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December 22, 2016
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August 9, 2011
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September 16, 1974
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Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4 NEW YORK TIMES . Took `Extraordinarily Soft Line' U.S.' .S In Allende's First Year, Envoy Says By PETER KIHSS In the late Salvador A4nde Gossens's first year as Presi- dent in Chile, the United States pursued "an extraordinaryly soft line" and tried to develop a "modus vivendi" wit'. the P/ Vw a wit n Mr. Korry, 52 years old, was price of copper provided enough e in dollars for Frei." h i om s interviewed at h last I Mr Worry sai( Y N liff Manor ., . , Briarc Thursday after disclosures of Congressional testimony by William S. Colby, Director of Centrrt Intelligence. Mr. Colby reportedly testified that the agency was authorized to spend more than $8-million clandestinely from 1970 to 1973 to "destabilize" the Marxist re- gime. Acc-)rding to Washington reports, $7-million of the au- thorized amount was spent. lefist Government, according to former Arbassador Edward M. Korry. Mr. Korry says hat when Dr. .'.ilende reneged on one agree- ment and "proceeded to break almost every assurance he had volunteered," he warned the Chilean leader of "the in- escapable consequences of pro- voking American enmity," at least in terms of blocking inter- national credits. That was in September, 1971, just about a ;month before Mr. Korry's ap- pointment in Santiago ended. Mr. Korry described efforts during his ambassadorship to cooperate with Dr. Allende's regime to back up testimony he' gave last year to a Senate For- eign Relations subcommittee. He contended that his testi- was heinv wrongly challenged as potentially mis- leading in the latest disputes over Central Intelligence Agen- cy activities in Chile. - Mr. Korry, who was Ambas- sador from October, 1967, through October, 1971, had told the subcommitt(le: 'The United States did not seek to pressure, subvert, influence a single member of the Chilean Con gress at any time in the entire four years o: my stay. No hard! line toward Chile was carried out at any time." He said in an interview with; The New York Times, that in sofar as his own period asl Ambassador was concerned, "I', stand by that statement un-' conditionally." In his use of the word "influence," Mr. Korry said, he meant to deny any attempt to "influence in the sense of bribery." Succeeded In 1970 Dr. Allende won a niu:ality in a three-way presidential election on Sept. 4, 1970. He was confirmed as President by the Chilean Congress on Oct. 24, and was inaugurated on Nov. 3, 1970. In October, 1971, Mr. Korry was succeeded as Ambassador to Chile by Na- 'thar.icl i)a?.'is, who was still serving when a military coup fled to Dr. Allende's ouster and ldeath in September of last year. Support for Center "When I launched the soft line toward , Allende," Mr. Korry said, "I also believed unswervingly that the United States should support some of those who were committed to democracy and its practices as understood in the United States as well as in Chile [to help them; to survive. The kinds of people that I had in mind were nonextremist, nonmilitary pracx titioners of center democracy." Mr. Korry said he had warned in a September, 1970, cable gram shortly after Dr. Allende's h a no w pealed against the decision, warning that Mr. Frei would "start nationalizing copper companies" and would resume trade relations with Premier Fidel Castro's Cuban Govern- ment despite inter-American sanctions-as it then did. . , The United States, Mr. Korry said, had already decided. inl 1968, during the Johnson Ad-; ministration, virtually to avoid, any new guarantees of Ameri can investment in Chile. He said the reason was that Chile had, a disproportionately high per- centage of such United States'- guarantees on a worldwide basis. 1 In 1969, he said Washington refused to-go along with busi- ness opposition to. Chilean na- tionalization of copper com- panies. In 1970, he said, Wash- ington "put the Chilean mili- tary off limits" to embassy re- lations and "refrained from financing any party or candi- date." Under the Chilean con- stitution, Mr. Frei could not elr ctton that t ere chance of any political or other succeed himself. intervening event preventing I Mr. Korry held that it Allende from being confirmed would betray both his govern- as President or inaugurated in ment oaths and Chileans whose November." lives would be endangered to "I gratuitously inserted, not;jdiscuss details of Central In- once but more than once." he ' telligence Agency activities. added, "the strong statement!', But he declared that in testi- that if anyone were to be con- ,moray before a Senate Foreign templating a United States in-I; Relations subcommittee last tervention of any kind--directiIyear, he significantly "never or indirect-to bar Allende's denied" C.I.A. funding for some - assumption of power, its conse- programs-and had referred, United States interests than the Bay of Pigs, both in and out- side of Chile." Frei's Election Backed The administrations of both nist program," he said. After he Presidents John F. Kennedy and' warned against any effort to Lyndon B. Johnson, Mr. Korry (block Dr. Allende's confirma- d to support the election of Ed- uardo Frei Montalva, a Chris- tian Democrat, as President in 'Anti-Communist Program' The United States In 1969 and 1970 "was continually carrying out an anti-Commu- tion or inauguration, he say he took part in consultations in Washington in October, 1970, on three potential policies: "A-conscious effort to work "Congress was fully aware of out a modus vivendi; B-seek the policy of stopping Allende (correct but minimal relations; The Administration of Presi- dent Richard M. Nixon. he said, decided in March, J969-while Mr. Frei was Still in off u'-- against signing agreements Mr. Korry had negotiated for 540- million in standby loans to Chile cially decided on the middle "correct but minimal" line. In fact, Mr. Kerr,' said, all three lines were followed. 00796 /; J STAT Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4 Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4 NEW YORK TIMES On- hIs own, he said he of- fered to work with Clodomiro Almeyda Medina. Foreign Min- ister in the Allende Govern. ment, "prag-natically, problem by problem"-and in, secret, to have greater latitude. The first result, he said, was that the Chileans agreed to buy at an acceptable. price a plant -of the Northern Indiana Brass Company.. Also, he said, there had been x'800-million in outstanding Agency for international Devel- opment loans by the United United States to Chile, and "tens of millions" under these were kept flowing that. first year. Bank Loan's Agreed On his recommendation, he said, the Nixon Administration consented in 1971 to two Inter- American Development Bank loans to Chile totalling $11.6- million. He said he told Allende offi- cials that the United States iwould consider new bilateral help if there was no "undue hostility or irrationality," but had added that Congressional requirements for audits would probably be unacceptable to' the Chileans. ' The "high points of this early period of good working relations," Mr. Korry said, were' agreement.. early in April,' 1971, for Chilean purchase of Bethlehem Steel Company iron mines with 15-year bonds "in the $20-million bracket" and then in May, 1971, for Chilean purchase 'of a Cerro Copper Company mine. The Cerro pact, he said, would have averted a $14-mil- lion outlay by the United States in. Overseas Private In- vestment Corporation antiex- propriation insurance. Thirty minutes before it wa& to be signed, Mr. Korry said, President Allende delayed it under pressure from "the most extreme of the Marxist-Lenin- ists in his coalition"-and kept stalling it until the coup. Mr. Korry said he had looked on the Cerro pact as a prece- dent for potential agreements on properties of the Anaconda and Kennecott copper com- panies and the International Telephone & Telegraph Com- pany, which involved United States antinationalization guar- antees with 'taxpayer exposure 'of between $300-million and - $500-million." In July, 1971, Mr. Korry said he went to Washington and obtained approval from William P. Rogers, then the Secretary of State, and "no objection" from Henry A. Kissinger on behalf of the National Security Conn- (!ii to offer another idea. Thiv, he said, was to be "in my name only" at the outset, to avoid drawn-out bureaucratic delays. It would have' had Chile pay; for nationalizations in low-; interest, 25-year notes. The United States Treasury would 'back these with its "fuill faith and credit" so that each'-com- pany could then readily dis- count the rotes for cash in banks. A similar plan this year let the Treasury back Israeli 'bonds for arms purchases, Mr. Korry . said. 00797 Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4