Covert Action in Chile 1963-1973.
94th Congress 1st Session COMMITTEE PRINT
COVERT ACTION IN CHILE 1963-1973
Staff Report of the Select Committee To Study
Governmental Operations With Respect to Intelligence Activities
UNITED STATES SENATE
December 18, 1975
Printed for the use of the Select Committee To
Study Governmental Operations With Respect to Intelligence Activities
U.S. GOVERNMENT PRINTING OFFICE 63-372
the December 4, 1975 hearing the Select Committee has, in the course
of its continuing investigation received new information which supplements
the following sections of the Staff Report on Covert Action in Chile:
Section III.A.4, the Role of Multinational Corporations; Section IV.B.1.e,
Intelligence Estimates and Covert Action; and Section IV.C, Congressional
Oversight. All pertinent information on the above will be reflected
in the Select Committee's Final Report to the Senate.
SENATE SELECT COMMITTEE TO STUDY GOVERNMENTAL
OPERATIONS WITH RESPECT TO INTELLIGENCE ACTIVITIES
FRANCK CHURCH, Idaho, Chairman
JOHN G. TOWER, Texas, Vice Chairman
PHILIP, A. HART, Michigan HOWARD H. BAKER,Jr., Tennessee
- WALTER F. MONDALE, Minnesota BARRY GOLDWATER, Arizona - WALTER D.
HUDDLESTON, Kentucky CHARLES McC. MATTHIAS,Jr., Maryland - ROBERT
MORGAN, North Carolina RICHARD SCHWEIKER, Pennsylvania - GARY HART,
Colorado - HOWARD H. BAKER, Jr., Tennessee - BARRY GOLDWATER, Arizona
- CHARLES McC. MATHIAS, Jr., Maryland - RICHARD SCHWEIKER, Pennsylvania
WILLIAM G. MILLER, Staff Director
FREDERICK A. O. SCHWARZ,Jr., Chief Counsel
CURTIS R. SMOTHERS, Counsel to the Minority
AUDREY HATRY, Clerk of the Committee
The statements of facts contained in this report are
true to the best of the Committee staff's ability to determine them.
The report and any judgement expressed in it are tentative. Several
areas are merely touched on; investigation in these areas is continuing.
The purpose of the report is to lay out the basis facts of covert
action in Chile to enable the Committee to hold public hearings.
This report is based on an extensive review of documents
of the Central Intelligence Agency, the Department of State and Defense,
and the National Security Council; and on testimony by officials and
former officials. With few exceptions, names of Chileans and of Chilean
institutions have been omitted in order to avoid revealing intelligence
sources and methods and to limit needless harm to individual Chileans
who cooperated with the Central Intelligence Agency. The report does,
however, convey an accurate picture of the scope, purposes and magnitude
of United States covert action in Chile.
Table of Contents
I. Overview and Background
Range of Covert Action in Chile
Major Covert Action Programs and Their Effects
IV. Chile: Authorization,
Assessment, and Oversight
V. Preliminary Conclusions
Appendix. Chronology: Chile 1962-1975
Covert Action in Chile: 1963-1973.
I. Overview and Background
Overview: Cover Action in Chile
Covert United States involvement in Chile in the decade
between 1963 and 1973 was extensive and continuous. The Central Intelligence
Agency spent three million dollars in an effort to influence the outcome
of the 1964 Chilean presidential elections. Eight million dollars
was spent, covertly, in the three years between 1970 and the military
coup in September 1973, with over three million dollars expended in
fiscal year 1972 alone.(1)
It is not easy to draw a neat box around what was "covert
action". The range of clandestine activities undertaken by the CIA
includes covert action, clandestine intelligence collection, liaison
with local police and intelligence services, and counterintelligence.
The distinctions among the types of activities are mirrored in organizational
arrangements, both at Headquarters and in the field. Yet it is not
always so easy to distinguish the effects of various activities. If
the CIA provides financial support to a political party, this is called
"covert action"; if the Agency develops a paid "asset" in the party
for the purpose of information gathering, the project is "clandestine
The goal of covert action is political impact. At the
same time secret relationships developed for the clandestine collection
of intelligence may also have political effects, even though no attempt
is made by American officials to manipulate the relationships for
short-run political gain. For example, in Chile between 1970 and 1973,
CIA and American military attache contacts with the Chilean military
for the purpose of gathering intelligence enabled the United States
to sustain communication with the group most likely to take power
from President Salvador Allende.
What did covert CIA money buy in Chile? It financed
activities covering a broad spectrum, from simple propaganda manipulation
of the press to large-scale support for Chilean political parties,
from public opinion polls to direct attempts to foment a military
coup. The scope of "normal" activities of the CIA Station in Santiago
included placement of Station-dictated material in the Chilean media
through propaganda assets, direct support of publications, and efforts
to oppose communist and left-wing influence in student, peasant and
In addition to these "routine" activities, the CIA
Station in Santiago was several times called upon to undertake large,
When senior officials in Washington perceived special
dangers, or opportunities, in Chile, special CIA projects were developed,
often as part of a larger package of U.S. actions. For instance, the
CIA spent over three million dollars in an election program in 1964.
Half a decade later, in 1970, the CIA engaged in another
special effort, this time at the express request of President Nixon
and under the injunction not to inform the Departments of State or
Defense or the Ambassador of the project. Nor was the 40 Committee
(2) ever informed. The CIA attempted, directly, to
foment a military coup in Chile. It passed three weapons to a group
of Chilean officers who plotted a coup. Beginning with the kidnaping
of Chilean Army Commander-in-Chief Rene Schneider. However, those
guns were returned. The group which staged the abortive kidnap of
Schneider, which resulted in his death, apparently was not the same
as the group which received CIA weapons.(3)
When the coup attempt failed and Allende was inaugurated
President, the CIA was authorized by the 40 Committee to fund groups
in opposition to Allende in Chile. The effort was massive. Eight million
dollars was spent in the three years between the 1970 election and
the military coup in September 1973. Money was furnished to media
organizations, to opposition political parties and, in limited amounts,
to private sector organizations.
Numerous allegations have been made about U.S. covert
activities in Chile during 1970-73. Several of these are false; others
are half true. In most instances, the response to the allegations
mus be qualified:
Was the United States DIRECTLY involved, covertly,
in the 1973 coup in Chile? The Committee has found no evidence that
it was. However, the United States sought in 1970 to foment a military
coup in Chile; after 1970 it adopted a policy both overt and covert,
of opposition to Allende; and it remained in intelligence contact
with the Chilean military, including officers who were participating
in coup plotting.
Did the U.S. provide covert support to striking truck-owners
or other strikers during 1971-73? The 40 Committee did not approve
any such support. However, the U.S. passed money to private sector
groups which supported the strikers. And in at least one case, a small
amount of CIA money was passed to the strikers by a private sector
organization, contrary to CIA ground rules. Did the U.S. provide covert
support to right-wing terrorist organizations during 1970-73?
The CIA gave support in 1970 to one group whose tacticts
became more violent over time. Through 1971 that group received small
sums of American money through third parties for specific purpose.
And it is possible that money was passed to these groups on the extreme
right from CIA-supported opposition political parties.
The pattern of United States covert action in Chile
is striking but not unique. It arose in the context not only of American
foreign policy, but also of covert U.S. involvement in other countries
within and outside Latin America. The scale of CIA involvement in
Chile was unusual but by no means unprecedented.
The Chilean case raises most of the issues connected
with covert action as an instrument of American foreign policy. It
consisted of long, frequently heavy involvement in Chilean politics:
it involved the gamut of covert action methods, save only covert military
operations; and it revealed a variety of different authorization procedures,
with different implications for oversight and control. As one case
of U.S. covert action, the judgements of past actions are framed not
for their own sake; rather they are intended to serve as bases for
formulating recommendations for the future.
The basic questions are easily stated:
(1) Why did the United States mount such an extensive
covert action program in Chile? Why was that program continued and
then expanded in the early 1970's?
(2) How was this major covert action program authorized
and directed? What roles were played by the President, the 40 Committee,
the CIA, the Ambassadors and the Congress? (3) Did U.S. policy-makers
take into account the judgements of the intelligence analysts on Chile
when they formulated and approved U.S. covert operations? Does the
Chilean experience illustrate an inherent conflict between the role
of the Director of Central Intelligence as a producer of intelligence
and his role a manager of covert operations?
(4) Did the perceived threat in Chile justify
the level of U.S. response? What was the effect of such large concentrated
programs of covert political action in Chile? What were the effects,
both abroad and at home, of the relationships which developed between
the intelligence agencies and American based multinational corporations?
C. Historical Background to Recent United States-Chilean
1. Chilean Politics and Society: an Overview.
Chile has historically attracted far more interest
in Latin America and, more recently, throughout the world, than its
remote geographic position and scant eleven-million population would
at first suggest.
Chile's history has been one of remarkable continuity
in civilian, democratic rule. From independence in 1818 until the
military coup d'etat of September 1973, Chile underwent only three
brief interruptions of its democratic tradition. >From 1932 until
the overthrow of Allende in 1973, constitutional rule in Chile was
Chile defies simplistic North American stereotypes
of Latin America. With more than two-thirds of its population living
in cities, and a 1970 per capita GNP of $760, Chile is one of the
most urbanized and industrialized countries in Latin America. Nearly
all of the Chilean population is literate. Chile has an advanced social
welfare program, although its activities did not reach the majority
of the poor until popular participation began to be exerted in the
early 1960's. Chileans are a largely integrated mixture of indigeneous
American with European immigrant stock. Until September 1973, Chileans
brokered their demands in a bicameral parliament through a multi-party
system and through a broad array of economic, trade union, and, more
recently, managerial and professional associations.
2. U.S. Policy Toward Chile.
The history of United States policy toward Chile followed
the patterns of United States diplomatic and economic interests in
the hemisphere. In the same year that the United States recognized
Chilean independence, 1823, it also proclaimed the Monroe Doctrine.
This unilateral policy pronouncement of the United States was directed
as a warning toward rival European powers not to interfere in the
internal political affairs of this hemisphere.
The U. S. reaction to Fidel Castro's rise to power
suggested that while the Monroe Doctrine had been abandoned, the principles
which prompted it were still alive. Castro's presence spurred a new
United States hemispheric policy with special significance for Chile
- the Alliance for Progress. There was little disagreement among policymakers
either at the end of the Eisenhower Administration or at the beginning
of the Kennedy Administration that something had to be done about
the alarming threat that Castro was seen to represent to the stability
of the hemisphere.
The U.S. reaction to the new hemispheric danger - communist
revolution - evolved into a dual policy response. Widespread malnutrition,
illiteracy, hopeless housing conditions and hunger for the vast majority
of Latin Americans who were poor; these were seen as communism's allies.
Consequently, the U.S. undertook loans to national development programs
and supported civilian reformist regimes, all with an eye to preventing
the appearance of another Fidel Castro in our hemisphere.
But there was another component in U.S. policy toward
Latin America. Counterinsurgency techniques were developed to combat
urban or rural guerrilla insurgencies often encouraged or supported
by Castro's regime. Development could not cure overnight the social
ills which were seen as the breeding ground of communism. New loans
for Latin American countries' internal national development programs
would take time to bear fruit. In the meantime, the communist threat
would continue. The vicious circle plaguing the logic of the Alliance
for Progress soon became apparent. In order to eliminate the short-term
danger of communist subversion, it was often seen as necessary to
support Latin American armed forces, yet frequently it was those same
armed forces who were helping to freeze the status quo which the Alliance
sought to alter.
Of all the countries in the hemisphere, Chile was chosen
to become the showcase for the new Alliance for Progress. Chile had
the extensive bureaucratic infrastructure to plan and administer a
national development program; moreover, its history of popular support
for Socialist, Communist and other leftist parties was perceived in
Washington as flirtation with communism. In the years between 1962
and 1969, Chile received well over a billion dollars in direct, overt
United States aid, loans and grants both included. Chile received
more aid per capita than any country in the hemisphere. Between 1964
and 1970, $200 to $300 million in short-term lines of credit was continuously
available to Chile from private American banks.
3. Chilean Political Parties: 1958-1970.
The 1970 elections marked the fourth time Salvador
Allende had been presidential candidate of the Chilean left. His personality
and his program were familiar to Chilean voters. His platform was
similar in all three elections: efforts to redistribute income and
reshape the Chilean economy, beginning with the nationalization of
major industries, especially the copper companies; greatly expand
agrarian reform; and expanded relations with socialist and communist
Allende was one of four candidates in the 1958 elections.
His principal oponents were Jorge Alessandri, a conservative, and
Eduardo Frei, the candidate of the newly formed Christian Democratic
Party, which contended against the traditionally centrist Radical
Party. Allende's coalition was an uneasy alliance, composed principally
of the Socialist and Communist Parties, labeled the Popular Action
Front (FRAP). Allende himself, a self-avowed Marxist, was considered
a moderate within his Socialist Party, which ranged from the extreme
left to moderate social democrats. The Socialists, however, were more
militant than the pro- Soviet, bureaucratic -though highly organized
and disciplined- Communist Party.
Allende finished second to Alessandri in the 1958 election
by less than three percent of the vote. Neither candidate received
a majority, and the Chilean Congress voted Alessandri into office.
If Allende had received the votes which went to a leftist priest -who
received 3.3 percent of the votes- he would have won the election.
The Alessandri government lost popularity during its
tenure. Dissatisfaction with it was registered in the 1961 congresional
and 1963 municipal elections. The FRAP parties made significant gains,
and the Christian Democratic Party steadily increased its share of
the electorate until, in the 1963 elections, it became the largest
The 1964 election shaped up as a three-way race. Frei
was once again the Christian Democratic candidate, and the parties
of the left one again selected Allende as their standard-bearer. The
governing coalition, the Democratic Front, chose Radical Julio Duran
as their candidate. Due in part to an adverse election result in a
March 1964 by-election in a previously conservative province, the
Democratic Front collapsed. The Conservative and Liberals, reacting
to the prospect of an Allende victory, threw their support to Frei,
leaving Duran as the standard- bearer of only the Radical Party.
After Frei's decisive majority victory, in which he
received 57 percent of the vote, he began to implement what he called
a "revolution in liberty". That included agrarian, tax, and housing
reform. To deal with the American copper companies, Frei proposed
"Chileanization", by which the state would purchase majority ownership
in order to exercise control and stimulate output.
Frei's reforms, while impressive, fell far short of
what he had promised. Lacking a majority in Congress, he was caught
between the FRAP parties, which demanded extreme measures, and the
rightists, who withheld support from Frei in order to force a compromise
on the agrarian reform issue. Like its predecessor, the Frei government
lost popularity during its tenure; the Christian Democrats' portion
of the vote in congressional elections fell from 43 percent in 1965
to 31 percent in 1969. During the Frei years the internal strains
of the Party became more evident, culminating in the 1968 defection
of the Party's left-wing elements.
Frei's relations with the United States were cordial,
although he pursued an independent foreign policy. His government
established diplomatic relations with the Soviet Union immediately
after taking power and in 1969 reestablished trade relations with
II. The range of covert
action in Chile.
A. Covert Action
and Other Clandestine Activities.
This study is primarily concerned with what is labeled
"covert action" by the United States government. Covert action projects
are considered a distinct category and are authorized and managed
accordingly. But it is important to bear in mind what the category
excludes as well as what it includes. The Committee's purpose is to
evaluate the intent and effect of clandestine American activities
in Chile. Some secret activities by the United States not labeled
"covert action" may have important political impacts and should be
The CIA conducts several kinds of clandestine activity
in foreign countries: clandestine collection of positive foreign intelligence:
counterintelligence (or liaison with local services); and covert action.
Those different activities are handled somewhat differently in Washington;
they are usually the responsibility of different CIA officers in the
field. Yet all three kinds of projects may have effects on foreign
politics. All three rely on the establishment of clandestine relationships
with foreign nationals.
In the clandestine collection of intelligence, the
purpose of the relationship is the gathering of information. A CIA
officer establishes a relationship with a foreign "asset" -paid or
unpaid- in a party or government institution in order to find out
what is going on inside that party or institution. There is typically
no attempt made by the CIA officer to influence the actions of the
"asset". Yet even that kind of covert relationship may have political
significance. Witness the maintenance of CIA's and military attaches'
contacts with the Chilean military after the inauguration of Salvador
Allende: although the purpose was information-gathering, the United
States maintained links to the group most likely to overthrow the
new president. To do so was to walk a tightrope; the distinction between
collecting information and exercising influence was inherently hard
to maintain. Since the Chilean military perceived its actions to be
contingent to some degree on the attitude of the U.S. government,
those possibilities for exercising influence scarcely would have had
to be consciously manipulated.
Liaison relationships with local police or intelligence
services pose a similar issue. The CIA established such relationships
in Chile with the primary purpose of securing assistance in gathering
intelligence on external targets. But the link also provided the Station
with information on internal subversives and opposition elements within
Chile. That raised the difficulty of ensuring that American officials
did not stray into influencing the actions of Chileans with whom they
were in contact. And it meant that the CIA was identified, to some
degree, with the internal activities of Chilean police and intelligence
services, whether or not the U.S. government supported those actions.
That became a matter for great concern in 1973 with the advent of
the Pinochet regime.
The purpose of this case study is to describe and assess
the range of covert U.S. activities which influenced the course of
political events in Chile. Most of the discussion which follows is
limited to activities labeled and run as "covert action" projects.
That category is itself broad. But it excludes other clandestine activities
with possible political effects.
B. Covert Action in Chile:
Even if the set of activities labeled "covert action" does
not include all clandestine American efforts with possible political
effects, that set is nonetheless broad. U.S. covert action in Chile
encompassed a range of techniques and affected a wide variety of Chilean
institutions. It included projects which were regarded as the framework
necessary for covert operations, as well as major efforts called forth
by special circumstances. The following paragraphs will give a flavor
of that range.
The most extensive covert action activity in Chile
was propaganda. It was relatively cheap. In Chile, it continued at
a low level during "normal" times, then was cranked up to meet particular
threats or to counter particular dangers.
The most common form of a propaganda project is simply
the development of "assets" in media organizations who can place articles
or be asked to write them. The Agency provided to its field Station
several kinds of guidance about what sorts of propaganda were desired.
For example, one CIA project in Chile supported from one to five media
assets during the seven years it operated (1965-1971). Most of those
assets worked for a major Santiago daily which was the key to CIA
propaganda efforts. Those assets wrote articles or editorials favorable
to U.S. interests in the world (for example, criticizing the Soviet
Union in the wake of the Czechoslovakian invasion); suppressed news
items harmful to the United States (for instance about Vietnam); and
authored articles critical of Chilean leftists.
The covert propaganda efforts in Chile also included
"black" propaganda -material falsely purporting to be the product
of a particular individual or group. In the 1970 election, for instance,
the CIA used "black" propaganda to sow discord between the Communists
and the Socialists and between the national labor confederation and
the Chilean Communist Party.
TABLE I -Techniques of Covert Action
-Expenditures in Chile, 1963-73 (1).
|Propaganda for elections and other support for political
|Producing and disseminating propaganda and supporting mass
|Influencing Chilean institutions (labor, students, peasants,
women) and supporting private sector organizations
|Promoting military coup d'etat
(1) Figures rounded to nearest $100,000
In some cases, the form of propaganda was still more
direct. The Station financed Chilean groups who erected wall posters,
passed out political panflets (at times prepared by the Station) and
engaged in other street activities. Most often these activities formed
part of larger projects intended to influence the outcomes of Chilean
elections (see below), but in at least one instance the activities
took place in the absence of an election campaign.
Of thirty-odd covert action projects undertaken by
Chile by the CIA between 1961 and 1974, approximately a half dozen
had propaganda as their principal activity. Propaganda was an important
subsidiary element of many others, particularly election projects.
(See TABLE I). Press placements were attractive because each placement
might produce a multiplier effect, being picked up and replayed by
media oulets other than the one in which it originally came out.
2. Support for Media
In addition to buying propaganda piecemeal, the Station
often purchased it wholesale by subsidizing Chilean media organizations
friendly to the United States. Doing so was propaganda writ large.
Instead of placing individual items, the CIA supported -or even founded-
friendly media outlets which might not have existed in the absence
of Agency support.
From 1953 through 1970 in Chile, the Station subsidized
wire services, magazines written for intellectual circles, and a right-wing
weekly newspaper. According to the testimony of former officials,
support for the newspaper was terminated because it became so inflexibly
rightist as to alienate responsible conservatives.
By far, the largest -and probably the most significant-
instance of support for a media organization was the money provided
to El Mercurio, the major Santiago daily, under pressure
during the Allende regime. The support grew out of an existing propaganda
project. In 1971 the Station judged that El Mercurio, the
most important opposition publication, could not survive pressure
from the Allende government, including intervention in the newsprint
market and the withdrawal of government advertising. The 40 Committee
authorized $700,000 for El Mercurio on September 9, 1971,
and added another $965,000 to that authorization on April 11, 1972.
A CIA project renewal memorandum concluded that El Mercurio
and other media outlets supported by the Agency had played an important
role in setting the stage for the September 11, 1973, military coup
which overthrew Allende.
3. Gaining Influence in Chilean Institutions
Through its covert activities in Chile, the U.S. government
sought to influence the actions of a wide variety of institutions
and groups in Chilean society. The specific intent of those activities
ran the gamut from attempting to influence directly the making of
government policy to trying to counter communist or leftist influence
among organized groups in the society. That most of these projects
included a propaganda component is obvious.
From 1964 through 1968, the CIA developed contacts
within the Chilean Socialist Party and at the Cabinet level of the
Projects aimed at organizade groups in Chilean society
had more diffuse purposes than efforts aimed at government institutions.
But the aim was similar: influencing the direction of political events
Projects were directed, for example, toward:
Wresting control of Chilean university student
organizations from the communists;
Supporting a women's group active in Chilean political
and intellectual life;
Combating the communist-dominated CENTRAL UNICA
DE TRABAJADORES CHILENOS (CUTCH) and supporting democratic labor groups;
Exploiting a civic action front group to combat
communist influence within cultural and intellectual circles.
4. Major Efforts to Influence Chilean Elections
Covert American activity was a factor in almost every
major election in Chile in the decade between 1963 and 1973. In several
instances the United States intervention was massive.
The 1964 presidential election was the most prominent
example of a large- scale election project. The Central Intelligence
Agency spent more than $2.6 million in support of the election of
the Christian Democratic candidate, in part to prevent the accession
to the presidency of Marxist Salvador Allende. More than half of the
Christian Democratic candidate's campaign was financed by the United
States, although he was not informed of this assistance. In addition,
the Station furnished support to an array of pro-Christian Democratic
student, women's, professional and peasant groups. Two other political
parties were funded as well in an attempt to spread the vote.
In Washington, an inter-agency election committee was
established, composed of State Department, White House and CIA officials.
That committee was paralleled by a group in the embassy in Santiago.
No special task force was established within the CIA, but the Station
in Santiago was reinforced. The Station assisted the Christian Democrats
in running an American-style campaign, which included polling, voter
registration and get-out-the-vote drives, in addition to covert propaganda.
The United States was also involved in the 1970 presidential
campaign. That effort, however, was smaller and did not include support
for any specific candidate. It was directed more at preventing Allende's
election than at insuring another candidate's victory.
Nor have U.S. involvement been limited to presidential
campaigns. In the 1965 Chilean congressional elections, for instance,
the Station was authorized by the 303 Committee to spend up to $175,000.
Covert support was provided to a number of candidates selected by
the Ambassador and Station. A CIA election memorandum suggested that
the project did have some impact, including the elimination of a number
of FRAP (leftist coalition) candidates who might otherwise have won
5. Support for Chilean Political Parties
Most covert American support to Chilean political parties
was furnished as part of specific efforts to influence election outcomes.
However, in several instances the CIA provided subsidies to parties
for more general purposes, when elections were not imminent. Most
such support was furnished during the Allende years, 1970-1973, when
the U.S. government judged that without its support parties of the
center and right might not survive either as opposition elements or
as contestants in elections several years away.
In a sequence of decisions in 1971 through 1973, the
40 Committee authorized nearly $4 million for opposition political
parties in Chile. Most of this money went to the Christian Democratic
Party (PDC), but a substantial portion was earmarked for the National
Party (PN), a conservative grouping more stridently opposed to the
Allende government than was the PDC. An effort was also made to split
the ruling Popular Unity coalition by inducing elements to break away.
The funding of political parties on a large scale in
1970-73 was not, however, without antecedents, albeit more modest
in scale. In 1962 the Special Group (predecessor to the 40 Committee)
authorized several hundred thousand dollars for an effort to build
up the PDC in anticipation of the 1964 elections. Small authorizations
were made, in 1963 and 1967, for support to moderate elements within
the Radical Party.
6. Support for Private Sector Organizations
As part of its program of support for opposition elements
during the Allende government, the CIA provided money to several trade
organizations of the Chilean private sector. In September 1972, for
instance, the 40 Committee authorized $24,000 in emergency support
for an anti-Allende businessmen's organization. At that time, supporting
other private sector organizations was considered but rejected because
of the fear that those organizations might be involved in anti-government
The 40 Committee authorized $100,000 for private sector
organizations in October 1972, as part of the March 1973 election
project. According to the CIA, that money was spent only on election
activities, such as voter registration drives and get-out-the-vote
drives. In August 1973, the Committee authorized support for private
sector groups, but with disbursement contingent on the agreement of
the Ambassador and State Department. That agreement was not forthcoming.
7. Direct efforts to Promote a Military Coup
United States covert efforts to affect the course of
Chilean politics reached a peak in 1970: the CIA was directed to undertake
an effort to promote a military coup in Chile to prevent the accession
to power of Salvador Allende. That attempt, the so-called "Track II",
is the subject of a separate Committee report and will be discussed
in section III below. A brief summary here will demonstrate the extreme
in American covert intervention in Chilean politics.
On September 15, 1970 -after Allende finished first
in the election but before the Chilean Congress had chosen between
him and the runner-up, Alessandri(4), -President Nixon met with Richard Helms,
the Director of Central Intelligence, Assistant to the President for
National Security Affairs Henry Kissinger and Attorney General John
Mitchell. Helms was directed to prevent Allende from taking power.
This effort was to be conducted without the knowledge of the Departments
of State and Defense or the Ambassador. Track II was never discussed
at a 40 Committee meeting.
It quickly became apparent to both White House and
CIA officials that a military coup was the only way to prevent Allende's
accession to power. To achieve that end, the CIA established contact
with several groups of military plotters and eventually passed three
weapons and tear gas to one group. The weapons were subsequently returned,
apparently unused. The CIA knew that the plans of all groups of plotters
began with the abduction of the constitutionalist Chief of Staff of
the Chilean Army, General Rene Schneider. The Committee has received
conflicting testimony about the extent of CIA/White House communication
and of White House officials' awareness of specific coup plans, but
there is no doubt that the U.S. government sought a military coup
On October 22, one group of plotters attempted to kidnap
Schneider. Schneider resisted, was shot, and subsequently died. The
CIA had been in touch with that group of plotters but a week earlier
had withdrawn its support for the group's specific plans.
The coup plotting collapsed and Allende was inaugurated
President. After his election, the CIA and U.S. military attaches
maintained contacts with the Chilean military for the purpose of collecting
intelligence. Whether those contacts strayed into encouraging the
Chilean military to move against Allende; or whether the Chilean military
-having been goadedtoward a coup during Track II- took encouragement
to act against the President from those contacts even though U.S.
officials did not intend to provide it: these are major questions
which are inherent in U.S. covert activities in the period of the
C. Covert Action
and Multinational Corporations.
In addition to providing information and cover to the CIA,
multinational corporations also participated in covert attempts to
influence Chilean politics. The following is a brief description of
the CIA's relationship with one such corporation in Chile in the period
1963-1973 -International Telephone and Telegraph, Inc. (ITT). Not
only is ITT the most prominent and public example, but a great deal
of information has been developed on the CIA/ITT relationship. This
summary is based on new information provided to this Committee and
on material previously made public by the Subcommittee on Multinational
Corporations of the Senate Foreign Relations Committee.
1. 1964 Chilean Elections
During the 1964 presidential campaign, representatives
of multinational corporations approached the CIA with a proposal to
provide campaign funds to the Christian Democratic Party. The CIA
decision not to accept such funds, as well as other CIA contacts with
multinational corporations during that campaign, are fully described
in Part III.
2. 1970 Chilean Elections: Phase I
In 1970, the U.S. government and several multinational
corporations were linked in opposition to the candidacy and later
the presidency of Salvador Allende. This CIA-multinational corporation
connection can be divided into two phases. Phase I comprised actions
taken by either the CIA or U.S.-based multinational companies at a
time when it was official U.S. policy not to support, even covertly,
any candidate or party in Chile. During this phase the Agency was,
however, authorized to engage in a covert "spoiling" operation designed
to defeat Salvador Allende. Phase II encompassed the relationship
between intelligence agencies and multinational corporations after
the September 1970 general election. During Phase II, the U.S. government
opposed Allende and supported opposition elements. The government
sought the cooperation of multinational corporations in this effort.
A number of multinational corporations were apprehensive
about the possibility that Allende would be elected President of Chile.
Allende's public announcements indicated his intention, if elected,
to nationalize basic industries and to bring under Chilean ownership
service industries such as the national telephone company, which was
at that time a subsidiary of ITT.
In 1964 Allende had been defeated, and it was widely
known both in Chile and among American multinational corporations
with significant interests in Chile that his opponents had been supported
by the United States government. John McCone, a former CIA Director
and a member of ITT's Board of Directors in 1970, knew of the significant
American government involvement in 1964 and of the offer of assistance
made at that time by American companies. Agency documents indicate
that McCone informed Harold Geneen, ITT's Board Chairman, of these
In 1970 leaders of American multinational corporations
with substantial interests in Chile, together with other American
citizens concerned about what might happen to Chile in the event of
an Allende victory, contacted U.S. government officials in order to
make their views known.
In July 1970, a CIA representative in Santiago met
with representatives of ITT and, in a discussion of the upcoming election,
indicated that Alessandri could use financial assistance. The Station
suggested the name of an individual who could be used as a secure
channel for getting these funds to the Alessandri campaign.
Shortly thereafter John McCone telephoned CIA Director
Richard Helms. As a result of this call, a meeting was arranged between
the Chairman of the Board of ITT and the Chief of the Western Hemisphere
Division of the CIA. Geneen offered to make available to the CIA a
substantial amount of money to be used in support of the Alessandri
campaign. In subsequent meetings ITT offered to make $1 million available
to the CIA. The CIA rejected the offer. The memorandum indicated further
that CIA's advice was sought with respect to an individual who might
serve as a conduit of ITT funds to the Alessandri campaign.
The CIA confirmed that the individual in question was
a reliable channel which could be used for getting funds to Alessandri.
A second channel of funds from ITT to a political party opposing Allende,
the National Party, was developed following CIA advice as to a secure
funding mechanism utilizing two CIA assets in Chile. These assets
were also receiving Agency funds in connection with the "spoiling"
During the period prior to the September election,
ITT representatives met frequently with CIA representatives both in
Chile and in the United States and CIA advised ITT as to ways in which
it might safely channel funds both to the Alessandri campaign and
to the National Party. CIA was kept informed of the extent and the
mechanism of the funding. Eventually at least $350,000 was passed
by ITT to this campaign. A roughly equal amount was passed by other
U.S. companies; the CIA learned of this funding but did not assist
3. Following the 1970 Chilean Elections:
Following the September 4 elections, the United States
government adopted a policy of economic pressure direct against Chile
and in this connection sought to enlist the influence of Geneen on
other American businessmen. Specifically, the State Department was
directed by the 40 Committee to contact American businesses having
interests in Chile to see if they could be induced to take actions
in accord with the American government's policy of economic pressure
on Chile. On September 29, the Chief of the Western Hemisphere Division
of the CIA met with a representative of ITT. The CIA official sought
to have ITT involved in a more active way in Chile. According to CIA
documents, ITT took note of the CIA presentation on economic warfare
but did not actively respond to it.
One institution in Chile which was used in a general
anti-Allende effort was the newspaper chain EL MERCURIO. Both the
United States government and ITT were funneling money into the hands
of individuals associated with the paper. That funding continued after
Allende was in office.
A great deal of testimony has been taken on the above
matters, initially before the Subcommittee on Multinational Corporations.
The degree of cooperation between the CIA and ITT in the period prior
to the September 1970 election raises an important question: while
the U.S. government was NOT supporting particular candidates or parties,
even covertly, was the CIA authorized to act on its own in advising
or assisting ITT in its covert financial support of the Alessandri
III. Major Covert
Action Programs and Their Effects.
This section outlines the major programs of covert
action undertaken by the United States in Chile, period by period.
In every instance, covert action was an instrument of United States
foreign policy, decided upon at the highest levels of the government.
Each subsection to follow sets forth that policy context. Without
it, it is impossible to understand the covert actions which were undertaken.
After a discussion of policy, each subsection elaborates the covert
action tactics employed in each case. Finally, the effect of each
major program is assessed.
The section begins with the first major United States
covert action in Chile -the 1964 presidential elections.
A. The 1964 Presidential Election.
1. United States Policy
The United States was involved on a massive scale in
the 1964 presidential election in Chile. The Special Group authorized
over three million dollars during the 1962-64 period to prevent the
election of a Socialist or Communist candidate. A total of nearly
four million dollars was spent on some fifteen covert action projects,
ranging from organizing slum dwellers to passing funds to political
The goal, broadly, was to prevent or minimize the influence
of Chilean Communists or Marxists in the government that would emerge
from the 1964 election. Consequently, the U.S, sought the most effective
way of opposing FRAP (Popular Action Front), an alliance of Chilean
Socialists, Communists, and several miniscule non-Marxist parties
of the left which backed the candidacy of Salvador Allende. Specifically,
the policy called for support of the Christian Democratic Party, the
Democratic Front (a coalition of rightist parties), and a variety
of anti-communist propaganda and organizing activities.
The groundwork for the election was laid early in 1961
by establishing operational relationships with key political parties
and by creating propaganda and organizational mechanisms capable of
influencing key sectors of the population. Projects that had been
conducted since the 1950's among peasants, slum dwellers, organized
labor, students and the media provided a basis for much of the pre-election
The main problem facing the United States two years
before the election was the selection of a party and/or candidate
to support against the leftist alliance. The CIA presented two papers
to the Special Group on April 2, 1962. One of these papers proposed
support for the Christian Democratic Party, while the other recommended
support of the Radical Party, a group to the right of the Christian
Democrats. The Special Group approved both proposals. Although this
strategy appears to have begun as an effort to hedge bets and support
two candidates for President, it evolved into a strategy designed
to support the Christian Democratic candidate.
On August 27, 1962, the Special Group approved the
use of a third-country funding channel and authorized $180,000 in
fiscal year 1969 for the Chilean Christian Democrats. The Kennedy
Administration had preferred a center-right government in Chile, consisting
of the Radicals on the right and the Christian Democrats in the center.
However, political events in Chile in 1962-1969 -principally the creation
of a right-wing alliance that included the Radical Party- precluded
such a coalition.
Consequently, throughout 1963, the United States funded
both the Christian Democrats and the right-wing coalition, the Democratic
After a by-election defeat in May 1964 destroyed the
Democratic Front, the U.S. threw its support fully behind the Christian
Democratic candidate. However, CIA funds continued to subsidize the
Radical Party candidate in order to enhance the Christian Democrats'
image as a moderate progressive party being attacked from the right
as well as the left.
2. Covert Action Techniques
Covert action during the 1964 campaign was composed
of two major elements. One was direct financial support of the Christian
Democratic campaign. The CIA underwrote slightly more than half of
the total cost of that campaign. After debate, the Special Group decided
not to inform the Christian Democratic candidate, Eduardo Frei, of
American covert support of his campaign. A number of intermediaries
were therefore mobilized to pass the money to the Christian Democrats.
In addition to the subsidies for the Christian Democratic
Party, the Special Group allocated funds to the Radical Party and
to private citizens' groups. In addition to support for political
parties, the CIA mounted a massive anti-communist propaganda campaign.
Extensive use was made of the press, radio, films, pamphlets, posters,
leaflets, direct mailings, paper streamers, and wall painting. It
was a "scare campaign," which relied heavily on images of Soviet tanks
and Cuban firing squads and was directed especially to women. Hundreds
of thousands of copies of the anti-communist pastoral letter of Pope
Pius XI were distributed by Christian Democratic organizations. They
carried the designation, "printed privately by citizens without political
affiliation, in order more broadly to disseminate its content." "Disinformation"
and "black propaganda" -material which purported to originate from
another source, such as the Chilean Communist Party- were used as
The propaganda campaign was enormous. During the first
week of intensive propaganda activity (the third week of June 1964),
a CIA-funded propaganda group produced twenty radio spots per day
in Santiago and on 44 provincial stations; twelve-minute news broadcasts
five time daily on three Santiago stations and 24 provincial outlets;
thousands of cartoons, and much paid press advertising. By the end
of June, the group produced 24 daily newscasts in Santiago and the
provinces, 26 weekly "commentary" programs, and distributed 3,000
posters daily. The CIA regards the anti-communist scare campaign as
the most effective activity undertaken by the U.S. on behalf of the
Christian Democratic candidate.
The propaganda campaign was conducted internationally
as well, and articles from abroad were "replayed" in Chile. Chilean
newspapers reported: an endorsement of Frei by the sister of a Latin
American leader, a public letter from a former president in exile
in the U.S., a "message from the women of Venezuela." and dire warnings
about an Allende victory from various figures in military governments
in Latin America.
The CIA ran political action operations independent
of the Christian Democrats' campaign in a number of important voter
blocks, including slum dwellers, peasants, organized labor and dissident
Socialists. Support was given to "anti-communist" members of the Radical
Party in their efforts to achieve positions of influence in the party
hierarchy, and to prevent the party from throwing its support behind
3. U.S. Government Organization for the 1964
To manage the election effort, an electoral committee was
established in Washington, consisting of the Assistant Secretary of
State for Inter-American Affairs, Thomas Mann; the Western Hemisphere
Division Chief of the CIA, Desmond Fitzgerald; Ralph Dungan and McGeorge
Bundy from the White House; and the Chief of the Western Hemi sphere
Division Branch Four, the branch that has jurisdiction over Chile.
This group was in close touch with the State Department Office of
Bolivian and Chilean Affairs. In Santiago there was a parallel Election
Committee that coordinated U.S. efforts. It included the Deputy Chief
of Mission, the CIA Chief of Station, and the heads of the Political
and Economic Sections, as well as the Ambassador. The Election Committee
in Washington coordinated lines to higher authority and to the field
and other agencies. No special task force was established. and the
CIA Station in Santiago was temporarily increased by only three officers.
4. Role of Multinational Corporations
A group of American businessmen in Chile offered to provide
one and a half million dollars to be administered and disbursed covertly
by the U.S. Government to prevent Allende from winning the 1964 presidential
election. This offer went to the 303 Committee (the name of the Special
Group after June 1964) which decided not to accept the offer. It decided
that offers from American business could not be accepted, that they
were neither a secure way nor an honorable way of doing business.
This decision was a declaration of policy which set the precedent
for refusing to accept such collaboration between CIA and private
business. However, CIA money represented as private money, was passed
to the Christian Democrats through a private businessman.
5. Role of the Chilean Military
On July 19, 1964, the Chilean Defense Council, which is
the equivalent of the U.S. Joint Chiefs of Staff, went to President
Alessandri to propose a coup d'etat if Allende won. This offer was
transmitted to the CIA Chief of Station, who told the Chilean Defense
Council through an intermediary that the United States was absolutely
opposed to a coup. On July 20, the Deputy Chief of Mission at the
U.S. Embassy was approached by a Chilean Air Force general who threatened
a coup if Allende won. The DCM reproached him for proposing a coup
d'etat and there was no further mention of it. Earlier, the CIA learned
that the Radical candidate for election, several other Chileans, and
an ex-politician from another Latin American country had met on June
2 to organize a rightist group called the Legion of Liberty. They
said this group would stage a coup d'etat if Allende won, or if Frei
won and sought a coalition government with the Communist Party. Two
of the Chileans at the meeting reported that some military officers
wanted to stage a coup d'etat before the election if the United States
Government would promise to support it. Those approaches were rebuffed
by the CIA.
6. Effects of Covert Action
A CIA study concludes that U.S. intervention enabled
Eduardo Frei to win a clear majority in the 1964 election, instead
of merely a plurality. What U.S. Government documents do not make
clear is why it was necessary to assure a majority, instead of accepting
the victory a plurality would have assured. CIA assistance enabled
the Christian Democratic Party to establish an extensive organization
at the neighborhood and village level. That may have lent grassroots
support for reformist efforts that the Frei government undertook over
the next several years.
Some of the propaganda and polling mechanisms developed
for use in 1964 were used repeatedly thereafter, in local and congressional
campaigns, during the 1970 presidential campaign, and throughout the
1970-1973 Allende presidency. Allegations of CIA involvement in the
campaign, and press allegations of CIA funding of the International
Development Foundation contributed to the U.S. reluctance in 1970
to undertake another massive pre-election effort.
Covert Action: 1964-1969.
During the years between the election of Christian
Democratic President Eduardo Frei in 1964 and the presidential election
campaign of 1970 the CIA conducted a variety of covert activities
in Chile. Operating within different sectors of society, these activities
were all intended to strengthen groups which supported President Frei
and opposed Marxist influences.
The CIA spent a total of almost $2 million on
covert action in Chile during this period, of which one-fourth was
covered by 40 Committee authorizations for specific major political
action efforts. The CIA conducted twenty covert action projects in
Chile during these years.
1. Covert Action Methods
In February 1965 the 303 Committee approved $175,000
for a short-term political action project to provide covert support
to selected candidates in the March 1965 congressional elections in
Chile. According to the CIA, twenty-two candidates were selected by
the Station and the Ambassador; nine were ejected. The operation helped
defeat up to 13 FRAP candidates who would otherwise have won congressional
Another election effort was authorized in July 1968,
in preparation for the March 1969 congressional election. The 40 Committee
authorized $350,000 for this effort, with the objective of strengthening
moderate political forces before the 1970 presidential election. The
program consisted of providing financial support to candidates, supporting
a splinter Socialist Party in order to attract votes away from Allende's
socialist party, propaganda activities, and assisting independent
groups. The CIA regarded the election effort as successful in meeting
its limited objective; ten of the twelve candidates selected for support
won their races, including one very unexpected victory. The support
provided to the dissident socialist group deprived the Socialist Party
of a minimum of seven congressional seats.
The 303 Committee also approved $30,000 in 1967 to
strengthen the right wing of the Radical Party.
A number of other political actions not requiring 303
Committee approval were conducted. The project to increase the effectiveness
and appeal of the Christian Democratic Party and to subsidize the
party during the 1964 elections continued into late 1965 or 1966,
as did a project to influence key members of the Socialist Party toward
orthodox European socialism and away from communism. During this period,
the CIA dealt with a Chilean official at the cabinet level, though
with scant result.
Covert action efforts were conducted during this period
to influence the political development of various sectors of Chilean
society. One project, conducted prior to the 1964 elections to strengthen
Christian Democratic support among peasants and slum dwellers, continued
to help train and organize "anti-communists" in these and other sectors
until public exposure of CIA funding in 1967 forced its termination.
A project to compete organizationally with the Marxists among the
urban poor of Santiago was initiated shortly after the 1964 election,
and was terminated in mid-1969 because the principal agent was unwilling
to prejudice the independent posture of the organization by using
it on a large scale to deliver votes in the 1969 and 1970 presidential
elections. In the mid-1960's, the CIA supported an anti-communist
women's group active in Chilean political and intellectual life.
Two projects worked within organized labor in Chile.
One, which began during the 1964 election period, was a labor action
project to combat the communist-dominated Central Unica de Trabajadores
Chilenos (CUTCh) and to support democratic labor groups. Another project
was conducted in the Catholic labor field.
Various CIA projects during this period supported media
efforts. One, begun in the early 1950's, operated wire services. Another,
which was an importaut part of the 1964 election effort, supported
anti-communist propaganda activities through wall posters attributed
to fictitious groups, leaflet campaigns, and public heckling.
A third project supported a right-wing weekly newspaper,
which was an instrument of the anti-Allende campaign during and for
a time after the 1970 election campaign. Another project funded an
asset who produced regular radio political commentary shows attacking
the political parties on the left and supporting CIA se1ected candidates.
After the Soviet invasion of Czechoslovakia, this asset organized
a march on the Soviet Embassy which led to major police action and
mass media coverage. Other assets funded under this project placed
CIA-inspired editorials almost daily in El Mercurio, Chile's major
newspaper and, after 1968, exerted substantial control over the content
of that paper's international news section.
The CIA also maintained covert liaison relations with
Chile's internal security and intelligence services, civilian and
military. The primary purpose of these arrangements was to enable
the Chilean services to assist CIA in information collection about
foreign targets. A subsidiary purpose of these relationships was to
collect information and meet the threat posed by communists and other
groups of the far left within Chile.
2. Effects Of Covert Action
The CIA's evaluations of the 1965 and 1969 election
projects suggest that those efforts were relatively successful in
achieving their immediate goals. On the other hand, the labor and
"community development" projects were deemed rather unsuccessful in
countering the growth of strong leftist sentiment and organization
among workers, peasants and slum dwellers. For instance, neither of
the labor projects was able to find a nucleus of legitimate Chilean
labor leaders to compete effectively with the communist-dominated
The propaganda projects probably had a substantial
cumulative effect over these years, both in helping to polarize public
opinion concerning the nature of the threat posed by communists and
other leftists, and in maintaining an extensive propaganda capability.
Propaganda mechanisms developed during the 1960's were ready to be
used in the 1970 election campaign. At the same time, however, in
a country where nationalism, "economic independence" and "anti-imperialism"
claimed almost universal support, the persistent allegations that
the Christian Democrats and other parties of the center and right
were linked to the CIA may have played a part in undercutting popular
support for them.
C. The 1970
Election: a "Spoiling" Campaign.
1. United States Policy and Covert Action
Early in 1969, President Nixon announced a new policy
toward Latin America, labelled by him "Action for Progress." It was
to replace the Alliance for Progress which the President characterized
as paternalistic and unrealistic. Instead, the United States was to
seek "mature partnership" with Latin American countries, emphasizing
trade and not aid. The reformist trappings of the Alliance were to
be dropped; the United States announced itself prepared to deal with
foreign governments pragmatically.
The United States program of covert action in
the 1970 Chilean elections reflected this less activist stance. Nevertheless,
that covert involvement was substantial. In March 1970, the 40 Committee
decided that the United States should not support any single candidate
in the election but should instead wage "spoiling" operations against
the Popular Unity coalition which supported the 'Marxist candidate,
Salvador Allende. In all, the CIA spent from $800,000 to $1,000,000
on covert action to affect the outcome of the 1970 Presidential election.
Of this amount about half was for major efforts approved by the 40
Committee. By CIA estimates, the Cubans provided about $350,000 to
Allende's campaign, with the Soviets adding an additional, undetermined
amount. The large-scale propaganda campaign which was undertaken by
the U.S. was similar to that of 1964: an Allende victory was equated
with violence and repression.
2. Policy Decisions
Discussions within the United States Government about
the 1970 elections began in the wake of the March 1969 Chilean congressional
elections. The CIA's involvement in those elections was regarded by
Washington as relatively successful, even though the Christian Democrats'
portion of the vote fell from 43 per cent in 1965 to 31 per cent in
1969. In June 1968 the 40 Committee had authorized $350,000 for that
effort, of which $200,000 actually was spent. Ten of the twelve CIA-supported
candidates were elected.
The 1970 election was discussed at a 40 Committee meeting
on April 17, 1969. It was suggested that something be done, and the
CIA representative noted that an election operation would not be effective
unless it were started early. But no action was taken at that time.
The 1970 Presidential race quickly turned into a three-way
contest. The conservative National Party, buoyed by the 1969 congressional
election results, supported 74-year-old, ex-President Jorge Alessandri.
Radomiro Tomic became the Christian Democratic nominee. Tomic, to
the left of President Frei, was unhappy about campaigning on the Frei
government's record and at one point made overtures to the Marxist
left. Salvador Allende was once again the candidate of the left, this
time formed into a Popular Unity coalition which inchided both Marxist
and non-Marxist parties. Allende's platform included nationalization
of the copper mines, accelerated agrarian reform, socialization of
major sectors of the economy, wage increases, and improved relations
with socialist and communist countries.
In December 1969, the Embassy and Station in Santiago
forwarded a proposal for an anti-Allende campaign. That proposal,
however, was withdrawn because of the State Department's qualms about
whether or not the United States should become involved at all. The
CIA felt it was not in a position to support Tomic actively because
ambassadorial "ground rules" of the previous few years had prevented
the CIA from dealing with the Christian Democrats. The Agency believed
that Alessandri, the apparent front runner, needed more than money;
he needed help in managing his campaign.
On March 25, 1970 the 40 Committee approved a joint
Embassy/CIA proposal recommending that "spoiling" operations -propaganda
and other activities- be undertaken by the CIA in an effort to prevent
an election victory by Allende. Direct support was not furnished to
either of his opponents. This first authorization was for $135,000,
with the possibility of more later. On June 18, 1970, the Ambassador,
Edward Korry, submitted a two-phase proposal to the Department of
State and the CIA for review. The first phase involved an increase
in support for the anti-Allende campaign. The second was a $500,000
contingency plan to influence the congressional vote in the event
of a vote between the candidates finishing first and second. In response
to State Department reluctance, the Ambassador responded by querying:
if Allende were to gain power, how would the U.S. respond to those
who asked what actions it had taken to prevent it ?
On June 27, the 40 Committee approved the increase
in funding for the anti-Allende "spoiling" operation by $300,000.
State Department officials at the meeting voted "yes" only relunctantly.
They spoke against the contingency plan, and a decision on it was
deferred pending the results of the September 4 election.
CIA officials met several times with officials from
ITT during July. The CIA turned down ITT's proposal to make funds
available for CIA transmission to Alessandri but did provide the company
advice on how to pass money to Alessandri. Some $350,000 of ITT money
was passed to Alessandri during the campaign -$250,000 to his campaign
and $100,000 to the National Party. About another $350,000 came from
other U.S. businesses. According to CIA documents, the Station Chief
informed the Ambassador that the CIA was advising ITT in funding the
Alessandri campaign, but not that the Station was aiding ITT in passing
money to the National Party.
The 40 Committee met again on August 7 but did not
give further consideration to supporting either Alessandri or Tomic.
As the anti-Allende campaign in Chile intensified, senior policy makers
turned to the issue of U.S. policy in the event of an Allende victory.
A study done in response to National Security Study Memorandum 97
was approved by the Interdepartmental Group (IG) on August 18. The
approved paper(5) set forth four options, one in the form
of a covert annex. The consensus of the Interdepartmental Group favored
maintaining minimal relations with Allende, but the Senior Review
Group deferred decision until after the elections.
Similarly, a paper with alternatives was circulated to 40 Committee
members on August 13, but no action resulted.
3. "Spoiling" Operations
The "spoiling" operations had two objectives: (1) undermining
communist efforts to bring about a coalition of leftist forces which
could gain control of the presidency in 1970; and (2) strengthening
non-Marxist political leaders and forces in Chile to order to develop
an effective alternative to the Popular Unity coalition in preparation
for the 1970 presidential election.
In working toward these objectives, the CIA made use
of half-a-dozen covert action projects. Those projects were focused
into an intensive propaganda campaign which made use of virtually
all media within Chile and which placed and replayed items in the
interna- tional press as well. Propaganda placements were achieved
through subsidizing right-wing women's and "civic action" groups.
A "scare campaign," using many of the same themes as the 1964 presidential
election program, equated an Allende victory with violence and Stalinist
repression. Unlike 1964, however, the 1970 operation did not involve
extensive public opinion polling, grass-roots organizing, or "community
development" efforts, nor, as mentioned, direct funding of any candidate.
In addition to the massive propaganda campaign, the
CIA's effort prior to the election included political action aimed
at splintering the non-Marxist Radical Party and reducing the number
of votes which it could deliver to the Popular Unity coalition's candidate.
Also, "black propaganda" -material purporting to be the product of
another group- was used in 1970 to sow dissent between Communists
and Socialists, and between the national labor confederation and the
Chilean Community Party.
The CIA's propaganda operation for the 1970 elections
made use of mechanisms that had been developed earlier. One mechanism
had been used extensively by the CIA during the March 1969 congressional
elections. During the 1970 campaign it produced hundreds of thousands
of high-quality printed pieces, ranging from posters and leaflets
to picture books, and carried out an extensive propaganda program
through many radio and press outlets. Other propaganda mechanisms
that were in place prior to the 1970 campaign included an editorial
support group that provided political features, editorials, and news
articles for radio and press placement; a service for placing anti-commimist
press and radio items; and three different news services.
There was a wide variety of propaganda products: a
newsletter mailed to approximately two thousand journalists, academicians,
politicians, and other opinion makers; a booklet showing what life
would be like if Allende won the presidential election; translation
and distribution of chronicles of opposition to the Soviet regime;
poster distribution and sign-painting teams. The sign-painting teams
had instructions to paint the slogan "su paredon" (your wall) on 2,000
walls, evoking an image of communist firing squads. The "scare campaign"
(campaa de terror) exploited the violence of the invasion of Czechoslovakia
with large photographs of Prague and of tanks in downtown Santiago.
Other posters resembling those used in 1964, portrayed Cuban political
prisoners before the firing squad, and warned that an Allende victory
would mean the end of religion and family life in Chile.
Still another project funded individual press assets.
One, who produced regular radio commentary shows on a nationwide hookup,
had been CIA funded since 1965 and continued to wage propaganda for
CIA during the Allende presidency. Other assets, all employees of
El Mercurio, enabled the Station to generate more than one editorial
per day based on CIA guidance. Access to El Mercuric had a multiplier
effect since its editorials were read throughout the country on various
national radio networks. Moreover, El Mercurio was one of the most
influential Latin American newspapers, particularly in business circles
abroad. A project which placed anti-communist press and radio items
was reported in 1970 to reach an audience of well over five million
The CIA funded only one political group during
the 1970 campaign, in an effort to reduce the number of Radical Party
votes for Allende.
The covert action "spoiling" efforts by the United
States during the 1970 campaign did not succeed: Allende won a plurality
in the September 4 election. Neverteless, the "spoiling" campaign
had several important effects.
First, the "scare campaign" contributed to the political
polarization and financial panic of the period. Themes developed during
the campaign were exploited even more intensely during the weeks following
September 4, in an effort to cause enough financial panic and political
instability to goad President Frei or the Chilean military into action.
Second, many of the assets involved in the anti-Allende
campaign became so visible that their usefulness was limited thereafter.
Several of them left Chile. When Allende took office, little was left
of the CIA-funded propaganda apparatus. Nevertheless, there remained
a nucleus sufficient to permit a vocal anti-Allende opposition to
function effectively even before the new President was inaugurated.
Action Between September 4 and October 24, 1970(6)
On September 4, 1970, Allende won a plurality in Chile's
presidential election, Since no candidate had received a majority
of the popular vote, the Chilean Constitution required that a joint
session of its Congress decide between the first- and second-place
finishers. The date set for the congressional session was October
The reaction in Washington to Allende's plurality victory
was immediate. The 40 Committee met on September 8 and 14 to discuss
what action should be taken prior to the October 24 congressional
vote. On September 15, President Nixon informed CIA Director Richard
Helms that an Allende regime in Chile would not be acceptable to the
United States and instructed the CIA to ploy a direct role in organizing
a military coup d'etat in Chile to prevent Allende's accession to
Following the September 14 meeting of the 40 Committee
and President Nixon's September 15 instruction to the CIA, U.S. Government
efforts to prevent Allende from assuming office proceeded on two tracks(7). Track I comprised all covert activities
approved by the 40 Committee, including political, economic and propaganda
activities. These activities were designed to induce Allende's opponents
in Chile to prevent his assumption of power, either through political
or military means. Track II activities in Chile were undertaken in
response to President Nixon's September 15 order and were directed
toward actively promoting and encouraging the Chilean military to
move against Allende.
1. Track I
A. POLITICAL ACTION
Initially both the 40 Committee and the CIA fastened
on the so-called Frei re-election gambit as a means of preventing
Allende's assumption of office. This gambit, which was considered
a constitutional solution to the Allende problem, consisted of inducing
enough congressional votes to elect Alessandri over Allende with the
understanding that Alessandri would immediately resign, thus paving
the way for a special election in which Frei would legally become
a candidate. At the September 14 meeting of the 40 Committee, the
Frei gam-bit was discussed, and the Committee authorized a contingency
fund of $250,000 for covert support of projects which Frei or his
associates deemed important. The funds were to be handled by Ambassador
Korry and used if it appeared that they would be needed by the moderate
faction of the Christian Deniocratic Party to swing congressional
votes to Alessandri. The only proposal for the funds which was discussed
was an attempt to bribe Chilean Congressmen to vote for Alessandri.
That quickly was seen to be unworkable, and the $250,000 was never
CIA's Track I aimed at bringing about conditions in
which the Frei gambit could take place. To do this, the CIA, at the
direction of the 40 Committee, mobilized on interlocking political
action, economic, and propaganda campaign. As part of its political
action program, the CIA attempted indirectly to induce President Frei
at least to consent to the gambit or, better yet assist in its implementation.
The Agency felt that pressures from those whose opinion and views
he valued -in combination with certain propaganda activities- represented
the only hope of converting Frei. In Europe and Latin America, influential
members of the Christian Democratic movement and the Catholic Church
were prompted either to visit or contact Frei. In spite of these efforts,
Frei refused to interfere with the constitutional process, and the
re-election gambit died.
B. PROPAGANDA CAMPAIGN
On September 14, the 40 Committee agreed that a propaganda
campaign should be undertaken by the CIA to focus on the damage that
would befall Chile under an Allende government. The campaign was to
include support for the Frei re-election gambit. According to a CIA
memorandum, the campaign sought to create concerns about Chile's future
if Allende were elected by the Congress; the propaganda was designed
to influence Frei, the Chilean elite, and the Chilean military.
The propaganda campaign included several components.
Predictions of economic collapse under Allende were replayed in CIA-generated
articles in European and Latin American newspapers. In response to
criticisms of El Mercurio by candidate Allende, the CIA, through its
covert action resources, orchestrated cables of support and protest
from foreign newspapers, a protest statement from an international
press association, and world press coverage of the association's protest.
In addition, journalists -agents and otherwise- traveled to Chile
for on-the-scene reporting. By September 28, the CIA had agents who
were journalists from ten different countries in or en route to Chile.
This group was supplemented by eight more journalists from five countries
under the direction of high-level agents who were, for the most part,
in managerial capacities in the media field.
Second, the CIA relied upon its own resources to generate
anti-Allende propaganda in Chile. These efforts included: support
for an underground press; placement of individual news items through
agents; financing a small newspaper; indirect subsidy of Patria y
Libertad a group fervently opposed to Allende, and its radio programs,
political advertisements and political rallies; and the direct mailing
of foreign news articles to Frei, his wife, selected leaders, and
the Chilean domestic press.
Third, special intelligence and "inside" briefings
were given to U.S. journalists, at their request. One Time cover story
was considered particularly noteworthy. According to CIA documents,
the Time correspondent in Chile apparently had accepted Allende's
protestations of moderation and constitutionality at face value. Briefings
requested by Time and provided by the CIA in Washington resulted in
a change in the basic thrust of the Time story on Allende's September
4 victory and in the timing of that story.
A few statistics convey the magnitude of the
CIA's propaganda campaign mounted during the six-week interim period
in the Latin American and European media. According to the CIA, partial
returns showed that 726 articles, broadcasts, editorials, and similar
items directlv resulted from Agency activity. The Agency had no way
to measure the scope of the multiplier effect -i.e., how much its
"induced" news focused media interest on the Chilean issues and stimulated
additional coverage- but concluded that its contribution was both
substantial and significant.
C. ECONOMIC PRESSURES
On September 29, 1970, the 40 Committee met. It was
agreed that the Frei gambit had been overtaken by events and was dead.
The "second-best option" -the cabinet resigning and being replaced
with a military cabinet- was also deemed dead. The point was then
made that there would probably be no military action unless economic
pressures could be brought to bear on Chile. It was agreed that an
attempt would be made to have American business take steps in line
with the U.S. government's desire for inimediate economic action.
The economic offensive against Chile, undertaken as
a part of Track I, was intended to demonstrate the foreign economic
reaction to Allende's accession to power, as well as to preview the
future consequences of his regime. Generally, the 40 Committee approved
cutting off all credits, pressuring firms to curtail investment in
Chile and approaching other nations to cooperate in this venture.
These actions of the 40 Committee, and the establishment
of an interagency working group to coordinate overt economic activities
towards Chile (composed of the CIA's Western Hemisphere Division Chief
and representatives from State, the NSC, and Treasury), adversely
affected the Chilean economy; a major financial panic ensued. However,
U.S. efforts to generate an economic crisis did not have the desired
impact on the October 24 vote, nor did they stimulate a military intervention
to prevent Allende's accession.
2. Track II
As previously noted, U.S. efforts to prevent Aliende's
assumption of office operated on two tracks between September 4 and
October 24. Track II was initiated by President Nixon on September
15 when he instructed the CIA to play a direct role in organizing
a military coup d'etat in Chile. The Agency was to take this action
without coordination with the Departments of State or Defense and
without informing the U.S. Ambassador. While coup possibilities in
general and other means of seeking to prevent Allende's accession
to power were explored by the 40 Committee throughout this period,
the 40 Committee never discussed this direct CIA role. In practice,
the Agency was to report, both for informational and approval purposes,
to the White House.
Between October 5 and October 20 1970, the CIA made
21 contacts with key military and Carabinero (police) officials in
Chile. Those Chileans who were inclined to stage a coup were given
assurances of strong support at the highest levels of the U.S. Government
both before and after a coup.
Tracks I and II did, in fact, move together in the
month after September 15. Ambassador Korry, who was formally excluded
from Track II, was authorized to encourage a military coup, provided
Frei concurred in that solution. At the 40 Committee meeting on September
14, he and other "appropriate members of the Embassy mission" were
authorized to intensify their contacts with Chilean military officers
to assess their willingness to support the "Frei gambit." The Ambassador
was also authorized to make his contacts in the Chilean military aware
that if Allende were seated, the military could expect no further
military assistance (MAP) from the United States. Later, Korry was
authorized to inform the Chilean military that all MAP and military
sales were being held in abeyance pending the outcome of the congressional
election on October 24.
The essential difference between Tracks I and II, as
evidenced by instructions to Ambassador Korry during this period,
was not that Track II was coup-oriented and Track I was not. Both
had this objective in mind. There were two differences between the
two tracks: Track I was contingent on at least the acquiescence of
Frei; and the CIA's Track II direct contacts with the Chilean military,
and its active promotion and support for a coup, were to be known
only to a small group of individuals in the White House and the CIA.
Despite these efforts, Track II proved to be no more
successful than Track I in preventing Allende's assumption of office.
Although certain elements within the Chilean army were actively involved
in coup plotting, the plans of the dissident Chileans never got off
the ground. A rather disorganized coup attempt did begin on October
22, but aborted following the shooting of General Schneider.
On October 24, 1970, Salvador Allende was confirmed
as President by Chilean Congress. On November 3, he was inaugurated.
U.S. efforts, both overt and covert, to prevent his assumption of
office had failed.
E. Covert Action
During the Allende Years, 1970-1973
1. United States Policy and Covert Action
In his 1971 State of the World Message, released February
25, 1971, President Nixon announced: "We are prepared to have the
kind of relationship with the Chilean government that it is prepared
to have with us." This public articulation of American policy followed
internal discussions during the NSSM 97 exercise. Charles Meyer, Assistant
Secretary of State for Inter-American Affairs, elaborated that "correct
but minimal" line in his 1973 testimony before the Senate Foreign
Relations Subcommittee on Multinational Corporations:
Mr. MEYER. The policy of the Government, Mr. Chairman,
was that there would be no intervention in the political affairs of
Chile. We were consistent in that we financed no candidates, no political
parties before or September 8, or September 4... The policy of the
United States was that Chile's problem was a Chilean problem, to be
settled by Chile. As the President stated in October of 1969, "We
will deal with governments as they are." (Multinational Corporations
and United States Foreign Policy, Hearing before the Subcommittee
on Multinational Corporations of the Committee on Foreign Relations,
United States Senate, Ninety Third Congress Washington: GPO, 1973
Part 1, p. 402).
Yet public pronouncements not withstanding, after Allende's
inauguration the 40 Committee approved a total of over seven million
dollars in covert support to opposition groups in Chile. That money
also funded and extensive anti-Allende propaganda campaign. Of the
total authorized by the 40 Committee, over six million dollars was
spent during the Allende presidency and $84,000 was expended shortly
thereafter for commitments made before the coup. The total amount
spent on covert action in Chile during 1970-73 was approximately $7
million, including project funds not requiring 40 Committee approval.
Broadly speaking, U.S. policy sought to maximise pressures
on the Allende government to prevent its conso1idation and limit its
ability to implement policies contrary to U.S. and hemispheric interests.
That objective was stated clearly in National Security Decision Memorandum
(NSDM) 93, issued in early November1970. Other governments were encouraged
to adopt similar policies, and the U.S increased efforts to maintain
close relations with friendly military leaders in the hemisphere.
The "cool but correct" overt posture denied the Allende government
a handy foreign enemy to use as a domestic and international rallying
point. At the same time, covert action was one reflection of the concerns
felt in Washington: the desire to frustrate Allende's experiment in
the Western Hemisphere and thus limit its attractiveness as a model;
the fear that a Chile under Allende might harbor subversives from
other Latin American countries; and the determination to sustain the
principles of compensation for U.S. firms nationalized by the Allende
Henry Kissinger outlined several of these concerns
in a background briefing to the press on September 16, 1970, in the
wake of Allende's election plurality:
Now it is fairly easy for one to predict that if Allende
wins, there is a good chance that he will establish over a period
of years some sort of communist government. In that case you would
have one not on an island off the coast which has not a traditional
relationship and impact on Latin America, but in a major Latin American
country you would have a Communist government, joining, for example,
Argentina, which is already deeply divided, along a long frontier;
joining Peru, which has already been heading in directions that have
been difficult to deal with, and joining Bolivia, which has also gone
in a more leftist, anti-U.S. direction, even without any of these
So I don't think we should delude ourselves that an
Allende takeover in Chile would not present massive problems for us,
and for democratic forces and for pro-U.S. forces in Latin America,
and indeed to the whole Western Hemisphere. What would happen to the
Western Hemisphere Defense Board, or to the Organization of America
States, and so forth, in extremely problematical... It is one of those
situations which is not too happu for American interests ( Multinational
Corporations and United States Foreign Policy, Hearings before the
Subcommittee on Multinational Corporations of the Committee on Foreign
Relations, United States Senate, Ninety-Third Congress, Washington:
GPO, 1973, Part2, pp. 542-3)
As the discussion of National Intelligence Estimate
in Section IV of this paper makes clear the more extreme fears about
tbe effects of Allende's election were ill-founded; there never was
a significant threat of a Soviet military presence; the "export" of
Allende's revolution was limited, and its value as a model more restricted
still; and Allende was little more hospitable to activist exiles from
other Latin American countries than his predecesor has been. Nevertheless,
those fears, often exagerated, appear to have activated officials
The "cool but correct" public posture and extensive
clandestine activities formed two-thirds of a triad of official actions.
The third was economic pressure, both overt and covert, intended to
exacerbate the difficulties felt by Chile's economy. The United States
cut off economic aid, denied credits, and made efforts -partially
successful- to enlist the cooperation of international financial institutions
and private firms in tightening the economic "squeeze" on Chile. That
international "squeeze" intensified the effect of the economic measures
taken by opposition groups within Chile, particularly the crippling
strikes in the mining and transportation sectors. For_instance the
combined effect of foreign credit squeeze and domestic copper strikes
on Chile's foreign exchange position was devastating. Throughout the
Allende years, the U.S. maintained close contact with the Chilean
armed forces, both through the CIA and through U.S. military attachs.
The basic purpose of these contacts was the gathering of intelligence,
to detect any inclination within the Chilean armed forces to intervene.
But U.S. officials also were instructed to seek influence within the
Chilean military and to be generally supportive of its activities
without appearing to promise U.S. support for military efforts which
might be premature. For instance, in November 1971, the Station was
instructed to put the U.S. government in a position to take future
advantage of either a political or a military solution to the Chilean
dilemma, depending on developments within the country and the latter's
impact on the military themselves.
There is no hard evidence of direct U.S. assistance
to the coup, despite frequent allegations of such aid. Rather the
United States - by its previous actions during Track II, its existing
general posture of opposition to Allende, and the nature of its contacts
with the Chilean military- probably gave the impression that it would
not look with disfavor on a military coup. And U.S. officials in the
years before 1973 may not always have succeeded in walking the thin
line between monitoring indigenous coup plotting and actually stimulating
2. Techniques of Covert Action
A. SUPPORT FOR OPPOSITION POLITICAL PARTIES
More than half of the 40 Committee-approved funds supported
the opposition political parties: the Christian Democratic Party (PDC),
the National Party (PN), and several splinter groups. Nearly half-a-
million dollars was channeled to splinter groups during the Allende
years. Early in 1971 CIA funds enabled the PDC and PN to purchase
their own radio stations and newspapers. All opposition parties were
passed money prior to the April 1971 municipal elections and a congressional
by-election in July. In November 1971 funds were approved to strengthen
the PDC, PN, and splinter groups. An effort was also made to induce
a breakup of the UP coalition. CIA funds supported the opposition
parties in three by-elections in 1972, and in the March 1973 congressional
election. Money provided to political parties not only supported opposition
candidates in the various elections, but enabled the parties to maintain
an anti-government campaign throughout the Allende years, urging citizens
to demonstrate their opposition in a variety of ways.
Throughout the Allende years, the CIA worked to forge
a united opposition. The significance of this effort can be gauged
by noting that the two main elements opposing the Popular Unity government
were the National Party, which was conservative, and the reformist
Christian Democratic Party, many of whose members had supported the
major policies of the new government.
B. PROPAGANDA AND SUPPORT FOR OPPOSITION MEDIA
Besides funding political parties, the 40 Committee
approved large amounts to sustain opposition media and thus to maintain
a hard-hitting propaganda campaign. The CIA spent $1.5 million in
support of El Mercurio, the country's largest newspaper and the most
important channel for anti-Allende propaganda. According to CIA documents,
these efforts played a significant role in setting the stage for the
military coup of September 11, 1973.
The 40 Committee approvals in 1971 and early 1972 for
subsidizing El Mercurio were based on reports that the Chi1ean government
was trying to close the El Mercurio chain. In fact, the press remained
free throughout the Allende period, despite attempts to harass and
financially damage opposition media. The alarming field reports on
which the 40 Committee decisions were based are at some variance with
intelligence community analyses. For example, an August 1971 National
Intelligence Estimate -nine months after Allende took power- maintained
that the government was attempting to dominate the press but commented
that El Mercurio had managed to retain its independence. Yet one month
later the 40 Committee voted $700,000 to keep El Mercurio afloat.
And CIA documents in 1973 acknowledge that El Mercurio and, to a 1esser
extent, the papers belonging to opposition political parties, were
the only publications under pressure from the government.
The freedom of the press issue was the single most
important theme in the international propaganda campaign against Allende.
Among the books and pamphlets produced by the major opposition research
organization was one which appeared in October 1972 at the time of
the Inter-American Press Association (IAPA) meeting in Santiago. As
in the 1970 period, the IAPA listed Chile as a country in which freedom
of the press was threatened.
The CIA's major propaganda project funded a wide range
of propaganda activities. It produced several magazines with national
circulations and a large number of books and special studies. It developed
material for placement in the El Mercurio chain (amounting to a total
daily circulation of over 300,000); opposition party newspapers; two
weekly newspapers; all radio stations controlled by opposition parties;
and on several regular television shows on three channels. El Mercurio
was a major propaganda channel during 1970-73, as it had been during
the l970 elections and pre-inaugura tion period. The CIA also funded
progressively a greater portion -over 75 percent in 1973- of an opposition
research organization. A steady flow of economic and technical material
went to opposition parties and private sector groups. Many of the
bills prepared by opposition parliamentarians were actually drafted
by personnel of the research organization.
C. SUPPORT FOR PRIVATE SECTOR ORGANIZATIONS
The Committee has taken testimony that 40 Committee-approved
funds were used to help maintain and strengthen the democratic opposition
in Chile. It has been stressed that CIA had nothing to do with the
truck owners' strike and the disorders that led to the coup. The question
of CIA support to Chilean private sector groups is a matter of considerable
concern because of the violent tactics used by several of these groups
in their efforts to bring about military intervention.
The issue of whether to support private groups was
debated within the Embassy and the 40 Committee throughout late 1972
and 1973. In September 1972, the 40 Committee authorized $24,000 for
"emergency support" of a powerful bussinesmen's organization, but
decided against financial support to other private sector organizations
because of their possible involvement in anti-government strikes.
In October 1972, the Committee approved $100,000 for three private
sector organizations -the bussinesmen's organization, associations
of large and small bussinesmen and an umbrella organization of opposition
groups- as part of a $1.5 million approval for support to opposition
groups. According to ~ CIA testimony, this limited financial support
to the private sector was confined to specific activities in support
of the opposition electoral campaign, such as voter registration drives
and a get-out-the-vote campaign.
After the March 1973 elections, in which opposition
forces failed to achieve the two thirds majority in the Senate that
might have permitted them to impeach Allende and hold new elections,
the U.S. Government re-assessed its objectives. There seemed little
likelihood of a successful military coup, but there did appear to
be a possibility that increasing unrest in the entire country might
induce the military to re-enter the Allende government in order to
restore order. Various proposals for supporting private sector groups
were examined in the context, but the Ambassador and the Department
of State remained opposed to any such support because of the increasingly
high level of tension in Chile, and because the groups were known
to hope for military intervention.
Nevertheless, on August 20, the 40 Committee approved
a proposal granting $1 million to opposition parties and private sector
groups, with passage of the funds contingent on the concurrence of
the Ambassador, Nathaniel Davis, and the Department of State. None
of these funds were passed to private sector groups before the military
coup three weeks later. While these deliberations were taking place,
the CIA Station asked Headquarters to take soundings to determire
whether maximum support could he provided to the opposition, including
groups like the truck owners. The Ambassador agreed that these soundings
should be taken, but opposed a specific proposal for $25,000, of support
to the strikers. There was a CIA recommendation for support to the
truck owners, but it is unclear whether or not that proposal came
before the 40 Committee. On August 25 -16 days before the coup- Headquarters
advised the Station that soundings were being taken, but the CIA Station's
proposal was never approved.
The pattern of U.S. deliberations suggests a careful
distinction between supporting the opposition parties and funding
private sector groups trying to bring about a military coup. However,
given turbulent conditions in Chile, the interconnections among the
CIA-sup- ported political parties, the various militant trade associations
(gremios) and paramilitary groups prone to terrorism and violent disruption
were many. The CIA was aware that links between these groups and the
political parties made clear distinctions difficult.
The most prominent of the right-wing paramilitary groups
was Patria y Libertad (Fatherland and Liberty), which formed following
Allende's Septamber 4 election, during so-called Track II. The CIA
provided Patria y Libertad with $38,000 through a third party during
the Track II period, in an effort to create tension and a possible
pretext for intervention by the Chilean militarv. After Allende took
office, the CIA occasionally provided the group small sums through
third parties for demonstrations or specific propaganda activity.
Those disbursements, about seven thousand dollars in total, ended
in 1971. It is possible that CIA funds given to political parties
reached Patria y Libertad and a similar group, the Rolando Matus Brigade,
given the close ties between the parties and these organizations.
Throughout the Allende presidency, Patria y Libertad
was the most strident voice opposing all compromise efforts by Christian
Democrats, calling for resistance to government measures, and urging
insurrection in the armed forces. Its tactics came to parallel those
of the Movement of the Revolutionary Left (MIR) at the opposite end
of the political spectrum. Patria y Libertad forces marched at opposition
rallies dressed in full riot gear. During the October 1972 national
truckers' strike, Patria y Libertad was reported to strew "miguelitos"
(three-pronged steel tacks) on highways in order to help bring the
country's transportation system to a halt. On July 13, 1973, Patria
y Libertad placed a statement in a Santiago newspaper claiming responsibilitv
for an abortive coup on June 29, and on July 17, Patria y Libertad
leader Roberto Thieme announced that his groups would unleash a total
armed offensive to overthrow the government.
With regard to the truckers' strike, two facts are
undisputed. First, the 40 Committee did not approve any funds to be
given directly to the strikers. Second, all observers agree that the
two lengthy strikes (the second lasted from July 13, 1973 until the
September 11 coup) could not have been maintained on the basis of
union funds, It remains unclear whether or to what extent CIA funds
passed to opposition parties may have been siphoned off to support
strikes. It is clear that anti-government strikers were actively supported
by several of the private sector groups which received CIA funds.
There were extensive links between these private sector organizations
and the groups which coordinated and implemented the strikes. In November
1972 the CIA learned that one private sector group had passed $2,800
directly to strikers, contrary to the Agency's ground rules. The CIA
rebuked the group but nevertheless passed it additional money the
3. United States Economic Policies Toward
A. COVERT ACTION AND ECONOMIC PRESSURE
The policy response of the U. S. Government to the
Allende regime consisted of an interweaving of diplomatic, covert,
military, and economic strands. Economic pressure exorted by the United
States formed an important part of the mix. It is impossible to understand
the effect of covert action without knowing the economic pressure
which accompanied it.
B. CHILEAN ECONOMIC DEPENDENCE
The demise of the brief Allende experiment in 1970-73
came as the cumulative result of many factors -external and internal.
The academic debate as to whether the external or the internal factors
weighed more heavely is endless. This is not the place to repeat it.
A brief description of the Chilean economy will suffice to suggest
the probable effect on Chile of U.S. economic actions and the possible
interactions between economic and political factors in causing Allende's
Chile's export-oriented economy remained, in 1970,
dependent for foreign exchange earnings on a single product -copper-
much as it had depended on nitrate in the 19th century. However, the
Allende Administration consciously adopted a policy of beginning to
diversify Chile's trade by expanding ties with Great Britain, the
rest of the Western European countries, and Japan, and by initiating
minor trade agreements with the Eastern Bloc countries.
Nevertheless, Chilean economic dependence on the United
States remained a significant factor during the period of the Allende
government. In 1970, U.S. direct private investment in Chile stood
at $1.1 billion, out of an estimated total foreign investment of $1.672
billion. U.S. and foreign corporations played a large part in almost
all of the critical areas of the Chilean economy. Furthermore, United
States corporations controlled the production of 80 percent of Chile's
copper, which in 1970 accounted for four-fifths of Chile's foreign
exchange earnings. Hence, the Allende government faced a situation
in which decisions of foreign corporations had significant ramifications
throughout the Chilean economy.
Chile had accumulated a large foreign debt during the
Frei government, much of it contracted with international and private
banks. Chile was able, through the Paris Club, to re-negotiate $800
million in debts to foreign governments and medium-term debt to major
U.S. banks in early 1972. It also obtained in 1972 some $600 million
in credits and loans from socialist bloc countries and Western sources;
however, a study done by the Inter-American Committee on the Alliance
for Progress, concluded that these credits were "tied to specific
development projects and [could] be used only gradually".
Even with a conscious policy of diversifying its foreign
trading patterns, in 1970 Chile continued to depend on the import
of essential replacement parts from United States firms. The availability
of short-term United States commercial credits dropped from around
$300 million during the Frei years to around $30 million in 1972.
The drop, a result of combined economic and political factors, seriously
affected the Allende government's ability to purchase replacement
parts and machinery for the most critical sectors of the economy:
copper, steel, electricity, petroleum, and transport.
By late 1972, the Chilean Ministry of the Economy estimated
that almost one-third of the diesel trucks at Chuquicamata Copper
Mine, 30 percent of the privately owned city buses, 21 percent of
all taxis, and 33 percent of state-owned buses in Chile could not
operate because of the lack of spare parts or tires. In overall terms,
the value of United States machinery and transport equipment exported
to Chile by U.S. firms declined from $152.6 million in 1970 to $110
million in 1971.
C. THE INSTRUMENTS OF UNITED STATES FOREIGN ECONOMIC
POLICY TOWARD ALLENDE.
United States foreign economic policy toward Allende's
government was articulated at the highest levels of the U.S. government,
and coordinated by interagency task forces. The policy was clearly
framed during the Track II period. Richard Helm's notes from his September
15, 1970, meeting with President Nixon, the meeting which initiated
Track II, contain the indication: "Make the economy scream". A week
later Ambassador Korry reported telling Frei, through his Defense
Minister, that "not a nut or bolt would be allowed to reach Chile
While the Chilean economy was vulnerable to U.S. pressures
over a period of a few years, it was not in the short run. That judgement
was clearly made by intelligence analysts in the government, but its
implications seem not to have affected policy-making in September
and October of 1970. A February 1971 Intelligence Memorandum noted
that Chile was not immediately vulnerable to investment, trade or
monetary sanctions imposed by the United States. In fact, the imposition
of sanctions, while it would hurt Chile eventually, was seen to carry
one possible short-run benefit -it would have given Chile a justification
for renouncing nearly a billion dollars debt to the United States.
The policy of economic pressure -articulated in NSDM
93 of November 1970- was to be implemented through several means.
All new bilateral foreign assistance was to be stopped, although disbursements
would continue under loans made previously. The U.S. would use its
predominant position in international financial institutions to dry
up the flow of new multilateral credit or other financial assistance.
To the extent possible, financial assistance or guarantees to U.S.
private investment in Chile would be ended, and U.S. businesses would
be made aware of the government's concern and its restrictive policies.
The bare figures tell the story. U.S. bilateral aid,
$35 million in 1969, was $1.5 million in 1971. (See Table II.) U.S.
Export-Import Bank credits, which had totalled $234 million in 1967
and $29 million in 1969, dropped to zero in 1971. Loans from the multilateral
Interamerican Development Bank (IDB), in which the U.S. held what
amounted to a veto, had totalled $46 million in 1970; they fell to
$2 million in 1972 (United States A.I.D. figures). The only new IDB
loans made to Chile during the Allende period were two small loans
to Chilean universities made in January 1971(8). Similarly, the World Bank made no new loans
to Chile between 1970 and 1973. However, the International Monetary
Fund extended Chile approximately $90 million during 1971 and 1972
to assist with foreign exchange difficulties.