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December 9, 1974
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Approved For Release 2011/08/09: CIA-RDP09TOO207RO01000020004-9 9 DEC 1974 Spook:} Cash: What Happened to Funds - CIA Aimed at.Chile? w w i Of $8 Million Budget, Little Can Be Traced; a Courier Left $100,000 in a Bank By EVERETT G. MARTIN Staff Reporter of THE WALL STREET JOURNAL SANTIAGO, Chile - This much seems clear, and President Ford has admitted it: rized to spend some $8 million between 19701 organization, vigorously denies that the and 1973 to support opposition to Chile's truckers got any. "Anyone who took money Marxist President Salvador Allende. from outside," he says, "should forfeit his Besides fueling a controversy, the disclo- Chilean citizenship. A driver who took part sure raised a few questions of fact. For ex- in the truck strike, however, questioned on ample: Where did the money go? the point, raises his fist and shouts, "CIA, In a country like Chile, with only 10 mil- gracias!" lion people, $8 million for a political cam- Others say that if recipients of foreign paign is a very large-in fact, well-nigh un-. funds really had to forfeit their citizenship, spendable-amount of money. And talks Chile would lose a lot of citizens. "There j with a number of Chileans, including some isn't a political party in Chile, Marxist or who actually had their hands on CIA funds, otherwise, that could have functioned with- now suggest that only part was used in Chile out help from abroad," a Christian Demo- for campaign spending. Some may have crat says. During the Allende years ?espe- been spent for other purposes; but a lot of cially, some Chileans say, foreign money money apparently never even got to Chile. and other aid flowed freely. Presumably, the CIA knows what happened Comic-Book Offensive to it all, though it seems doubtful the U.S. The military regime regularly reports taxpayer ever will. turning up hidden caches of arms from Money in the Bank Cuba, arms the regime says were meant for In one year, 1973, according to sources a clandestine Marxist army. An East Ger- here, European banks kept on hand nearly man newspaper, according to West German $500,000 to finance the 1973 election cam- newspapers, recently disclosed that the paign of Chile's conservative National East German labor movement contributed Party, the country's second largest party more than $11 million to support the Allende and the most uncompromising in its opposi- governriient. The Chilean junta 'claims It tion to Marxism. Chileans with knowledge of the. accounts- we,.en't certain, but they al- ways.-assumed, that the money had come frog-the CIA. Yet one courier responsible fdfr ? delivering funds to Chile from Europe says he actually delivered only about $100,- 1000 of the $200,000 given him. it was hard enough, the courier says, to buy escudos-the Chilean currency unit-in $10,000 and $20,000 quantities In European markets, much less in sums larger. And, he says, "you can't spend that much money ($200,000) on a Chilean election. Indeed, the total expenses of the Christian Democrats, Chile's largest party, are estimated to have reached only $120,000 in the 197.1 congres- sional elections. Of the remaining $100,000 lie got, the cou- rier says: "On my word of honor, what I had left is still sitting in a bank account, and I don't know what to do with it." Sergio Onofre Jarpa, president of the Na- tional Party, was astonished when he heard that party candidates were getting money from abroad. "He went around town trying to find out where the money was," an ac- quaintance says. He adds: "Someone must have kept most of it for himself." Mr. Jarpa !flatly denies that his party received any for- eign money. "I always opposed anyone who 'sungested we ask for money outside the country because it would have destroy-11 Though some apparently did, the courier from Europe believes that other CIA funds ports suggest that CIA money may have been used to finance truckers whose 37-day nationwide strike in 1973 brought Chile's fal- tering economy to a standstill and set the stage for the military coup and dictatorship that followed Dr. Allende's death. The truckers were protesting a govern- ment attempt to force them into a national- ized trucking system by denying them spare parts for their vehicles. Business groups, private citizens and farmers provided food, clothing and other aid to the truckers and their families. But like just' about everybody, else in Chile who was a logical recipient of CIA has photostats of bank documents and testi-I baby clothes," he says. mony that Dr. Allende -got* $ 780,000 from Cuba and $500,000 from Czechoslovakia toy buy the Santiago newspaper ?Clarin in 1972.i By U.S. admission. and other evidence? the CIA's spending in Chile started with a $500,000 authorization to aid Dr. Allende's opponents in the 1970 presidential election. Much of this, a U.S. official says, was spent on newspaper advertising and posters de- picting the horrors of Communism. "They also put out anti-Communist comic books," he says. "It was all childish and Idiotic." Apparently, it also was ineffective. Dr. Allende won the election. Then, says a U.S. official in Chile at the time, CIA funds went to Chileans who couldn't cover postdated checks they had written as cam- ; paign contributions to anti-Allende parties. Customarily, Chilean banks had honored !I such checks but waited until due dates to collect them. One of the first acts of the new Allende government, however, was to take control of private banks and demand imme- diate payment for the checks. Many people who didn't get CIA funds were caught short. Some even served short jail terms for their overdrafts. At the same time, according to testimony by former CIA director William E. Colby, before a House of Representatives subcom our fighting spite," he says. "I don't know mittee last April, the CIA was authorized to if individual candidates received any." spend $350,000 to persuade Chilean congress men not to ratify Dr. Allende's election. "But It wasn't spent," says Edward R. Korry, U.S. ambassador to Chile at the time. "Bribing wasn't tried." President Ford, in discussing CIA activi- ties in Chile at a September press confer- ence, said the agency gave financial aid to opposition newspapers, radio and television stations. The government had cut off Its own lucrative advertising. The government sei- zure of private firms also hurt advertising. El Mercurio, Chile's largest daily and Dr. Allende's most vociferous opponent, still de- nies getting any CIA money. Some radio-station managers say they tried to get U.S. money in trips to the U.S. but failed. They say they did get money from private citizens and businesses in Chile. One manager says that "CIA money could have come in that way. I took any- thing that came across my desk and didn't ask questions." An-anti-Allende radio commentator says she was offered a monthly payment to sup- plement her slim salary In the spring of - 1972. The offer, she says, came from a Mex- -l ican-American staying in a Santiago hotel. She recalls that she told her would-be bene- factor, "This sounds like the CIA." He an- swered, "It Is." Having refused the money, she says she is angered at the Implication that all anti- = 'Allende journalists were in the CIA's pay. The Chilean journalists' union has sent a let- ter to President Ford requesting that he re= lease the names of individuals who did take CIA money to clear the names of those who didn't. Otherwise, many Chileans seem less than outraged that CIA money may have flowed Into the country. "You had a moral obllga'.Jl tion to help us fight Communism," one says. i (Another man recalls his politician mother telling how, years ago, she wheeled him in I his baby carriage to pick up cash from an'r American embassy man she was meeting in t a park. "She brought It back hidden in my1 How the CIA Succeeded In Business With Allende By a WALL STREET JOURNAL Staff Reporter SANTIAGO, Chile - The Central In- telligence Agency may have made money dealing with the late President Salvador Allende's Marxist government in Chile. When Chile ran critically short of beef in 1972, the government resorted to a costly solution. It hired aircraft to fly in beef twice a day from Mendoza, Ar- gentina, just over the Andes from San- tiago. Southern Air Transport chartered out a C-130 cargo plane for the meat runs. Southern Air Transport, at the time, was one of several CIA-owned air transport firms that operated as profit., making businesses when not engaged In special CIA missions. 00550 Approved For Release 2011/08/09: CIA-RDP09TOO207RO01000020004-9