Chile: Hardball

excerpted from the book

The Price of Power

Kissinger in the Nixon White House

by Seymour M. Hersh

Summit Books, 1983, paper

Chile: Hardball

By the mid-l960s Chile had become widely known in the American intelligence services as one of the CIA's outstanding success stories. The Agency had managed to penetrate all elements of Chilean government, politics, and society and took credit for insuring that Chile remained a progressive democratic nation that-not so incidentally-encouraged American multinational corporations to do business within its borders. The extent of American corporate involvement was a source of constant debate in Chile, however, and by the end of the decade it was a major political issue, pitting the Chilean right, with its support for continued American profit taking, against the left, which organized increasingly fractious labor strikes and public demonstrations against the American firms. Chile was a world leader in the mining of copper, but 80 percent of its production-60 percent of all exports from Chile-was in the hands of large corporations mostly controlled by U. S. firms, most prominently Anaconda and Kennecott Copper. Profits for the American firms were enormous: During the 1960s, for example, Anaconda Copper earned $500 million on its investments-generously estimated by the company at $300 million -inside Chile, where it operated the largest open-pit copper mine in the world. The most significant threat to Chilean democracy, in the view of American policy makers, was Salvador Allende Gossens, a member of the Socialist Party, who had unsuccessfully run for president in 1958 and 1964 on a platform that advocated land reform, nationalization of major industries (especially copper), closer relations with socialist and communist countries, and redistribution of income. National concern over the disparity of income was especially critical to Allende's campaigns: By 1968, studies showed that the 28.3 percent of the Chilean people at the bottom of the economic scale took in 4.8 percent of the national income, while the 2 percent of the population at the top received 45.9 percent of the income.

In 1958, Allende had lost the presidential election by less than 3 percent to Jorge Alessandri Rodriguez, an arch-conservative who was strongly probusiness and was heavily backed by American corporations. Neither Allende nor Alessandri received a majority vote, and under the Chilean constitution the election was resolved in a runoff election in the Chilean Congress, which voted Alessandri into office. Despite CIA aid, Alessandri and his party steadily lost


popularity over the next six years, and the presidential elections of ~964 came down to a battle between Allende and his radical forces and Eduardo Frei Montalva, a liberal representing the Christian Democratic Party, which was pro-American and far more favorable to business than Allende's coalition.

The United States' influence on the 1964 election was more extensive than has been publicly reported. At least $20 million in support of the Frei candidacy-about $8 per voter-was funneled into Chile by the United States in 1963 and 1964, much of it through the Agency for International Development (AID). Millions of dollars in AID and CIA funds were allocated, with the full knowledge of the Chilean and United States governments, to Roman Catholic organizations throughout the country whose objective was to oppose Protestantism and communism. Frei won handily with 56 percent of the vote. Fully aware of the source of his funding, Frei also received covert help from a group of American corporations known as the Business Group for Latin America. The group had been organized in 1963 by David Rockefeller, chairman of the Chase Manhattan Bank, at the express request of President Kennedy, who was directing his administration's fight against Castro and the spread of communism in Latin America. It included on its executive committee such prominent corporation executives as C. Jay Parkinson, board chairman and chief executive officer of Anaconda; Harold S. Geneen, head of the International Telephone and Telegraph Company, which owned and operated the telephone facilities in Chile; and Donald M. Kendall, board chairman and chief executive officer of PepsiCo, the soft-drink company, which had extensive business activities in Latin America.

The principal contact in Chile for the CIA as well as for the American corporations was the organization of Agustin Edwards, a close friend of Kendall's who was the owner of the conservative El Mercurio newspaper chain in Chile and a focal point for the opposition to Allende and the left. The CIA and the Business Group (which by 1970 had been reorganized into the Council of the Americas) relied heavily on Edwards to use his organization and his contacts to channel their covert monies into the 1964 political campaign. Many of the ties between the Business Group and the CIA in 1964 remained in place long after the election. For example, Enno Hobbing, a CIA official who had been assigned as liaison to the Business Group, later left the CIA and became the Council's principal operations officer.

The most profound issue for the American corporations was the threat of possible nationalization of their profitable subsidiaries in Chile. Allende's election would certainly lead to such a step. Frei, although his Christian Democratic Party included factions that insisted on nationalization, offered more hope: One of his major campaign promises called for a compromise known as "Chileanization," a procedure by which the state would be authorized to purchase large blocks of the stock of the Chilean subsidiaries of the American copper companies. By 1967, the Frei regime had purchased 51 percent of Kennecott's Chilean company and :5 percent of the Chilean Anaconda firm. The stock transfers took place after negotiations with the companies, which subsequently continued to generate high profits for their American-based owners. Frei's reforms did not affect other industries, and there was a general increase of American business activity and profit taking inside Chile throughout the 1960s. Political pressure from the left increased, and the Frei regime reopened its negotiations with Anaconda in 1969 and tried to begin a discussion of total nationalization-the only process that would enable the state to gain control of the huge profits, as the more radical supporters of the Christian Democratic Party were demanding.

During the Frei years, the CIA continued to operate at will throughout the country, primarily seeking to repress radical and leftist political activities. At least twenty covert operations were mounted inside Chile between 1964 and 1969, according to a report of the Senate Intelligence Committee, which conducted an extensive investigation in 1975. Most of them were designed to support moderate and conservative candidates in Chilean congressional elections. By the late 1960s, serious strains began to develop in the CIA's relationship with the Frei government. The most important reason for this change was that the CIA station chief in Santiago, Henry D. Hecksher, believed that Frei and his Christian Democratic Party had tilted dangerously far to the left. Hecksher, a vigorous anti-Communist, as were his subordinates, incessantly urged CIA headquarters to change American policy and formally turn from Frei to Alessandri, who was planning to run for president again in the 1970 elections. Under Chilean law, Frei could not stay in office for consecutive terms. Hecksher and others feared-correctly, as it turned out-that the Christian Democrats would choose an even more liberal candidate in 1970. If the CIA needed further evidence of the party's leftward drift, Frei soon gave it: In 1969 he reestablished trade relations with Cuba...


... Like a child, Latin America was to be seen and not heard. Those who defied Nixon, such as Valdes and Eduardo Frei-and, later, Salvador Allende-were to be treated harshly. In his memoirs, Richard Nixon devoted only seven paragraphs and a few hundred words to Chile, and said nothing at all about Latin American


policy during his presidency. Kissinger, in his memoirs, defended his role in a long chapter on Chile but in no other way dealt with the administration's policies and problems in the South. Until 1970, Kissinger wrote, when he became involved in the planning against Allende, "Latin America was an area m which I did not then have expertise of my own." That may be so, but from the first months of the administration, he was an expert disciple of basic American policy: Latin America was to be permitted little independence. And the independence that did exist, Kissinger also understood, was to be controlled and manipulated by American intelligence.

Kissinger, with his long and varied experience in the world of clandestine operations, was able to assert almost total control over the intelligence community soon after he joined the Nixon Administration. His bureaucratic device was a high-level group known as the 40 Committee, formally chaired by Kissinger (and brought into being by NSDM 40). Its members included John Mitchell, Richard Helms, Admiral Moorer, Alexis Johnson, and David Packard, Melvin Laird's deputy in the Defense Department. The 40 Committee was, m theory, responsible for approving all sensitive covert operations by the CIA; ~t also supervised and monitored many intelligence-gathering activities by the armed forces. In practice, however, Kissinger and Nixon treated it as they did all the bureaucracy-as another office to be utilized or ignored at will. In Chile, for example, the CIA was ordered to conduct its activities aimed at overthrowing or assassinating Allende without any knowledge or involvement of the 40 Committee members, with the exception of Kissinger and Mitchell.

Kissinger and Nixon were not the only ones to hide information from the 40 Committee. The CIA, in what amounted to routine operating policy, was also circumspect. For example, the Agency's extensive contacts with ITT officials throughout Latin America, and especially in Chile, were carefully shielded from the 40 Committee, whose members presumably did not "need to know" -as the CIA would put it-about them, although ITT played a major role in Chile before the 1970 elections.

Most sensitive intelligence decisions are made without a paper trail. In the case of Chile in 1970, many of the documents that did exist, even those in government files, remained secreted inside the Agency long after the Senate Intelligence Committee and the Justice Department conducted full-scale inquiries in 1975 and 1976. Justice Department attorneys concluded, according to files later made public under the Freedom of Information Act, that Kissinger went so far as to make his own personal minutes of the 40 Committee meetings, which presumably were more detailed, and kept them separate from the official minutes that were routinely distributed to the bureaucracy.

The files of the 40 Committee, at least those the CIA turned over to the various investigating groups, showed that the pending election m Chile was discussed on at least four occasions between April 1969 and September 1970. In April 1969, the CIA warned that a major campaign to influence the 1970 elections would not succeed unless the CIA station in Santiago could begin assembling paid operatives in various political parties. No direct action was taken, the records show, until a 40 Committee meeting on March :5, 1970-a week after the overthrow of Prince Sihanouk in Cambodia-at which time $ 300,000 for anti-Allende propaganda efforts was approved. On June 27, the 40 Committee approved an additional outlay of $300,000-recommended by Ambassador Korry as well as the CIA-for more anti-Allende electioneering. It was at this meeting, according to the official minutes, that Kissinger signaled his support of the anti-Allende programs: "I don't see why we need to stand by and watch a country go Communist due to the irresponsibility of its own people."


... Salvador Allende defied the opinion polls and won the Chilean election by 39,000 votes out of the 3,000,000 cast, forcing a congressional runoff election on October 4-an election in which, if history repeated itself, Allende, as the winner of the popular election, was destined to defeat Alessandri. Washington reacted with despair, and with rage at Allende for having defied the wishes of American policy makers. At 6:30 on the morning of September 5, a Saturday, Richard Helms and a group of key assistants rushed into the Agency's operations center to look at the results. An official who was on duty that day recalls their attitude. "The CIA had had its nose rubbed in the dirt in Chile. We had staked our reputation on keeping Allende out. Alessandri's loss hurt the CIA's standing [in the White House] and its pride." The official, who monitored highly secret traffic from Santiago to Washington over the next few months, says that Helms and his deputies "just couldn't put up with Allende. He became part of a personal vendetta. They'd gone so far and got out on a limb."

Korry was also upset at Allende's victory in the popular election. He filed a dramatic cable noting metaphorically that he could "hear the tanks rumbling under my window" as Allende's socialism began to take over Chile. "We have suffered a grievous defeat; the consequences will be domestic and international...." In his memoirs, Kissinger described that sentence as among those underlined by Nixon when he read the Korry report. But in a sentence Nixon left unmarked, the Korry cable also said: "There is no reason to believe that the Chilean armed forces will unleash a civil war or that any other intervening miracle will undo his victory."

That was not what Nixon and Kissinger wanted to hear. "Nixon was beside himself," Kissinger wrote, adding that the President blamed the State Department and Korry "for the existing state of affairs." In future planning in the Chilean crisis, Kissinger wrote, Nixon "sought as much as possible to circumvent the bureaucracy." Kissinger neglected to note that he too was beside himself, and as eager as Nixon to circumvent the bureaucracy.

There is compelling evidence that Nixon's tough stance against Allende in 1970 was principally shaped by his concern for the future of the American corporations whose assets, he believed, would be seized by an Allende government. His intelligence agencies, while quick to condemn the spread of Marxism in Latin America, reported that Allende posed no threat to national security. Three days after the popular election, the CIA told the White House in a formal Intelligence Memorandum that, as summarized by the Senate Intelligence Committee, the United States "had no vital interests within Chile, the world military balance of power would not be significantly altered by an Allende regime, and an Allende victory in Chile would not pose any likely threat to the peace of the region." Nixon's anger at failing his corporate benefactors-Jay Parkinson, Harold Geneen, and Donald Kendall-was passed directly on to Kissinger. Kissinger, many on his staff recall, seemed to be less interested in corporate well-being than in pleasing Nixon. "While he was their servant ideologically," Morris says, "Henry's attitude toward the business community was contemptuous." * But Kissinger also seemed to be truly concerned about Allende's election: "I don't think anybody in the government understood how ideological Kissinger was about Chile. I don't think anybody ever fully grasped that Henry saw Allende as being a far more serious threat than Castro. If Latin America ever became unraveled, it would never happen with a Castro. Allende was a living example of democratic social reform in Latin America. All kinds of cataclysmic events rolled around, but Chile scared him. He talked about Eurocommunism [in later years] the same way he talked about Chile early on. Chile scared him." Another NSC aide recalls a Kissinger discussion of the Allende election in terms of Italy, where the Communist Party was growing in political strength. The fear was not only that Allende would be voted into office, but that-after his six-year term-the political process would work and he would be voted out of office in the next election. Kissinger saw the notion that Communists could participate in the electoral process and accept the results peacefully as the wrong message to send Italian voters. In mid-September, in Chicago with the President, Kissinger talked privately with a group of midwestern reporters about the Chilean election, among other issues. He told the journalists, with apparent conviction, "I have yet to meet somebody who firmly believes that if Allende wins there is likely to be another free election in Chile." His real fear, of course, was precisely the opposite: that Allende would work within the democratic process.

His other fears about Allende were expressed more candidly. Convinced that the domino theory was true for Latin America, he went on to say, ". . . [I]n 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 m directions that have been difficult to deal with, and joining Bolivia, which has also gone m a more leftist, anti-U.S. direction.... So I do not think we should delude ourselves that an Allende take-over in Chile would not present massive problems for us, and for democratic forces in Latin America, and indeed to the whole Western Hemisphere.


... The corporate path to Nixon had begun in Santiago the day before Allende's election, when Agustin Edwards made his first and only visit to Korry's embassy. Edwards had been on friendly terms with Korry's predecessor, Ralph A. Dungan, a Democrat who served in Chile from 1964 to 1967, but had not developed a similar relationship with Korry. During their ten-minute talk, Korry recalls, he reassured Edwards that the latest polls still predicted that Alessandri would win. "Edwards seemed pleased and left," Korry said. "[He told me] that he had plowed all his profits for years into new industries and modernization, and would be ruined if Allende won." Three or four days after the election, Hecksher told Korry that Edwards wanted to meet with him again, but this time at the home of one of his employees, on the outskirts of Santiago. At the meeting, Korry says, he told Edwards he did not believe the Chilean armed forces would move to prevent Allende's election by Congress;

he also acknowledged that the CIA propaganda programs had little chance of accomplishing their goal. Edwards agreed that Allende's election by the Congress seemed assured, and surprised Korry by announcing that he was leaving Chile immediately. He explained that he had been told by Allende's associates that he would be "crushed" by the new regime. He flew within days to see Donald Kendall in Washington, who immediately hired him as a PepsiCo vice president and invited him to be a house guest. On September ~4, according to Kissinger's memoirs, Kendall met privately with Richard Nixon, a meeting that, like many others, did not appear on Nixon's daily log as maintained by the Secret Service. The next morning, Mitchell and Kissinger, at Nixon's direction, had breakfast with Kendall and Edwards; hours later, Kissinger asked Helms to meet Edwards for, as Kissinger wrote, "whatever insight he might have." Helms later told an interviewer that Kendall was with Edwards when they met in a Washington hotel. The two men appealed passionately for CIA help in blocking Allende-an argument, Helms realized, they must have made to Nixon. In the early afternoon, Nixon summoned Helms, Mitchell, and Kissinger to his office and gave Helms a blank check to move against Allende without informing anyone-even Korry-what he was doing.

The newspapers and networks would later make much of the fact, as published m the Senate Intelligence Committee's report on Chile, that Helms provided the committee with his handwritten notes of the September 15 meeting with Nixon. The notes included such remarks as "no concerned risks involved;" "full-time job-best men we have;" "make the economy scream," "$ 10,000,000 available, more if necessary;" and "no involvement of Embassy." But CIA men who served closely with Richard Helms knew that he had much more than mere notes to turn over, if he chose to do so. "You don't take notes" in such meetings, one senior CIA man explains, "but as soon as you're in your car, you dictate a memo for the record." Helms was extremely careful about keeping such memoranda, this official says, which were never put into the official CIA record-keeping system.

In his testimony to the Senate Intelligence Committee, Helms said he left the Oval Office meeting with the "impression . . . that the President came down very hard . . . that he wanted something done, and he didn't much care how and that he was prepared to make money available.... This was a pretty all-inclusive order.... If I ever carried the marshal's baton in my knapsack out of the Oval Office, it was that day [emphasis added]." Asked specifically by Senator Gary Hart, Democrat of Colorado, whether assassination was included, Helms responded carefully: "Well, not in my mind.... I had already made up my mind that we weren't going to have any of that business when I was director."

Helms's answer was carefully hedged and far from responsive. In a conversation later with a close associate, Helms provided a much more believable description of what took place on September 15; Nixon had specifically ordered the CIA to get rid of Allende. Helms told the associate that there was no doubt in his mind what Nixon meant. In the weeks following the meeting Helms added, he was pressured on the subject at least once more by Kissinger. Helms also revealed that he had made and kept detailed memoranda of his talks with Nixon and Kissinger about Allende.

Helms was no innocent in the matter of CIA assassinations, having been one of the few high-level Agency officials to be fully aware of the efforts, beginning m late 1959, to have Castro assassinated. Helms told the Senate Intelligence Committee in 1975, according to its published report on assassinations, that he fully believed in those attempts, some involving Mafia leaders, and that the CIA, as the committee put it, was "acting within the scope of its authority and that Castro's assassination came within the bounds of the Kennedy Administration." Asked by Senator Charles McC. Mathias, Jr., Republican of Maryland, whether an explicit presidential order to assassinate Castro was necessary, Helms was quoted as responding: ". . . I think that any of us would have found it very difficult to discuss assassinations with a President of the United States. I just think we all had the feeling that we were hired to keep those things out of the Oval Office." In a second appearance, a month later Helms was pressed again on the issue, this time by Senator Frank Church, the committee chairman. Asked whether Robert F. Kennedy, President Kennedy's Attorney General, had ever ordered him to kill Castro, Helms responded: "Not in those words, no." Were less direct phrases used to make the same point? "Sir," he replied, discomfited, "the last time I was here, I did the best I could about what I believed to be the parameters under which we were working, and that was to get rid of Castro. I can't imagine any Cabinet officer wanting to sign off on something like that. I can't imagine anybody wanting something in writing saying I have just charged Mr. Jones to go out and shoot Mr. Smith."

Another senior CIA official, who spent years dealing with Cuba and Latin America, explained the technique more directly in an interview: "All a President would have to say is something innocuous-'We wish he wasn't there.' That much of a message, even if it were to appear on the famous [Nixon White House] tapes, would get no one in trouble. But when it gets down to our shop, it means to about six people, 'Don't ever come back and tell what happened.' "

Talking about assassination was not as dangerous in the White House in 1969 and 1970 as it would become five years later, at the height of the domestic uproar over revelations of the CIA's failed assassination attempts against Castro and its involvement in the murders of Patrice Lumumba of the Belgian Congo and Rafael Trujillo of the Dominican Republic. Roger Morris recalls at least two casual conversations with fellow Kissinger aides about the killing of Nguyen Van Thieu, South Vietnam's President, who was seen as a key stumbling block to the success of the Paris peace talks. In one case, Morris says, he mentioned plaintively to a colleague that Thieu's "assassination is one that the American government ought to look at with interest." To his amazement, his colleague, who worked in Kissinger's personal office in the White House, responded seriously: "They have."

There was boasting about assassination, too. Haig once told John Court, an NSC staff aide, that, as Court recalls, "if we have to take care of somebody, we could do it." Court linked Haig's remarks to the killing in late October 970, two days before the congressional election, of General Rene Schneider, commander in chief of the Chilean Army, who was viewed as the only man capable of stopping a faction of right-wing officers from staging a coup to prevent Allende's election. In Chile too there was talk about assassination. Korry was directly approached by the ambassador of a West European nation and urged, in all seriousness, to arrange for the murder of Allende. Korry rebuffed the diplomat, he recalls, and carefully reported the gist of their conversation to the State Department.

Out of Nixon's meeting on September 15 emerged what the CIA would later call the "two-track" approach. Track I would include the anti-Allende propaganda and political programs voted by the 40 Committee and relayed to Korry and Hecksher. Korry was also to continue his support for a solution involving last-minute political chicanery by Frei or Alessandri. Track II was to be kept secret from Korry, the State Department, and even the 40 Committee. Specially recruited CIA agents, using forged foreign passports, would work their way into Santiago and make contact with a group of extreme right-wing military officers who were willing-if properly financed-to overthrow the government before the October 14 congressional election and prevent an Allende presidency. The goal of Track II was not only to encourage the Chilean military to initiate a coup but also to provide direct assistance in getting one under way It was to be an American coup carried out by Chileans.

With Track II launched, the White House apparently decided to keep ITT too, in the dark about the great lengths to which it was willing to go in Chile. A week after Allende's election, John McCone met with Kissinger and Helms and relayed yet another ITT pledge, this one for $ 1 million, to assist any CIA plan to stop Allende. Viron Vaky, the NSC aide for Latin American affairs was separately informed of the offer by an ITT official in Washington, who added that Harold Geneen was available to fly to the White House to discuss the matter with Kissinger. ITT was taking no chances; its two top guns were making pitches to the White House in the same week. The Senate Multinational Subcommittee could not learn whether a Geneen-Kissinger meeting on Chile took place, nor could it find evidence that ITT passed funds to the Nixon Administration for use in Chile-a predictable failure, given the less than candid testimony in the hearings, which enabled the company to glide past the subcommittee in 1973.

In his memoirs, Kissinger went to great lengths to minimize the significance of Track II: ". . . [T]here was always less to Track II than met the eye. As I have shown many times . . . Nixon was given to grandiloquent statements on which he did not insist once their implications became clear to him. The fear that unwary visitors would take the President literally was, indeed, one of the reasons why Haldeman controlled access to him so solicitously." It is not clear from the memoirs whether Kissinger considered Richard Helms one of those "unwary" visitors who took the President at his word.

Helms tried his best. The men sent down to Chile included one agent who was a smuggler and black-market dealer, another described in CIA documents as an alcoholic suffering from a nervous breakdown, and a third who passed a large sum of cash to a Chilean desperado whose sole goal at the time, as the Agency knew, was to assassinate Allende.

If there was apprehension in the White House over what the administration was trying to do to Chilean democracy, Richard Nixon did not share it. On September 16, the day after his strained meeting with Helms, he flew to Kansas State University to give a lecture honoring Alfred M. Landon, the losing Republican presidential candidate in 1938.

Nixon praised Landon's graceful acceptance of defeat and added: "There are those who protest that if the verdict of democracy goes against them democracy itself is at fault, the system is at fault-who say that if they don't get their own way the answer is to burn a bus or bomb a building. Yet we can maintain a free society only if we recognize that in a free society no one can win all the time."

Especially Salvador Allende.

The Price of Power

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