51

away from the increasingly left-wing Radicals. The Radicals were not entirely abandoned by the CIA, however, for they noted that Julio Durán had recently avoided an attempt within his party (which the CIA had initially hoped would beat Allende) to endorse Allende directly! With this action the CIA—who had never come to the same opinion twice about the Radicals or Durán—realised that there was still utility in supporting Durán, and they were happy to note that their funding had been “instrumental” in maintaining the Radical candidate in that particular struggle.⁹⁴ All along, CIA and Country-Team political assessments were unsure whether Durán and the Radicals stole votes from the PDC or the FRAP, but with the attempt of the Radical party to align with the FRAP, this became a secondary concern to keeping them from supporting the FRAP directly. With the help of Frei, the PDC was thus enlisted to push money to Durán in order to keep him both in the race and friendly to Frei, for in the case of a slim electoral majority and a run-off contest between Frei and Allende, the hope would be for friendly Radical party congressmen to vote for Frei as President. While the CIA could keep Durán in the race for President, they could not guarantee the post-election support of the Radical party, nor could they guarantee the prevention of another Radical Party move to support Allende, for “Due to ambassadorial restrictions against supporting Radicals, our equities in that party [are] quite diminished.”⁹⁵ For the mean time, at least, this was not a major problem.

## More Money

⁹³ Memorandum, C/WHD to DDP, “Request for Renewal of Project”, 20 March 1968. [CIA]

⁹⁴ Department of State, INR/IL Historical Files, Special Group Files, 14 May, 1964. [State]

⁹⁵ Memorandum, C/WHD to DDP, “Request for Renewal of Project”, 20 March 1968. [CIA]

52

If the CIA could not influence every aspect of the Chilean political system, the US government as a whole could at least throw a lot of money at the one party they could sway. On 14 May, 1964, the Special Group considered a proposal to increase the funds available for covert use in the Chilean election, noting the CIA's opinion that "recent political developments and additional information" indicated that an additional $1,250,000 was needed for the program to defeat Allende. Almost all of these funds were to go to Frei, allowing his party to "campaign at its full potential."⁹⁶ According to the minutes of the Special Group meeting where this was approved, "the principle of financial flexibility," lay behind the new payment, for "if, as the campaign develops, one segment [of the operation] needs additional support and another less, authority exists to shift the subsidy in the needed direction." Here we know LBJ had at least a cursory awareness of the ongoing proposal, for MacGeorge Bundy informed the participants "higher authority was aware of the seriousness of this election."⁹⁷

Yet more money was to follow. The 303 Committee, successor as of 2 June, to the Special Group, considered on 23 July a proposal to provide "supplementary support for the Chilean presidential elections." In a 21 July memorandum to the 303 Committee the Central Intelligence Agency reported that an additional $500,000 was needed for the program to defeat Allende, as it would permit Frei to "maintain the pace and rhythm of his campaign effort" and allow the CIA to meet any "last minute contingencies." The 303 Committee's obvious question on why yet more money was required in addition to the US $2 million already spent (an enormous sum even in a US election, several people noted) was met with an apology from the CIA: Frei had miscalculated his finances, they

⁹⁶ FRUS Doc. 262 (Editorial)

53

said, an error "attributable to the PDC's inexperience in organizing a campaign of this
magnitude."⁹⁸ Apparently placated, NSC staffer Peter Jessup recommended approval of
the suggestion to Bundy on 23 July, repeating the mantra: "We can't afford to lose this
one, so I don't think there should be any economy shaving in this instance. We assume
the Commies are pouring in dough; we have no proofs. They must assume we are pouring
in dough; they have no proofs. Let's pour it on and in."⁹⁹ The funding was approved.
There was also the case of an unnamed Chilean man who, apparently on the basis of
conversations with various Americans, assumed that he had a tacit commitment for
financial support from the US. Although no formal commitment had been made to him,
nor any deals signed (for the CIA, of course, was careful about Chileans not detecting
their hidden hand), the 303 Committee felt he "had made measurable contributions to the
Frei campaign through his 'front' organisation and that some allocation of funds should
be made to defray his deficit of $395,000."¹⁰⁰ This was an enormous sum of money for
an individual, especially in Chile in 1964. Indeed, ARA's Ambassador Thompson
commented disapprovingly that it "seems a great deal", but he did not enter any caveat to
the disbursement.¹⁰¹ This incident indicates the seriousness with which the US
Government viewed the elections but also, more importantly, how freely their money was
injected into Chile.

⁹⁷ Memorandum for the Record, "Minutes of Special Group Meeting of 13 May", 14 May, 1964 [NARA: National Security Council, 303 Committee Files, Subject Files, Chile thru 1969]

⁹⁸ Memorandum for the Record, "Minutes of 303 Committee Meeting 21 July", 21 July 1964. [NARA: National Security Council, 303 Committee Files, Subject Files, Chile thru 1969]

⁹⁹ FRUS Doc. 246. Editorial.

¹⁰⁰ FRUS Doc. 267. Editorial.

¹⁰¹ Ibid.

54

Progress

If so much money was being thrown around in Chile, was it actually achieving the aim? Did it look as if Frei would actually beat Allende. By and large, the Santiago CIA station thought so: "In the Embassy's opinion almost every evidence and observation suggest that Senator Eduardo FREI should win the most votes in the national election on September 4, 1964... [despite] FRAP charges that he is the candidate of the Church, the Right and the United States...."¹⁰² The implication that their support—which they knew was secret—might be aiding the FRAP was impossible, and they concentrated instead on their scientific polling—a function introduced to the non-Communist Chilean political scene by the US Embassy Country Team, and which they shared with Frei.¹⁰³ The US Embassy also met with local business leaders, who “all agreed with me that Frei [was the] likely winner. General feeling [was that] serious violence [was] unlikely and [the] GOC [was] well prepared to maintain order.”¹⁰⁴ There was, however, fear in the Embassy and the CIA in particular. The latter felt that all the money they were passing to the PDC was doing nothing to ameliorate the fact that the PDC was simply less well organised than the FRAP, and it “is now convincingly evident that the communists have indeed been working hard for many years pointing toward this election. They have made notable inroads among the campesinos...” and other segments of the electorate that the PDC simply could not reach.¹⁰⁵ While people were generally confident of a PDC win, “a certain tension is felt in middle and upper class circles as shown by such things as the

¹⁰² Airgram, US Amb Santiago (Cole) to State Dept, "The Presidential Campaign with Two weeks to go", 21 Aug 1964. [NARA: NSF, Country File, Chile, Vol. 1, Cables 1/64-8/64]

¹⁰³ Interview, Jack Devine, 2004.

¹⁰⁴ Telegram, US Amb Santiago (Cole) to Sec State, "Met Today", 27 Aug 1964. [NARA: NSF, Country File, Chile, Vol. 1, Cables 1/64-8/64]

¹⁰⁵ Airgram, US Amb Santiago (Cole) to State Dept, "The Presidential Campaign with Two weeks to go", 21 Aug 1964. [NARA: NSF, Country File, Chile, Vol. 1, Cables 1/64-8/64]

55

greatly increased issuance of visitor's visas, plane and ship bookings and capital
**flight.**¹⁰⁶ Not totally dismissing the unscientific political prognostication of the locals,
the CIA—haunted by the concept of an Allende win and another Cuba on their watch—
made inquiries amongst the Chilean army on what they might do in the event of an
Allende victory. The answer to this question was a resounding 'nothing.' Simply, the
Chilean military was conditioned by a long tradition of 'non-deliberation', remaining
outside of politics, liable only to act if a party, any party, attempted to subvert the Chilean
constitution. "If Allende should impatiently attempt to override Congress," the CIA
Station wrote to Washington, "the military would almost certainly intervene to preserve
constitutional order. If he should too abruptly seek to impose his personal control on the
military establishment, there might also be a reaction. Otherwise, the military and the
Carabineros [the Chilean national police] would be likely to support the duly elected
regime." Despite military intervention in the government briefly in 1924, there simply
was no great likelihood of any extra-constitutional action: "Military intervention in
politics can happen in Chile, though not without strong provocation."¹⁰⁷ Furthermore,
this was no run-of-the-mill South American banana republic, and the warning was made
to the White House that "we should not confuse the Chile of 1964 with the Guatemala of
1954 unless we are prepared to physically occupy the country."¹⁰⁸ Luckily, this course of
action did not seem too likely, as the polls were coming out in favour of Frei. An August

¹⁰⁶ Ibid. Original Italics

¹⁰⁷ NIE, "The Chilean Situation and Prospects", 3 October 1963. [CIA]

¹⁰⁸ Memorandum, McGeorge Bundy/Lawrence O'Brien/John Reilly to Senator H.H. Humphrey, "The Present Political Situation in Chile, 16 June 1964. [LBJ: EX CO 4 Chad, Republic of, BOX 21]

56

1964 sampling of the important areas of Santiago and Valparaiso shows Frei ahead by 20.2% over Allende in those cities.¹⁰⁹

The Station, however, was keen to stress that these were rough polling numbers, hard to translate into a prediction of the actual election outcome, and that the 'important point' was that Frei looked like he was in for a simple majority and a solid mandate.

Such a majority, they noted hopefully,

> would mean that the election would not have to be thrown to congress and therefore that the uncertainties surrounding that process, including the possibility of rioting, would be eliminated. Furthermore, with a clear majority Frei would not have to make any political deals with other parties. Forced to predict, however, we would give the following: Frei-53 percent; Allende-41 percent; Duran-6 percent.¹¹⁰

This was wonderful news for the White House. Nonetheless, as 4 September of 1964 approached there were, no doubt, more than a few white knuckles both in Washington and Santiago.

## Election Day

Come the election day of 4 September, the various parts of the Johnson administration involved in the Chilean operations closely monitored the official voting count in Chile. The Department of State received hourly updates from the Embassy in Santiago, which in turn were forwarded to the White House.¹¹¹ Although the initial returns echoed the polls and put Frei into the lead quite early on, the final result was surprisingly decisive. With only slightly more than a tenth of the electorate not voting,

¹⁰⁹ Memorandum, CIA to State/NSC, "Chilean Election Forecast", 1 September 1964. [FRUS 268]

¹¹⁰ Ibid.

¹¹¹ Memorandum, Chase to Bundy, "Chilean Polling", 4 September 1964. [LBJ: NSF, Country File, Latin America Vol. II, 6/64-12/64] See also telegrams 366-371, Santiago to Washington, 4 September 1964. [NARA: RG 59, Central Files 1964-66, POL 14 CHILE]

57

Eduardo Frei and his PDC received 56% of the vote; Salvador Allende Gossens and the FRAP 39%; Julio Durán Neumann, centre of such hand-wringing and worry in the Santiago Station, finished third with just 9% of the vote—very close indeed to the CIA's polling numbers. President Johnson addressed the importance of the Chilean election at a news conference on 5 September. The election, he said, served as a reminder of the strength of democratic institutions throughout Latin America; it was a victory for democracy as well as a defeat for "those who are hostile to freedom" (read: communism).¹¹² The Embassy staff was slightly more prosaic, commenting in a cable several days after the poll that "Midnight Wednesday mercifully brought to an end an election campaign which has been going on for longer than Embassy officers care to remember."¹¹³

## Effectiveness & Results

The CIA was not shy about the share of the credit due them for the stunning win, the first clear majority government in a Chilean election in 22 years, as DCI John McCone pointed out to the 303 Committee. The CIA was one of the "indispensable ingredients of Frei's success."¹¹⁴ Frei, personally, praised the Embassy for its role during the campaign, noting their "discretion and cooperation" throughout his campaign.¹¹⁵ The Station likely agreed wholeheartedly. They indicated to the 303 Committee their belief that Frei's chances of winning the election "would have been considerably more tenuous, and it is doubtful if his campaign would have progressed as

¹¹² FRUS Doc. 269 Editorial.

¹¹³ Airgram A-187, Santiago to State, Joint Weeka No. 36, 3 September 1964. [NARA: RG 59, Stack 250, Box 2025, Pol 2-1 Joint Weekas Chile]

¹¹⁴ Ibid.

58

well as it did without this covert U.S. Government support."¹¹⁶ The Ambassador, Charles Cole, agreed, and the day after the election he reported that the combined effort of U.S. agencies "contributed significantly to the very satisfactory Frei victory on September 4."¹¹⁷ Feeling, apparently, in a remarkably generous mood, McCone remarked that the voters "themselves... deserved some commendation."¹¹⁸ It was, all around, a great day for being in the CIA. Whether it had been a good day for Chile is debatable.

Commenting on the matter almost forty years later, William D. Rogers gives a more reasoned and rational tone to the reaction, which also puts into perspective the supposed secrecy of the CIA's efforts:

> We saw [the election] in 64 as kind of an acid test. You know the old domino effect: we were terrified. I still remember the sense of relief in the Alliance that he won. He was our strong preference, so we put our money where our mouth was. But there wasn't any secret about it, about where our aid money was going. And I think it was applauded by most of the liberal side of the spectrum here in Washington.¹¹⁹

Accordingly, they did everything they could both openly and clandestinely to ensure a Frei victory, though Rogers also added "Oh, no that's wrong: it wasn't everything we could; we could have done a hell of a lot more. We were pretty restrained in what we really did. But there was no doubt in where we saw our interests lie."¹²⁰ Nonetheless, Rogers disagreed with the assessment that the CIA was a major factor in the Frei victory. Instead, he believes a combination of Frei's charismatic personality, the collapse of the Democratic Front after Curico, and the continued candidacy of a defeated Durán that led

¹¹⁵ Telegram #383, Santiago to State, 8 September 1964. [NARA: RG 59, Central Files 1964-1966, POL 14 Chile]

¹¹⁶ Department of State, INR/IL Historical Files, Chile, 1964-1967. [FRUS 269]

¹¹⁷ Telegram, Ambassador to SecState, # 372, 5 September 1964. [NARA: RG 59, Central Files 1964-66, POL 14 CHILE]

¹¹⁸ FRUS Doc. 269.

¹¹⁹ Interview, William D. Rogers, 2004.

¹²⁰ Interview, William D. Rogers, 2004.

59

to this notable majority. Indeed, this opinion was echoed by senior State Department
Official Ambassador John H. Crimmins, who indicated in an interview that Bob
Hurwitch, the Embassy's First Secretary, "believed that the [US] efforts had had a very
marginal effect.¹²¹

But it most certainly *had* had an effect. Regardless of whether they had actually
assisted the Frei candidacy, almost universal suspicion arose in Chile that Frei was the
US's man. Eduardo Labarca remarks: "*Lo cierto es que en la época del gobierno del
presidente Frei, Washington se ha valido preferentemente, en su labor corrupta y
colonizadora, de personeros democratacristianos.*"¹²² Habeas Corpus or not, plausible
deniability simply does not matter when everyone comes to believe that the supposedly
unproved allegations are true. The US had effectively, and with consent, undermined the
credibility of the Frei government and the PDC by aligning too closely with them. The
final word on this can be given to Jorgé Alessandri, the recently ex-President of Chile
who would stand again for the Presidency in 1970. Meeting a US official several weeks
after the inauguration of Frei, the former President was noted (in a curtly worded
telegram to Washington) as saying:

> Chile was [an] over-politicised nation accelerating its plunge towards chaos ruin and inevitable military intervention... [the] PDC [is the] incurably muddled inefficient cutting edge for eventual open Marxist takeover which only armed force could and should and would stop, however much he lamented blows to Chilean democratic tradition.

> Frei could not change stripes (he implied that he regarded Frei as a Chilean Kerensky) and therefore independents would oppose Frei to the end, running their own candidate in 1970 even if it assured victory of FRAP and put communists in GO[C] At least such eventuality would trigger army intervention.

¹²¹ Interview, John. H. Crimmins, 2004.

¹²² Labarca, p. 24.

60

He held USG largely responsible, not only for its direct actions, but for support it gave to such subversive organisations as ECLA [Economic Commission for Latin America] and FAO, for the imminent Chilean crisis. Intellectuals surrounding President Kennedy had meddled ruinously in Chile.¹²³

Such a damning—and, as it turns out, shockingly accurate—appraisal of the results of the US’s involvement in Chile likely fell on deaf ears.

123 Cable, Santiago to SecState, "President Frei Insisted", 21 Dec 1967. [LBJ: Country File Box 14, Chile Vol V, Memos, 8/67-11/68]

have determined” wrote Broe, “that the ITT election operation has not been closely
held even within the company, contrary to what was [Broe] was led to believe.”<sup>23</sup> To
an Agency very heavily concerned with the repercussions of exposure with regards to
Chile especially (the fear of an exposure was the motivating factor behind the CIA’s
low-key, ‘Alessandri if necessary but not necessarily Alessandri’ no-candidate stance
in the election), this lack of operational security must have been very worrying. It
seemed it was, as the cable goes on for another two pages discussing the nature and
scope of the compromise. Yet at this time, CIA Western Hemisphere Division
concluded that no dirty laundry was being stored for later airing, as “conversation
with Geneen was limited to commenting on the integrity of the [word deleted]
channel [already set up by ITT] and mild encouragement that ITT *et al* become
involved in the election.”<sup>24</sup> Yet, it was urged that the Station in Santiago limit its
discussions with ITT’s local representatives, since if the CIA became heavily
involved in the passage of funds from ITT/Chitelco to Alessandri’s party, it risked
both a breech of operational security as well as a breech of the non-partisan stance in
the election ordained from Washington. Neither breech held consequences the
Agency was happy to allow.<sup>25</sup>

Yet, within a short while, William Broe was talking to E.J. Gerrity once again
about operations in Chile. What they discussed, however, vastly outshines the review
of a funding channel in terms of seriousness: for by the next time they met, Allende
had, on 4 September, won the presidential election with a slim plurality, and now
waited only upon the formality of a Congressional confirmatory vote after 50 days,
and an inauguration several days thereafter. The pressure from ITT—which had
almost $700million US at stake in Chile—on the White House was not small, and on

23 Cable, CIA, Broe to Santiago, "We Have Weighed", 6 August 1970.

²⁴ Ibid.

²⁵ Ibid.

12 September Kissinger stated that he "had a call last night from McCone...[he] thinks it would be a catastrophe if we let [Chile] go."<sup>26</sup> While 'correlation is not causation', the CIA became more active in its discussions with ITT in the week following this call. In what can be viewed as 'phase 2' of the ITT revelations, Anderson revealed the matter of these discussions: the CIA's attempt to convince ITT of a plan to cause economic chaos in Chile in order to force the army to prevent the confirmation and inauguration of Allende. As published in Anderson's column, the memorandum seemed to reveal particularly sinister planning by the CIA. On 29 September, Broe met with E.J. Gerrity, ITT's Senior Vice-President in charge of public affairs, the former presenting "suggestions based on recommendations from our representative on the scene and analysis in Washington."<sup>27</sup> First of all, it could be drawn from this that the Agency was taking its orders from ITT, but this revelation is eclipsed by Broe's suggestions. Gerrity wrote that

> the idea presented, and with which I do not necessarily agree, is to apply economic pressure.... He indicated that certain steps were being taken but that he was looking for additional help aimed at inducing economic collapse. I discussed the suggestions with [ITT's Latin American President Jack] Guilfoyle. He contacted a couple of companies who said they had been given advice which is directly contrary to the suggestions I received.<sup>28</sup>

Unfortunately, there is very little in the CIA's files to corroborate the discussion, though its occurrence is not in doubt: the CIA solicited the help of a corporation in the matter of wrecking the economy of another country, a truly scandal-worthy occurrence. Regardless of CIA intentions, ITT dismissed the idea as unworkable and its own memoranda indicate that no move was made by the company to increase economic chaos in Chile, for "information we received today from other

<sup>26</sup> TELCON, President/Kissinger, 12:32 p.m., 12 September 1970.

<sup>27</sup> Memorandum, ITT, Gerrity to Geneen, 29 September 1970.

<sup>28</sup> Ibid. *Emphasis added.*

sources indicates that there is a growing economic crisis in any case.”²⁹ Whether or not the CIA carried on with the plan independently will be discussed later.

## Part 2, Chile

There is no doubt that the CIA, through William Broe, were in contact with the upper echelon of ITT in Washington. The nature of the ITT-CIA relationship in Chile, however, has perhaps a greater impact on the validity of the scandal, for it comments directly on the accuracy of the ITT documents published by Anderson. The first very clear implication of the Anderson Papers was that ITT was working hand-in-hand with the CIA in Santiago, a sort of adjunct civilian operational arm of the ongoing covert actions in Chile's capital. Weighing the evidence, it does seem clear that Hendrix and Berrellez had some contact with at least one officer of the CIA station, perhaps even Hecksher himself. The question needs to be more specific: was CIA-ITT contact casual or secret, continuous or sporadic? Was it the case, as US Ambassador Edward reported in a recent interview, that some of the things going on around the embassy "were more appropriate to John Le Carré"?³⁰

Documents from the Agency show that the relationship with ITT in Santiago was not longstanding. Before he went to speak with Harold Geneen on 17 July of 1970, Broe had been prepared with a likely questions-and-answers memo prepared by WHD. The last of the potential questions listed in the memorandum, "Are we currently in touch with ITT personnel in Chile?" is answered simply "no."³¹ It was the general policy of the agency, witnessed in Chile during the 1964 election, to discourage private companies from getting involved in secret funding of political

²⁹ Ibid.

³⁰ Fermandois, Fontaine, et al, "El Embajador Edward M. Korry en el CEP", *Estudios Públicos*, Vol. 72, No. 3, 1998, p. 24.

³¹ Memorandum, CIA, "Harold D. Geneen—Questions and Answers", memo #1049, undated, July or August 1970.

parties for fear that they were likely to be caught and exposed to general US
embarrassment. But this policy was facing something of a reality check in 1970.
Faced with a massive loss in funds, private corporations were making independent
moves towards supporting the PDC and other parties. As the station cabled to the
Agency this was a trend the CIA was unlikely to be able to stop:

> [We] doubt they can be dissuaded, coordinated or channelled. Approx
> 800 million dollars of investments are at stake. Also, most American
> corporations believe that the US embassy has done nothing in the past
> and will do nothing in future to stave off disaster. Short of telling them
> what is being done, ref arguments would carry little weight.³²

Essentially, it was a panic to save investments as much as possible, and it was
outside of the CIA's ability to secure. "More doom and gloom" is Broe's exasperated
marginal comment on this cable.³³ The Agency obviously looked at the odds and
figured it was in the interest to assist the biggest of the corporations in as unobtrusive
way as possible. If they could not be stopped, they could at least be shepherded. The
17 July meeting in Washington thus initiated the Agency-ITT relationship in
Santiago; not permitted or desirous of channelling the funds to Alessandri themselves,
but not wishing to have ITT cause a massive uproar by being caught in the act of
passing funds, the CIA agreed to guide the ITT men in their own covert action to pass
the funds.³⁴ Memoranda over the following days show that the CIA reviewed the
security of a Chilean who could help ITT move funds to Alessandri discreetly. The
Santiago station reported back to Langley that "with advice of our Chief of Station"³⁵
a local ITT representative had made contact with a member of Alessandri's entourage
and "that offer in Ref A Amount [$300,000] made and accepted. *Station midwifery*

³² Cable, Santiago Station to CIA HQ, "Doubt they can be dissuaded", 10 September 1970.

³³ Ibid.

³⁴ It was in fact legal for ITT to pass the funds, but politically impossible, as is discussed below.

³⁵ Memorandum, CIA, William Broe for the Record, 3 August 1970.

neither mentioned nor implied [to Alessandri contact]."³⁶ A subsequent review of the event, written sometime after April 1972, commented that only three or four individuals were witting to the ITT-Alessandri transaction, and "none of these [deleted] individuals have ever been used operationally by the agency," and "there is no indication that these individuals were aware of the advisory role played by the Agency in this funding."³⁷ So, beginning in July of 1970, the CIA station in Santiago met with representatives of ITT in Santiago for the purpose of passing funds. These representatives could have been no others than Berrellez and Hendrix, for we know from ITT's papers that these were their two men in Chile. This could be significant, for when one reviews the Anderson papers there is a vast amount of 'intelligence reporting' from the two former newspapermen that hints at access to the secret parts of the embassy, if not access to the CIA Station itself.

In one of the first ITT documents released is the description of what is now known as the 'Alessandri Formula,' or the 'Frei Re-election Gambit.'³⁸ In this plan, close runner-up Alessandri promised that if the congress voted for him to be president, he would immediately resign, allowing Frei to run for the first office again, according to Chilean constitutional practice which prevented consecutive terms as president. This information is hardly scandalous, and certainly did not emerge from Agency sources: it was a matter of public record and Alessandri's offer was actually placed in the major Santiago daily *El Mercurio*. It is the subsequent comment in the same memorandum—partially quoted above—that aroused the most furore in the US when Anderson secured their publication:

³⁶ CIA Cable, Santiago Station to CIA HQ, "Suggest You Allow", 18 July 1970. Emphasis added. Figure of $300,000 a hand-written marginal note.

³⁷ Memorandum, CIA, "ITT Funding in Chilean 1970 Presidential Election", Cable #1061, undated, likely post-April 1972.

³⁸ Memorandum, ITT, Hendrix and Berrellez to Gerrity, "Chile", 17 September 1970.

Late Tuesday night (September 15) Ambassador Edward Korry finally received a message from State Department giving him the green light to move in the name of President Nixon. The message gave him maximum authority to do all possible—short of a Dominican Republic-type action—to keep Allende from office.³⁹

Did any cable go to Santiago on 15 September giving a 'green light?' A previously unreleased telephone transcript shows by 12 September that Kissinger and the President were interested in more aggressive action in Chile. In that conversation, between the President and Kissinger, Nixon asks the latter to "send a back channel to Korry" and for the CIA to get a man to Santiago to make "an appraisal of what the options are." This was necessary not because of any rift between Korry and the State Department, but because to the President, Korry was "a Kennedy Democrat" who "may have wanted to put us on the spot."⁴⁰ Two days later, on 14 September, Secretary of State Rogers counselled caution in Chile and told Kissinger that "I have been disturbed by Korry's telegrams. They sound frenetic and somewhat irrational... I think we've got to be sure he acts with discretion...."⁴¹ We know that Rogers was not the vector of the 'green light' quotation to Santiago: indeed, he was urging caution and worried about what the 'frenetic' Korry might do. The only cable sent by State to Korry on 15 September tells him to increase his contacts with the military to ensure the flow of information, but reminds him that "your role is thus very delicate one and you will be required to walk a fine line. We do not want you to get out in front and we do not want to 'take over.'"⁴² This is hardly a green light. Furthermore, it is unlikely that it came from the Embassy, for as Ambassador Korry's noted in his last interview, he threw Berrellez and Hendrix "out of the Embassy. I gave everybody

³⁹ Ibid.

⁴⁰ TELCON, President/Kissinger, 1232hrs, 12 September 1970.

⁴¹ TELCON, Rogers/Kissinger, 1215hrs, 14 September 1970.

⁴² Cable, CIA/State, Sec State to Ambassador Korry, "Meeting Covered at Length", 15 September 1970.

instructions to have nothing more to do with them.”<sup>43</sup> This points to a source in the Station.

What further steals credibility from the assertion that the ITT information came directly from the Station is a later paragraph in the same memo, where it is said that

> Ambassador Korry, before getting the go-signal from Foggy Bottom, clearly put his head on the block with his extremely strong messages to State. He also, to give him due credit, started to manoeuvre with the CD, the Radical and National parties and other Chileans—without State authorization—immediately after the election results were known. He has never let up on Frei, to the point of telling him to “put his pants on.”<sup>44</sup>

There are several indicators in the paragraph that show its origins to be other than secret. In a statement written by Korry after the breaking of the scandal, he points out that he met with President Frei only one after the election, for about 30 minutes, and at this meeting on 12 September at Viña del Mar was serving only as translator to several other diplomats.<sup>45</sup> Otherwise, he had minimised all contact with the President or any other political party. That he stopped all meetings is corroborated by a hitherto undisclosed telephone transcript of 12 September 1970, released to the author by Dr. Henry Kissinger, where he informs the President of Korry's recent measures in Chile, including the fact that "Korry has stopped all appointments unless they come to him."<sup>46</sup> The 'pants' comment to Frei likely never happened.

None of this ignores the very real measures that the Nixon Whitehouse took to undermine the congressional vote to elect Allende. Here again, however, the ITT cable has its facts and figures wrong. The first meeting to decide on a hard covert

<sup>43</sup> Fernandois, Fontaine, et al, "El Embajador Edward M. Korry en el CEP", *Estudios Públicos*, Vol. 72, No. 3, 1998, p. 25.

<sup>44</sup> Memorandum, ITT, Hendrix and Berrellez to Gerrity, "Chile", 17 September 1970.

<sup>45</sup> Memorandum, Korry for the Record, "Significant References to Mr. Korry in ITT Documents", incorrectly dated 30 Sept 1970, likely 23 March 1972, as marginally noted later in the document.

<sup>46</sup> TELCON, President/Kissinger, 1232hrs, 12 September 1970.

action in Chile occurred on 15 September when President Richard Nixon called CIA director Richard Helms, Henry Kissinger and Attorney General John Mitchell into the Oval Office to give executive direction for US action towards Allende. William Colby—then Deputy and later the Director of the CIA—noted that "Nixon was furious"⁴⁷ He wanted to prevent Allende from being inaugurated President at the beginning of November. The message he delivered—famously preserved in Colby's hand-written notes—launched Operation FUBELT, otherwise known as Track II.⁴⁸ With the first memoranda for Track II generated on 16 and 17 September, we start getting a glimpse of 'green light' potential material: the establishment of CIA capabilities to somehow thwart Allende's confirmation. Once again the ITT cable is wrong. From the start, Korry was not privy to Track II information- that is what made it Track II, with 'Track I' representing the ongoing efforts from Korry towards the Frei Re-election gambit. Furthermore, the first few telegrams sent to Santiago for Track II did not authorise any movement: they noted the President's desire "to prevent [Allende] from coming to power or unseat him", but to report back on 18 September to report on the feasibility of this project.⁴⁹

The question remains: who was the 'Green Light' source? One can largely dispense with the explanation given at the ITT Senate investigation that the source was an associate of President Frei, though this does not automatically mean that the source came directly from the Embassy or that the ITT men did not have contacts with, or report information from, Chilean sources.⁵⁰ The overall picture here is of a game of 'Chinese Whispers', whereby the ITT men are making reference to generally true information, but information taken out of its original form by one or two

⁴⁷ William Colby, and Peter Forbath, *Honorable Men: My Life in the CIA* (New York, 1978), p. 303.

⁴⁸ "Alleged Assassination Plots Involving Foreign Leaders," 94th congress, 1st session, US Senate, Nov 1975, p. 227. Henceforward 'Alleged Plots.'

⁴⁹ Memorandum, CIA, Broe for the Record, "Genesis of Operation FUBELT", 16 September 1970.

⁵⁰ Senate ITT Report, Testimony of McCone, pp. 130-132.

removes. Certainly, it was Berrellez or Hendrix who had been the vehicle for ITT's funding to the Alessandri campaign, and it is through that situation alone that the two worked with the Station. In a CIA internal audit of contact with ITT throughout the Allende period, and notes that "ITT representatives [deleted] maintained close contact with the Santiago Station throughout the 1970 electoral campaign and consulted with the Station in ITT's proposals to support Alessandri."⁵¹ The information in the ITT memoranda, though, is sufficiently vague to indicate Berrellez and Hendrix were not fully witting of Track II. They were likely associating with Station officers with regards to funding Alessandri or perhaps acting as cut-outs for information passed from the PN with regards to the re-election gambit. In their meeting with CIA officers, they would have gathered that something major was afoot, and perhaps a Station member indicated the presence of a strong presidential directive. The inaccuracy and sparseness of their information overall, however, does not indicate full intimacy with the CIA plan, merely awareness of its existence. Giving the details of an extremely secret operation to former reporters, however friendly and familiar, would have been an inexcusable breach of security for professional intelligence officers. While this conclusion does not seem major in the first instance, it reports directly upon the conclusions of Senator Church in his investigations about the ITT scandal and the information it revealed about even more serious allegations about CIA activity.

There is one possibility, at least, that has not been explored in any context: were Berrellez and Hendrix 'non-official cover' agents?

DKDKG:LSDGM

⁵¹ Memorandum, CIA, "ITT Funding in Chilean 1970 Presidential Election", Cable #1061, undated, likely post-April 1972.

The Viaux Plot

The most controversial part of US involvement in the election of Allende was the assassination of General René Schneider, the commander-in-chief of the Chilean army, on 22 October, 1970. In this situation, again, the Anderson Papers give an insight into the situation greater than the sum of the CIA's papers and those of ITT. Former Brigadier General Roberto Viaux had been dismissed from the military after leading an abortive army revolt in October of 1969. By early October 1969, Viaux had used his stature amongst junior officers to begin coup-plotting against Allende. Knowledge of Viaux's plotting was widespread and "Rumours that he would trigger a coup on October 9 or October 10 were rampant in Chile and spilled over into Buenos Aires, Argentina," noted Berrellez and Hendrix in a cable to ITT on 16 October 1970.⁵² The CIA's desperate scramble to comply with Presidential directives had up to that point produced little of value, as almost all Agency and State Department officers had noted "the idea of a military overthrow had not occurred to us as a feasible solution."⁵³

The history of CIA plotting with Viaux and others, and the subsequent assassination of Chilean Army Commander General René Schneider has been dealt with previously.⁵⁴ What is at issue here is the accuracy of the ITT reporting, which is relatively good though often off in timing. The first mention of Viaux in any ITT documents, noted above, happens on 16 October, when Hal Hendrix filed a long situation report back to E.J. Gerritty in Washington. Noting that the rumour of

⁵² ITT Memorandum, H. Hendrix (in San Juan by phone dictation) to E.J. Gerrity, "Chile", 16 October 1970.

⁵³ Hersh, p. 277.

⁵⁴ see Kristian Gustafson. "Reexamining the Record: CIA Machinations in Chile in 1970" in *Studies in Intelligence* (Vol. 47, No. 3, 2003, unclassified edition)

Viaux's plotting was rife, the ITT memorandum also mentioned the fact that he likely did not have sufficient support for a coup, for "Viaux has been conferring with high-ranking and junior officers about taking some action to prevent Allende from becoming President. He has pledges of support from several, but unfortunately not from any key troop commanders, at least not to our knowledge."⁵⁵ The fairly closely matches information cabled by the Santiago Station to Langley, where it was written that "COS met with [a false flag officer] who said he had talked with General Viaux, and as a consequence is convinced that Viaux has no military support."⁵⁶ Similar information, but the CIA cable was sent six days before that of ITT.

One of the most controversial points about the Schneider assassination is the 'turn off' message allegedly sent by Kissinger to Viaux on 16 October. Most historical accounts to date refute the assertion, noting that Kissinger still desired a coup, and would not actively urge Viaux to desist. The key memo comes from the NSC on 15 October 1970, and reads:

> ...It was decided by those present that the Agency must get a message to Viaux warning him against precipitate action. In essence our message was to state: 'We have reviewed your plans, and based on your information and ours, we come to the conclusion that your plans for a coup at this time cannot succeed. Failing, they may reduce your capabilities for the future. Preserve your assets...the time will come when you with all your other friends can do something. You will continue to have our support.'⁵⁷

This memo was then reworded and passed to Viaux through a false flag officer. Here we have a link that argues strongly *for* co-operation between the CIA Station and the ITT men in Chile. In the ITT memo of 16 October, the following was written:

> It is a fact that word was passed to Viaux from Washington to hold back last week. It was felt that he was not adequately prepared, his

⁵⁵ ITT Memorandum, H. Hendrix (in San Juan by phone dictation) to E.J. Gerrity, "Chile", 16 October 1970.

⁵⁶ Memorandum Intelligence Note to File, "Track II," 10 October 1970.

⁵⁷ Memorandum of Conversation, "Dr. Kissinger, Mr. Karamessines, Gen. Haig at the White House," 15 October 1970.

timing was off, and he should 'cool it' for a later, unspecified date.
Emissaries pointed out to him that if he moved prematurely and lost,
his defeat would be tantamount to a 'Bay of Pigs in Chile.... Viaux
was given oral assurances he would receive material assistance and
support from the US... [but] friends of Viaux subsequently reported
Viaux was inclined to be a bit sceptical about only oral assurances⁵⁸

Whether or not one chooses to believe that ITT was working directly with the CIA in Santiago, this cable adds credence to the official line that Viaux was 'turned off.'

Strikingly similar to the CIA's cable, the information is sufficient to convince most readers of an intimate relation between the CIA and ITT in Santiago. The final sentence of the paragraph, however, and the time lag between the first CIA memorandum and the ITT memorandum indicates information being passed either through Chilean contacts, or through a one-time chat with a sympathetic CIA official.

While recent documents show that the CIA still held hope for a coup after the assassination of Schneider, ITT saw clearly that the result of the assassination was not to be of benefit for those who opposed Allende's ratification as President. This was due to the simple matter of military succession. With Schneider out of the way, it was the army Chief-of-Staff, General Carlos Prats, who would be promoted to Commander-in-Chief of the army, and this gentleman (later assassinated in Argentina by Pinochet's dreaded *DINA* spy-agency) was as firmly constitutionalist as General Schneider. As Hendrix commented to Gerrity:

> We will continue to monitor the situation. Whether it will develop into any military action remains to be seen, but at this stage it seems doubtful with General Prat (sic) now in command.... Prat supported Schneider in his attitude toward General Roberto Viaux, who had attempted to spark a military coup earlier [the failed *Tacnazo*]. Prat does not like Viaux personally. As far as we can determine, Prat will display the same loyalty to Frei as Schneider did in the past.⁵⁹

⁵⁸ ITT Memorandum, H. Hendrix (in San Juan by phone dictation) to E.J. Gerrity, "Chile", 16 October 1970.

⁵⁹ ITT Memorandum, Hendrix to Gerrity, "Chile (Bob Berrellez Called this Morning)", 22 October 1970.

At the same time that the ITT men are making this accurate prediction, CIA cables are still hoping for an 11th-Hour coup.⁶⁰ There is also revealing information in what is *not* mentioned in the ITT telegrams. General Camilo Valenzuela, allegedly a co-conspirator with Viaux and one of the other men with whom the CIA was plotting, is not mentioned at all. This adds another piece of evidence that ITT was not fully witting of the CIA machinations of Track II. The information is cumulative: Hendrix and Berrellez certainly knew the CIA men in Chile. They likely associated with them on occasion. They were not, however, part of the plot to overthrow Allende.

Regardless, its revelation in the pages of a syndicated column blew the whole CIA operation into the open.

## The ITT Scandal in the Senate

The scandal started by the Anderson Papers marked the first break in an unspoken agreement between the Agency and Congress where the CIA enjoyed relatively lax scrutiny from the combined legislative body. There was, as there is today, no dedicated committee to oversee intelligence, this function being covered largely by the Armed Services Committees. As ITT broke the headlines, the public mood, already angered by Vietnam and other excesses of the Nixon administration, seemed to push congress towards a more zealous stance. In 1972 the Democratic Senator from Idaho, Frank Church, set up a Sub-committee on Multinational Corporations of the powerful Senate Committee on Foreign Relations, to follow up disclosures of ITT's interventions in Chile and to investigate how far big companies were influencing or forming foreign policy. "The multi-national corporation" noted Church ahistorically, "is a relatively new phenomenon," and one he suspected was

⁶⁰ Memorandum, CIA, "Track II", 24 October 1970.

unduly influencing government.⁶¹ ITT's involvement "is not a question of private or public morality. What concerns us here is a major issue of foreign policy for the United States," said Church,⁶² mirroring the *Washington Post* comment that President Nixon "stands charged in what is purported to be an authentic ITT document, of personally approving an attempt [to keep Allende from Power]."⁶³

Apparently under pressure from the Nixon White House, Church agreed not to hold hearings on ITT until after the 1972 presidential election, though in September of 1972 members of his staff started to conduct interviews with ITT employees, CIA officers, and other officials from the State Department and the NSC.⁶⁴ This put the CIA in an interesting position: it could keep its collective mouth shut, in which instance whatever was said in the Anderson Papers would go unchallenged. On the other hand, it could explain the allegations, in which instance much more secret operations would be revealed. It was a no-win situation for the Agency, for the DCI, and for the administration as a whole.⁶⁵ The hearings commenced at the beginning of February, 1973.

From the beginning of the hearings the matter which most drew the attention of the Committee was the 'scheme to create economic chaos.' Senators Church and Case, firing questions at John McCone, suggested that the memo from Berrellez and Hendrix was ITT policy, reflecting CIA policy, and therefore US government policy.

⁶¹ Sentate ITT, *Opening statement, Senator Church*, p. 2. What types of corporation Senator Church considered IBM, Ford, GM, or the United Fruit Company to be is unknown.

⁶² David Boulton, *The Lockheed Papers* (London, 1978), p. 178. *check citation*.

⁶³ *Washington Post*, Editorial, “ITT: And Now Chile,” 22 March 1972, p. A22.

⁶⁴ Corn, p. 241.

⁶⁵ Helms, pp. 413-415, 440-443. The successful prosecution for perjury brought against Richard Helms in 1975, based in part on his testimony to the Church Subcommittee on Multinational Corporations was unprecedented, and broke new grounds in terms of the balance of power between the Executive and the Legislature where it applies to covert operations. Essentially, Helms stated that he lied to the Subcommittee because he was bound by oath to the President not to reveal the operations, and that the Church Sub-Committee lacked authority of oversight on the CIA. Likewise, Helms claims that the testimony was in open session and to ask for executive session at that point would be tantamount to answering in the positive.

McCone reacted first against the suggestion that ITT wanted economic chaos, for as a corporation they had a duty to stay in business, and that to create an economic crisis would undo their *raison d'être*. Answering in his capacity as a former DCI, McCone said

> Now I understand that various ideas were generated at the staff levels of the CIA. They were never approved by Mr. Helms, never were submitted to [the 40 Committee] and, therefore, were not policy. This must be clearly understood; that is the difference between staff thinking and policy determination.⁶⁶

William Broe explained the approach being based on the "thesis that additional deterioration in the economic situation could influence" Christian Democrat Senators to vote against Allende, as was their right, but that the thesis quickly proved to be impracticable.⁶⁷ Charles Meyer, Undersecretary of State from ARA, likewise offered the opinion that "one of the problems facing this distinguished committee... is the distinction between policy and examinations of feasibility." He continued:

> Mr. Broe... explored with Mr. Gerrity the action and reaction within Chile, which he clearly stated, of an advance of the economic deterioration which was going to occur anyway, as a potential effect on the congressional support or non-support of Dr. Allende. He explored it, they brainstormed. Had it been adopted, it would have been a change in [the official] policy. It...disappeared.⁶⁸

The 'Frei Election Gambit' also received a degree of attention. Here it was pointed out by Hendrix himself that this was common knowledge in Santiago, and did nothing to show that ITT was actively plotting with the CIA to do anything with the Chilean congress: the Gambit was a domestic event which they had no role in instigating and no influence over at all and which in any case was perfectly legal under the Chilean constitution, if perhaps untraditional. Broe added to this by stating that the Gambit was "of great interest at the time and we were all watching to see if

⁶⁶ Senate ITT, testimony of McCone, p. 103.

⁶⁷ Senate ITT, testimony of Broe, p. 250.

⁶⁸ Senate ITT, testimony of Meyer, p. 399.

there was any feasibility to it" but, when they realised there was not, nothing further
was done. It was merely an investigation into a natural event in domestic politics,
abandoned as easily as it was picked up.

As historian Mark Falcoff has stated, in an operational sense no coordinated
ITT-CIA plan to bribe the Congress or create a financial crisis ever existed.⁶⁹ There
were, indeed, large bank withdrawals following the election of 4 September, but these
were born of legitimate fears of Allende and his well-stated expropriation agenda and
his plan to drastically lower interest rates. In his testimony to Congress, William Broe
emphasised that the CIA hoped only to build on this existing trend,⁷⁰ and several
others reported that neither the CIA nor any US company ever closed or caused a run
on a Chilean bank.⁷¹ As for the reason that ITT was talking to the government in the
first place, William Merriam, ITT's man in charge of the Washington office,
commented that ITT's approaches to Nixon and Kissinger were "just to let anyone
who would listen, in government, know that ITT was stood to lose a bundle."⁷² In
most cases, as with the initial contact to Viron Vaky at the NSC by ITT, the
government disregarded the attempted influence by the corporation.⁷³ The picture
painted by the testimony was that if the actions taken were questionable, they were
still legal. Nonetheless, the Senate investigation into this matter—as well as other
established matters such as their funding of Alessandri and of the newspaper *El
Mercurio*—was enough to provoke a reaction in Chile, and gave the Allende
government the excuse they required to expropriate ITT's Chilean holdings without
compensation. It did not matter what had actually happened, only how it looked.

⁶⁹ Falcoff, p. 210.

⁷⁰ Senate ITT, testimony of Broe, pp. 250-251.

⁷¹ Senate ITT, testimony of Berrellez, p. 168.

⁷² Senate ITT, testimony of Merriam, p. 23.

⁷³ Senate ITT, testimony of Vaky, p. 436.

The matter of the expropriation of ITT does require a further comment.

Allegations that ITT provoked its own expropriation by its efforts to block Allende, as Peter Kornbluh has asserted, ignores the reality of expropriations under Allende. The fact is that by 1973 the Allende government had multiplied the number of the Chilean firms under government control ten-fold, placing well over 90% of the Chilean GDP in the hands of the government.⁷⁴ It is doubtful that Allende would have left Chitelco, Chile's primary phone company, un-nationalised as companies dealing with communications were listed specifically in the UP manifesto as targets of expropriation.⁷⁵ What the ITT scandal did do, however, is to provide the Allende government with an internationally recognised reason to expropriate which the US could not bring to the Paris Club or any other organisation for review, and which alleviated the US Overseas Private Investment Corporation (OPIC) from paying out on the ITT insurance policy. Ultimately, while Anderson may have saved the US taxpayer $500 million, that same amount was lost to American investors.

## What the ITT Evidence Shows

For all their lack of discretion in intelligence affairs, the officers and directors of ITT did have a good appreciation of local conditions in Chile, of international economics, and of the relations between the two. In the Church sub-committee investigations, testimony from several ITT officials, including board member and former DCI John McCone, indicated that ITT predicted months before the CIA that Allende would win the election.⁷⁶ Examining the declassified documents from both the CIA and the State Department, neither had predicted a certain Allende victory

⁷⁴ Falcoff 132, if not somewhere else

⁷⁵ Programa Básico de Gobierno de la Unidad Popular, 4th ed. (Santiago: Impresa Horizonte, 1970, p. 20.

⁷⁶ Church Sub-Committee Report, pp. 2-3.

until July or August 1970, less than a month before the election.⁷⁷ This is in contrast with the ITT board of governors, who at their monthly meeting in June 1970 expressed the unanimous belief that Allende would indeed triumph.⁷⁸ When informed of this verdict by McCone, current DCI Richard Helms indicated that this opinion was not supported by the members of the 40 Committee. Allende's narrow victory justified ITT's initial fears, while highlighting the general failure of the US intelligence establishment in Chile (counting INR as well as the CIA) to adequately weigh the chance of an Allende victory at the polls.

Nor did ITT fully share the CIA's belief that an Allende government would immediately produce the total communist dictatorship that the CIA, as well as Korry, initially predicted. This difference in verdict on the election of Allende is perhaps the most accurate prediction of the fate of that leader and his government. While acknowledging the lack of action after the Schneider assassination, ITT came to the general consensus that:

> ...the election of Allende by congress pulled the plug from under the anaemic Chilean economy. Without help from Washington, Allende will be forced to turn to the communists and Moscow. The Russians don't want another Tito on their hands. In order to fortify their hold, the communists will have to start tampering with the congress, the trade unions and the military. This will invite some serious troubles for the communists.⁷⁹

This is indeed an accurate prediction. During a recent interview, one former Santiago Station CIA officer, present in the capital when the Chilean Armed Forces overthrew the president, explaining his appreciation of the military's motivation for

⁷⁷ Memorandum, 40 Committee, "Options in Chilean Presidential Election," 31 August 1970. Cf. Interview, John Crimmins: In recent interviews, Ambassador John Crimmins, formerly of ARA stated the case with more nuance, arguing that ARA realised *the chance* of an Allende victory all along, but was still not sufficiently moved by the prospect to back any significant covert action. Such a covert action, if it failed, might have negative long term effects on US diplomacy in Latin America which outweighed the negative aspects of a six-year Allende presidency. Interview, John H. Crimmins, 2004.

⁷⁸ Church Subcommittee, p. 2.

⁷⁹ ITT Memorandum, Berrellez to Hendrix, "Chileans", 22 October 1970.

overthrowing the Allende government, noted the army's train of thought being that the institution of the Army "outranked the constitution and the president and the democratic process—for the good of the institution they had to take the coup plotting out of the dark."⁸⁰ But this later quote is a representation of thought several years after the Allende election. At the same time ITT was predicting an eventual coup before a Marxist state could be established, three years before that coup, the CIA (if not the calmer State Department) were still shrilly predicting the rapid progression of communist oppression.⁸¹

The ITT scandal itself offers valuable comments on the CIA's tactical thinking in Chile. "The Station has no mechanism which could render covert support to Tomic", quotes one CIA paper, "*and has stressed the desirability of permitting Chilean voters to choose their president without outside assistance.*"⁸² Yet, at the same time, the CIA is relatively quick to 'encourage' (in the CIA's words) ITT to contribute funds to the Alessandri and NP campaigns in the election. Why the discrepancy? While no clear explanation is in the papers, it is likely that the CIA's arguments are sincere and reflect the belief in *their own* abilities to effect the outcome of the election. Nevertheless, all along the CIA had been dismissive of Alessandri/NP appeals for money, because they did not believe that it was the position of the US government to finance his campaign, a duty best carried out by member of the local business community, whom they thought too apathetic overall. To the CIA, 'local business community' included ITT's majority-owned Chitelco phone company. Part of the problem, from the CIA's planning perspective, was that Chitelco *could not* be seen to pass money to the PN or the opposition press. For a company that was

⁸⁰ Interview, Unnamed CIA officer, March 2003.

⁸¹

⁸² Memorandum, C/WHD to CI (via DDP), "Background paper for Meeting with Ambassador Korry", 17 September 1969. Italics added.

trying desperately to avoid expropriation (a clear promise of Allende) the 'optics' of
passing money to opposition-supporting *El Mercurio* was sure to only speed
Allende's expropriation agenda. It was a death-or-glory scenario for ITT: sit idle and
let a victorious Allende expropriate Chitelco, or move to prevent an Allende victory
by covert passage of funds, which if discovered would help an Allende victory and
speed expropriation. From ITT's perspective it made perfect sense to accept the
CIA's help, and from the CIA side it only made sense to keep the corporation from
getting itself into trouble—trouble that would effect the entire anti-Allende effort—
for something it was going to do regardless of CIA help, which amounted to little
more than advice on people they could contact.⁸³

ITT's cables also give us a glimpse at the confusing scenario of who in the
government apparatus dealing with Chile were for or against supporting Alessandri,
or even who was in favour of blocking Allende at all. A hitherto unreleased telephone
transcript between Henry Kissinger and President Nixon adds some support to the
scenario of Ambassador Korry and ARA being less than sanguine about trying to
block Allende. In the conversation, which took place on 12 September 1970,
Kissinger starts discussion on Chile with the understatement that "The big problem
today is Chile." More importantly, however, Kissinger states that "Latin America
Bureau at State is against doing anything."⁸⁴ This dismisses, first, that Korry ever
told Frei 'to put his pants on' as alleged in the Gerrity-Hendrix reports, but also shows
how the State Department and Ambassador were in agreement that Chile should be
left largely to its own devices. It adds weight to the argument that the origin of the
CIA's 'Track II' operation lay firmly with "Nixon's aberrational and hysterical

⁸³ Cord Meyer, *Facing Reality* (New York, 1980) p. 182.

⁸⁴ TELCON, President/Kissinger, 12:32 p.m., 12 September 1970.

decision"⁸⁵ in favour of an extreme covert action and against the 'wait and see'
approach counselled by the State Department and, less stridently, by CIA.

Recent comments by many of the players involved offer fairly blithe verdicts
on the effect of the Church Subcommittee investigation. Viron Vaky, a State official
seconded to the NSC as Kissinger's Latin American expert, said "I think it just stirred
things up but I do not think it was taken seriously It was not taken seriously by
Henry [Kissinger]. It just fed people's anxieties."⁸⁶ Continuing, Vaky noted:

> I don't think it bothered Henry. Henry was just worried about Cold
> War and balance of power, those sort of things. Nixon may have been,
> because... people supporting him were having their interests cut, [and]
> this probably fed his alarm, but even in this case I think the real
> concern is how [Chile] fit into the whole Cold War picture.⁸⁷

Kissinger, speaking for himself, noted "You have to see all of this in the Vietnam
context. Opponents of Vietnam were trying to prove that this was a criminal
government, and that everything it did all over the world was covert. Covert
operations did not have a dirty name in those days; they were highly classified but
were perceived as daring. So, I do not believe I focused on ITT."⁸⁸

Perhaps these comments are a little disingenuous: the ITT scandal and
subsequent Senate hearings no doubt had people in the White House and CIA quite
concerned. While it would not have been certain at the time, the Church Sub-
Committee on Multi-National Corporations was only a pre-cursor to the much more
serious Church Committee investigations of 1975. Certainly, in the long-run the ITT
scandal led to a sea-change in the way that the CIA operated and the manner in which
oversight was conducted. The old, easy way of running business in Langley was
coming to an end. In this case it was probably to the long-run benefit of the Agency,

⁸⁵ Meyer, p. 184.

⁸⁶ Interview, Viron P. Vaky,

⁸⁷ Interview, Vaky.

⁸⁸ Interview, Kissinger, etc.

for it emphasised the need for a more prescribed cycle of covert action authorisation to be established and followed. Clearly this was not done in the case of the period from 4 September to 26 October 1970, where the CIA rushed—under a legal Presidential edict—to find *any* method to stop Allende's inauguration. Had an order such as this been given under the current system of covert action approval, it would not have been ratified or carried out. Since the panic to stop Allende proved detrimental to US and Agency interests in the long run, and would have been of doubtful benefit in the short run, it is hard to see how such 'fast and loose' operations were a good thing in the first place. Despite the sometimes flimsy facts in the ITT documents, they did reveal the general nature of a CIA operation which many in the US were unwilling to accept at the time or any time since: tampering with the constitutional process of a foreign democracy. In this sense the ITT scandal, for all its hyperbole, is a true marker of the watershed in the public perception of intelligence which began in the early 1970's and largely persists to this day.

Page 1 of 2

Jessee Incao

From: William_Rogers@aporter.com
Sent: Tuesday, April 12, 2005 11:03 AM
To: jincao@kmaglobal.com
Subject: Message for Dr. Kissinger

Re: Gustafson

Herewith Gustafson's slight rewrite of his chapter on the 1964 Chile election (and US support for Allende) as well as material on ITT -- which last I have not yet read.

Evidently his work on Chile is not hindering his career. He was, I gather, thinking about returning to remote Canada but A.Horne tells me he would like to see Gustafson receive some fellowship that Allistair has influence over. And Gustafson is now appointed to Sandhurst. This should give his name an added glow, and improve the chances that he can find a publisher.

He asks for suggestions on that head.

-----Forwarded by William Rogers/Atty/DC/ArnoldAndPorter on 04/12/2005 10:52AM -----

To: William Rogers/Atty/DC/ArnoldAndPorter@APORTER
From: Kristian Gustafson <kcg23@cam.ac.uk>
Sent: kcg23@hermes.cam.ac.uk
Date: 04/12/2005 09:41AM
cc: Cecilia Petrowsky/Sec/DC/ArnoldAndPorter@APORTER
Subject: Chapter Letter

Dear Mr. Rogers,

Thanks so much for your letter of 5 April, which I received today. After posting the chapter to you I noted several of the glitches you mentioned (including the embarrassing spelling of 'champagne') and have since corrected them... I hope; there seems to be no end of typos found after even dozens of proof-reads. Attached is a slightly edited version of the same chapter, with some extra material added. Also attached is a chapter on the ITT scandal, though is still a draft with a few sections required.

It is too bad I failed to note the meeting at the LBJ library in Austin which you mention. This would have been valuable to attend. If you encounter anyone at the meeting who might be of assistance to my work by way of interview or comment, please let me know. If it is helpful please show them some of my work.

There have been several important evolutions to the schedule for my thesis. Yesterday I was offered a job as a lecturer at the Royal Military Academy, Sandhurst (it seems I am to be one of Prince Harry's lecturers!), and this job starts in one month, before I have fully completed my first draft. This will put me back slightly from my intended submission date of 15 June, but I think by August I will be complete. I have not yet approached any publishing houses. If you could recommend any editors who I might successfully approach I would be happy to receive your counsel. I imagine a book could be published within about 6 to 9 months from submission.

Once again, thank you for the help and the knowledge that there are those

APR 1 2 2005

4/12/2005

# "The CIA and the 1964 Chilean Presidential Election"

Kristian Gustafson
Downing College
Cambridge

US Involvement in Chile is certainly most famous for its most recent period: CIA involvement in the fall of Salvador Allende Gossens and the rise of General Augusto Pinochet Ugarte. The extremes of this period unfortunately eclipse more than a decade of preamble, a string of covert actions under three successive presidents before the fateful actions under President Nixon. The CIA's behaviour during the presidency of Allende did not occur in isolation from other policy, nor was the US government unaware, in 1970, of the threat posed by Allende or the political forces pushing him. President Allende, of course, was not created just in time for September of 1970; prior to his victory, Senator Allende he had stood in three successive elections as a candidate of various leftist front parties. In each of those elections the US undertook some form of action against the Marxist front parties and so Salvador Allende. In order to place later and more elaborate operations of 1970-1973 into perspective, the US perspective on Allende's political career must be understood. These operations are not the attempted assassinations and plotted coups of the popular conception, but rather much subtler affairs of money and influence. They mark, nonetheless, a serious meddling in the affairs of a friendly democracy. Meddling, one should note, that was not without its darker side and menacing consequences. The planning and execution of covert operations in the 1964 Chilean Presidential election was a point of no return for US interests in Chile, a precursor to the events of the Nixon/Allende administrations, a waypoint on the long road

18

to the coup, and an independently important event in the history of US state behaviour in
Chile and Latin America.

***

"From the viewpoint of US interest, it would be better if any of the candidates other than Allende won the Chilean elections. Were Allende to win we could be faced with a pro-Soviet, anti-US administration in one of the most important countries in the hemisphere."¹ So wrote the Assistant Secretary of State for Inter-American Affairs (ARA) in June of 1958, presaging a sentiment that would dominate US thinking about Latin America for the next two decades. Before the reality of Castro's Cuba, the US was presented with a challenge in its own back yard, the threat of a pro-Soviet government in *the Americas*. The shock was doubly sharp because it was unexpected (at least to the Americans: most Chilean observers saw it coming). For the US, Chile represented one of the *good* Latin-American states, a true democracy with a strong record of civilian governance and peaceful handovers only twice broken since independence from Spain in 1818. After a revision in 1925, the Chilean constitution remained unchanged until after the 1973 coup.² Overall, Chile's history is one remarkably free of the *golpe de estado*

¹ Memo, Ast. Sec. State ARA to Dep Und Sec Economic Affairs, 18 June 1959. [FRUS 58-60, Vol. V Micorfiche Supplement, CI-6]

² The President was elected for a term of six years and was not able to succeed himself. Deputies were elected for four-year terms and senators for terms of eight years. J. Biehl Del Rio and Gonzalo Fernandez R., "The Political Pre-requisites for a Chilean Way," in *Government and Opposition*, Vol. 7, No.3, 1972, p. 308.

19

(coup d'etat) that fit within the North American stereotype of Latin America.³ As American Ambassador Edward M. Korry described it, Chile was:

> The most stable, tested, freest democracy in South America... Democracy in Chile meant exactly what it meant in the United States. Even more: it meant an unfettered press. It meant a multi-partied Congress. It meant an independent judiciary. It meant an apolitical army, an army that had never participated in politics.⁴

For the US, it was the one Latin-American country that could be depended upon, due to its strong middle-class (something entirely absent in most of the rest of the region) and burgeoning industrial/consumer economy.⁵ Yet in the 1958 election campaign the US, for the first time since the Pacific War of 1879-1884, had to pay close attention to Chile, for from seemingly out of nowhere the Communist-Socialist Front under Senator Salvador Allende, was now poised—perhaps—for a win.⁶ What was going on?

Chile had changed. While the nation had grown wealthy through the two world wars by sales of copper and foodstuffs to the belligerents, its population had stratified. There was a notably sophisticated upper and middle-class, upwardly mobile and educated, comprising about one third of the population, with the remaining population existing in several distinct layers of 'working class' and urban poor.⁷ It was later noted

³ Harold Eugene Davis, "The Presidency in Chile," In *Presidential Studies Quarterly*, Vol. X, No. X, 19XX, p. 707.

⁴ F. Orrego Vicuna, ed., *Chile; The Balanced View* (Santiago, 1975), p. 292.

⁵ An economy, though, almost entirely fuelled by copper exports. As with any resource-based economy, Chile's GDP mirrored the rise and fall of copper prices on the global commodities market: it just so happened, though, that wars tended to drive up prices of such strategic metals. Ergo, Chile had done quite well for itself in the period of 1914-1945, though much of the profit still went to the largely foreign owners of the mines.

⁶ In the period surrounding the War of the Pacific, Chile successfully challenged the US as the dominant naval power in the South Pacific littoral with its defeat of Peru and Bolivia. American political and commercial dominance of the southern cone was thwarted for several decades and was instead traded between Chile and Argentina. See William F. Sater, *Chile and the United States: Empires in Conflict* (Athens, USA, 1990).

⁷ Sigmund, 21. Cf. Mark Falcoff, *Modern Chile 1970-1989: A Critical History* (Pittsburgh, 1989), p. 18. Falcoff argues that the Chilean socio-economic set-up was almost a perfect mimic of the European and North American societies.

20

that despite this wealth, for half the population real wages had been declining since
1950.⁸ This social stratification and poor wealth distribution contributed to a Communist
party that was one of the strongest in the west,⁹ and all parties "are well aware that it is
controlled by Moscow."¹⁰ The Socialist party could claim a thirty-seven year history
with impressive results both in and out of government, as the Chilean social-welfare
system—and concomitant debt—indicates. Consciously copying the European model,
Chile's socialists began, in the 30's, to form into 'Popular Fronts', the first of which, the
"*Frente Popular*," brought President Pedro Aguirre Cerdo (himself a low-key socialist) to
power in 1938. This party, a mix of communists and socialists, was one of the most loyal
to Moscow in the entire world.¹¹ Indeed, the decision to form this front was taken at the
7th Congress of the International Communist Movement, held in Moscow in 1935.¹²
Suffice to say that Chile had a strong political strain of Socialism/Communism pre-dating
US interest in the domestic politics of the state.

This movement of leftist parties Chile ran in opposition to the long established
political culture. On the right were, at various times, the Conservative and Liberal parties
(who would run together initially in 1958 under the banner of 'Democratic Front') and
the National Party and in the centre was the Radical Party (which, in 1962, also joined the
Democratic Front) a collection of various socialists held together by a shared anti-

⁸ NIE 94-63, "The Chilean Situation and Prospects," 3 October 1963. [JFK FRUS, Vol. XII Microfiche supplement, Doc 45.]

⁹ Ambassador Nathaniel Davis, *The Last Two Years of Salvador Allende* (Ithaca, 1989), p. 3.

¹⁰ Memorandum, INR, "Salvador Allende, Chilean Presidential Candidate", 24 April 1964. [DDRS]

¹¹ James D. Theberge, *The Soviet Presence in Latin America* (New York, 1974), p. 51. See also testimony of Ambassador Korry, "The United States and Chile During the Allende Years", Hearings Before the House Sub-Committee of Foreign Affairs, July 1 1971, p. 11.

¹²Eusebio Mujal-León, *The USSR and Latin America: A Developing Relationship* (Boston, 1989), p. 124-125. See also Biehl and Fernandez, "The Political Pre-requisites for a Chilean Way," p. 316.

21

clericalism, and divided on the subject of cooperating with the Marxist left.¹³ All of these orthodox parties were historically very important in Chilean politics but saw some measure of their support drawn away to the Communist/Marxist 'popular fronts' that emerged after 1938.¹⁴ Likewise drawing away support for the centre-right parties was the relatively new and left-leaning Christian Democratic Party (PDC), whose membership tended to support land reform, state influence in the economy, and the cause of "Christian communitarianism."¹⁵ Prior to 1964 the Christian Democrats had not been involved in any government. Their chosen leader was Eduardo Frei Montalva, a charismatic, frugal and hardworking Senator from a patrician family.

Despite all these active parties, INR was quick to note that no more than 15% of the Chilean electorate was a member of a political party. A large majority of the non-committed were 'a floating mass of lower-class voters' who supported the candidate offering the greatest promise of improving their lot.¹⁶ This was, potentially, ripe for harvest by a keen popular front. So, if numerous American and Western officials could celebrate Chile's openness and democratic liberalism there was reason for concern posed by the nation's highly ideological political culture and the active participation of two large and well led Marxist parties.¹⁷ As has been made clear by numerous historians and former CIA officers, this situation was somewhat analogous to Italy, and indeed US operations in Chile would be modelled after US covert action in Italy in the 1940's.

There, as former DCI William Colby noted, the US made efforts to "strengthen the centre

13 Julio Faúndez, *Marxism and Democracy in Chile* (New Haven, CT, 1988), pp. 31, 160-161.

14 Ibid.

15 Sigmund, p. 17.

16 Memorandum, INR to ARA, "Pressures for Change Dominate Chilean Presidential Campaign", 1 May 1964. [DDRS]

17 Falcoff, *Modern Chile*, p. 203.

22

democratic forces—parties, cooperatives, women's groups, etc.—against the leftist challenge.¹⁸ This was to be the template for US action in Chile, though this only became the case after the scare of the 1958 election in Chile.

## Allende and the 1950's Elections

The election of 1958 was the second one in which Allende, now a senator, competed—in 1952 he was the candidate for a fringe Socialist party, where he received 5.5% of the vote. The poor showing of the Socialists in the 1952 Presidential race left the US apparently unimpressed by the threat of Communism in Chile, but this was to change in 1958. As head of the *Popular Action Front* (FRAP) Allende was one of four candidates but notably represented all the Marxist/Socialist parties, previously fractured; his principal opponents were Jorge Alessandri Rodríguez, of the conservative *Democratic Front*, and Eduardo Frei Montalva of the PDC.¹⁹ Allende lost to Frei by only 3.3%—fewer than 32,000 votes—and the Chilean Congress confirmed Alessandri as president in the required run-off vote.²⁰ For the first time—due to changing demographics and electoral laws—the bulk of the Chilean working poor had exerted their electoral clout, and the US paid attention.

The reaction was determined, if not yet panicked, within the US government. Noting the narrowness of the conservative victory over the Socialist front party, US Ambassador Walter Howe noted in a despatch to Washington that things were likely to

¹⁸ Colby and Forbath, *Honorable Men*, p. 191.

¹⁹ Faúndez, p. 109.

²⁰ Falcoff, *Modern Chile*, p. 14. According to the Chilean constitution, if in an election no individual secures a majority, the two leading candidates are put to a combined session of congress for a run-off vote. Long standing tradition—but neither the letter nor spirit of the law—dictated that the candidate with the most votes be selected.

23

get worse, not better. "We must recognise", the ambassador wrote, "that the political pendulum has swung as far to the right in Chile as it is likely to go, and that the return swing is likely to be evidenced in... the presidential election of 1964." More than just a call for increased support for the conservatives, Howe was urging the US government to get ahead of the swing back and support "the non-communist parties of the Chilean centre and left."²¹ This was an interesting policy option that was to become the chosen course for the subsequent Democratic administrations of Kennedy and Johnson, and stands apart from the assumption that the US would always support the conservatives as the main opposition to socialists. President Alessandri of Chile, while visiting Eisenhower in February of 1960, reiterated the suggestion of a broad-based anti-Communist approach in Chile, noting that the Communists had a sophisticated propaganda machine that attacked the US regularly to the detriment of all the non-communist parties. President Alessandri "urged that... the US conduct a vigorous campaign of counter-propaganda."²² Eisenhower, while previously keen to overthrow several lesser nations, seems to have thought such low-threshold pro-capitalist propaganda was inappropriate for Chile, and "said jokingly he assumed that president Alessandri was not suggesting that the US buy a newspaper in Santiago and turn it into an official US propaganda organ."²³ While this was the precise course of action the US would eventually take with the *El Mercurio* in 1970, it was evidently unacceptable at the

21 Despatch, Ambassador Walter Howe to State Department, 8 January 1960 [FRUS 58-60, Vol. V Microfiche Supplement, CI-27]

²² Memorandum of Conversation, President Alessandri with President Eisenhower, 29 February 1960 [FRUS 58-60, Vol. V Microfiche Supplement, CI-30]

²³ Ibid.

24

time, and president Alessandri "laughed, and said that of course was not his intention".²⁴
We must take his assurances at face value.

## The Alliance for Progress

While John F. Kennedy beat out Richard M. Nixon to win the 1960 election by only a thin margin, his rhetoric on taking office showed the determination of a strong mandate. Latin America played an important part of his inaugural address, an address otherwise famous for the 'ask not what your country can do for you' statement. In a paragraph addressed to 'our sister republics south of our border,' Kennedy read,

> we offer a special pledge—to convert our good words into good deeds—in a new alliance for progress—to assist free men and free governments in casting off the chains of poverty. But this peaceful revolution of hope cannot become the prey of hostile powers. Let all our neighbours know that we shall join with them to oppose aggression or subversion anywhere in the Americas. And let every other power know that this Hemisphere intends to remain the master of its own house.²⁵

Like any 'speech from the throne' Kennedy's words are densely packed with significance and indications of future policies. The last three lines of this paragraph are familiar to any student of politics since 1823, for it is an unmistakable reiteration of the Monroe Doctrine, updated with a veiled threat against communism, those 'aggressors' who might try to 'subvert' the cause of freedom in the Americas. But whereas such a statement could have as easily come from the Eisenhower Whitehouse, the first part of the paragraph most certainly would not have, for it states an understanding of, and sympathy for, those segments of society left behind by the course of statist capitalism (or pure kleptocracy) in the region. The idea led to the creation, in March of 1961, of the

²⁴ Ibid.

25

eponymous Alliance for Progress, an organisation destined to be one of the greatest US aid efforts ever conducted after the Marshall Plan. William D. Rogers, a Washington lawyer and later an Assistant Secretary of State under Nixon, served as Deputy U.S. Coordinator for the Alliance for Progress from 1961 until 1965. In a recent interview he noted "there were a lot of people who were enthusiastic about it at the time, regarding it as an enlightened chapter in American foreign policy towards Latin America, which was to move beyond old Cold War antipathies and to move towards positive development of the hemisphere."²⁶ Despite the rhetoric of 'moving beyond Cold War antipathies', Rogers said the programme was "admittedly [designed] to counter the lure coming out of Havana." Nevertheless, Rogers believes that Kennedy was wise and statesmanlike enough to realise that "for the US to project that image [of positive development aid] was the best kind of antidote for the appeal of Fidel and Ché."²⁷

Chile was to feature in the new Alliance for Progress, for at the time democracy was a rare system in Latin America. Particularly after the coup in Brazil, Rogers noted,

> democracies you could count on one hand: Chile, Costa Rica, Venezuela, and that was it.... in Latin America democracy was very much embattled at that time, so Chile was one of the few places where we felt that the concept of the Alliance for Progress had a chance of being realised in the near term. We ran a lot of programs in Chile for that very purpose, demonstratively.²⁸

The 1964 Chilean presidential election existed in this context for the United States. To set a non-communist model of success for Latin America required a shining example of democratic success. With the number of democracies in South America so sharply

²⁵ John F. Kennedy, "Inaugural Address" in *Inaugural Addresses of the presidents of the United States: from George Washington to George W. Bush* (2nd Ed.), US Congress, Senate, USGPO, 1989,

²⁷ Ibid.

²⁸ Ibid.

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limited, if the Marxist-Communist front under a *Fidelista* like Allende won the election in Chile, there would be precious few chances for the President's Alliance to work its magic. Conversely, the Alliance might give the impetus required for the victory of the pro-democratic party. The 1964 Presidential election in Chile suddenly became a very *important* matter, being both a subject of, and requirement for, the success of the Alliance for Progress.

That Chile was increasingly important is reflected by the production, in October of 1963, of the first ever National Intelligence Estimate (NIE) on Chile. Obviously concerned with the potential negative outcome of the election, American policy makers had initiated the study to better inform the determination of a coordinated US response, both overt and covert, to this threat of communism spreading out of isolated Cuba. The NIE echoed what many in the administration had said over the previous six years, indicating the 1958 election results "raised apprehension that the 1964 presidential election might bring to power a government under strong communist influence, if not control."²⁹ This was taken seriously in government, and responding to the NIE, a group of State Department officers agreed "we need to take the Allende campaign seriously."³⁰ Essentially, as historian Mark Falcoff has stated, in the context of immediately after the Cuban Revolution, Chile was burdened with being the most advantageous hemispheric battlefield on which the US could meet the Cuban challenge to Western Capitalist-Democratic ideals.³¹

²⁹ NIE 94-63, "The Chilean Situation and Prospects," 3 October 1963.

³⁰ Memorandum of Conversation, Belcher, Thompson, Richardson and Carlisle, "Chile", 14 November 1963. [JFK FRUS Vol. XII Supplement, Doc 46.]

³¹ Falcoff, *Modern Chile*, p. 203.

27

The modern conception of Salvador Allende paints him as a pleasant and jovial 'Champagne Socialist' along European lines, more democrat that despot. Was the reaction to him in the early 1960's a false one, viewed through the eyes of desperately and unreasonably anti-Communist Americans, made worse by Monroe Doctrine fears? It is likely that there something more to Allende's stance that spooked the Americans into action.

## Who's Afraid of Salvador Allende?

Dr. Salvador Allende Gossens was a recurring character in Chile's political dramas from the 1930's onwards.32 From a wealthy family, Allende had entered politics while still in medical school and had helped found the Chilean Socialist party in 1933, the year he graduated.33 Elected as a federal deputy in 1937, Allende became Secretary-General of the Socialist Party in 1943, and by 1951 he was president of the Chilean Medical Society and vice-president of the Chilean Senate.34 Revolutionary Cuba would emerge as his party's main model and Allende cultivated a close friendship with Castro. Allende was important in the forming of the Cuban-sponsored Latin American Solidarity Organization (LASO), which was to serve as the political body behind Che Guevera's 1967 Bolivian adventure.35 Indeed, Allende's daughter Beatriz would later marry the Cuban diplomat (and spy) Luiz Fernandez Oña, a former Guevaraista and intimate of

32 In Spanish speaking countries, two last names are officially used. However the latter name, called the matronymic, is not used in addressing an individual.

33 Barry Goldwater, "On Covert Actions in Chile 1963-1973: A response to the Church Committee Report" in *Inter-American Economic Affairs*, Vol. XXX, No. 1, 1986, p. 86.

34 Memorandum, INR, "Salvador Allende, Chilean Presidential Candidate", 24 April 1964. [DDRS]

35 Barry Goldwater, "On Covert Actions in Chile 1963-1973: A response to the Church Committee Report", p. 87.

28

Castro.³⁶ In the merger of the Socialists and Communists each entity remained intact, but there was enough cohesion in the party to retain Allende as the presidential candidate over the course of three consecutive elections.

As noted by former CIA officer David Atlee Phillips in his fascinating book *The Night Watch*, the CIA had penetrated both the Communists and the Socialists parties in the early fifties, and was thus capable of getting very detailed information about their leadership personalities and even finances.³⁷ Previous to the 1958 election, however, and despite accurate CIA reporting, few in the US government would have ever heard the name Allende, and those who had would not have been unduly worried by it. Allende was just another socialist politician in another Latin American country. In the run-up to the 1964 election, though, Allende finally appeared as a bright icon on the US government's anti-communist radar screen. This is not to say that perceptions of Allende were entirely conditioned by anti-communist obsession, nor was it entirely hysterical in tone. Tasked in 1963, as part of the NIE procedure, to give a sketch of Allende, the US country-team in Santiago wrote:

> Allende is a chameleonic person... Personally he is vain, quick tempered, easily offended, socially as well as politically ambitious, able turn on or off at will a considerable social charm. He is sensitive to charges he would be dominated by Communists or that he would institute anti-democratic measures. Nevertheless were he to achieve power we think he could be led by events into being harsh and ruthless with his opponents but more likely use exile than prison or pardon. It is probable that he thinks in terms Marxist regime similar Castro's Cuba in its free-wheeling, relatively independent line but more sophisticated, cultured, without emotional excesses of "tropical" country such as Cuba.³⁸

³⁶ Nathaniel Davis, p. 91.

³⁷ David Atlee Phillips, *The Night Watch: Twenty Five Years of Peculiar Service* (New York, 1977), pp. 14-28.

³⁸ Cable, Embassy Santiago to Department of State, "Assessment Socialist-Communist Candidate Salvador Allende", 22 April, 1964. [LBJ FRUS, 251]

29

Allende himself (who in the CIA's view "does not possess unusual intelligence") was clothed in the rhetoric of Marxism, but nonetheless wore a democrat's cloak. Despite his periodic statements (often to American press representatives) that he was not a Communist, as well as the wide-spread belief among Chileans, including many in opposition, that he was basically a democratic socialist as opposed to communist, the CIA believed the "record shows he has collaborated with Communists for more than 15 years with no apparent difficulty" and was likely fully in league with Communist Party leader Luis Corvalán.³⁹ INR added that Allende "has turned increasingly to the Communists as an instrument of victory and has risked becoming their tool."⁴⁰ Indeed, Allende may have believed himself to be a new breed of *Chilean Marxist-Socialist*, and he would become agitated when accused of wanting to do away with Chilean democratic institutions, saying that he will actually *save* democracy by the introduction of *People's Government*: "The new social order will require new institutions...we shall draft a new Constitution using the present Charter as a springboard."⁴¹ But if one was unsure about the precise meaning of this last sentence, Allende provided a more concise explanation in his party platform: "the objective is total, scientific Marxist socialism."⁴² Allende may have been a new-model Marxist, but in using such language he confirmed, to any but the most sophisticated political philosophers amongst American officials, that he was indeed a Marxist first and foremost.

But 'Allende the threat' was not taken for granted by US officials. Many in the State Department and other parts of the government put significant thought into the

³⁹ Ibid.

⁴⁰ Memorandum, INR, "Salvador Allende, Chilean Presidential Candidate", 24 April, 1964. [DDRS]

⁴¹ Airgram A-756, AMEmbassy to State, 10 April 1964. [NARA, RG 59, Stack 250, Box 2025, Pol 2-1 Joint Weekas Chile]

30

question. One particularly noteworthy discussion of the matter came from the US Embassy First Secretary Robert Hurwitch, who produced a lengthy and thoughtful letter on the topic addressed directly to the NSA, McGeorge Bundy. While suggesting that the Soviets would be likely, but not certain, to take advantage of a communist Chile to expand their presence in America, Hurwitch was much clearer about the overall impact of an Allende victory:

"Dear Mac:

I have had very much in mind your request for another opinion as to whether an Allende victory would be seriously detrimental to US national security interests.... As a practical matter, whatever our assessment of the significance of an Allende victory, we may find our manoeuvrability the day after the election severely circumscribed. (I have often thought that the real tragedy for us of Castro's having embraced the Marxist, rather than our, world lay in the limitations now placed upon the flexibility of US policy toward situations which superficially resemble that of Cuba.) Another "Castro" in the Hemisphere, particularly one who achieved power through the democratic process in a country where we have invested the highest rate of per capita assistance, would be awfully tough to handle from both the international and domestic standpoints. This would clearly be a case where one and one totalled much more than two and the consequences throughout the Hemisphere of a second Castro would be serious."43

That the issue of Chile was tied to the issue of Cuba is inescapable—as Hurwitch regretfully notes—but the discussion here is much less hysterical than some have supposed. Hurwitch ultimately suggest quite simply that “An Allende victory would constitute a defeat for US policy....”44 The practical examples of such a defeat were quickly identified: “If Allende wins and stays in power, we are in trouble” wrote Gordon Chase of the State Department, for would “probably nationalize the copper mines, which

42 Régis Debray, *The Chilean Revolution* (New York, 1971) p. 118.

43 Letter, "First Secretary of the Embassy in Chile (Hurwitch) to McGeorge Bundy", 19 June 1964. [FRUS 259]

44 Ibid.

31

in turn, might end the aid program because of the Hickenlooper amendment; this, in turn,
could lead Chile to ask the Bloc for economic aid."⁴⁵ For the US government in the
1960's all Communist roads led to Moscow.

Even without reference to the Kremlin, the mere mention of the word 'Cuba'
would have caused blood to boil, hackles to rise, and numerous alarms to sound in a
Whitehouse still occupied—for just a few more days—by the brothers Kennedy. It is
likely that the CIA station in Santiago had a good idea of Allende's connections with
foreign and domestic communist parties, and with the Soviet Union itself.⁴⁶ While it is
unclear what precisely the CIA knew about Allende in 1963, new work by Professor
Christopher Andrew and Vasili Mitrokhin shows that by this time Allende was indeed
firmly in the Soviet camp. First contact by the Soviets with Allende was made by a KGB
'Line PR' officer from Buenos Aires, Svyatoslav Fyodorovich Kuznetsov (LEONID) in
1953. Salvador Allende was issued the appropriate codename "LEADER" by the KGB,
though he was not officially recruited as an agent. Systematic contact between Allende
and the KGB was established in 1961 when relations were restored and the KGB set up a
residency in new trade mission. To the KGB Allende had 'stated his willingness to co-
operate on a confidential basis and provide any necessary assistance, since he considered
himself a friend of the Soviet Union. He willingly shared political information....'⁴⁷

Like their American counterparts, the KGB carefully analysed the man with
whom they placed a good degree of hope. Perhaps a comment on the judgement of both

⁴⁵ Memorandum, Gordon Chase to McGeorge Bundy, "Chiefs of Mission Conference-Brazil and Chile", 19 March, 1964 [LBJ, NSF, Country File, Latin America, Vol. I, 11/63-6/64] The Hickenlooper Amendment stated that the US had to end all financial aid to any nation that expropriated US property without compensation or due legal process.

⁴⁶ That the CIA was operating within the FRAP constituent parties is clear by the security deletions in CIA documents about these parties. Detailed information about party strategies or personalities is followed by such deletions, likely obscuring the source within these organizations. See XXXX.

32

services, the similarities between the KGB and CIA assessment of Salvador Allende are
perfectly eerie. The KGB noted, from contacts in Communist Party, that Allende's
"characteristic traits were arrogance, vanity, desire for glorification and a longing to be in
the spotlight at any price. He was easily influenced by stronger and more determined
personalities." Illustrating a distinction that would have been lost on most Americans,
they also thought him to be "dangerously Maoist", and to have very bourgeois
connections with freemasonry. Making reference to not-so-secret information, he was
further noted to be something of a womaniser.⁴⁸ That Allende was being supported by
international communist elements was clear even outside the CIA, for Presidential
candidate Eduardo Frei reported to the US Ambassador that "large quantities of funds
[around $1 Million] for the Allende campaign had recently come in from Canada and that
more were expected in the near future. [Political Attaché] Scott Fox had told him that he
had not been able to track down the report but that the presumption was that the money
had originated in Cuba". Work in Soviet archives by Chilean-based researcher Olga
Ulianova does indeed show Soviet aid to Chilean Communist party (PCCh) at a baseline
of $50,000/annum in 1960 to 1969 with spikes of up to $400,000.⁴⁹ Eventually, the sums
of money passed to the PCCh were the highest in Latin America after Cuba.⁵⁰ Even
without this knowledge (Phillips does not tell us what information his agents actually
produced) many commented that Allende was spending money at a rate far fastered then he
could possible be raising domestically.⁵¹

⁴⁷ Andrew, Mitrokhin, Vol. 2, p. 8.

⁴⁸ Andrew, Mitrokhin, Vol. 2, p. 8-9

⁴⁹ Ulianova, p. 89.

⁵⁰ Leonov, p. 39.

⁵¹ Telegram, Embassy Santiago to Sec State & Embassy Ottawa, "Allende's Funding", 5 May 1964. [LBJ, NSF, Country File, Chile, Vol. 1, Cables 1/64-8/64, doc 32]. See also David Atlee Phillips, p. 14-28.

33

The rise of Allende and the strength of the Chilean communist party helped prompt the Soviet Union out of its normal aversion to operations in the American sphere of influence. After the sudden and unanticipated success in Cuba, the USSR no longer looked at Latin America as merely part of the American sphere, but rather as an independent zone: previously 'out of bounds,' Latin America now appeared as an enormous political arena which, if exploited properly, offered an opportunity to hurt the Americans. For the first time, a Latin American branch was formed in the KGB and Foreign Ministry, the former being given to the new KGB officer Nikolai Leonov, who's memoirs offer substantial comments on Chile. The strategic vision was less direct than many might perhaps think. Leonov introduces the concept that the USSR was not interested in Chile because it would derive any necessary strategic or tactical benefit, but because *the US did*. The USSR itself gained no particular advantage out of winning *aside from winning*.⁵² That such a victory might be achieved in the most capitalist of Latin American countries was a tangible plus. Reporting from the Embassy in 1964 described the chain of events resulting from a Communist government in Chile, and the impact they would have on the United States:

> Negative economic impact will be very great immediately and probably over short-term as well. Allende would probably try to expand activities and efforts of existing GOC institutions that directly involved in economy in effort compensate for lacks and lags in private sector. He will undoubtedly seek help from bloc and "unaligned" countries but conceivably might make unreasonable request of USG (e.g. low interest loan pay for expropriation copper companies and utilities) expecting turn down which he could use as ostensible justification Chilean public for turning [to] bloc. In general economic deterioration after Allende victory would tend stimulate and be used justify extreme internal measures toward

⁵² Nikolai Leonov, *Likholetye*, (publisher info) pp. 37-40.

34

full statist economic power as well as shift to excessive Chilean
dependence Communist bloc aid and trade.⁵³

American statements to the effect that having Chile ‘go communist’ would be a
blow to their prestige first and foremost shows a basic understanding of the great-power
stakes shared by their Soviet counterparts. “In essence,” said National Security Advisor
McGeorge Bundy to President Johnson, “the problem we face is that a very popular and
attractive candidate, named Allende, who has thrown in his lot with the Communists, has
more than a fighting chance to win”⁵⁴ That the US had to do something to avert this was
quite simply assumed.

Initiation of the 1964 Operation

By the northern autumn of 1963, the US government had essentially decided to actively prevent the election of Allende in Chile. In overt terms this had begun with the inauguration of President Kennedy in 1961, largely through the Alliance for Progress, with the idea of assisting the Christian Democrats first mooted in March 1962 by Ambassador Cole and the then Special Assistant to the President, Richard Goodwin. At this time the ‘5412 Special Group’ (a semi-official cabinet-level body tasked to review and approve covert action proposals) approved a programme of ‘non attributable’ assistance to Eduardo Frei’s Christian Democrats in April 1962 and again on 30 August 1963, with concurrent approval from States’ Latin American Policy Committee in January and June 1963. There was also, in 1963, a subsidy of an unknown amount to the Democratic Front (under the leadership of Radical Party boss Julio Durán Neumann), the

⁵³ Cable, Embassy Santiago to Department of State, "Assessment Socialist-Communist Candidate Salvador Allende", 22 April, 1964. [LBJ FRUS, 251]

35

coalition party of the right-leaning Conservative and Liberal Parties and the centre-left Radicals, a one-time payment not connected to any well thought-out policy, though specifically requested by a member of the party to make up their $500,000 campaign shortfall.⁵⁵

These payments, one senses from the tone of CIA discussions regarding them, were not party of a coordinated strategy, but rather stop-gap payments based on the recommendations of the Embassy country-team. With the Assassination of Kennedy in November of 1963, there was a pause in the measures to implement such a high-level, coherent plan to be executed by the Agency. Despite the sad delay in proceedings, the transition to President Johnson was relatively seamless and had little impact on the developing proceedings in Chile—except in the attitudes behind the support to Chile. By mid-December of 1963, the West Wing had absorbed the new administration and the new staff got on with the business at hand.⁵⁶ McGeorge Bundy seems to have put Chile back on the agenda, writing to President Johnson on 24 January with the suggestion that the Special Group, the informal committee that considered covert actions, “might, at an early date, give consideration to the interests of the United States in the Chilean election which occurs in December 1964.”⁵⁷ No one familiar with Latin American affairs, noted Bundy, “has any doubt as to the importance of the outcome of this election, not only in

⁵⁴ Johnson Library, National Security File, Country File, Chile, Vol. I, 1/64-8/64. Memos to the President, McGeorge Bundy, Vol. IV [LBJ FRUS 252]

⁵⁵ Memorandum, C/WHD (J.C. King) to DCI McCone, Political Action Program in Chile, 3 January, 1964. [LBJ FRUS 245]

⁵⁶ LBJ Briefings, Ch. 3.

⁵⁷ Memorandum, Amb Dungan to McGeorge Bundy, untitled, 18 January, 1964. [LBJ FRUS 246]

36

Chile but throughout the hemisphere" and it should therefore be dealt with promptly.⁵⁸
Nothing further, however, was briefed to the President.⁵⁹

The major problem faced by the US government in early 1964 was precisely who they were going to support to prevent an Allende victory. While the Maxist-Socialist left parties were united under the banner of the Popular Action Front or FRAP, the centre and right-of-centre both represented viable alternatives to a communist government and were running separately: the Democratic Front (FD) and the Christian Democrats (PDC). The decision on which one to support was evidently the cause of much hand wringing. The CIA's initial support to the PDC was aimed at getting them into a broad-based non-communist coalition with the Radicals, previously Chile's largest single political party— and may have had prompting from President Kennedy directly, as former US Ambassador to Chile Edward Korry stated in an interview in Santiago in 1999: "It started probably in early '63 after President Kennedy met directly with [PDC Chairman Eduardo] Frei in the White House. It was a secret meeting. I believe it was in the [Northern] spring of '63... In that period."⁶⁰ But with Kennedy gone this pro-PDC desire waned, exacerbated by the inability to tell Eduardo Frei that he was being supported by the US at all. The last reason for PDC funding had been to make the party unwittingly act as a third, or splitter, party, drawing votes away from elements of soft-socialist/pro-clerical supporters of the FRAP in a way that the FD could not. Asked to make a choice on which they should support, the CIA was firmly behind supporting just the FD despite Kennedy's pro-liberal and pro-Catholic sentiments, with the reasoning that the Christian Democratic Party would be less favourable and responsive to United States Government

⁵⁸ Ibid.

⁵⁹ Ibid.

37

policies than the Democratic Front, and that they were likely to try to "establish relations
with Iron Curtain countries... [and] will endeavour to increase its trade with the Soviet
Bloc and will not follow the United States lead in foreign policy with the same
willingness as the present government."⁶¹ The underlying reasoning of the CIA was
echoed by the State Department's Assistant Secretary for Inter-American Affairs (ARA)
Thomas Mann, who suggested support should only go to the FD because Durán, being
more pliable—from the American viewpoint—in economic matters than Frei, might be
more ready to reinvest money into Chile. Also, Durán's relatively left-leaning tendencies
"might draw further votes away from Allende." But some small measure of "support to
the [PDC] should be continued because they too offer strong competition to Allende."⁶²
Despite the Kennedy's drive for some kind of 'progressive development aid' in Latin
America to back the Alliance, the Agency and State were aiming at the US-default of
supporting the right-wing, the 'alliance for progress' instead relapsing to a 'mandate for
stability.' In February the CIA's Chief of Western Hemisphere Division (C/WHD) J.C.
King submitted his recommendation to the Special Group to obtain approval for election
support of the Democratic Front and a subsequent cutback in the subsidy to the Christian
Democratic Party. Luckily for the PDC, however, the Special Group did not meet on 5
March, as planned, and failed to discuss Chile at its next meeting a week later.⁶³ As
would be repeated in 1970, the Special Group dithered over the decision on which party
they should support. Before that decision could be made, however, local politics would

⁶⁰ *Estudios Públicos*, 72 (primavera 1998). "El Embajador Edward M. Korry en el CEP".

⁶¹ Memorandum, C/WHD (J.C. King) to DCI McCone, Political Action Program in Chile, 3 January, 1964.
[LBJ FRUS 245]

⁶² Memorandum for the Record, Chief and Deputy Chief, WHD with Assistant Secretary Mann, "Record of Conversation", 28 February 1964. [LBJ FRUS 247]

⁶³ Ibid. See also NARA Department of State, INR/IL Historical Files, Special Group Files, Meetings.

38

force the American hand to a more progressive policy with long-lasting effects on US-Chilean interaction.

Chile, it was often noted by foreign political observers, seemed to be in a nearly constant election campaign. Between presidential, congressional, municipal, and by-elections there was always some sort of campaigning underway. In March 1964, as it happened, a deputy had died and there was to be a by-election in his riding of Curicó. Ralph W. Richardson, the State Department official in charge of Chilean affairs noted that it would serve as a major indicator of the relative strength of the parties into the presidential race. Pride, it is said, cometh before the fall, and straight into this cavernous aphorism walked Durán, who stated explicitly that the by-election would stand as a 'plebiscite' on the ruling party, the Democratic Front, as well as his leadership of it.⁶⁴ This seemed a safe bet at first, notes historian Paul Sigmund, as Curicó was traditionally a rural conservative bastion.⁶⁵ The FRAP candidate in the election, however, was the son of a late and lamented Socialist deputy with great clout in Curicó, and he played the familial link to his immense advantage. On 15 March, the FRAP candidate won the Curicó by-election with 39.5 percent of the vote; the next day, Durán resigned as the DF presidential candidate (though not from the Presidential race itself). As the Democratic Front was a fragile coalition, the loss of Durán was mortal, and the party dissolved within a short time. This was a high Richter-scale event in the normally predictable Chilean political scene, and reaction in the US was high enough to prompt the CIA's Desmond

⁶⁴Memorandum, Richardson to Mann, "Curico By-Election", 6 March 1964. [NARA, RG 84, Santiago Embassy Files: FRC 69 A 6507, 1964, POL 14 Elections (Presidential) 1964.]

⁶⁵ Sigmund, *The Overthrown of Allende*, p. 29.

39

FitzGerald to write in a memorandum that "the most important thing is to keep people from panicking" as a result of the by-election loss to FRAP.⁶⁶

While many in the US government were vexed by the FRAP victory, some at the State Department (generally of the pro-JFK persuasion) saw the silver lining. One of these was Ralph Richardson of the Chilean desk. Realising the difficulty in running two horses against a very strong FRAP, Richardson believed that the best bet lay with a single, reformist candidate. The socialist parties had never taken more than 40% in any election in Chile, so if the centre and rightist parties could be induced to support the PDC candidate, Frei, as the main non-Marxist candidate, then the election had a much better chance of being won. While noting that the race was far from theirs, Richardson commented on the positive impact Curicó had on the decision-making process: "I still cannot repress a feeling of satisfaction in seeing how quickly and cleanly our 'decision' to swing behind Frei was made for us. I really had wondered before Durán's disaster whether we were going to get any definite decision from the front office on which group we should help."⁶⁷ Unable to force the executive to make a decision on who should be supported—as would happen again in the 1970 election—the Americans nonetheless had a candidate thrust upon them.

While it is often assumed that the US had been behind the PDC from JFK's inauguration onwards, the record shows it not to be so. Kennedy's Democrats—liberal and Catholic, like Frei—did have an affinity to this analogous Latin-American party, but sympathy had not been enough to swing a notably conservative administration into

⁶⁶ Memorandum, Carter to Hughes, "ARA-CIA Weekly Meetings, 1964-1965", 26 March 1964. [LBJ FRUS 248]

⁶⁷ Letter, Ralph W. Richardson to Jova, 3 April 1964. [NARA, RG 84, Santiago Embassy Files: FRC 69 A 6507, 1964, POL 14 Elections (Presidential) 1964 (1)]

40

actually supporting them: the Alliance for Progress was to be run on political terms dictated from Washington, and those terms demanded a pliable, conservative government. This was especially so after Kennedy's death when the more pragmatic LBJ took office and delegated his even less Kennedy-inspired staff to run the show. It is only from the relatively late date of 15 March, less than six months before the election, that the US government—because they had no choice—truly committed to supporting Eduardo Frei and his left-leaning, progressive Christian Democrats. Some still thought the loss of Durán was catastrophic and, as the embassy regretfully noted, “not without certain aptness has it been jested that the choice between Frei and Allende is between chaos and disaster.”⁶⁸ Despite this occasional lack of conviction about their now-chosen man, whatever the US lost in time they made up with enthusiasm, and within a matter of days the situation changed dramatically: the proscription against ‘witting’ (or overt) contact with the PDC was partially broken, and at the party’s request incredible sums of money were being sent from the US. With no other choice to avert a Marxist government, the PDC suddenly became the Great Hope.

## The CIA Swings Into Action

With focus thrust upon them, and determination accidentally imbued to the Whitehouse, the CIA acted with appropriate decisiveness in Chile. Within a short time the implications of the Curicó defeat had been absorbed and processed by the Agency with the help of the State Department and the Santiago Embassy. On 1 April, two weeks after the defeat, a comprehensive and lengthy memorandum was submitted to the Special

⁶⁸ Airgram A-45, Embassy to Dept State, "Semi-Annual Politico-Economic Assessment - Chile", 16 July 64. [NARA: RG 59, Stack 250, Box 2025, Pol 2-1 Joint Weekas Chile]

41

Group outlining the full plan for initial support to the PDC. The preamble to the memorandum is noteworthy, outlining the significantly different political scene in Chile after Curicó, and the way the PDC was now approaching American involvement. Central to this importance is that it tells us that at the end of March a member of Frei's campaign team visited the embassy (whether this is the political section or the CIA is not said) to present their campaign budget to the Americans. First they presented their current budget of US $100,000 per month, which they claimed to be meeting only with difficulty and which they did not think was sufficient anyway. Next, they presented their desired budget of over $300,000 per month. This, they said, was what needed to be spent in order to beat Allende. To maintain this budget, the Chileans coolly suggested that the U.S. Government make up the difference "which amounts to one million dollars for the period from now to election time."⁶⁹ The Embassy and the CIA station reviewed the budgets, felt they did not seem unreasonable, and subsequently recommended that the Chilean's request for one million dollars be granted as soon as possible.⁷⁰ Money to the Christian Democrats, though, was not the end of the proposed US program of covert support in Chile. "As a result of the [political] situation outlined above," the memorandum continued, "it becomes necessary to take all possible action to assist Frei in his campaign." A whole battery of tactics were proposed, which one can summarise as:

(1) Preventing the Radical Party from formally endorsing Allende; "In the event the Radical Party declares for Allende, financial assistance will have to be provided to individual Radical leaders or groups capable of bringing Radical voters into the Frei camp."

(2) Influencing the Conservative and Liberal parties to support Frei in a manner that would not damage his image as a reform candidate. (to be achieved by bribes);

⁶⁹ Memorandum, CIA to Special Group, "Support for the Chilean Presidential Election of 4 September 1964", 1 April 1964. [FRUS 250]

⁷⁰ Ibid.

42

(3) Complementing the subsidy directly to the PDC, influence on Frei to reach a private agreement with the Radicals for their support in exchange for post-election patronage;

(4) Preventing the declaration of a third candidate (the most likely was Jorgé Prat, a conservative from a powerful political family) by bribery and "pressure" to avert the splitting of the non-Marxist vote; and

(5) Financial assistance to ancillary organizations, such as youth and student groups, peasant organizations, slum dwellers' associations, labour unions, and women's clubs, to bring their votes to Frei.

(6) Initiating "specialized propaganda operations, some of which will be black, to denigrate Allende."⁷¹

All together, this seems a fairly reasonable set of options, perhaps even standard political wrangling, whose only sinister terms are the vaguely described 'pressure' to be applied to keep other candidates from challenging Frei's dominance of the centre and right. Nor was it illegal under either Chilean or US law. It is, nonetheless, serious political interference with the electoral process in a democratic state. To the Americans, however, it was merely a gentle inoculation of prevent the far worse anti-democratic disease of Marxism, for this was contagious disease: there were serious consequences "if this major Latin American nation should become the first country in the hemisphere to freely choose an avowed Marxist as its elected president."⁷² A further option listed at the end of the memo underlines the gravity with which the CIA and the Special Group viewed the situation. Realising that the first six options might not swing the required votes, the CIA should be prepared, in the latter stages of the campaign, "to buy some votes outright if required."⁷³

Despite the PDC's open and direct approach for campaign funding, there was still disagreement as to whether this funding should be provided to them in an overt fashion.

⁷¹ Ibid.

⁷² Memorandum, Assistant Secretary of State for Inter-American Affairs (Mann) to Secretary of State Dean Rusk, "Presidential Election in Chile", 1 May, 1964. [LBJ FRUS Doc 253]

⁷³ LBJ FRUS 250

43

While it is not yet stated explicitly, it was clear to all that the revelation of wholesale US funding to the PDC would be a disaster with massive political gains for Allende and the FRAP. Yet, with the whole point of the campaign being to "obtain some essential leverage" over the PDC during their erstwhile Presidency, the CIA suggested that the money be passed in a manner which might "infer U.S. Government origin of the funds yet permit us plausible denial if necessary" by explicitly attributing the funds to US non-official sources.⁷⁴ The Embassy's political staff, however, believed that the important matter was merely for Frei to win, that the benefit of leverage over the PDC was dramatically outweighed by the risk of a leak from some nationalist in the PDC that would compromise the entire operation. The PDC, though, was just that little too left wing for the Special Group to feel comfortable with them not under some American influence. Accordingly, the Special Group authorised $750,000 (of the requested $1 million) in immediate funding to go to the PDC, in the semi-covert fashion outlined by the CIA. This decision was made, however, with the understanding that it did not "reflect the Embassy's position." The difference was not too great, however, and it seems that the CIA was able to accommodate the slightly sceptical ambassador Cole. The following day the paper was approved, with new C/WHD Desmond FitzGerald announcing in an attached memo that a solution to the slight difference of opinion between Ambassador Cole and the Santiago CIA station had been reached: attribution of U.S. support would be inferred *but there should be no evidence or proof*.⁷⁵ This was, FitzGerald apparently assured them, something the CIA could do. Whether it would actually be effective at deflecting realisation of American funding would remain to be seen.

⁷⁴ Ibid.

44

After the Church Committee investigations of 1975, the manner in which covert actions were approved changed dramatically. Within a day of approval by the successor to the Special Group, the president would have to issue a 'finding' authorising the operation as necessary for the national security of the United States and then pass it to the congressional select committees on intelligence. This was not the case in 1964, a time when the covert-action decision-making infrastructure was still blissfully clear of bureaucratic hurdles or legal checks, especially those later emplaced by congress. While the President may have been partially cognisant of the ongoing procedures on Chile (he did not choose to read the still-classified 'intelligence checklist' [latterly known as 'the President's Daily Brief'] from the DCI, as would later become customary, so this is not certain<sup>76</sup>) the first evidence of him being informed about the actual programme and the associated funding decision came on or about 13 May, 1964. At this time, National Security Advisor McGeorge Bundy forwarded to Johnson a memorandum written by Assistant Secretary of State for ARA Thomas Mann to Secretary of State Dean Rusk which outlined the entire US programme of action in Chile, both covert and overt. To this memorandum Bundy appended a short note for the President, which highlighted the salient points as he perceived them, indicating

> We have a coordinated Government-wide program of action to strengthen [Allende's] opponent and support actions in Chile which will work to the advantage of those now in power. It is a highly fluid situation and one in which there may have to be further action as we get into the summer. I have been very much encouraged by the determination and unity which all Departments of the Government are showing on this one, and we will be

<sup>75</sup> Memorandum, Minutes of Special Group Meeting of 2 April, INR/IL Historical Files, Special Group Files, 9 April 1964. [NARA]

<sup>76</sup> Johnson briefings.

45

watching it very closely, but I do think you ought to know about it
yourself.⁷⁷

The latter point—full cooperation of all the departments—is important, for it is possible
that the success of this programme hinged upon it, as would be proved in later US efforts
in Chile. It is notable, however, that this entire programme of covert actions (and tens of
millions in overt funding) was occurring possibly *without the knowledge or permission of
the President*. Certainly, the system of security management in the NSC as established
by the National Security Act of 1948 was designed to allow swift responses by
empowered staff acting within the conceptual framework previously given by the
President. The Chief Executive is, after all, a fairly busy individual. Initially, one might
be shocked that such a delicate and seemingly important task, with so much money being
funnelled to a friendly democracy (an act, Loch Johnson notes, more serious than
operations in a repressive regime), without some small measure of control by the
President—but there is an explanation. Johnson, by April of 1964, had only been acting
as President for four months and before that he was kept—at the request of JFK—almost
totally in the dark about covert actions.⁷⁸ He had met on one occasion with DCI Allen
Dulles in July 1960 while a vice-presidential candidate, but neither Dulles nor his
successor, John McCone, had made much effort to keeping Johnson informed during the
intervening years.⁷⁹ Compared with the concerns of the Soviet Union, Eastern Europe,
Cuba, and especially Vietnam, Chile was a relatively secondary matter, so the fact that
LBJ had not been ‘read-in’ to the matter until April, when real action was being planned,
seems much more plausible. Nonetheless, by this time Johnson had long stopped

⁷⁷ Johnson Library, National Security File, Country File, Chile, Vol. I, 1/64-8/64. Memos to the President, McGeorge Bundy, Vol. IV [LBJ FRUS Doc 253]

⁷⁸ LBJ Briefs, Ch. 3

46

reading the Agency's *intelligence checklist*, preferring to let the agency or the NSC take
care of matters. Accordingly, one can detect very little Presidential input into the matter
both before and after this initial briefing.⁸⁰ The operation was, essentially, still operating
under the control of a dead president. But what JFK had started was impressive, and it
becomes clear in the rest of this memo to Johnson. In addition to the CIA's covert
actions, the memorandum outlines the entire sweep of US overt operations:

2) Providing AID loans in CY 64 amounting to approximately $70 million...

5) Organizing a political action and propaganda campaign through CIA contacts in coordination with or parallel to Frei's campaign. This includes voter registration drives, propaganda, person-to-person campaigning... and arrangements to provide some Italian Christian Democratic organizers to Frei as advisers...

7) [Attempt]... to encourage their rising awareness of the subversion
which would take place under an Allende government.

8) Continuing USIA placement in Chile of un-attributed material, giving
special care to low-keyed efforts which do not expose U.S. Government
involvement.

9) Encouraging, through covert ties and private U.S. organizations,
effective anti-Allende efforts by Chilean organizations including the
Roman Catholic Church, trade union groups, and other influential bodies,
such as the anti-clerical Masons.⁸¹

This was, indeed, a 'full court press', with all aspects of the US government directed to
prevent the election of Allende. Indeed, some observers were so impressed by the anti-
Allende efforts of other US government agencies that they assumed that they were CIA
fronts. Popular Chilean author Eduardo Labarca, in his book *Chile Invadido*, states quite
firmly that the United States Information Service (USIS) was a CIA front organisation,
though in its own records the CIA states that this was not the case. William Broe wrote
to the DDP, in explanation of his own activities, that "the material disseminated [by us]

⁷⁹ Ibid.

⁸⁰ LBJ Briefs, Ch. 7.

⁸¹ LBJ FRUS 253.

47

does not duplicate USIA efforts, which in Chile are centred mainly in propaganda areas other than radio."⁸² While Labarca may have been correct in noting that the USIA was spreading pro-American propaganda (as well as bad movies, if on can judge from their film repertoire #286 'Danza Hacia la Libertad' [Dancing towards Freedom] about two Hungarian ballerinas who bravely flee to West Berlin.), it was noted by the CIA that the "USIA effort does not concentrate on disseminating a significant amount of anti-Communist material."⁸³ While Labarca spots some fairly unlikely patterns to support his theory—he argues, for example that any editorial from Santiago daily *El Mercurio* that finished with the letters O, W, or S was a plant from the CIA—he is not incorrect to have spotted the American hand behind the large pro-Frei propaganda drive in Chile, including (though his letter pattern is nonsense) editorials in major conservative papers such as *El Mercurio*.⁸⁴ The Americans, however, felt that the operation and all its millions were still entirely *sub rosa*, with ARA assistant-secretary Mann telling his superior that they "are attempting to insure that extraordinary caution is observed in this action campaign to conceal official U.S. government interest, and we have rejected several ideas which have seemed to entail undue risks or excessive American involvement."⁸⁵

## Corporate Funding

Though the Americans perhaps had an inflated sense of their own security, they did at least take it seriously. Perhaps the most frequent charge levelled against the US in Latin America is that they were subservient or reactive to corporate interest at the

⁸² Memorandum, C/WHD to DDP, "Request for Approval and Renewal", 12 March 1968.

⁸³ Memorandum, C/WHD to DDP, "Request for Approval and Renewal", 12 March 1968

⁸⁴ Eduardo Labarca, *Chile Invadido* (Santiago, 1968), pp. 307-317.

48

expense of sound policy. This certainly applies to Chile, where the large US investments
in the copper mining industry, and in telecoms and infrastructure, were in the order of
billions of US dollars. In Chile in 1964, however, the desire to work directly with or for
the corporate sector was viewed as being too predictable and too likely to be
compromised for there was a "lack of assurance on security before, during, and after the
election" from interested corporations.⁸⁶ Part of this stemmed from admonishments
directly from Frei. On more than one occasion when speaking to US Embassy officials,
Frei emphatically stated that any linking of him to the US Government or—especially—
to the U.S. private sector financial assistance would be "fatal."⁸⁷ Simply, to have his
reformist and 'communitarian' party linked with foreign capital in such a highly
nationalist country as Chile would be a political kiss of death—a fact he made explicitly
clear to Joseph Jova, the Deputy Chief of Mission and Chargé d'Affairs.

Concerns about the political ramifications in Chile of a revelation about corporate
funding (made manifest in the ITT scandal of 1972) were not the only concern on the
minds of US politicians. While the common conception about US foreign policy is that it
is totally amoral, especially when in pursuit of anti-Communist goals, in 1964 the State
Department seems to have had great ethical concerns about corporate involvement as
well. In a cable to his superiors at Foggy Bottom, Jova wrote:

> The concept of American commercial firms passing financial aid surreptitiously to the U.S. government raised so many questions of ethics, financial and interrelationships that Mr. McCone said he felt the matter should be discussed in the [Special] Group. A lengthy exchange of views ensued, but the conclusion was that the legal aspects were too labyrinthine

⁸⁵ Memorandum, Mann to Rusk, "Presidential Election in Chile", 1 May, 1964. [FRUS 253] (or Johnson Library, National Security File, Country File, Chile, Vol. I, 1/64-8/64).

⁸⁶ Airgram, Deputy Chief of Mission (Jova) to ARA (Mann), "76320", 5 May 1964. [Frus 254].

⁸⁷ FRUS 254.

49

and the questions of tax benefits, conflicts of interest and corporation
behavior were too murky to make any clear determinations.⁸⁸

The security risks and questionable morality of acting as an agent, in effect, of U.S.
capital led to the agreement that the CIA would refuse any offers of assistance from any
US corporation invested in Chile: there was a "decision *not* to become a partner with
business interests in covert political action but at the same time [the US would] assure
[the corporations] that the U.S. was making every effort, on a priority basis, to prevent
the election of Allende."⁸⁹ Nonetheless, the US-owned corporations in Chile, including
the multi-national firm International Telephone and Telegraph (ITT) did have resources
or expertise that the CIA was often keen to use, and names such as that of Harold S.
Geneen, CEO of ITT, appear in the context of such non-intelligence matters as how to
move 3,500 metric tonnes of beef to Chile to prevent a price spike.⁹⁰ Of course, private
firms operating in Chile were not forbidden from making political contributions, and
many sought to do so (apparently, sometimes in the form of on-the-hoof beef). In August
of 1964 a request arrived at the embassy in Santiago from a private business woman,
named Carroll Walters, of Pfizer, asking how to contribute money to the Frei campaign,
as "most other American business firms are now making direct contributions to campaign
both through local offices and...through a business committee in NY."⁹¹ The official
line was set, however, and when the embassy sought guidance on what to tell her to do
they received the formula reply:

⁸⁸ FRUS 254.

⁸⁹ Memorandum for the Record, "Minutes of the Meeting of the Special Group", 12 May 1964. [FRUS 257]

⁹⁰ Telcon, DCI McCone and Under Secretary of State George Ball, 11:45AM, 7 May, 1964. [FRUS 256]

⁹¹ TELEGRAM, Embtel 264, Santiago Emb to Sec State, "Frei Campaign Officials", 15 Aug 1964. [NARA RG 59, Stack 250, Box 2026, Pol 5 & 12 Political Affairs and Relations/Political Parties]

50

Inform Walters that [State] Dept...[discourages] private contributions since we feared charges of US involvement in the campaign as a result of possible indiscretion. This is consistent with our long-standing policy to advise US citizens against interference or participation in the internal political affairs of any foreign country.

Despite a sincere corporate interest to help the PDC with either money or expertise, US corporations were deflected from doing at the combined request of Frei and the US Government.

## Playing Politics

Funding was not the sole course of action pursued by the US government in Chile, and a large part of the CIA's mission was to directly influence the decisions of certain political parties. It is clear that, to this end, the CIA was involved in the internal affairs of some parties. A memorandum from the Chief of Western Hemisphere Division to the Deputy Director for Plans in March of 1968 discusses the renewal of funding for certain (unnamed) projects. It notes that in one of these projects, the Agency was providing funding to moderate elements within the Radical Party since 1963.⁹² Though "we have worked with the same kind of collaborators within the party, the nature of our objectives, scope of involvement, and tactical use of such collaborators" changed along with the evolution in Chilean politics. When funding had started, the Radicals were part of the centre-right coalition in Congress that had supported Alessandri. This basis of support had evaporated when the Radical Julio Durán was defeated in a by-election. With Frei now established as the choice candidate for the US, and CIA support drifted away from the increasingly left-wing Radicals. The Radicals were not entirely abandoned by the CIA, however, for they noted that Julio Durán had recently avoided an attempt within his

51

party (which the CIA had initially hoped would beat Allende) to endorse Allende directly! With this action the CIA—who had never come to the same opinion twice about the Radicals or Durán—realised that there was still utility in supporting Durán, and they were happy to note that their funding had been “instrumental” in maintaining the Radical candidate in that particular struggle.⁹³ All along, CIA and Country-Team political assessments were unsure whether Durán and the Radicals stole votes from the PDC or the FRAP, but with the attempt of the Radical party to align with the FRAP, this became a secondary concern to keeping them from supporting the FRAP directly. With the help of Frei, the PDC was thus enlisted to push money to Durán in order to keep him both in the race and friendly to Frei, for in the case of a slim electoral majority and a run-off contest between Frei and Allende, the hope would be for friendly Radical party congressmen voting for Frei as President. While they could keep Durán in the race for President, they could not guarantee the post-election support of the Radical party, nor could they guarantee the prevention of another Radical Party move to support Allende, for “Due to ambassadorial restrictions against supporting Radicals, our equities in that party [are] quite diminished.”⁹⁴ For the mean time, at least, this was not a major problem.

## More Money

⁹² Memorandum, C/WHD to DDP, "Request for Renewal of Project", 20 March 1968.

⁹³ Department of State, INR/IL Historical Files, Special Group Files, 14 May, 1964.

52

political developments and additional information" indicated that an additional
$1,250,000 was needed for the program to defeat Allende. Almost all of these funds
were to go to Frei, allowing his party to "campaign at its full potential."<sup>95</sup> According to
the minutes of the Special Group meeting where this was approved, "the principle of
financial flexibility," lay behind the new payment, for "if, as the campaign develops, one
segment [of the operation] needs additional support and another less, authority exists to
shift the subsidy in the needed direction." Here we know LBJ had at least a cursory
awareness of the ongoing proposal, for MacGeorge Bundy informed the participants
"higher authority was aware of the seriousness of this election."<sup>96</sup>

Yet more money was to follow. The 303 Committee, successor as of 2 June, to
the Special Group, considered on 23 July a proposal to provide "supplementary support
for the Chilean presidential elections." In a 21 July memorandum to the 303 Committee
the Central Intelligence Agency reported that an additional $500,000 was needed for the
program to defeat Allende, as it would permit Frei to "maintain the pace and rhythm of
his campaign effort" and allow the CIA to meet any "last minute contingencies." The
303 Committee's obvious question on why yet more money was required in addition to
the US $2 million already spent (an enormous sum even in a US election, several people
noted) was met with an apology from the CIA: Frei had miscalculated his finances, they
said, an error "attributable to the PDC's inexperience in organizing a campaign of this
magnitude."<sup>97</sup> Apparently placated, NSC staffer Peter Jessup recommended approval of

⁹⁴ Memorandum, C/WHD to DDP, "Request for Renewal of Project", 20 March 1968.

⁹⁵ FRUS Doc. 262 (Editorial)

⁹⁶ Memorandum for the Record, "Minutes of Special Group Meeting of 13 May", 14 May, 1964 [NARA: National Security Council, 303 Committee Files, Subject Files, Chile thru 1969]

⁹⁷ Memorandum for the Record, "Minutes of 303 Committee Meeting 21 July", 21 July 1964. [NARA: National Security Council, 303 Committee Files, Subject Files, Chile thru 1969]

53

the suggestion to Bundy on 23 July, repeating the mantra: "We can't afford to lose this one, so I don't think there should be any economy shaving in this instance. We assume the Commies are pouring in dough; we have no proofs. They must assume we are pouring in dough; they have no proofs. Let's pour it on and in."⁹⁸ The funding was approved. There was also the case of an unnamed Chilean man who, apparently on the basis of conversations with various Americans, assumed that he had a tacit commitment for financial support from the US. Although no formal commitment had been made to him, nor any deals signed (for the CIA, of course, was careful about Chileans not detecting their hidden hand), the 303 Committee felt he "had made measurable contributions to the Frei campaign through his 'front' organisation and that some allocation of funds should be made to defray his deficit of $395,000."⁹⁹ This was an enormous sum of money for an individual, especially in Chile in 1964. Indeed, ARA's Ambassador Thompson commented disapprovingly that it "seems a great deal", but he did not enter any caveat to the disbursement.¹⁰⁰ This incident indicates the seriousness with which the USG viewed the elections but also, more importantly, how freely their money was injected into Chile.

## Progress

⁹⁸ FRUS Doc. 246. Editorial.

⁹⁹ FRUS Doc. 267. Editorial.

54

Right and the United States...."¹⁰¹ The implication that there support—which they knew was secret—might be aiding the FRAP was impossible, and they concentrated instead on their scientific polling—a function introduced to the non-Communist Chilean political scene by the US Embassy Country Team, and which they shared with Frei.¹⁰² The US Embassy also met with local business leaders, who “all agreed with me that Frei likely winner. General feeling serious violence unlikely and GOC well prepared to maintain order.”¹⁰³ There was, however, a note of fear from the Embassy and the CIA in particular. The latter felt that all the money they were passing to the PDC was doing nothing to ameliorate the fact that the PDC was simple less well organised than the FRAP, and it “is now convincingly evident that the communists have indeed been working hard for many years pointing toward this election. They have made notable inroads among the campesinos...” and other segments of the electorate that the PDC simply could not reach.¹⁰⁴ While people were generally confident of a PDC win, there was “a certain tension is felt in middle and upper class circles as shown by such things as the greatly increased issuance of visitor’s visas, plane and ship bookings and **capital flight**.”¹⁰⁵ Not totally dismissing the unscientific political prognostication of the locals, the CIA—haunted by the concept of an Allende win and another Cuba on their watch—made inquiries amongst the Chilean army on what they might do in the event of an Allende victory. The answer to this question was a resounding ‘nothing.’ Simply, the Chilean

¹⁰⁰ Ibid.

¹⁰¹ Airgram, US Amb Santiago (Cole) to State Dept, "The Presidential Campaign with Two weeks to go", 21 Aug 1964. [NARA: NSF, Country File, Chile, Vol. 1, Cables 1/64-8/64]

¹⁰² Interview, Devine.

¹⁰³ Telegram, US Amb Santiago (Cole) to Sec State, "Met Today", 27 Aug 1964. [NARA: NSF, Country File, Chile, Vol. 1, Cables 1/64-8/64]

¹⁰⁴ Airgram, US Amb Santiago (Cole) to State Dept, "The Presidential Campaign with Two weeks to go", 21 Aug 1964. [NARA: NSF, Country File, Chile, Vol. 1, Cables 1/64-8/64]

¹⁰⁵ Ibid. Original Italics

55

military was conditioned by a long tradition of 'non-deliberation', remaining outside of politics, liable only to act if a party, any party, attempted to subvert the Chilean constitution. "If Allende should impatiently attempt to override Congress," the CIA Station wrote to Washington, "the military would almost certainly intervene to preserve constitutional order. If he should too abruptly seek to impose his personal control on the military establishment, there might also be a reaction. Otherwise, the military and the Carabineros [the Chilean national police] would be likely to support the duly elected regime." Despite military intervention in the government briefly in 1924, there simply was no great likelihood of any extra-constitutional action: "Military intervention in politics can happen in Chile, though not without strong provocation."¹⁰⁶ Furthermore, this was no run-of-the-mill tin pot South American republic, and the warning was made to the White House that "we should not confuse the Chile of 1964 with the Guatemala of 1954 unless we are prepared to physically occupy the country."¹⁰⁷ Luckily, this course of action did not seem too likely, as the polls were coming out in favour of Frei. An August 1964 sampling of the important areas of Santiago and Valparaiso shows Frei ahead by 20.2% over Allende in those cities.¹⁰⁸

¹⁰⁶ NIE, "The Chilean Situation and Prospects", 3 October 1963.

¹⁰⁷ Memorandum, McGeorge Bundy/Lawrence O'Brien/John Reilly to Senator H.H. Humphrey, "The Present Political Situation in Chile, 16 June 1964. [LBJ: EX CO 4 Chad, Republic of, BOX 21]

¹⁰⁸ Memorandum, CIA to State/NSC, "Chilean Election Forecast", 1 September 1964. [FRUS 268]

56

possibility of rioting, would be eliminated. Furthermore, with a clear
majority Frei would not have to make any political deals with other
parties. Forced to predict, however, we would give the following: Frei-53
percent; Allende-41 percent; Duran-6 percent.¹⁰⁹

This was wonderful news for the White House. Nonetheless, as 4 September of 1964 approached there were, no doubt, a few white knuckles both in Washington and Santiago.

## Election Day

Come the election day of 4 September, the various parts of the Johnson administration involved in the Chilean operations closely monitored the official voting count in Chile. The Department of State received hourly updates from the Embassy in Santiago, which in turn were forwarded to the White House.¹¹⁰ Although the initial returns echoed the polls and put Frei into the lead quite early on, the final result was surprisingly decisive. With only slightly more than a tenth of the electorate not voting, Eduardo Frei and his PDC received 56% of the vote; Salvador Allende Gossens and the FRAP 39%; Julio Durán Neumann, centre of such hand-wringing and worry in the Santiago Station, finished third with just 9% of the vote—very close indeed to the CIA's polling numbers. President Johnson addressed the importance of the Chilean election at a news conference on 5 September. The election, he said, served as a reminder of the strength of democratic institutions throughout Latin America; it was a victory for democracy as well as a defeat for “those who are hostile to freedom” (read: communism).¹¹¹ The Embassy staff was slightly more prosaic, commenting in a cable

¹⁰⁹ Ibid.

¹¹⁰ Memorandum, Chase to Bundy, "Chilean Polling", 4 September 1964. [LBJ: NSF, Country File, Latin America Vol. II, 6/64-12/64] See also telegrams 366-371, Santiago to Washington, 4 September 1964.
[NARA: RG 59, Central Files 1964-66, POL 14 CHILE]

¹¹¹ FRUS Doc. 269 Editorial.

57

several days after the poll that "Midnight Wednesday mercifully brought to an end an election campaign which has been going on for longer than Embassy officers care to remember."¹¹²

## Effectiveness & Results

The CIA was not shy about the share of the credit due them for the stunning win, the first clear majority government in a Chilean election in 22 years, as DCI John McCone pointed out to the 303 Committee. The CIA was one of the "indispensable ingredients of Frei's success."¹¹³ Frei, personally, also praised the Embassy for its role during the campaign, noting their "discretion and cooperation" throughout his campaign.¹¹⁴ The Station likely agreed wholeheartedly, and they indicated to the 303 Committee their belief that Frei's chances of winning the election "would have been considerably more tenuous, and it is doubtful if his campaign would have progressed as well as it did without this covert U.S. Government support."¹¹⁵ The Ambassador agreed, and the day after the election Ambassador Charles Cole reported that the combined effort of U.S. agencies "contributed significantly to the very satisfactory Frei victory on September 4."¹¹⁶ Feeling, apparently, in remarkably generous mood, McCone remarked that the voters "themselves... deserved some commendation."¹¹⁷ It was, all around, a great day for being in the CIA. And it was probably a good day for Chile, too.

¹¹² Airgram A-187, Santiago to State, Joint Weeka No. 36, 3 September 1964. [NARA: RG 59, Stack 250, Box 2025, Pol 2-1 Joint Weekas Chile]

¹¹³ Ibid.

¹¹⁴ Telegram #383, Santiago to State, 8 September 1964. [NARA: RG 59, Central Files 1964-1966, POL 14 Chile]

¹¹⁵ Department of State, INR/IL Historical Files, Chile, 1964-1967. [FRUS 269]

¹¹⁶ Telegram, Ambassador to SecState, # 372, 5 September 1964. [NARA: RG 59, Central Files 1964-66, POL 14 CHILE]

¹¹⁷ FRUS Doc. 269.

58

> We saw [the election] in 64 as kind of an acid test. You know the old domino effect: we were terrified. I still remember the sense of relief in the Alliance that he won. He was our strong preference, so we put our money where our mouth was. But there wasn't any secret about it, about where our aid money was going. And I think it was applauded by most of the liberal side of the spectrum here in Washington.¹¹⁸

Accordingly, they did everything they could both openly and clandestinely to ensure a Frei victory, though Rogers also added “Oh, no that’s wrong: it wasn’t everything we could; we could have done a hell of a lot more. We were pretty restrained in what we really did. But there was no doubt in where we saw our interests lie.”¹¹⁹ Nonetheless, Rogers disagreed with the assessment that the CIA was a major factor in the Frei victory. Instead, he believes a combination of Frei’s charismatic personality, the collapse of the Democratic Front after Curico, and the continued candidacy of a defeated Durán that led to this notable majority. Indeed, this opinion was echoed by senior State Department Official Ambassador John H. Crimmins, who indicated in an interview that this opinion was also privately shared by Bob Hurwitch, the Embassy’s First Secretary: “He believed” said Crimmins, “that the [US] efforts had had a *very* marginal effect.¹²⁰

But it most certainly *had* had an effect. Regardless of whether they had actually assisted the Frei candidacy, the universal suspicion arose in Chile that Frei was the US’s man. Eduardo Labarca remarks: "*Lo cierto es que en la época del gobierno del presidente Frei, Washington se ha valido preferentemente, en su labor corrupta y*

¹¹⁸ Interview, William D. Rogers

¹²⁰ Interview, John H. Crimmins.

59

colonizadora, de personeros democratacristianos.”<sup>121</sup> *Habeas Corpus* or not, plausible deniability simply does not matter when everyone comes to believe that the supposedly unproved allegations are true. The US had effectively, and with consent, undermined the credibility of the Frei government and the PDC by aligning too closely with them. The final word on this can be given to Jorgé Alessandri, the recently ex-President of Chile who would stand again for the Presidency in 1970. Meeting a US official several weeks after the inauguration of Frei, the former President was noted as saying:

He held USG largely responsible, not only for its direct actions, but for support it gave to such subversive organisations as ECLA [Economic Commission for Latin America] and FAO, for the imminent Chilean crisis. Intellectuals surrounding President Kennedy had meddled ruinously in Chile.<sup>122</sup>

<sup>121</sup> Labarca, p. 24.

<sup>122</sup> Cable, Santiago to SecState, "President Frei Insisted", 21 Dec 1967. [LBJ: Country File Box 14, Chile Vol V, Memos, 8/67-11/68]

# CIA & ITT
## The Agency Response to Corporate Interest

by Kristian Gustafson

He felt that there was already too much open talk in these circles which was filtering back to Chile. Even Frei had pointed out that publicized large-scale U.S. business support for his candidacy would be a kiss of death. On the basis of the risks and the apparent lack of security, he felt the U.S. "private sector" should not engage in political action in this Chilean election.

c. The concept of American commercial firms passing financial aid surreptiously to the U.S. government raised so many questions of ethics, financial and interrelationships that Mr. McCone said he felt the matter should be discussed in the Group. A lengthy exchange of views ensued, but the conclusion was that the legal aspects were too labyrinthine and the questions of tax benefits, conflicts of interest and corporation behavior were too murky to make any clear determinations. The risks of acting as an agent, in effect, of U.S. capital and the lack of assurance on security before, during, and after the election led to the agreement that McCone would convey to Mr. Weed the U.S. decision *not* to become a partner with business interests in covert political action but at the same time to assure him that the U.S. was making every effort, on a priority basis, to prevent the election of Allende.¹

In March 1972, syndicated columnist—and famous Washington muckraker—Jack Anderson published in his syndicated column “The Washington Merry-Go-Round” a sensational allegation that the International Telephone and Telegraph Corporation had constructed, in league with the CIA a “bizarre plot to stop the 1970 election of leftist Chilean President Salvador Allende.” As published in his later book, *The Anderson Papers*, Jack Anderson alleges:

> The giant conglomerate was scheming to create financial chaos in Chile, to put pressure on the Chilean congress to keep Allende from power, and to organise a coup to take control of the government. Participating in the conspiracy were the CIA's clandestine services chief William V. Broe, and the ambassador to Chile, Edward Korry.²

¹ Memorandum for the Record, Minutes of the Meeting of the Special Review Group, 12 May 1964.

² Jack Anderson, *The Anderson Papers*, p. 112.

These were serious accusations for two reasons: if they were true, the US government was attempting to subvert a democracy, and it was doing so as the servant of corporate, not national, interest. They had a seismic impact on a country growing increasingly disillusioned with the perceived opacity of foreign affairs and the war in Vietnam. As the editors of the *Washington Post* argued, "this is a charge so serious it is hard to see how anything less than a congressional investigation can dispose of it."³ The allegations, in fact, proved excellent fodder for the highly partisan chair of the Senate Foreign Relations Committee, Senator J.W. Fulbright, which "asserted its paramount jurisdiction over intervention abroad" and voted to investigate the allegations.⁴ This alone was sensational in that up to this point in the history of US intelligence the Foreign Relations Committee had not exerted any influence over the CIA, this being carried out by the Armed Services Committees and their military appropriations subcommittees. Perhaps sensing the history he might make, Fulbright wasted no time in letting-loose one of his most ambitious and aggressive fellow senators and committee members, Senator Frank Church, an Idaho Democrat, empowered with the 'Subcommittee on Multinational Corporations.' In time, the investigations of Senator Church into ITT led into the more serious 'Church Committee Investigation' which investigated the full scope of the CIA's duties, and to a universal questioning of the policies and modalities of the Agency's actions around the world. These investigations, on top of inadvertently revealing many CIA methods and sources, brought the end of the 'old generation' at Langley and the end to the laissez-faire attitude with which the Congress traditionally provided oversight of their

³ *Washington Post*, "ITT: And Now Chile", 22 March 1972.

⁴ Senate Foreign Relations Committee (Subcommittee on Multinational Corporations), 93rd Congress, 1st Session, "International Telephone and Telegraph Company and Chile 1970-1971", Washington, 1973. (Henceforward: "Senate ITT Report")

activities.⁵ Moreover, they were fuel to the fire that was slowing burning under Nixon's presidency and which would eventually engulf him and the office of the President in general.

If the accusations of Jack Anderson and his ITT documents had such a great impact, one might assume that they were an accurate portrayal of the CIA's operations in Chile. In fact, as a careful analysis indicates, the ITT documents and Anderson's column contained far more sensation than fact. An appeal to recent document releases, as well as older congressional testimony, shows that the CIA and ITT did not in fact conspire to create economic chaos in Chile, nor did they combine to suborn the Chilean congress to any unconstitutional move against Allende. The ITT Corporation was not dictating programmes to the CIA, nor did it have the influence over the US government that the Anderson papers led the public to believe.

Yet the Anderson papers are not without their facts, and those facts are still extremely relevant when discussing the CIA and its covert actions in the 1970's. While the massive declassification undertaken over the last few years has given over the bulk of governmental documents on Chile—State, CIA, and the NSC have turned over the bulk of their Chile papers to an online declassification website—there is little to give context or depth to these bureaucratic written documents. So, unintentionally, the ITT papers provide a real insight into the functioning of the CIA in one of its most debated and controversial operations—an intimate and well-informed view of CIA operations from *outside* the CIA. When viewed in parallel with declassified CIA and State department papers, they help show a covert action policy *not* influenced by corporate interest, but rather one driven by an impatient

⁵ A general view of the impact of the Church committee from a CIA point of view can be seen in the memoirs of former DCI Richard Helms', *A Look Over My Shoulder*.

Chief Executive. The CIA was no *Rogue Elephant*, as some argue to this day.⁶ This, at least, is the opposite of the allegations made those thirty-odd years ago in the "Washington Merry-go-Round".

## The ITT Corporation

ITT was indeed one of the largest corporations in the US.

## The Scandal Breaks

The ITT scandal broke after the Jack Anderson columns of 21 and 22 March, 1972 in the pages of the *Washington Post* and several other papers across the US. So seriously did DCI Richard Helms view the information in the Anderson columns that he apparently tried to convince Anderson not to publish them, though admittedly such requests were fairly common in the era.⁷ Though not at first a front-page story, Jack Anderson's "The Washington Merry-Go Round" column nevertheless caused a stir, especially so when Anderson released his source material to the government and the public. The accusations in his columns, backed by the documents, were stark and direct: ITT "dealt regularly with the Central Intelligence Agency" and they "were plotting together to create economic chaos in Chile."⁸ To do this, ITT made "an offer to the White House to 'assist financially in sums up to seven figures.'"⁹ To assure the forward movement of their schemes, Anderson asserts, ITT was assisted in Washington by William V. Broe, CIA Chief of Western Hemisphere Division, and apparently ITT men in Chile were included in the intimate details of Agency and

⁶ Helms, p. 437.

⁷ Kombluh, *The Pinochet File*, p. 103, fn 36.

⁸ Jack Anderson, "Memos Bare ITT Try for Chile Coup" in *The Washington Merry-Go-Round*, 21 March 1972.

⁹ Jack Anderson, "ITT Pledge Millions To Stop Allende" in *The Washington Merry-Go-Round*, 22 March 1972.

Embassy plotting in Santiago. Anderson added the details of the plotting of Chilean General Roberto Viaux, on whose plot the CIA as well as ITT was "pinning its waning hopes."¹⁰

While some might have hoped to dismiss Anderson's column as just more idle anti-Agency gossip, the ITT memoranda released by the columnist seemed to entirely support his accusations. One of the most seriously considered accusations of Anderson's ITT memoranda is that of 17 September 1970, in which it is stated that on 15September, Ambassador Edward Korry received a message from the "State Department" giving him permission to do everything "short of a Dominican Republic-type action—to keep Allende from taking power.¹¹ To this end, Anderson asserted, the Chilean army "has been assured full financial assistance by the US military establishment."¹² Moreover Edward Korry, the mercurial US Ambassador to Chile had, according to the ITT documents, manoeuvred without State Department permission in the affairs of Chilean political parties, as well as haranguing Chilean president Eduardo Frei "to the point of telling him to 'put his pants on.'"¹³ Finally, showing a good degree of detail into the actions of the CIA in Chile, the article went on to discuss the CIA-ITT plan to support the *El Mercurio* newspaper, the conservative and anti-Allende newspaper that was under threat from pro-Allende forces and had even been threatened with closure and expropriation directly by one of Allende's lieutenants.

The accusations do not end with the alleged links in Chile itself. It is further argued in Anderson's lead article that

ITT officials were in touch with William V. Broe, who was then director of the Latin American division of the CIA's Clandestine

¹⁰ Ibid.

¹¹ ITT Memorandum, Hendrix & Berrellez to Garrity, "Chile", 17 September, 1970.

¹² Ibid.

¹³ Ibid.

Services. They were plotting together to create economic chaos in Chile, hoping this would cause the Chilean army to pull a coup that would block Allende from coming to power.¹⁴

Accordingly, “approaches continue to be made to select members of the Armed Forces in an attempt to have them lead some sort of uprising—no success to date...”¹⁵

While the article gives some descriptive weight to some of these allegations (and many more column-inches to independent ITT activities against Chile), they seem serious enough on their own—serious enough to act as catalyst for a Senate investigation and to remain in the public mind for decades afterwards. But while there is no doubt that Anderson’s column made good press, is it accurate?

## Assessing the Validity of the Scandal

To know how much the ITT memoranda say about the CIA and US Government policy one has to assess their accuracy, a tricky affair when dealing with such scant information. The key question is this whole debate is this: did the two men reporting for ITT in Chile have any special knowledge of CIA actions, and if so how detailed, or were they merely reporting rumour or public knowledge? GWU historian Peter Kornbluh states that Berrellez “repeatedly misled the Church subcommittee by denying any ITT contact with CIA officials in Chile”.¹⁶ Likewise, in the book by journalist David Corn on CIA officer Ted Shackley, the author spends several pages expositing on the connection between the alliterative ITT-men Hal Hendrix and Bob Berrellez and Santiago CIA station-chief Henry Hecksher, as well as links in Washington with CIA men Ted Shackley, William Broe and others. But it is nearly impossible to cross-check their accusations, which essentially imply that the CIA was

¹⁴ Anderson, “Memos Bare ITT Try for Chile Coup”.

¹⁵ Ibid.

¹⁶ Kornbluh, p. 102.

working with, and at the behest of, a corporation. Most of the station personnel from Santiago in 1970 have passed away, and those that remain are not talking, at least on the record. While authors such as Kornbluh and Corn seem convinced of the connection, neither of them offer any concrete proof that they are willing to cite, nor do they offer any explanation or nuance to the nature of the connection. This leaves the inquisitive reader with only two rather indefinite ways of untying the knot—or at least confirming the solution provided by the two authors mentioned above—textual comparison and intuition. Likewise, there are two distinct parts to the accusation of ITT-CIA links: those that occurred in Santiago and those that occurred in Washington, and these need to be dealt with separately to be understood in context.

## Part 1, Washington

During the Congressional investigations of 1975, Senator Frank Church, directing the investigating committee, concluded that "In 1970, US Government policy prohibited covert CIA support to a single party or candidate, at the same time, the CIA provided advice to an American-based multinational corporation on how to furnish just such direct support."¹⁷ This conclusion is based in large part on testimony which repeated allegations from the Anderson Papers, which "show that ITT officials were in close touch with William V. Broe, who was then director of the Latin American division of the CIA's clandestine services. They were plotting together...."¹⁸ When examined with reference to the CIA's own documents, and more recent information, one can perceive a greater degree of nuance in the matter.

Cooperation between ITT and the CIA at the executive level had its origins in the 'old boys club': John McCone, a senior director of ITT was also previously a DCI.

¹⁷ Church Report

¹⁸ Washington Merry Go Round, 21 March 1972. Washington Post.

A meeting about the election in Chile was initiated by a call to DCI Colby from
McCone. The first meeting between Broe and ITT President Harold S. Geneen—a
man called "a very *very* unpleasant freebooter... the kind of guy who thought Latin
American governments should be manipulated and bought off..." by one senior State
Department official¹⁹—occurred at the Sheraton-Carlton Hotel in Washington on 16
July. At this meeting Geneen gave Broe a short history of ITT's involvement in
Chile, including their passage of funds to the PDC during the 1964 Presidential
election (after McCone, as then DCI, had rejected a similar approach from ITT!).²⁰
Broe was told that ITT wanted to pass funds to the Alessandri campaign in this
election, and hoped that the CIA might either act as a channel for funds or advise ITT
the best way of channelling them itself. Broe, prepared by a WHD briefing memo,²¹
responded by telling Geneen the CIA "could not absorb the funds and serve as a
funding channel" and was advised "that the US Government was not supporting any
candidate but was most anxious that Allende not be elected."²² Broe left the meeting
with a promise that he would explore routes by which ITT could channel the funds by
its own means. Up to this point, the CIA was "highly impressed by ITT's
professionalism" and the Station expressed hopes that such professionalism would be
maintained. Always hoping for more corporate involvement in the election
campaign, the CIA had stepped outside the strict boundaries of the non-partisan ruling
to ensure the security of ITT's own funding channel to Alessandri.

For the CIA this was a relatively bold move in support of an outside
organisation, and their normal reticence to breach their security protocols soon
reasserted itself. "Since [deleted] 16 July meeting with Geneen [word deleted] we

¹⁹ Interview, Crimmins.

²⁰ Memorandum, CIA, William Broe for the Record, 17 July 1970.

²¹ Memorandum, CIA, "Harold D. Geneen—Questions and Answers", memo #1049, undated, July or August 1970.

²² Ibid.

William Rogers
DC - 701H 202-942-5915

To: jincao@kmaglobal.com
cc: Cecilia Petrowsky/Sec/DC/ArnoldAndPorter@APORTER
Subject: Message for Dr. Kissinger, if he is taking messages of secondary significance

04/05/2005 12:12 PM

Re: CHILE -- Kristian Gustafson 's Chapter 2

I have sent you Kristians' cover letter with respect to the draft second chapter of his book on Chile, this one on "The CIA and the 1964 Chilean Presidential Election." I have now read it. On a base of impressively detailed scholarship, he builds the story of American involvement on the 1964 Frei victory over Allende.

What comes clear is:

-- that beginning with Kennedy and through the Johnston Administration (though Johnson was not as personally involved as Kennedy) Washington poured money into the Frei campaign, for the purpose of keeping Allende out of office;

-- that Washington conceived that an Allende victory would not help the Soviets much but would be a devastating blow to the interests of the United States; "a second Castro" was a chilling prospect;

-- that -- as I vividly recall -- the support for Frei was not the best kept secret in the world;

-- that Frei felt he was compromised by the inability of the Americans to keep their mouths shut;

-- that he beat Allende won handily nonetheless; and

-- that the Agency took full credit for his victory, thus creating the illusion that they could and should be the arbiters of Chilean politics, with ominous consequences for 1970.

What Kristian leaves unsettled is whether the US money was in fact decisive. The Agency congratulated itself that it was. Kristian quotes me to the effect that other factors counted -- Frei's charisma, the fear in democratic Chile of Allende's Marxism, the sense that the Soviets were putting their own money into the contest as well, and so forth.

I will send you a copy of the chapter for overnight delivery tonight. No major surprises (though he does have some good stuff I had not seen before from the Soviet archives about the Soviet money). There is little of substance about 1970 et seq.

## CHAPTER 2

# “The CIA and the 1964 Chilean Presidential Election”

US Involvement in Chile is certainly most famous for its most recent period: CIA involvement in the fall of Salvador Allende Gossens and the rise of General Augusto Pinochet Ugarte. The extremes of this period unfortunately eclipse more than a decade of preamble, a string of covert actions under three successive presidents before the fateful actions under President Nixon. The CIA's behaviour during the presidency of Allende did not occur in isolation from other policy, nor was the US government unaware, in 1970, of the threat posed by Allende or the political forces pushing him. President Allende, of course, was not created just in time for September of 1970; prior to his victory, Senator Allende he had stood in three successive elections as a candidate of various leftist front parties. In each of those elections the US undertook some form of action against the Marxist front parties and so Salvador Allende. In order to place later and more elaborate operations of 1970-1973 into perspective, the US perspective on Allende's political career must be understood. These operations are not the attempted assassinations and plotted coups of the popular conception, but rather much subtler affairs of money and influence. They mark, nonetheless, a serious meddling in the affairs of a friendly democracy. Meddling, one should note, that was not without its darker side and menacing consequences. The lead-up to, and execution of, covert operations in the 1964 Chilean Presidential election was a point of no return for US interests in Chile, a precursor to the events of the Nixon/Allende administrations, a waypoint on the long road

18

***

19