Howard Schultz, a “greenwasher” of tainted coffee beans

Howard Schultz, the billionaire founder of Starbuck’s, the over-priced coffee chain that enthralls some deluded progressives by requiring them to speak a bastardized version of Esperanto when ordering a cup of coffee, believes he should be the president of the United States. As if the country can withstand another callous billionaire born in New York City in the White House, Schultz, who is flogging a book, revealed that he is considering an independent run for the presidency in 2020. Many political observers believe that Schultz, like Green Party candidate Jill Stein in 2016, will siphon votes from Democrats and, thus, ensure a second term for Donald Trump.

Schultz is a faux progressive as witnessed by his belief that Social Security, Medicare, Medicaid, and the veteran’s health system are all “entitlements” to be “reformed.” Schultz, Trump, Michael Bloomberg, and the three Mar-a-Lago club millionaires who are re-writing the benefits charter of the Department of Veterans Affairs—Isaac “Ike” Perlmutter, Bruce Moskowitz, and Marc Sherman—all believe that America’s social safety net programs somehow take money from their greedy and slimy pockets. Schultz has cloaked himself as a “do-gooder” philanthropist, but his work ethic at Starbuck’s is rife with serf-like labor practices. Starbuck’s “benefits” package is a ruse. The coffee chain’s “baristas” are predominantly part-time employees, who, if they want to participate in the company’s health care program, are forced to shell out exorbitant deductions from their measly pay checks and fork out outlandish co-pays.

And, when it comes to buying coffee from some of the world’s worst human rights violators and child labor practitioners, Schultz is leading the parade.

It turns out that Starbucks enjoyed a very cozy relationship with the Indonesian military-backed coffee-growing colonists who ran East Timor’s large plantations. Protestors highlighted Starbucks’ practices in East Timor and other countries during the anti-World Trade Organization protests in Seattle, Starbuck’s headquarters, in late November and early December 1999. Starbuck’s, a company that prided itself as being progressive, had egg on its face. Its trade practices turned out to be no different from those of Shell, British Petroleum, Nike, Chiquita Brands, and other companies that exploit workers in poor developing nations.

Starbucks had a public relations nightmare on its hands. Starbucks agreed to place “Fair Trade” labels on its products as proof that it was paying coffee farmers a fair price for some of their coffee. The Fair Trade labels are the brainchild of Trans Fair USA, the American branch of a self-regulatory international industry watchdog group that guarantees coffee, tea, chocolate, and banana growers receive a fair price without the markup of middlemen, and that farm laborers work under safe conditions.

Starbucks, as the first company to adopt the Fair Trade labeling scheme, offered its “fair trade” coffee free to passers-by during Washington’s World Bank protests. Although Starbucks wanted to get ahead in the public relations contest, fair trade labels are not found on most of the company’s products, including those packaged or brewed and served over the counter. In addition, there is no real way of determining how much of Starbucks’ business is actually conducted through “fair trade” entities, or if only a small percentage of its coffee purchases are “greenwashed” for public relations reasons.

In Chiapas, the rebellious Mexican state, such a “greenwashing” effort was already operating. In an attempt to drive independent squatters off of the sensitive rain forest land in Montes Azules, where farmers slash and burn for agricultural land, groups such as Conservation International and the World Wildlife Fund, as well as the always suspect U.S. Agency for International Development (USAID), began a campaign to protect the land for the 66 surviving Lacandon Mayan families.

Ernesto Ledesma Arronte of the Center for Political Analysis and Social and Economic Research (CAPISE), based in Chiapas, suspected ulterior motives by the environmental groups. He cited their major offenders—Starbucks, Pulsar Group, Chiquita, and Exxon—as a reason for caution. He said the companies all had their eyes on Montes Azules’s rich resources—coffee, fruit, oil, and pharmaceutical products. Conservation International denied that the companies had any plans to exploit the rain forest. The Zapatista National Liberation Front said it would fight any attempt to remove any villagers from Montes Azules, once again pitting Starbucks and its agents of influence against the poorest of the poor.

Starbucks’ history in East Timor was not a good one. In 1994, the U.S. Agency for International Development (USAID) officially took control of East Timorese coffee plantations from the Indonesian armed forces. One of the Indonesian military bigwigs in on the deal was former Indonesian armed force commander General Benni Murdani, a favorite of the Central Intelligence Agency. Although Murdani was forced to resign as commander in 1993, his influence over East Timor’s coffee production remained significant. Operating through a local super-cooperative called the Timor Coffee Project, which acted like a modern-day British East India Company, USAID and the U.S. National Cooperative Business Association (NCBA) administered the coffee plantations and arranged for most of the organically-grown reddish-hued Arabica bean crop to be sold to none other than Starbuck’s.

Rather than be caught selling East Timorese coffee at its stores, Starbuck’s cleverly re-named the coffee as being from Sulawesi or Sumatra.

NCBA has an interesting international background. It has been active in setting up similar agricultural cooperatives in both Nicaragua and El Salvador, two countries among many where USAID and U.S. intelligence agencies have often worked hand in glove.

Chemonics, a firm tied to the Republican Party and covert U.S. operations in Iraq and Afghanistan, became involved in El Salvador’s coffee production under a Bush administration contract. In early 2005, Chemonics led a USAID-funded delegation of U.S. and Canadian coffee roasters to visit El Salvadorean coffee growing regions.

Chemonics was also active in the Guatemalan coffee sector under a USAID contract. In East Timor, many of the local officials of the coffee cooperative were not even native Timorese, but migrants from Java and Bali who wanted to turn a quick profit on the backs of underpaid East Timorese farm workers.

The East Timorese plantation workers amounted to nothing more than indentured servants of the U.S. government. Although the Timorese received better wages from the Americans than they got from the Indonesians, USAID and its NCBA contractor negotiated prices and did all marketing on their behalf. And according to one businessman who is familiar with the deal, the salaries that the East Timorese plantation workers received from their U.S.-backed Indonesian overseers amounted to nothing more than “slave wages.”

Although the 1994 deal between USAID, NCBA, and the local coffee potentates was advertised as advantageous to the native East Timorese, during the summer of 1995 several coffee workers rioted in the towns Baucau, Emera, and Pante Makasar (in the all-but-forgotten East Timorese exclave of Ambeno Ocussi) over the arbitrary decision by Indonesia to lower coffee prices.

The cozy relationship worked out between USAID, Starbuck’s, and the ever-present Indonesian military seemed like the perfect Third World deal. So when it looked like East Timor might drift toward independence as a result of political changes in Jakarta, the Clinton administration got worried. So did Starbucks. According to Business Week, the coffee company received the entire 1998 crop of East Timor’s coffee, said to be worth around $20 million. The 1999 yield was estimated to be a record-setting bumper crop, worth some $100 million.

Although the Indonesian military officially got out of the coffee business in East Timor, its top officials still controlled much of the production of raw materials in the country, including coffee. In fact, the Indonesian army intended to claim East Timor’s coffee-growing hill country as part of Indonesia. The specter of violence being triggered by a change in East Timor’s political status did not auger well with the American, Indonesian, and Timorese coffee barons. In fact, as the Indonesians and their supporters departed East Timor, they actually stole some of the 1999 coffee crop from the fields. According to East Timor Action Network (ETAN) sources, the Indonesians brazenly demanded compensation for the coffee fields they plundered in East Timor.

ETAN also reported that in the years prior to the independence plebiscite, officials of the U.S. Institute of Peace, an organization whose board of directors are appointed by the president on the advice of Congress, began providing political seminars to East Timorese in which they stressed that integration into Indonesia with some local autonomy was preferable to outright independence. The Institute of Peace counted among its directors many individuals with extensive ties to the U.S. military and intelligence community.

Many of the East Timorese coffee entrepreneurs made no secret of their preference for Indonesian rule. After all, they were making money, and, even better than that, they were under the umbrella of a U.S. government agency that guaranteed a virtual continuous flow of coffee beans to corporations like Starbuck’s. Along with the Indonesian military occupiers, coffee plantation “quislings” provided support to the pro-autonomy militias. Not all the East Timorese coffee workers bought into the autonomy argument. A number were killed by the militias when they made their pro-independence views known.

Reminiscent of Trans Fair USA and its Fair Trade labels, USAID officials, proclaimed their Timor Coffee Project a success (note that they chose not to use the proper name of the country—East Timor—but the Indonesian name for the entire island (“province”). However, many East Timorese were wary of the real goals of Washington toward the hapless former Portuguese colony. In a 1997 interview with the Los Angeles Times, East Timorese activist and Nobel Peace Prize winner Jose Ramos-Horta said, “I am skeptical about U.S. good intentions or professed ideals about promoting democracy because U.S. policy is full of complex contradictions.” One of those contradictions was the Clinton administration’s tendency to put the interests of economics and political expediency ahead of human rights.

Behind every American foreign policy tilt you can usually find a bevy of political contributors. East Timor is no exception. The chief beneficiary of those delectable East Timor organic coffee beans that flow through the U.S. government-sponsored supply line was Howard Schultz. Not surprisingly, Schultz was a major campaign contributor to Bill Clinton. Ironically, Schultz fancied himself as a progressive Democrat (he joined Bill Bradley’s presidential fundraising campaign). But while he has ostensibly championed “health care reform,” “liberal employee benefits,” and the environment by banning the doubling of coffee cups in his stores, Schultz was much less concerned about the East Timorese, who have weathered one of the world’s most brutal military occupations while providing his corporate brew pots with the much-desired East Timor coffee beans. It is noteworthy that Schultz’s exploratory presidential campaign has attracted as staffers “never Trumper” Steve Schmidt, the person who convinced John McCain to take on Alaska Governor Sarah Palin as his running mate in 2008, and Bill Burton, a White House adviser to President Barack Obama.

As East Timor descended into chaos in September 1999, Starbucks’ public affairs machine assured its customers that its East Timor suppliers were guaranteeing that coffee supplies would not be interrupted, even though the lives of some 800,000 inhabitants of the province were irrevocably thrown into turmoil. But it was clear that Starbuck’s would have to re-negotiate the lucrative East Timor coffee deal with the National Council of East Timorese Resistance (CNRT), the organization that formed the post-independence government, since independence threatened to upset the cozy mercantile arrangement worked out between Indonesia, the Timor coffee cooperative, and Starbuck’s.

The powerful lobbying interests in Washington had quickly gone to work when East Timor began drifting toward independence. Following East Timor’s overwhelming vote for independence, every statement issued by Washington concerning the Indonesian genocide against the people of that province was tainted by assertions that any United Nations relief operation would have to be worked out with the authorities in Jakarta. Oddly, no such preconditions concerning Belgrade’s acquiescence were ever attached to NATO’s invasion of


Washington’s preference for the status quo ante in East Timor was made clear during a speech Clinton delivered on federalism in Mont Tremblant, Quebec, on October 8, 1999. The president opined, “Wouldn’t it have been better if they [the East Timorese] could have found their religious, their cultural, their ethnic and their economic footing and genuine self-government in the framework of a larger entity, which would also have supported them economically and reinforced their security instead of undermined it?” Clinton, it will be recalled, owed a debt of gratitude to Indonesia’s Riady family for political contributions to his presidential campaign.

Coffee may also determine West Papua’s fate. In the highlands of West Papua grows some of the same type of Arabica coffee that Starbuck’s shipped from East Timor. According to Washington businessman Jim Hope, who spent a considerable amount of time in West Papua, the West Papuan coffee crop is just waiting for someone to process it. Based on the East Timor example, however, the coffee in all likelihood will be harvested at the expense of the indigenous population.

Starbucks’ support for unsavory regimes did not end with the Indonesian military occupiers of East Timor. After Rwandan President Paul Kagame transformed his country into a virtual one-party state, Starbucks announced it was interested in buying Rwandan coffee. In April 2004, Kagame made a pilgrimage to Seattle, the home of Starbucks, with his trade and agriculture ministers in tow. Rwanda’s coffee industry received financial support from the Bush administration, anxious to bolster its client in Kigali. The Assistance a la Dynamisation de l’Agribusiness au Rwanda (ADAR), a Rwandan enterprise designed to spur entrepreneurship in the coffee industry, received U.S. government funding.

In an appearance in Seattle to promote his movie “Hotel Rwanda,” director Terry George, used the occasion to promote Rwandan coffee: “If Starbuck’s would carry Rwandan coffee—which is extremely good, by the way—that alone could save the country from economic disaster.”

Starbuck’s is also suspected of buying coffee from foreign companies and plantations that use forced child labor to harvest coffee on plantations in Colombia, Costa Rica, Cote d’Ivoire, the Dominican Republic, Guatemala, Guinea, Honduras, El Salvador, Kenya, Mexico, Nicaragua, Panama, Sierra Leone, Tanzania, Togo, Uganda, and Vietnam. Under Brazil’s new neo-Nazi president, Jair Bolsonaro, the nation’s child labor laws are being rolled back, with companies like Starbuck’s at the ready to take advantage of the situation to purchase cheaper coffee beans. Meanwhile, under Trump’s labor secretary, Alex Acosta, the department, which is charged with identifying nations using child labor, has seen its staff thinned out and budget reduced. This is much to the delight of Starbuck’s, which is always ready to make a quick buck at the expense of the poorest of the poor and the most vulnerable.

When it comes to billionaires like Schultz, they, like all others, have made their fortunes on the backs of others. In Schultz’s case, the backs include those of children as young as five-years old. When it comes to coffee or presidents—just take a pass on Starbuck’s.

Previously published in the Wayne Madsen Report.

Copyright © 2019

Wayne Madsen is a Washington, DC-based investigative journalist and nationally-distributed columnist. He is the editor and publisher of the Wayne Madsen Report (subscription required).

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