper, a historian of Bielefeld University, the plant security monitored opposition activities of its employees and facilitated in this way the arrest of at least seven employees, both male and female. This, according to Kopper, happened at a time when the use of torture by the Political Police was already known to the public in both Brazil and Germany. In December 2017, the VW Group has acknowledged its responsibility and apologized for its cooperation with the Brazilian military dictatorship.

Witness statements such as those of Bellentani or the testimonies of Héctor Ratto, who had similar experience at the Mercedes-Benz plant in Buenos Aires in 1977, suggest that German companies did not always refrain from cooperating with military dictatorships in Latin America. Stories like these can be found in numerous national and international companies that were active in Brazil and Argentina at that time. Hundreds of thousands of people have disappeared because of their party affiliation, union activities and their opposition to the authoritarian regimes. According to estimates by human rights organizations, a total of 30,000 people disappeared in Argentina during the military dictatorship (1976-1983). In Brazil, the numbers are still not clear. Only since 2014 has the so-called „Truth Commission“ begun to sift through the national archive. Currently 1,843 tortures and 483 deaths that occurred in 1964-1985 have been documented. The latest investigations, in addition to the already well-known brutal acts of the military regime, bring to light the cooperation of private companies both in the assumption of power and in the further establishment of military regimes and the repressions they have perpetrated. It is currently being examined more closely in the context of various bills of indictment (ação coletiva de reparação).

Source: Creative Commons CC BY-SA 2.0

Accounting for the problematic past

Unsurprisingly, scientific studies cite, above all, the economic interests of private enterprises, regardless of their nationality, as the main factor in supporting military governments. Not all former entrepreneurs and managers want to talk about their connections to the military; nevertheless, some confessed to active participation by the business elite. For example, Ayres Filho, former president of a foreign company in Brazil, boasted in an interview in 1987 that the revolution was planned in his living room in 1964: “the military did not want to take part in it. They only participated in it because the economic community implored them to. I know about it because I implored them for their help.” In many cases, companies acted through consortia and institutions that represent their industrial interests, such as: For example, the Federation of Industries of the State of São Paulo (FIESP) in Brazil, or in Argentina the CGE (Confederación General Económica), u. a.

According to Kopper’s study, the former president of the Brazilian VW plant Schultz-Wenk wrote an enthusiastic letter to former VW Group CEO Nordhoff on April 16, 1964, in which he expressed his positive opinion about the political change in Brazil and the welcome arrest of the union leadership and the communist party members. Present findings show that foreign companies have also partly financially supported the activity of OBAN in Brazil. The OBAN (Operação Bandeirantes, later known as DOI-CODI) was a repressive government organization of the state of São Paulo, which was founded in 1969 and was to crack down on the opposition by means of torture, if necessary.

Entanglements between Business and Politics

For private companies, the political upheaval meant a „rescue“ against the high and steadily rising inflation. In 1961, Brazil’s inflation rate amounted to 34.7%; it had already climbed to 78.4% two years later. In addition to the problem of economic stagnation, the incumbent government threatened the economic elite with social reforms that would range from agrarian reform to a stronger labor policy. In addition to the problem of economic stagnation, the incumbent government has threatened the economic elite with social reforms ranging from agrarian reform to more stringent labour policies. Another crucial point for the attractiveness of a military coup was the scheduled restrictions on direct transfer of profits to the parent company, which should mainly affect foreign enterprises. In contrast to this position, the military regime pursued an industrialization policy in favor of the large industrial enterprises. In return, private companies financed the political activities that were crucial to the establishment and legitimacy of the military government.

National and foreign companies benefited from an employer-friendly policy that allowed for easy layoffs and bans on strikes, while significantly weakening labour unions. In addition, specific economic strategies were developed for the promotion of large industrial companies, which enabled better access to the capital market and international financing options.

The attitude of the enterprises reinforced the link between politics and business organizations in Latin America. It is reputed to be a phenomenon of „capitalismo clientelista“ (Crony Capitalism), in which both sectors benefit from an informal, deviance-promoting relationship. An attitude, that is, which has historically been preserved and the consequences of which can be felt time and again, as for example „Operation Carwash„, the largest anti-corruption investigation in Brazil – which has brought to light the corrupt relationship between business and politics – shows. The „moral economy“, which the leaders of that time openly championed to the outside world, obviously did not apply to the military dictatorships in Latin America. Regardless of human rights violations, the only thing that set the tone here was successful economy through „regime shopping“. The term „regime shopping“ refers to the idea that multinational companies choose their locations according to business-friendly institutional rules. In the case of Latin American military dictatorships one could then assume that governments were helped to assume power in order to bring about business-friendly regulations.

 

Sources

Bellentani, Lucio (2015): „Manchmal, wenn du in einer Menschenmenge bist, fühlst du dich allein”, Testimonio Nummer 497. Lateinamerika Nachricht, accessed on 09.03.2018.

Centro de Estudios Legales Y Sociales: Empresas y dictadura, accessed on 09.03.2018.

Kopper, Christopher (2017): A VW do Brasil durante a Ditadura Militar brasileira 1964-1985. Uma abordagem histórica. For Corporate History Department of Volkswagen, accessed on 09.03.2018.

Lima, Wilson (2014): Comissão da Verdade confirma 434 mortes e desaparecimentos na ditadura, accessed on 09.03.2018.

Marusczyk,  Ivo: VW entschuldigt sich für Zusammenarbeit mit Militärregime. Deutschlandfunk vom 15.12.2017, accessed on 09.03.2018.

Payne, Leigh A. (2014): Cumplicidade Empresarial na Ditadura Militar. Revista Anistia Política e Justiça de Transição / Ministério da Justiça, n. 10, p. 260-297.

Staas, Christian (2013): Argentinische Militärdiktatur. Mord auf Bestellung? Zeit-Online vom 10. Januar 2013, accessed on 09.03.2018.

Wermus, Paulo (2016): La clase empresarial y el golpe de estado de 1976. MIRÍADA. Año 8 No. 12, p. 231-242, accessed on 09.03.2018.

 


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