CHILE: A CASE STUDY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09T00207R001000020023-8
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: August 9, 2011
• Sequence Number: 23
• Publication Date: September 30, 1974
• Content Type: OPEN SOURCE

Approved For Release 2011/08/09: CIA-RDP09TOO207RO01000020023-8
;Ep 1974
Chile: A Case Study
The U.S. began its heavy investment in the political fate
of Chile in the early 1960s. President John Kennedy had met
Eduardo Frei, leader of the Christian Democratic Party in
Chile. and decided that he was the hope of Latin America.
Frei was a man of the left, but not too far left, a man who
was not hostile to U.S. interests and just might be able to
achieve needed reform without violent revolution. When Frei
faced Salvador Allende, a self-professed Marxist with a Com-
munist following, in the 1964 election, the U.S. made no se-
cret of where its sympathies lay.
Frei became the recipient of American political advice, en-
couragement and hefty financial aid. Between 1962 and 1965,
the U.S. gave Chile S618 million indirect economic assistance
-more per capita than any other Latin American country.
In a diary due to be published in Britain this year, former
CIA Operative Philip Agee describes how he was called upon
for assistance from his post in Montevideo in 1964: "The San-
tiago station has a really big operation going to keep Sal-
vador Allende from being elected President. He was almost
elected at the last elections in 1958, and this time nobody's tak-
ing any chances. The trouble is that the office of finance in
headquarters [Langley, Va.] couldn't get enough Chilean es-
cudos from the New York banks; so they had to set up re-
gional purchasing offices in Lima and Rio. But even these
offices cant satisfy the requirement, so we have been asked
to help." The results were gratifying. Frei won with 56% of
the vote, and the future of Chile seemed to be assured.
But from the outset, Frei ran into trouble. He was at-
tacked by the right for moving too fast and by the left for
going too slowly. Allende's Socialist Party continued to grow,
picking up defecting left-wing Christian Democrats and unit-
ing with other opposition parties. It became a case for the
CIA. A station chief had been sent to Santiago in 1964; later
the agency's presence began to multiply in preparation for
the 19 70 election, '. hen Frei would be constitutionally barred
from seeking a second term and Allende would pose more of
a threat than before.
TinIE has learned that a CIA team was posted to Chile
with orders from the National Security Council to keep the
election "fair." The agents interpreted these instructions to
mean: Stop Allende. and they asked for a whopping $20 mil-
lion to do the job. They were given S5 million and ultimately
spent less than S 1 million. "You buy votes in Boston, you buy
votes in Santiago," commented a former CIA agent assigned
to the mission. But not enough votes were bought; Allende
had a substantial following. He was prevented from winning
a majority, but with only 36% of the vote he narrowly won a
three-way race that was finally decided in the Chilean Con-
gress. CIA officials in Washington were furious.
The Nixon Administration saw the Allende regime as
more of a threat than Cuba to the hemisphere. The White
House feared that Chile would serve as a base for South Amer-
ica's revolutionary left as well as a convenient outpost for the
Soviet Union. So many Marxist activists were pouring in from
Cuba. Czechoslovakia and China that a special team of CIA
clerks was dispatched to Chile to start indexing thousands of
cards on their activities. Publicly, Henry Kissinger warned of
the domino effect in Latin America. If Communism could
find a secure berth in Chile, it would be encouraged to spread
throughout the continent. Privately. the 40 Committee, the
top-level intelligence panel headed by Kissinger, authorized
SS million to be spent to make life even tougher for Allende
than he was making it for himself.
The extent of the CIA's involvement was revealed earlier
this month by congressional sources who had been privy to
earlier testimony by CIA Director William Colby. Further de-
tails have been supplied by other agency officials. Precisely
how much was spent by foreign Communists-principally
'Moscow-to get Allende into office and then to keep him
there is not known. Most Western intelligence experts figure
that the CIA campaign was scarcely comparable in terms of ex-
penditures or intensity. Nonetheless, the agency went further
than even many of its critics imagined.
For a Marxist government, the Allende regime had moved
relatively slowly toward' suppressing free institutions. But the
CIA believed it was only a matter of time before all dissent
would be muffled. Approximately half the CIA funds were fun-
neled to the opposition press, notably the nation's leading
daily El Mercurio,; Allende had steered government adver-
tising to the papers supporting him while encouraging news-
print prices to rise high enough to bankrupt the others. Ad-
ditional CIA funds went to opposition politicians, private
businesses and trade unions. "What we were really doing was
supporting a civilian resistance movement against an arbi-
trary government," argues a CIA official. "Our target was the
middle-class groups who were working against Allende."
Covert assistance went beyond help for the democratic op-
position. The CIA infiltrated Chilean agents into the upper ech-
elon of the Socialist Party. Provocateurs were paid to make
deliberate mistakes in their
jobs, thus adding to Allende's
gross mismanagement of the
economy. CIA agents orga-
nized street demonstrations
against government policies.
As the economic crisis
deepened, the agency sup-
ported striking shopkeepers
and taxi drivers. Laundered
CIA money, reportedly chan-
Christian Democratic parties
in Europe, helped finance the
Chilean truckers' 45-day
strike, one of the worst blows
to the economy. Moreover,
the strikers doubtless. picked
up additional CIA cash that
was floating round the coun-
try. As an intelligence official
notes, "If we give it to A, and
then A gives it to B and C
and D, in a sense it's true that
D got it. But the question is:
Did we give it to A knowing
D would get it?"
While owning up to CIA
efforts to weaken Allende,
Colby insists: "We didn't sup-
port the coup, we didn't stim-
ulate it, we didn't bring it
about in any way. We were quite meticulous in making sure
there was no, encouragement from our side." Most U.S. pol-
icymakers would have preferred that Allende be ousted in
democratic fashion at the election scheduled for 1976. That
kind of exit, they feel, would have decisively proved the bank-
ruptcy of his policies.
Clearly the CIA considers the junta to be the lesser of two
evils. Still, it rates the Chilean enterprise a failure since it
ended in military dictatorship. Several years of dangerous,
'costly and now nationally divisive intervention in another
country's internal politics might better have been avoided.
Though Soviet propaganda blames the CIA for the Chilean
coup and the death of Allende, Soviet intelligence analysts
do not give the CIA any credit. The Russians think the fault
lay with Allende himself for not being enough of a strong-
man. He temporized with constitutional processes when he
should have disregarded them. He did not follow the exam-
pie of Fidel Castro, who executed more than 1.000 of his op-
ponents when he came to power; 15 years later, he still rules
Cuba. Nor did the CIA have any better luck against him. !,
Approved For Release 2011/08/09: CIA-RDP09TOO207RO01000020023-8