Sidebar: Operation Condor

Report from CIA's 1970 Anti-Allende Task Force

FBI Report on Chile's DINA

CIA HQ to Santiago station: Overthrow Allende

U.S. Intelligence Fingered Charles Horman

U.S. Responsibility for the Coup in Chile

Daniel Brandt

Author's note, November 28, 1998:

Recent news reports tell us that some U.S. officials want to pursue an extradition request for Pinochet, because of the junta's role in the assassination of Orlando Letelier in Washington DC, in September 1976. Other reports indicate that if Spain ends up pursuing its case against Pinochet, their investigators will come to the U.S. and petition officials for CIA and other documents about Chile.

Meanwhile, only an occasional news report in the U.S. even bothers to acknowledge our role in Chilean affairs. Pinochet took tea with his friend Margaret Thatcher just before he was arrested in Britain, and it's safe to assume that Henry Kissinger will get involved if this thing goes much farther. As Henry's Rolodex spins, so spins our media.

It will be interesting to see how major U.S. players come down on the issue of the globalization of human rights, as personified so dramatically in the current Pinochet affair. But it will be much more instructive if one has a bit more background on the U.S. role in Chile.

Accordingly, I dug out a paper I wrote in 1975,1 and keyed in two sections. The first section is on U.S. economic policy in Chile, and the second is on U.S. covert activities in Chile. They may seem disjointed, having been ripped from the context of the paper, but that context is unimportant today. Moreover, it was contrived primarily to justify the research I wanted to do for these sections.

Note that Michael Townley is mentioned at one point, and this was nearly a year before he became a key participant in the Letelier assassination. Townley's activities were noted in one tiny publication more than two years before the assassination, and in several additional tiny publications one year before. The truth was out there, but you needed a shovel to find it.

What was the major media's response right after the assassination? Predictable. The FBI started searching for a jealous mistress, and Newsweek's Periscope column announced authoritatively that the CIA "has concluded that the Chilean secret police were not involved in the death of Orlando Letelier." The New York Times editorialized that it was an open question whether the assassination had been committed "by the government of Chile or by leftist extremists who will stop at nothing to heap discredit" on the Chilean junta. Business as usual for our major media.

If Pinochet goes to trial in Spain, expect more of the same.

U.S. Responsibility for the Coup in Chile

I. U.S. Economic Policy in Chile

At the end of 1968, according to Department of Commerce data, U.S. corporate holdings in Chile amounted to $964 million. During that year, U.S. corporations averaged 17.4 percent profit on invested capital, and mining enterprises alone turned an average of 26 percent.2 Copper companies, notably Anaconda and Kennecott, accounted for 28 percent of U.S. holdings, but ITT had the largest holding of any single corporation with an investment of $200 million.3 Chilean copper accounts for 21 percent of the world's proven copper reserves, and demand is expected to increase. Laura Allende recently stated in San Francisco that "over a 42 year period the copper companies earned $420 billion on original investments totalling $35 million."4

[Cartoon] Before Allende's election, ITT channeled $700,000 to Allende's opponent Jorge Allesandri, and used the advice of the CIA on how to channel this money safely.5 They also compiled a list of leading U.S. corporations in Chile in February, 1970, and through John McCone (CIA director, 1961-1965, and now on the ITT board), ITT president Harold Geneen offered $1 million to the CIA to help defeat Allende.6

ITT was not the only participant at this early stage. ITT vice-president William R. Merriam testified that he assembled a committee of representatives of U.S. corporations in February, 1971 to work out an anti-Allende strategy.7 The "united front" began after Allende's election, and included Treasury Secretary John Connally and his assistant John Hennessy (a man with solid Wall Street connections).8 But there is evidence that other corporations were independently conspiracy-minded at an earlier date:

The weight of evidence available from the ITT papers and other sources indicates that Anaconda helped finance a campaign of disruption before the election, and that it also joined with Kennecott in what was effectively sabotage in the copper mines. Ralston Purina cut back production sharply. NIBSA, the leading producers of brass valves and other fittings, a subsidiary of Northern Indiana Brass Company, shut down its plant and laid off 280 workers the day before Allende's inauguration. A representative of the parent company, Northern Indiana Brass, was accused of suggesting an "Indonesian solution" (killing all communists) for Chile. Purina, a subsidiary of Ralston Purina and the country's largest producer of animal feed, also cut production sharply.9
After Allende's election in 1970, commercial banks, including Chase Manhattan, Chemical, First National City, Manufacturers Hanover, and Morgan Guaranty, cancelled credits to Chile.10 In 1972, Kennecott tied up Chilean copper exports with lawsuits in France, Sweden, Italy, and Germany, forcing Chile to spend $150,000 in legal expenses.11 The campaign continued even after Allende agreed, in February 1972, to pay a Kennecott subsidiary $84 million and made a down payment of $5.7 million.12

Immediately after the 1973 coup, Manufacturers Hanover loaned $44 million to Chile, and ten other U.S. and two Canadian banks loaned $150 million.13 In 1975 a group of banks that included First National City, Bank of America, Morgan Guaranty, and Chemical gave a $70 million renewable credit to Chile.14 Ford, GM, Chrysler, and six other firms placed bids for a massive reorganization and expansion of the Chilean auto assembly industry,15 and ITT gave $25 million for a planned science research center.16 All 323 firms that were nationalized constitutionally under Allende have been returned to private ownership.17 ITT, which asked for $95 million from Allende, has recovered $235 million from the junta.18

In addition to multinationals and commercial banks, the U.S. government also involved itself in the economic boycott. The involvement of the government was partly a result of massive pressure from ITT, which had access to Kissinger, William Rogers, the CIA, and the U.S. Ambassador in Chile.19 Geneen met with CIA Chief of Clandestine Operations for the Western Hemisphere Division William V. Broe on July 16, 1970,20 and with Nixon's assistant for international affairs Peter Peterson in September, 1971.21 Merriam visited the State Department 25 times and talked with Kissinger and his aides for a year, according to his testimony,22 and on October 1, 1971 wrote to Peterson suggesting that the administration halt economic aid to Chile.23

Nixon's new economic policy, introduced in August, 1971, shifted responsibility for the formulation of economic policy toward Chile from the State Department to the Treasury Department. In addition to Connally and his assistant John Hennessy (formerly general manager of the First National City Bank in Lima and LaPaz), other Treasury officials in on the anti-Chile action were: John R. Petty, formerly a vice-president of Chase Manhattan Bank and now a partner of Lehman Brothers; Paul A. Volcker, formerly an executive of Chase Manhattan; Charls E. Walker, formerly special assistant to the president of the Republic National Bank of Dallas and former executive vice-president and chief lobbyist of the American Bankers Association.24 By October, 1971, the State Department also took the hard Treasury line. In a closed meeting with representatives of ITT, Ford, Anaconda, Ralston Purina, First National City bank, and Bank of America, William Rogers stated that the U.S. would cut off aid unless Chile provided prompt compensation.25

After 1970, the World Bank, Inter-American Development Bank, Agency for International Development, and the Export-Import Bank either cut programs in Chile or cancelled credits.26 The Allende government continued to pay off old loans from the IDB and the World Bank, but neither made new loans to Chile. The only exceptions were IDB loans to Catholic University and Austral University; both universities were strongholds of anti-Allende activity.27 A week before the coup the U.S. refused credits for Chile's purchase of 300,000 tons of wheat.28 Chile had been importing half of the amount annually for several years prior to 1970, but in 1971 and 1972 U.S. exports to Chile declined to negligible amounts.29 On October 5, 1973 the junta was granted 120,000 tons of wheat credits.30 AID, IDB, International Monetary Fund, and the World Bank were all involved in extensive refinancing and guarantees of the Chilean debt by early 1975.31

Chile's foreign-exchange reserves fell from $335 million in November, 1970 to $100 million by the end of 1971, and in August, 1972, Chile became the first country in the International Monetary Fund to completely exhaust its Special Drawing Rights.32 By this time Chile's imports had declined, and the percentage of total imports from the U.S. dropped from 40 percent to about 15 percent.33 In December, 1972, Allende spoke to the U.N. General Assembly and complained of Chile's inability to purchase food, medicine, equipment, and spare parts.34 Almost one-third of the privately-owned microbuses, taxis, and state-owned buses had been immobilized by early 1972 because of the lack of spare parts. The scarcity of parts also fueled the truckers' strike, which in turn provoked more economic chaos.35

The economic boycott did not include aid to the Chilean military. On the contrary, military aid to Chile, which has always been substantial, doubled in the 1970-1974 period as compared to the previous four years.36 In addition to the direct sale of arms, over 4,000 Chilean military officers have received training in the U.S. and the Canal Zone over the past twenty years.37 General Pinochet, Gustavo Leigh (Air Force), Admiral Toribio Merino (Navy), and General Cesar Mendoza (Carabineros) have all spent time in the U.S.,38 and over the past decade U.S. military personnel in Chile averaged about 48.39 Fred Landis, a researcher on Chile, describes some features of the counter-insurgency training program offered by the U.S.:

While undergoing their training they were told that there is an international communist conspiracy to take over the world. As a regular part of their training program, foreign officers are required to give an oral presentation on how the communist conspiracy applies to their own country. They read instruction manuals prepared jointly by the Pentagon and the USIA which included the official U.S. version of what happened in Indonesia in 1965 as a warning [i.e., a communist plot to take over the government].40
But the corporations and the U.S. government were not content with mere economic pressure and support for the Chilean military. The economic measures after 1970 must be seen against the background of a more direct intervention in Chile's internal affairs since 1964.

II. U.S. Covert Activities in Chile

In the U.S., Project Camelot began in 1963 with a budget of $8 million for the first year. It was initially sponsored by a Pentagon department called the Advanced Research Projects Agency, but it soon shifted to CIA control. As part of Project Camelot, researchers were sent to Chile and other Latin American countries with questionnaires that polled attitudes on politics. In the 1964 election of Allende against Eduardo Frei, the CIA had computerized these and other attitude studies for an intensive ad campaign. The known fears and anxieties of the target group were connected with communism:
The themes and images were outlined by the CIA, but were actually implemented by the ad agencies of McCann-Erickson and J. Walter Thompson, which ran Frei's campaign. Women were told that if Allende were elected, their children would be sent to Cuba, and their husbands would be sent to concentration camps. On election day women voted as expected.41
A U.S. firm under contract to Project Camelot, Abt Associates, developed a simulation game called Politica, which was purchased by the Pentagon in 1966. Politica is fed information from a computer that links the files of the CIA, Defense Intelligence Agency, and the State Department's Bureau of Intelligence and Research. Crisis situations are simulated and used in the training of Third World police officials at the army's Military Police Training School at Fort Gordon, Georgia. Such a simulation may have eventually played a role in anti-Allende strategy in Chile.42 It is known that Rand Corporation sponsored in-depth studies of Chilean women and farmers between 1970 and 1973, which were identified by the CIA as the key anti-Allende factions.43

The CIA spent more than $2.6 million on Frei's successful campaign in 1964, and $175,000 in 1965 for the support of 22 congressional candidates, according to the Senate Intelligence Committee.44 Other estimates place CIA expenditures in 1964 at $20 million.45 Even $2.6 million becomes an outrageously high figure when compared to U.S. campaigns on a per capita basis. Philip Agee reports that a CIA colleague told him in 1964 that "we are spending money in the Chilean election practically like we did in Brazil two years ago."46

Another form of direct intervention in Chile was sponsored by the American Institute for Free Labor Development. Funded by AID and controlled by the CIA, AIFLD trains potential labor leaders in the techniques of anti-communist and pro-management labor organizing. AIFLD trainees are given generous stipends for themselves and their families, which continue for nine months after they return to Latin America from the AIFLD school in Front Royal, Virginia.47 From 1962 to 1972, 79 Chileans graduated from this school, and another 8,837 received training in seminars conducted in Chile. In a six-month span following 1972, another 29 Chileans graduated from Front Royal, an increase of almost 400 percent.48 During the economic boycott, AID continued to provide funds for AIFLD, while cutting most other forms of aid to Chile.49

AIFLD cooperates with the Chilean Maritime Federation (COMACH), a union with strong connections to the Chilean navy. Naval officers were prominent in the coup leadership in Valparaiso, the first city to fall in 1973.50 The Confederation of Chilean Professionals (CUPROCH), a union that was formed in May, 1971 with AIFLD assistance, was instrumental in the right-wing strikes that precipitated the coup.51 After the junta took power, the AIFLD program in Chile doubled,52 and in January, 1974 the junta arranged for a meeting of 26 small AIFLD-connected unions and called it the Chilean National Workers Confederation. All other labor organizing is now illegal in Chile.53

U.S. planning for the 1970 election began in June, 1970, when the Forty Committee met on Chile and Richard Helms promised John McCone $400,000 of CIA funds to assist the anti-Allende news media.54 The CIA also contributed $1 million to Allende's opponents.55 Allende's election went to the Chilean congress sitting as an electoral college, where an additional $350,000 was paid out by the CIA in an attempt to buy votes.56

After Allende's victory, Nixon, Kissinger, Helms, and John Mitchell met on September 15, 1970. Helms came from that meeting with the impression that "Nixon wanted a plan for action that would include a military coup and a broad-based destabilization effort that would 'make the economy scream.'" Helms' notes of the session read, "Not concerned with risks involved. Full time job -- best men we have."57 An additional $6 million was spent over the next three years,58 including $1.5 million to rightist candidates in the March, 1973 congressional election.59 The grand total of $8 to $11 million spend by the CIA since 1970 may have been worth $40 to $50 million after being funneled through the black market.60

On the day that Helms received his instructions from Nixon, the owner of El Mercurio, wealthy Chilean businessman Agustin Edwards, conferred with top officials of the Nixon administration.61 The El Mercurio network consists of newspapers, radio station, ad agencies, and a wire service; it dominates the Chilean media in audience, size, and prestige, and includes the three principal newspapers of Santiago and seven provincial papers.62 In the seven-month period from September 9, 1971 to April 11, 1972 the CIA spent $1.5 million on El Mercurio,63 but the funding also preceded and followed this period. El Mercurio may have been the recipient of almost half of the total CIA expenditures in Chile since 1970.64 In addition to the sort of ads that were used successfully in the 1964 campaign, CIA funding also sponsored mailings before the election on forged Popular Unity stationery to hundreds of thousands of voters. These mailings asked voters to list household goods and indicate whether they would be willing to share with the poor after the election.65 The CIA even purchased a radio station for the right-wing.66 The El Mercurio network was used by the CIA to "launder propaganda, disinformation, fake themes and scare stories which were then circulated through 70 percent of the Chilean press and 90 percent of the Chilean radio. The USIA and the Inter-American Press Association (IAPA) in turn circulated these stories all over the world."67 CIA agents at El Mercurio included Enno Hobbing, Alvaro Puga, and Juraj Domic.68

The CIA helped finance truckers' strikes in 1972 and June, 1973, probably through the International Transport Workers Federation,69 and may have had a hand in funding, training, and arming the Patria y Libertad, an extreme right-wing party in Chile.70 Michael Townley, a former Peace Corp volunteer in Chile recruited by the CIA, directed groups of Patria y Libertad to paint "Djakarta is approaching" slogans all over Santiago immediately before the coup.71 CIA money also subsidized a strike of middle-class shopkeepers and a taxi strike in the summer of 1973.72

At 2 a.m. on October 22, 1970, some Chilean army officers picked up three submachine guns and ammunition from the military attache at the U.S. Embassy in Santiago with the intention of kidnapping General Rene Schneider.73 Schneider was the commander-in-chief of the Chilean army, and "one of the few strict constitutionalists in the upper ranks."74 Six hours later the officers ambushed Schneider's car and killed him, apparently when he drew his own gun.75

Fred Landis spent time in Chile after the coup collecting information, and accuses the CIA of "blowing up bridges, railway lines, and killing people" shortly before the coup.76 The idea was to increase pressure on the military to act. There were 40 terrorist attacks daily in Santiago provinces alone,77 which gave the military an excuse to enforce the Weapons Act with massive searches for leftist arms in the weeks before the coup (somehow the right-wing arms were ignored). Women demonstrated at army barracks to get some action, and threw corn and feathers at officers and called them chicken.78 The army was tense and exhausted by the time Plan Z was unveiled in August, 1973. Plan Z was a leftist plan to liquidate the armed forces and their families (6,000 in Valparaiso alone). "The document was personalized, using a computer so that each officer found on the copy shown him his name among the list of intended victims as well as the names of all his children."79 Landis and Philip Agee both feel that the CIA had something to do with concocting Plan Z.80

CIA presence in Chile was substantial before the coup. Almost one-third of the staff at the U.S. Embassy in Santiago were on the CIA payroll.81 The list so far includes Frederick Purdy;82 John Isaminger;83 Raymond Alfred Warren;84 Deane Roesch Hinton, Harry W. Shlaudeman, Daniel N. Arzac, James E. Anderson, John B. Tipton, Arnold M. Isaacs, Frederick W. Latrash, Joseph F. McManus, Keith W. Wheelock, and Donald H. Winters.85 A U.S. Foreign Service officer told Richard Fagen in 1972 that the Embassy had succeeded in infiltrating all parties of the Popular Unity coalition except MIR (Movement of the Revolutionary Left);86 this was confirmed by Colby's secret testimony in October, 1973.87 The Embassy also proved less than helpful to endangered U.S. citizens after the coup.88

Finally, there is some evidence of U.S. complicity of a more circumstantial nature. On May 20, 1973, a member of the U.S. Embassy met at 1 a.m. on a navy cruiser in the port of Arica with "the high command of the navy and various officers of high rank in the northern army division," and in the months of June and July a U.S. Naval Intelligence officer accompanied every ship of the Chilean fleet.89 U.S. warships stood by off the coast of Valparaiso to give symbolic support for the military insurgents.90 Three Chilean right-wing leaders traveled to Washington prior to the abortive coup attempt in June, 1973, and U.S. Ambassador Nathaniel Davis met with Kissinger several days before the September coup.91

1. Daniel Brandt, "Leftist Christians in Chile and the Coup of 1973: Lessons for Future Leftist Movements," December 1975. Berkeley, Calif.: Graduate Theological Union. This paper was written for a course taught by Robert McAfee Brown.

2. "U.S. Sabotage of the Chilean Economy," The Militant, 37 (28 September 1973), p. 4.

3. Dick Roberts, "U.S. Imperialism's Stake in Chile Coup," The Militant, 37 (19 October 1973), p. WO/3.

4. Alan Burfford, "'Struggle With Valor and Without Tears,'" Berkeley Barb, No.534 (7-13 November 1975), p. 5.

5. "Ten Years of U.S. Intrigue in Chile," San Francisco Chronicle, 5 December 1975, p. 1.

6. "U.S. Sabotage of the Chilean Economy," p. 4.

7. Ibid.

8. Laurence Birns, "The Demise of a Constitutional Society." In The End of Chilean Democracy: An IDOC Dossier on the Coup and its Aftermath (New York: Seabury Press, 1974), p. 26.

9. Gary MacEoin, No Peaceful Way: Chile's Struggle for Dignity (New York: Sheed and Ward, Inc., 1974), pp. 91-2.

10. Ibid., pp. 95-100.

11. John M. Swomley, Jr. "The Political Power of Multinational Corporations," Christian Century, 91 (25 September 1974), p. 881.

12. "U.S. Sabotage of the Chilean Economy," p. 4.

13. Jonathan Kandell, "Private U.S. Loan in Chile Up Sharply," New York Times (12 November 1973); reprinted in Birns, p. 193.

14. "Chile: Missing Persons," Time (18 August 1975), p. 31.

15. Rod Larsen, "Big Auto Sets Up Shop in Chile; Layoffs in U.S.," New American Movement, 4 (June 1975), p. 11.

16. Signe Burke Goldstein, "Demonstrators Challenge ITT," New American Movement, 4 (June 1975), p. 11.

17. "Junta Hands Back Firms; Refugees Stream From Chile," Guardian, 27 (25 June 1975), p. 10.

18. Mark Day, "Terror Increases in Chile as Opposition Movement Grows," Los Angeles Free Press, 12 (7 March 1975), p. 23.

19. MacEoin, p. 64.

20. Ibid., p. 67.

21. Swomley, p. 881.

22. MacEoin, p. 67.

23. Swomley, p. 881.

24. Joseph Collins, "Tightening the Financial Knot," in Birns, pp. 181-2.

25. Ibid., p. 182.

26. MacEoin, pp. 95-100.

27. Collins, p. 185-6.

28. Tad Szulc, "The View from Langley," Washington Post (21 October 1973); reprinted in Birns, p. 155-6.

29. Birns, p. 196.

30. Szulc, pp. 155-6.

31. Larsen, p. 1.

32. "U.S. Sabotage of the Chilean Economy," p. 4.

33. Collins, p. 185.

34. "U.S. Sabotage of the Chilean Economy," p. 4.

35. Collins, p. 185.

36. North American Congress on Latin America, "Chile: The Story Behind the Coup," Latin America and Empire Report, 7 (October 1973), p. 8.

37. Ibid., p. 9.

38. Ibid.

39. MacEoin, p. 151.

40. Fred Landis, "Psychological Warfare in Chile: The CIA Makes Headlines," Liberation, 19 (March-April 1975), p. 31.

41. Ibid., p. 22.

42. Sid Blumenthal, "Politica: The Secret Government Strategy to Change the World," Oui, 4 (December 1975), pp. 56-8, 134.

43. Ibid., p. 58.

44. "Ten Years of U.S. Intrigue in Chile," p. 16.

45. "U.S. Sabotage of the Chilean Economy," p. 4; Blumenthal, p. 58.

46. Philip Agee, Inside the Company: CIA Diary (Harmondsworth, Middlesex, England: Penguin Books, 1975), p. 382.

47. Fred Hirsch, An Analysis of our AFL-CIO Role in Latin America or Under the Covers with the CIA (San Jose, Calif.: published by the author and the Emergency Committee to Defend Democracy in Chile, 1974), p. 3.

48. Hirsch, p. 33; NACLA, "Chile: The Story Behind the Coup," p. 11.

49. Hirsch, p. 33.

50. Ibid., p. 35.

51. Ibid., pp. 36-42.

52. Tim Nesbitt, "Unionists Respond to AFL-CIO Links," New American Movement, 4 (October 1974), p. 6.

53. Hirsch, p. 41-2.

54. MacEoin, p. 68; Szulc, p. 158.

55. "The CIA's New Bay of Bucks," Newsweek (23 September 1974), p. 51.

56. Ruth Needleman, "CIA Role in Chile Exposed," Guardian, 26 (18 September 1974), p. 15.

57. David M. Alpern,, "The CIA's Hit List," Newsweek (1 December 1975), p. 30.

58. "The CIA's New Bay of Bucks," p. 51.

59. Needleman, p. 15.

60. Richard R. Fagen, "The Intrigues Before Allende Fell," Los Angeles Times (6 October 1974), part 8, p. 1.

61. "Ten Years of U.S. Intrigue in Chile," p. 1.

62. Landis, p. 26.

63. "Ten Years of U.S. Intrigue in Chile," p. 1.

64. Landis, p. 25.

65. Ibid., p. 24.

66. Needleman, p. 15.

67. Landis, p. 26.

68. Ibid.

69. Agee, p. 583.

70. Needleman, p. 15.

71. Landis, p. 30.

72. "How CIA Millions Financed Right-Wing 'Strikes' in Chile," The Militant, 38 (4 October 1974), p. 3.

73. Alpern, p. 30.

74. MacEoin, p. 167.

75. Alpern, p. 30; "CIA: Tantalizing Bits of Evidence," Time (4 August 1975), p. 8.

76. Landis, p. 26.

77. Ibid., p. 31.

78. Ibid.

79. Ibid., pp. 30-2.

80. Ibid., p. 31; Agee, p. 584; Philip Agee, "Playboy Interview," Playboy (August 1975), p. 60.

81. Fagen, p. 1.

82. MacEoin, p. 187; Landis, p. 32.

83. Landis, p. 26.

84. NACLA, "Chile: The Story Behind the Coup," pp. 14-5; Agee, Inside the Company: CIA Diary, p. 583.

85. NACLA, "Chile: The Story Behind the Coup," pp. 14-5.

86. Fagen, p. 1.

87. Szulc, p. 160.

88. "Swedish Ambassador Answers Chile Junta," The Militant, 38 (22 March 1974), p. 15.

89. Miguel Enriquez, "The MIR Analyzes the Coup"; reprinted in Birns, p. 104.

90. Landis, p. 26; Hirsch, p. 35.

91. NACLA, "Chile: The Story Behind the Coup," p. 12.

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