Empire: World History - 276. The Biggest Corruption Scandal in French History (Part 4)

Episode Date: July 28, 2025

How was George Eiffel of the Eiffel Tower involved in a huge corruption scandal associated with the Panama Canal? How many workers died during the French attempt to build the canal? And who was Bunau-Varilla and how did this smooth-talking moustache-wielding French engineer manage to sweet talk the US government to back his plan? Anita and William are joined once again by Matthew Parker, author of Hell’s Gorge: The Battle To Build The Panama Canal, to discuss how French dreams were dashed when the project came crumbling down, and how one man climbed out of the rubble and charmed his way to the White House…  Empire Club: Become a member of the Empire Club to receive early access to miniseries, ad-free listening, early access to live show tickets, bonus episodes, book discounts, our exclusive newsletter, and access to our members’ chatroom on Discord! Head to empirepoduk.com to sign up. For more Goalhanger Podcasts, head to www.goalhanger.com. Email: [e-mail] Instagram: @empirepoduk Blue Sky: @empirepoduk X: @empirepoduk Assistant Producer: Becki Hills Producer: Anouska Lewis Executive Producer: Neil Fearn Learn more about your ad choices. Visit podcastchoices.com/adchoices

If you want access to bonus episodes reading lists for every series of Empire, a chat community. Discounts for all the books mentioned in the week's podcast, add free listening and a weekly newsletter, sign up to Empire Club at www.mpowerpoduk.com. Hello and welcome to Empire with me, Anita Arnan. And me, William Durhampool. And today we are joined once again by the brilliant Matthew Parker, author of Hell's Gorge, it is a fabulous book, to discuss the building of the Panama Canal. So you might remember in the last episode, we were talking about Panama becoming part of Colombia and how the

California gold rush of 1848 brought a huge new wave of wealth to the region. And the building of the Panama Railroad was almost necessitated by that rush. We left you with somewhat nutty de Lesseps and his extravagant PR campaign to fund a French attempt to build this canal. and his daughter struck the first symbolic blow with a pickaxe, not to the damn side itself, but a champagne box filled with dirt. And carrying on with the story, Matthew, can you introduce us to the equally unusual Frenchman with an even more extraordinary moustache? Please tell us about Philippe Jean Banois-Varilla.

Okay, so he's a French engineer. He's in his sort of early 20s. He went to the elite engineering school in Paris. where you wear a uniform, and the motto is La Patri, Les Siance and La Guar, the country, science, and glory. Brilliant motto. Brilliant motto. So 19th century. The whole French story is so 19th century.

He's very short. He's five foot four. His father died when he was young. You're right. He has a sort of red moustache with the tips, sort of carefully waxed into points. I mean, you just want to put him straight on a penny farthing is where he belongs. That's where he would feel at her. That's the kind of moustache he's got.

And people found him when they met him a rather sort of eccentric and slightly overwhelming figure. He was very, very intense. This is one report in American who met him. Mr. Veria's tremendous mental capacity becomes apparent when one looks at him. His brain rises from an active rather square face, but as if to contain it, the sides of his head are much larger than his face. So he's odd looking. He's just so intense. Anyway, he'd met Ferdand de Lesz up in 1880.

I'm just looking at pictures of him. This youth, he looks like a Prussian general. He's got the full. Well, I think everyone looked like that in the military sort of academies. Anyway, so he'd met Doleset, and he'd clearly been subject to Dolesop's sort of hairdry charisma, and he'd taken on this great idea of the canal. He spoke, not in sentences, but in sort of proclamations. I love him more and more.

I mean, he was gripped. Like all these people before had been gripped by the great idea of the canal, he called it the greatest conception the world has ever seen of French genius. Again, sounds like Trump, but with a French spin. Yeah. So in 1884, by this stage, Yellow Fever has struck the French project like a hammer blow. It's killing.

It's a war zone out there. And some of the French, you know, his teachers at the Academy, saying to French engineers, look, don't go there. You know, it's really far too risky. But he goes anywhere. And he declares the constant dangers of yellow fever exalted the energy of those who were filled with a sincere love for the great task undertaken, to its irradiating influence,

was joined the heroic joy of self-sacrifice for the greatness of France. Right. What he's talking about is people in spasms of agony dying in dysentery, I mean, but that's what he sees, which is, you know, says a lot about him. He sees a tricolour fluttering over the whole project. This is something that really struck me when I was researching the French part of the story. It's the sort of the amazing sort of bravery and full-house. of these young French engineers who went out.

There was another one I found called Henri Samuars. And he's, he's one of this ordinary guys. He's not one of the big bosses like the others. He says, look, we knew about the dangers, but it was like a battle. We had to brave, brave. And he says, you know, I'm going to be hit like a cannonball by the sun. I'm going to face yellow fever, nose to nose.

And he says, me ba. Mebaugh. And you can imagine the sort of gallic shrug. I mean, what was amazing? This is a point where three quarters of the French engineers who go out to Panama are dead within three months. Literally. But they're still prepared to do it. They're prepared to die for the great idea of the canal.

And one who turns up before too long, if it isn't French enough, this whole story, Georges-Felle himself turns up. Yes, that's much later. But what happened was basically to let's have to keep raising money. Like any private enterprise, it requires sort of confidence. So he kept having to spend money on the press. More hot air balloons over Paris, all that sort of thing. More money.

It became known as the Panama Czech. And something like 2,500 magazines received money from the canal company, including things like marriage journal, Forrester's Echo. You know, what have they got to do? And some magazines were set up purely to get the Panama check. So if you wanted money, you set up a magazine and then you got this check. So it's becoming more and more desperate. And on the isthmus, the idea of digging a sea level canal soon it becomes apparent that it's not possible. For the French, everything that could go wrong

goes wrong. There's an earthquake. There's huge floods. There's a civil war at one point on the isthmus where rival factions are actually fighting and most of Cologne gets burned down, including a lot of equipment. The real problem is yellow fever. And there's this amazing story of a guy called Jules Dangley, basically France's most senior engineer. And he sent out on a huge salary in 83. And in order to prove that yellow fever has no fear for him, he brings out his family, his daughter, his son, his daughter's fiancé and his wife. And at this point, we have to understand, this is before the mosquito theory of transmission has really been understood for yellow fever and for malaria. No one really knows where it comes from.

Are they still thinking miasma? It's something in the air, but, you know, something that we can't put our finger on. Certainly for malaria, it's about myasma, which comes. And obviously, if you dig a canal, you're going to release lots of myasma. So that's obviously causing the malaria. My asthma, for those who don't know, is sort of like infected air. That's, you know, all these diseases were said to be carried in invisible clouds. of death that, you know, we're mysteriously coming up from somewhere. Yeah. For yellow fever, it's even more mysterious because it sort of comes and goes. And obviously, yellow fever has played a large part in history if we think about America and Haiti and these sort of places. And Barbados at one point was pretty much wiped out by it. And no one knew what it was. Some people said it was a certain wind off the air.

One doctor suggested it came from eating apples. And then, but most people thought it was sort of the personal behavior, the sort of morality of the individual. visits to the brothels. Exactly. Or filth or filth and, you know, because it was around ports, they thought it was sort of filth and dead rats and that sort of stuff. Anyway, so Dangley turns up with his entire family, he announces only the drunken and dissipated die of yellow fever. His beautiful little daughter, Louise, who's 18, she becomes the toast of Panama society. She's clearly very charismatic. And she's the pride and joy, her mother says, of their family. She gets yellow fever and dies an agonising death. The next day, D'angley is back at his desk. Then his son dies.

And then the fiancé dies. Each time his duty takes him back to his desk and he's back at work. And then about six months later, his wife dies, at which point he breaks. And his entire family has been wiped out. But not just him. There are 22,000 workers who have also died at this point. Carnage. It's a mass graveyard. For all the terrible body count in this story, it is actually a good old sort of political corruption scandal that does for the French. Can you talk us through what happens and how this dream sort of gets dashed against the rocks? Yes, well, as I said, DeLessex keeps sort of issuing bond issues to try and raise money,

to try and keep the project going. He's still bribing the French press. By this stage, the Americans and the Bush are saying, look, this is done for. they're going to go bankrupt. And so he eventually agrees to a sort of lock canal. So they change their plan, at which point Eiffel is hired. And he's a great hire for the company. Just sorry, Belisha Beacon.

Boop, Boop, Boop. Eiffle of the tower. Yeah, the tower is under construction. He's well famous. He's paid a lot of money. He starts building locked. And they're going to be temporary locks. We'll still get back to the important sea level canal.

But then he issues a lottery bond. So this is a slightly different way to raise money. So it's like a bond issue, but you have numbers, you have sort of numbers on your bonds. And there's, you know, every couple of months or every six months or so, a ticket is drawn and you can win. A lot of money, like 250,000 francs or something like that. And this had saved Sears. When Suez was at a crisis point, it was saved by a lottery bond issue. That was under the Emperor.

And this is now, the Third Republic, things are slightly different. They need government approval. And this takes ages. And it takes, there's committees, there's ages. And then they all go on holiday for the whole summer as they do. It's France. So time is running out. Time is running out.

And then he tries one more bond issue and everyone. The sort of the wall is falling from the eyes, even of the most dedicated French investors. Most of whom small investors, a lot of women have sent their children savings in. You know, this is, you know, the little people in France have been the backers of this, not the big investors. But they've given up and it's declared bankroll. corrupt and then the recriminations begin and it all starts. 1892 this is that.

You know, they look at the books and it all comes out about the bribery. For the lottery issue, the company gave a million francs to a minister to vote in its favour. The government falls, ministers are arrested, they resign, the cabinet goes. It's an absolute scandal. It's a terrific story this. What a story. But one of the spurious details is that, you know, the leaders of the plan, who, you know, the Lesips, sure, but also they name Eiffel of the tower,

and they're given jail sentences, which are later overturned. I mean, this is, you know, the recriminations are serious and it just, it's a national humiliation. It is a political swamp that is revealed, and it hurts the French psyche for generations to come. Yes, it's a, it's a humiliation up there with, you know, the Franco-Prussian war. I think Charles Lessex actually does spend sometimes. time in prison. He's the son and he was a director of the company. Oh, the one who kept saying, don't do it, Dad. You're too old. But the Ferdinand himself, he sort of checks out. He sits in an armchair with a three-week-old newspaper on his lap. He doesn't really know what's going on. He's taken

into the trial. He puts on his legion d'honne uniform and he doesn't really understand what's happening. And he goes back and he says, I had this terrible dream that we were on trial somewhere. Oh, dear. So he's sort of, so, and what happens, what happens just to sort of fill in the little gaps. A lot of the people like Eiffel, also like Bunaveria, they are forced. I mean, Eiffel made something like seven million francs on doing not very much. You know, it was, the whole thing was corrupt. All the contractors, they were bribing the inspectors.

You know, on the isthmus itself, corruption was completely rife. They were all drinking too much. You know, they would have champagne for breakfast. breakfast to stop the lame me corb. And it was really, you know, an absolute sink of corruption, as the Americans would describe it. Anyway, so some of these people who had made ridiculous profits, you know, everyone said, where's this money gone? A billion francs had been spent. And how much had been dug by this point of the bankruptcy? How many miles of canal is there? They've made a start. Not very much, is there? A lot of champagne and not much canal. They've done, they've done all of

dredging, sort of on the river, you know, the river bits and so on. They've really, Because the real challenge is the continental divide is the mountain range you've got to cut through. And that will be. And there's a nine-mile stretch there, which was none of the Kulabra cut. That's the real challenge for any canal builder in Panama. So this corruption scandal, this bankruptcy in Paris, it's completely tanked the building of the canal. Join us after the break to see what happens next in Panama. Welcome back.

Before the break, we discussed how the French attempt flopped in a complete humiliation. and corruption scandal. But what happened to the workers? Yes. If we go to Panama, we'll see that most of the huge workforce have sort of gone. A lot of them in extreme poverty, they have to be shipped out by the Jamaican government. Are the lots that are totally unpaid and have they been working on arrears? Yes, exactly right. So they're sort of starving, basically, and desperate. Some of the Jamaicans, because it's mainly Jamaicans who are the workforce for the French effort. Some of them go off to other parts of South America or Central America to do other jobs. I mean, they're great sort of emigrators, the West Indians, as I'm sure you know. But what happens at the trial is that

the people who'd made ridiculous amounts of money from bribes and so on had been forced to invest in what was called the new company, the new canal company, which was a sort of holding sort of body. And they did some sort of desultory work on the isthmus. But really they were looking, they were still desperate. People like Buna Varia, he still wanted the canal built. He was one of the people, they were called penalty investors. And one of the stipulations was that they should have nothing to do with the canal. Give us the money and get lost. Yeah, you're tainted. We don't want anything to do with you. So what they've got to do is they've got to basically try and sell the canal or get a new investor in the canal to keep it going. And the obvious one is to sell it to the Americans. But there's a big

problem. The Americans are set on a canal at Nicaragua. Which is much longer? Yes, it's longer. It's the San Jose River goes up to Lake Nicaragua and then there's a sort of steep descent down the other side. The American engineers favoured this over Panama, mainly because of the problem in Panama of the river. There's this river Shagras in Panama, which is one of the most volatile in the world. This is another one of the main problems of the French face. Panama, for some reason, is one of the wettest places on earth. You know, five inches of rain can fall in a couple of hours. So this river can rise and sweep everything away. And also, the canal has to be at the lowest points of the valley. So it has to drain the area. So it has to be a sort of canal and the river,

which does not work for navigation. So that was the reason why the Americans rejected Panama in favor of Nicaragua. So Buna Varea and the new company have a big challenge on their hands. They have to persuade the Americans to change their minds and to buy them out. Otherwise, the new company is worthless and all of those lives have been for nothing. And this is when Bunaverria really flexes his brilliance, along with another man called William Cromwell, who is an American Wall Street lawyer, and he is taken on by the new company to represent their interests in New York. And the two of them gets work really on one of history's most extraordinary lobbying campaigns. And when you say, you know, one of history's most extraordinary lobbying campaigns,

what does it look like? Whose doors are they knocking on? Are they, again, buying up influence as they did in France with the old company? They do the obvious things. They, you know, they write to all the senators. They write, there's various sort of commissions and committees in America to do with the canal, with lots of distinguished members. So they lobby them. And Bunaveria, he's the master of the chance encounter. Right. So when he's in Paris, he's already befriended an American called John Bigelow,

who's quite well connected. So Americans passing through Paris somehow meet him, and he gives them the sort of, you know, the sort of laser treatment on Panama. He has this spiel, and he pins them down, and he doesn't stop until they've changed their minds. And he's brilliant at this. And with good reason,

though Panama has a lot of advantages over Nicaragua. But he's this persuader extraordinaire. And then he gets himself invited to a conference in Cleveland, and he spends three months travelling around America, lecturing. He's bought a newspaper in order to promote Panama. He writes a book. He does everything possible. And again, the master of the chance encounter, even though in theory he's supposed to have

nothing to do with the canal company. Right. And just to remind people, I mean, he's five foot four. He has this enormous moustache, which is wax-tipped and sort of fiery red, although I guess it's graying quite quickly after this experience. But he's sort of charm personified, just like DeLessup's was. So you've got these two sort of, you know, very forceful figures. One has fallen by the wayside and is living in a fog of dementia.

But Bruno Veria, I guess it's really popular in America because they love a personality in America. I mean, how successful is he at Charming People? Yes, I don't think he's, used humour. I don't think humor was one of his weapons. But he's got this intensity. He's got this passion for, you know, you know, when Americans said, I love someone with a passion. And he really, it's consumed him.

He's absolutely, this is his, his whole life. And he does manage to meet some very influential people. And there's an amazing story of him at the Waldorf Astoria in New York. And he's, according to his account, he's just going for a breath of fresh air about midnight. Oh, and in the lobby, he bumps into an American friend who happens to be with a guy called Mark Hanna, who is an incredibly influential Republican politician. And really has the ear of President McKinley, who was the president at the time, and he gives him the treatment, the Panama treatment, and he converts him. So that's pretty. And then he hangs around a bit longer, and you can kind of imagine him with his small size, sort of hiding behind a potted palm in the sort of atrium.

I love it. And then he pops out again and he meets someone who gets an introduction to McKinley himself. So he gets right to the top and he's, you know, with his Panama spiel. And he's starting to change minds. You know, meanwhile, Cromwell is, the lawyer, is being a bit more direct. He goes to see Mark Hanna and he just put $60,000 down on the table as a party donation. A really brown envelope thing. Wow. And while all this is going on, McKinley is particularly interested in Panama because of changes in the local politics. Take us through that. McKinley has a real interest, a special interest in the Tronit's Mincanau because things have changed obviously since the 1880s. The United States now has possessions, you know, in Hawaii,

the Philippines, Puerto Rico and effectively cute. This is all stuff we've done last year on the pod. And if anyone wants to hear more about how America collected those colonies, you can look at Empire Pod episodes 166 to 169 in our backlist. With fabulous Daniel Immar. This is a sort of turning point in American politics, obviously, when they're suddenly taking on colonies and so on. And there was an incident in the Spanish war where the premium battleship, bear in mind the United States has no real Navy. to speak of at this point. But the premium battleship, the Oregon, is in San Francisco, and it needs to get to Cuba to fight in a decisive battle. And it has to go 8,000 miles. It takes

67 days to go round the Cape Ford. And all the time, the press in the US are following its progress, reporting where it is, where it is, where it is. And there cannot be a better demonstration of the military importance of a Transisman Canal. And so for the Americans, this is the most important thing about breaking through that barrier, it's so that they can move warships between the two oceans. Right. And there's another thing you touched on in the last episode, which is sort of mindset, that the French had made a big deal of, you know, this is our service to humanity. We are French, we are great, we are giving this gift to the world. The Americans have made no pretense of, you know, we're making this for ourselves because it'll be really helpful

to us. Yes. There's none of that sort of, the idealism that we've seen in the story so far is, I mean, some people, you know, obviously think it would be a good thing for world trade, but it would be a particularly good thing for American trade so that, you know, the manufacturing goods of the East Coast can get to China. Obviously, the China market has been in session throughout history, and the agricultural produce of the West can get to Europe. You know, this will be transformative for American commerce. But I think it's the military is the most important thing,

and that really hits home with the public who have been following the Oregon on its epic voyage. So McKinley is keen on the trans-Ithman canal, not necessarily a one in Panama, which is what Buna Vario wants to sell so he gets his money back, but an Isthmine canal of some sort. But gradually, Cromwell and Bunaveria managed to convert more and more people in the sort of high-ups in Washington to Panama rather than Nicaragua. And it all comes down to a vote in the Senate. And very happily for Buno-Viria, there's quite a large volcanic explosion in Martinique, which kills lots of people. And it's a sort of sensation. new sensation.

Just a moment. Just a moment. Okay, okay. Back up. Back up. Go through this. Those two things aren't automatically linked. Back.

The heck up. Yes. Okay. Okay. We're talking 1902, right? So there's a volcanic eruption. 30,000 dead. How this could possibly be good news for the little man with the red star.

Anyone? Cromwell and Bunaveria exploit this tragedy. Is that better? Exploit this tragedy. Yes, better. in order to sort of change minds about Nicaragua versus Panama. And lots of people in America were firmly, was obsessed with Panama, of Nicaragua as Buna Vorea was with Panama.

So it's a really hard job. But they point out that there's volcanoes in Nicaragua. And there's a report which turns out to be entirely untrue that one has erupted. This is sort of blown away. But at a crucial moment before the vote, Brun Overia has this inspiration. He remembered this one Sintivo Nicaraguan stamp, which had the majestic bulk of Mount Momitombo,

in the background and a wharf in the front. And the artist, in a sort of autistic flourish, it added a little bit of smoke coming out of this basically extinct volcano, which is 100 miles from the canal route anyway. But he goes, Buna Vria goes around, all the philatelists of Washington, collecting and buying as many of these can as he can. And he sends them to all the senators as evidence of the...

And it swings it. It swings. And this, we should remember, is less than 20 years after the explosion of Crackatoa. which was one of the greatest seismic event of recent centuries. Yeah, but just to stress, this volcano was absolutely no threat to the canal, but this man is a genius because if he thinks that they will see it with their own eyes on a stamp, and stamps don't lie, why are you going to pour money in a place where a volcano can swallow up your investment and melt it into a lump of ashes thanks to lava?

I mean, that's, and it works. You said it works. It works, and it's squeaked through for Panama. and all they had to do now was buy out the French company and do a deal with Columbia. They bought it for $40 million, which includes the concession and all everything, all the sort of French plants and everything like that. A lot of money, a huge amount of money. I mean, Louisiana purchase was a lot less.

But I mean, a lot of money compared to the French investment. Do they, I mean, even break even with this kind of deal? I mean, you said it was, what, one billion francs? No, that's gone. That's gone. So that's all disappeared. So this is just a recoupment. And it is, you say, you know, substantial.

More than they thought they would get? Well, they originally asked for $100 million. Okay. Less than they thought they would get. And this was really, this was one of the things that was swinging at Nicaragua's way, that huge expense. So Cromwell has words with the boss of the new company in Paris and says, look, come on. And he agrees to take it down to 40. So still, as I said, a huge amount of money.

And there's all sorts of shenanigans going. I mean, it came out later that, you know, some of Cromwell's friends had bought new company stock at a sort of bargain basement rates and then made a huge profit. So there's all sorts of shenanigans going on. Couldn't possibly happen today. Shocker. Yeah. Anyway, so in the meantime, McKinley, of course, has been assassinated. And Teddy Roosevelt, the vice president is the unexpected new president.

And he in his first presidential address also really stresses that he wants a canal and this is going to be something that's really demonstrate to the world, America's, you know, industrial, might. And Teddy Roosevelt, as we know from our previous series, is a man who's very keen on pushing America's footprint all over South America and the region. He's not afraid of foreign adventures at all. And apparently, on his mother's side, descended from one of the survivors of the Darien disaster. Really? Oh, we didn't know that. Scott's blood, Anita, gets everywhere, see? Yes, it does. So he's set on Panama and they buy out the French company, and now they have to do a deal with Colombia. Now, one of the things that the Americans are insisting, on is a canal zone and complete control over a sort of 10 mile wide strip around the proposed route of the canal, to the extent where they have American sovereignty over that strip. Oh, right, okay. So I'm sure the Colombians have something to say about that, because that is a land grab

by a different means. If you're going to put your own flag up there, it's not yours anymore. That's right. The Colombians had just emerged from a long and very bloody civil war. and there was a certain amount of sort of confusion, I guess, and they had very little communication with their, for instance, their ambassador in Washington. But they were presented with this plan. And first of all, they say, well, aren't we due some of this $40 million?

At which point, Ruzdark goes, they're blackmailers. You know, he has no respect at all for, well, non-Americans in Latin America, it has to be said. Yeah, and we should, I mean, we should stress. I mean, this is not just a cosmetic thing that you have to do a deal with the Colombians, because at this moment in time, Panama is still part of Colombia. Absolutely, absolutely, absolutely. But the Colombians, you know, they've seen the Americans, you know, take over parts of the Caribbean, and they've seen them sort of put their power tentacles out.

And they've seen Roosevelt announces that he's going to be the policeman of Latin America, you know, with his big stick. And it's all incredibly patronising and, you know, humiliating for them. Also, they have something in their constitution that forbids them from giving up sovereigns. of any part of their country. So they're never going to get a deal with the Colombians. So Roosevelt has his Secretary of State, John Hay, they have a sort of choice. What are they going to do in order to get the Panama Car. And they can't wait around because there's an election coming up. And you want to have this, you know, the Canal deal as part of your platform.

I have in my hand a piece of paper that gives us a shortcut that you've all been dying for. Exactly, exactly. So they have three choices really. One is to to invade Panama. And Roosevelt sends spies to go and check that out and see how that's going to, you know, what the plans for that would be. One is to continue dealing with Colombians who, Roosevelt's now calling inefficient bandits. The other is to do a deal not with Colombia, but with an independent Panama. I know this is a tense moment to end the episode on. But do join us in the next episode to find out how America starts a pattern that it will repeat for years to come. Meddling. with Central and South American politics for the sake of, well, America.

And may I take a moment in the style of the Bunwaveria campaign to you listeners, that if you want to listen to that episode right now, as well as get ad-free listening, bonus episodes, and much more than join our club. Head to Empirpoduk.uk.com. That's Empirpodukuk.com to sign up. And if there was a stamp to convince you to join the club, I would send it to you. But for now, it's goodbye from me, William Durham. just to do it in that unusual da.

Yeah, weird. Oh, don't like it. And goodbye from me, Anita Arnan.