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A casualty of US foreign service abuse of power: Tahoe Resources' state-of-the-art Escobal silver mine in Guatemala.

Credit: Mining.com

Making the world safe for prosperity: State Department needs overhaul to become business-friendly


by J Michael Waller, PhD

Summary. The State Department’s shift toward building “civil society” abroad has clashed with the mission to promote traditional US national interests. Occasionally it has harmed legitimate American business interests abroad. To illustrate the problem, this paper describes how international NGOs operated in a single country to target and shut down a billion-dollar US-based business operation and deprive the company of billions of dollars in capitalization. The beneficiary was not the American people, but political activists, international NGOs, and radical groups in the foreign country. This case study illustrates the problem, and shows the strategy and techniques of the NGOs, to help guide Secretary of State Rex Tillerson’s reforms of the State Department.

Introduction

Some US-based companies have found that the State Department is no longer a dependable confidant abroad. The State Department in the past decade has become a devotee of promoting sharp socioeconomic change in other countries, almost without regard to local economic impact, in the name of building “civil society” for the “international community.”

In some countries, the US Embassy has worked in partnership with international non-governmental organizations (INGOs) with a history of suspicion of, or hostility toward, US national interest and free enterprise. State Department cooperation with non-US groups against US companies has cost billions of dollars in revenue and market capitalization. If left unchecked, State Department behavior will continue to damage American-based companies that do not have influential lobbies in Washington.

This paper studies the case of Tahoe Resources, a Nevada-based mining company registered in Canada. Traded on the New York Stock Exchange with the ticker TAHO, Tahoe Resources invested more than $1 billion in Guatemala to open one of the world’s largest and most modern silver mines in 2014. International NGOs had the mine shut down in 2017. The US Embassy pressured the Guatemalan Congress to appoint a radical NGO activist lawyer as the de facto leader of the country’s highest court, which will hear Tahoe Resource’s final legal appeal.

The case shows how US Ambassador to Guatemala Todd Robinson used the might of the American Embassy to promote the anti-mining NGOs’ themes, and compel Guatemalan lawmakers to make a radical change in the nation’s judiciary to suit the interests of the anti-mining movement. Robinson is not an anomaly. He is a distinguished career foreign service officer who has held senior diplomatic posts. He is representative of a new, mature generation of the United States Foreign Service who believes that the State Department’s role is to follow the lead of international NGOs for the benefit of the “international community.”

Knowledge of the case can aid the State Department leadership in devising ways and means of reforming the Foreign Service, and the Department as a whole to serve the interests of Americans first.

This research paper is still in progress. View the present draft on Academia.edu, or download here: State Department Overhaul Guatemala Case Study FINAL

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