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March 27, 1972
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Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09TOO207ROO1000030017-4 2 7 MAR 1972 -r,- /" l r il e ,make clear that the compa- "iTT has been and con- ~, e ~ ny's .attempts to mobilize tinues to be - a good,l ,v corporate citizen in Chile as the administration against Allende were a failure. This well as in all other countries Citizen' failure is reflected in bitterly where it has operations." A ~~j()pt~ Corporate critical evaluations by ITT The ITT documents indi- . and cate, however, that the con- 1 ties of Meyer ?~ execuvOi? Economic Imperialist? Korry for their refusal to glomerate's executives were f,, extremely upset by the Al with The standard leftist stereotype of the multi-national U.S. company engaged in aggressive economic "imperial- ism" abroad has always seethed fanciful or, at best, ana- chronistic. But judging from a collection of secret docu- ments that surfaced last week. the International Telephone. and Telegraph Corp. in fact fits that image as it sought to control events in Chile nearly two years ago. The documents, acquired by columnist Jack Anderson and made available to the press, comprise 26 confidential ITT memoranda describing the firm's efforts to block the inauguration in late 1970 of Chilean President Salvador Allende Gossens, an avowed Marxist who pledged to na- tionalize U.S. holdings in his country; Anderson claims that he obtained copies of the docu- ments even though ITT's Washington office destroyed many of its files. The memoranda show that ITT operatives in South America as well as cot l'oration executives in Washington and New York considered tactics for promoting and financ- ing a right-wing military coup d'etat aimed at ousting Allende. This plan, the papers reveal, was recommended to a senior ITT representative by a high-ranking member of J the U.S. Central Intelligence Ag'ncy in charge of clan- destine operations in Latin America. The corporation also tried to enlist the support of top American officials, among then President Nixon's na- tional security adviser, Henry A. Kissinger, Assistant Sec- retary of State for Inter- American Affairs Charles A. Meyer, and Edward M. Korry , then the U.S.. Am- bassador to Chile. Neither Kissinger nor Korry has commented on the affair. In an interview with The Washington Post, Meyer said that he had talked with ITT representa- tives in the past but the company's activities "were unknown to ntc." Speaking to a closed ses- sion of the Senate Foreign Relations committee on foreign firms. Its holdings Neal reported on a conversa- Wed esday, Secretary of in Chile consisted of six af- Lion he had the previous nied that t P. Rogers rs ' filiates employing about Friday with `iron Vaky, a had at ITT influenced admimaneu maneuvers 8,000 workers. Latin American expert on had Chile. The largest of these, the Eissinger's itaff. Vaky now lion attitudes toward Chile. Chile Telephone Co., began teaches at Georgetown L'ni- The administration had not operating in 1930 under a varsity. acted in a "wrongful man- 50-year concession. The Chi- deal said that he told her" in Chile, Rogers said. lean government took it Vaky State Department spokes- V of the "deep concern" over in September 1970. and of Harold S. Geneen, further . . . . _ , the firm d underline -.. -- - of ITT, wit the Chil- that, on Thursday. saying ing for compensation of 5103 mail "not only that, ,any ideas of thwarting million, its 70 per cent own. ean of ITT, the Chilean constitutional ership share. The corpora- from the standeoint of our processes following the elec- tion still runs two Sheraton heavy investment but also Lion of 1970 were firmly re hotels and a telecontmuni because of the threat to the jetted by the administra cations company- in Chile. entire hemispl ' lion." Current pronouncements The ITT documents also by its spokesman assert that By Stanley I\arnow tion's efforts to intervene in point of planning extraor? litical situa the Chilean po dinary measures. tton. tvncedes Defeat The Senate Foreign Rela- tion-, eoe`or in his r Committee has never- well-to-do early G well-to-do -t Allende pledged theless decided on a dc- during his campai;n to suc- tailed investigation into the ceed President Eduardo Frei involvements of American that he would nationalize corporations abroad. Ascer- that U.S. companies nationalize taining the extent to which Chile. In companies ni ITT's ITT's alleged political mach- holdings, these included inations are typical of U.S. corporate practices abroad American copper interests would be a prime objective valued a $300 million, as of the ivestigation. well as banks and other business. Better Coordinated Allende won a plurality In In the opinion of Prof. the election held on. Sept. 4, Louis Wells, a Harvard Busi- 1970. He then faced a run-off ness School specialist on in- in the Chilean Congress ternational corporations, against his two main foes. ITT is an exceptional, rather conservative Jorge Alessan- than typical. example of the dri and Christian Democrat global U.S. conglomerate. Radomiro Tomic. Under Chi- According to Wells. most lean law. Frei was barred American firms operating from succeeding himself. abroad are so diversified As the Anderson docu- geographically that their ac- menu illustrate, it was dur. tivities are not highly organ- in- the period between the ized. They try to sway local Sept. 5 election and the U.S. diplomatic officials, run-off on Oct. 24 that ITT Wells suggests, but they was most active in its ef- generally function by "rule forts to prevent Allende of thumb" without central from taking office. By the direction. time of Allende's inau7ara- What makes ITT different Lion on Nov. 4, the corpora- Wells from most says. U is U.S. that it has companies, tion had virtually conceded defeat. "long experience and heavy commitment overseas." a Chronologically arranged, nd is thus "possibly better coon- the available documents dinated" to engage in organ- present the following pie- ized political activities ture of 1TT's endeavors to abroad. bring its weight to bear on With worldwide assets of the Chilean situation. $6.6 billion. ITT ranks eighth In a memorandum sent on in Fortune Magazine's list of Sept. 14, 1970, to William R. t i id i l en n ants. Merriam, vice-pres g major U.S. industria Its subsidiaries include such charge of 1TT's Washington companies as the Sheraton office, a corporation opera- Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09T00207R001000030017-4 ' Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09T00207R001000030017-4 Aid The ITT operative, accord- ans It "done a good Job Assessing the situat in enough pressure must be ing to the memorandum, in 'screwing-up their own ' Chile, the ITT memo as- brought to bear on Frei so further told Vaky that he dessert.' " serted that Allende was that he'll respond. was aware of a plan ad- Evidently undaunted by being directed by the Chi. "Matte did not mention vanced by Edward M. Kor- this lack of cooperation, lean Communist Party money or any other needs. ry, the U.S. Ambassador in Neal reported that he went whose "strategy is coordi- At the end, when it was Chile. Under this plan, to a wedding reception at nated" by the Soviet Union. mentioned that we were, as moves would be made to the Korean Embassy that The report also forecast that always, ready to contribute help Alessandri win the evening in hopes of button- "some degree of bloodshed with what was necessary, he run-off in Congress so that holing Secretary of State seem inevitable" if the he would resign in favor of Rogers or Under Secretary 1lessandri Formula" fa- said In we finald a advi of lthe Frei. Neal also referred U. Alexis Johnson. vored by ITT succeeded. memorandum, the two ITT to ',rumors of moves by the Neither man was there, In the event of violence, rrsen dum,s o f f e r e ITT Chilean military." but Neal ran into then At- the two ITT operatives rep When Vaky replied that torney General John N. , wrote, the Chilean army and some recommendations for the Chilean situation was a ,Mitchell and mentioned the national police "have the actions "apart from direct "real touch one" for the Chilean problem to him. capability." Moreover, they assistance" that could be un- United States, the memoran- Mitchell answered that he added, "we know that the dertaken to fight Allende. dum states, Neal voiced the had recently seen Geneen army has been assured full Among other things. they hope that the White House, and could "understand" his material and financial assist- proposed that ITT and other the State Department and concern over ITT's invest- ance by the U.S. military es- U.S. corporations in Chile other executive branches ments in Chile. According to tablishment." "pump some advertising" would "take a neutral posi- the memo Mitchell said Frei Was Key Into a chain of newspapers "help Lion or not discourage" at- nothing more on the sub- opposed to Allende, This estimate of the Chi " T some tempts to "save the situa- ject. with ~cttin, propa- tion." A memorandum on Sept. lean army, the memoran- gandists working again on Neal then asked Vaky to 17 addressed to ITT senior dum said, conflicted with radio and television" and tell Kissinger that. ITT Pres- Vice President E. J. Gerrity l>orry s opinion of the coup- "bring what pressure we try's forces as a "bunch of ident Geneen was willing to was signed by two of the can" on the U.S. Informa- come to Washington to dis- corporation's field opera- toy soldiers." The ITT docu- tion Service to distribute ment nevertheless gave cuss the corporation's inter- tives-Robert Berrellez, a hih marks for his o- anti-Allende e d i t o r i a I s est, adding that "we are pre- long-time Associated Press Korry litical conduct, p throughout Latin America pared to assist financially in reporter in Latin America and Europe. On the one hand, it re- sums up to seven figures." now based in Buenos Aires On Sept. 21, Washington It is not clear from the for the company, and Hal ported, Korry was keeping operative Neal sent a brief the on the, re- memorandum whether this Hendrix, a former Scripps- luctant Freisu en age him- memorandum to ITT Vice- offer of million-dollar assist- Howard correspondent in Yrcidcnt Merriam praising self "to the point of telling ance refers to an input into the area who currently open- him to 'put his pants on'." the report by Berreliez and the Chilean situation or rep- ales for ITT out of New Hendrix, and added a few resents a domestic political York and Miami. Calculating that the anti- rNeal reported hav- contribution. 'Big Push' Allende effort "more than remarks. ing e advised John Fisher, Neal went on to advise Stamped "Personal and likely will require some out- then head of a State Depart- Vaky that ITT has long " side financial support," Ber- ndent office formerly called ., Confidential," the document rellez and Hendrix reported, feared the Allende victory" notation by ITT's "We the Bureau of Andean and and had been "trying unsue- bears ashin a cam: Vice President have pledged our sup pacific Affairs, that "we are cossfully to get other Ameri- Merriam: "This should be port if needed." ready to see anyone or do can companies aroused over tightly held." The two ITT operatives anything possible." the fate of their invest The night-Wage memoran- also reported in the memo According to Neal. Fisher ments, and join us in pre dum reported that Anibassa- on a meeting they had with replied that he "understood According to the uocu- "received a message from wnose aavice they presuma- ment, Vaky promised to State Department giving bly considered important. pass Neal's message along to him the green light to move Matte told them, they said, Kissinger and "offered to in the name of President that the Chilean armed keep us informed." Nixon." The ITT memoran- forces commander Rene Told Mitchell dum said that the message Schneider was "fully zware" The following day, Neal gave i' orry "maximum au- of the danger from Allende reported in the same memo thority to do all possible- but hesitant to act. he telephoned Assistant Sec- short of a Dominican Repub. But retired general Rob- retary of State Charles A? lie-type action-to keep Al- erto Viaux. they went on, "is Meyer, referring to him as lende from taking power." all gung-ho about moving "Chuck," a nickname Meyer Precisely what Korry had immediately." Schneider, detests. Here again, Peal ap- been instructed to do is not however, had threatened to parently got a brush-off. clear from the memo. Its have Viaux shot "if he As his report to Merriam context suggests, however, moves unilaterally." discloses, Meyer tactfully that a "big push" was under According to Berrellez advi Depart him that waatchinStang way to persuade the Chilean and Hendrix, Matte empha- eparment was "watching Congress to select Alessan- sized that Frei was the key, the situation as closely as dri, who would then resign but that he would not budgie poesiblec and was awaiting to permit Eduardo Frei to unless he was confronted by the outcome Chilesof the rtt. off run in a new election. Or as "a constitutional threat." in the Chilean Congrold the memorandum put it: Concluding the report on Neal said Meyer told him At this stage the key to their talk with Matte. the that the Chileans them- whether we have a solution two ITT operatives wrote: selves "are becoming quite concerned" and that "even or a disaster is Frei-and Bring Pressure the labor unions see a disadhow much pressure the U.S. "That threat must be pro- and the anti-Communist in Allende," Accord- movement in Chile can vises one tc?a.' or another ng to to Neal, Meyer further through provocation. At the sal rav problem" and that the Chile- The nest day. ITT Vice- President Gerrity sent a short cable to Geneen, the company president, who was apparently in Europe at the time. The cable suggested that the "strategy" recom- mended In the memoran- dum by Berrellez and Hen- drix "is the best course to be followed." More mysteriously, the message said that Merriam reviewed the actions being taken that clay "with the man you introduced him some months ago." The man. cited only as llerriam's "contact," was reported as having suggested that "all possible pressures be ex- erted." On Sept. 29, Gerrity sent a longer telex message to Geneen, who was still in Eu- rope. Gerrity reported that he had been visited by the sterious individual re- c%`..1r.;e-,! Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09T00207R001000030017-4 Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09T00207R001000030017-4 ierred to in his Sept. 2Z cable. The indidivual was plainly known to Gencen, because Gerrity described him as "the man you met with Merriam some weeks ago." This anonymous "repre- sentative," as Gerrity termed him, put forth a plan that would cripple the Chi- lean economy, ignite social unrest and hand the army the pretext to take over. Stating that he did "not nec- essarily agree" with the project, Gerrity outlined it for Geneen. Among other points, the project required that banks delay or not renew credits, that companies "drag their feet" in sending money, making deliveries and ship- ping spare parts, that sav- ings and loan companies be closed and that corporations either shut their doors or withdraw their technical em- ployees and refuse future technical assistance to the country. GerrItyIs reservations ?about this plan for "induc- ing economic collapse," as he called it, were based on his doubt that other key cor- porations in Chile would fol- low it. He told Geneen that be advised the unnamed "visitor" that "we would do everything to help." But, he added, "I pointed out in de- tail the problems we would have." Be Discreet An internal memo from Gerrity to other ITT execu- tives in Washingtori the next day revealed the mysterious "representative" to Ii a v e I been William V. Broe, then director of the CIA's Latin American division of Clan- destine Services. The memo, dated Sept. ICO, also disclosed that Geneen agreed with Gerrity' that Broe's suggestions "are not workable." Gencen futher recommended, according to the document, that "we be very discreet in handling Broe." The Gerrity memo also pointed out that other top CIA men were not entirely enthusiastic about the Broe proposal for an economic catastrophe. His memo said that Gre- gorio Amunategui, a repre- sentative of Alessandri, had advised Enno I-lobbing of the CIA that the best policy at the moment was "keep cool, c c rock the boat, we the growing dissatisfa i told him, Neal said, that he ? of the corporation's meoto had reduced U.S. "pipeline" are making progress, --writers with White House aid to Chile as much as pos- Hobbing, a former Life inertia. sible but was having diffi- editor who has worked inter- On Sept. 30, for example, culty convincing the admin- mittently for the CIA for Neal sent a memorandum to istration to cut "every pos- years, transmitted this coun- Merriam entitled "Chile-A sible assistance" to the coun- sel to Jack Guilfoyle. an ITT Questionable U.S. Policy." try. employee in Washington. in which he pointed out that Neal reported that Korry, "This is in direct contrast to American aid had been de- seeking to see Geneen, ad- what Broe recommended," signed to undercut Marxism vised the ITT president to wrote Gerrity. but that the fight was being relay "any ideas about U.S. In Latin America. mean- abandoned "now that the policy toward Allende's gov- while, 1TT's operatives were battle is in the home stretch ernment" to the White apparently becoming in- and the enemy is more House ''immediately." creasingly worried that clearly identifiable." On Oct. 16, ITT's Latin nothing was being done in A similar tone of disap- American operative Iien- Chile to stop Allende from pointment pervades an Oct. drix reported to Gerrity that winning the endorsement of 7 memo from 'Merriam to Gen. Viaux had been primed the Chilean Congress on Gerrity saying that "every- to launch a coup a week car- Oct. 24. This is mirrored in a one foresees an Allende vic- Her but received word from report telephoned by Berrel- tory in Congress unless Washington to "hold back," lez in Buenos Aires to Hen- some last minute miracle As Hendrix put it: drix in New York on Sept. takes place." "It was felt that he was 29. The 'Merriam memo be- not adequately prepared, his Hedge Against Losses trays a hint of hostility to- timing was off and he "A more realistic hope among those who want to block Allende," said Berrel- lez, "is that swiftly deterio- rating economy . . . will touch off a wave of violence, resulting in a military coup." Apparent in the Berrellez report, however, was this disappointment with the progress of the scheme to undermine the economy and trigger a military coup. For one thin;;. Ike said, Frei was not taking a firm position but "has been dou- ble-dealing to preserve his own stature and image as the champion of Latin American democracy." In addition, Berrellez reported, some businessmen who seemed all gung-ho about stopping Allende are now talking in terms of trying to make deals with him." Berrellez said that some Chilean businessmen ad- vised ITT to "deal in some manner with Allende in an effort to resolve at least a portion of our investment instead of losing it all." Evidently as a hedge against future possibilites, Berrellez emphasized, "Every care should be exer- cised to insure that we are not-repeat not-identified openly with any anti-Al- lende move." While admitting to pessi- mism, Berrellez concluded by saying that efforts to pro- voke violence and bring on military intervention were continuing. Santiago Burns' In Washington. mean. while, signs of ITT's disap- pointment with the Chilean situation were mirrored in ton for. consultations. Korry STAT -, 5 nt:e ward the State Department should 'cool' for a later, vin- that would later become bit- specified date. Emissaries ter: "Assistant Secretary of pointed out to him that if he State Meyer leaves tomor- moved prematurely and lost, row for a week in Haiti and his defeat would be tanta- Santo Domingo (while San- mount to a 'Bay of Pigs in tiago burns)!" Chile.' Two days later, on Oct. 9, CIA Swann Merriam sent a long memo to John McCone, formed "As part of the persuasion head of the CIA and now a to delay, Viaux was given member of the ITT board of oral assurances he would re- directors. The memoran_ ceive material assistance dum, essentially a synopsis and support from the U.S. of the Chilean situation, and others for a later maneu- contained no indications ver" that Merriam was striving Hendrix did not identify to persuade McCone to use the emissaries to Viaux. his influence to obtain CIA However, he said that All- help for ITT's cause. ende "obviously must be Merriam disclosed, how aware of this sort of plot- ever, that he had lunched at ting,' and quoted the Chi- the CIA headquarters in lean leader as noting that McLean. Va., that day and Chile was now swarming had learned that unsuccess- with CIA agents." ful "approaches continue to By Oct. 20, as a confiden- be made to select members tial memorandum from of the [Chilean] armed Gerrity to Geneen shows, forces in an attempt to have the ITT hierarchy was look- them lead some sort of up- ing for new alternatives. rising." Gerrity spoke of invoking The ITT vice-president the Hickenlooper Amend- also told McCorre that "prat- ment, which calls for cut- tically no progress has been ting aid to countries that na- made in trying to get Ameri- tionalize U.S. firms without can business to cooperate in compensation. Ile also de- some way as to bring on ego- manded that the State Do- nomic chaos" in Chile. partment "be pinned down He revealed that General on the record" to demon- Motors and Ford "say that strate that it "has been abso- they have too much inven- lutely wrong on the outcome tory on hand in Chile to in Chile. as other govern- take any chances, and that ment agencies have." they keep hoping that every- The Gerrity memo urged thing will work out all that ITT executives present right." Merriam said that the corporation's case to the Bank of America had President Nixon, Secretary agreed to close its office Rogers and "our friends in "but each day keeps post- Congress." Said Gerrity, poning the inevitable." "Freedom is dying in Chile On Oct. 15, Neal wrote a and what it means to Latin memo on a talk lie had that America and to us-to free morning with Korry, who men everywhere-is not was then back in Washing- pleasant to r te." Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09T00207R001000030017-4 Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09T00207R001000030017-4 Gerrity also sent a letter to \McCone on Oct. 20 sug- gesting that Gen. `'faux might still stage a coup against the lane-duck Presi- dent Frei before Allende's inauguration on Nov. 4. The ITT executive informed McCone of rifts between Korry and the State Depart- ment. Approach 'Mansfield Contending that the am- bassador "deals now di- rectly" with the White House, Gerrity said that. "the word among Korry's colleagues is that Charles Meyer and his deputy, John Crimmons, are determined to get Korry out of Chile? and out of the Department if possible." On Oct. 22, the Chilean commander-in-chief Gen. Rene Schneider was assassi- nated, presumably for resist- ing pressure to oppose Al- lende. Viaux was implicated in the plot and arrested. The same day. Merriam advised .Gerrity that the time had come for congressional ac- tion in Washington. Merriam reported that a $2.9 billion Inter-American Bank appropriation bill was awaiting Senate approval, and he said that he and col- leagues planned to approach Senate 'Majority Leader Mike .Mansfield of Montana and Republican leader Hugh Scott of Pennsylvania "to see if they will just (forget) to take up the bill." The head of ITT's Wash- ington office also said he was contemplating "what other pressures we can drum up to make the State Department Slitten its atti- tude." He suggested that ITT President Geneen tele- phone directly to Assistant Secretary \ley'er. In an attached "Reap- praisal of Our Latin Amc'ri- can Policy," \Icrriani said that he did ' ;lot visualize re- taliation or vengence as part of'our? policy." lie urged, however, that "every possi- ble pressure which might keep Dr. allende within hounds" be applied. includ- ing "a stoppage of all loans by international banks and U.S. private baflks" if confis- cated American holdings in Chile were not compen- sated. Merriam sent a copy of this program to Kissinger on Oct. 23 and asked for the presidential adviser's com- ments. It took Kissinger more than two weeks to reply with a brief brush-off saying that he had read it "carefully" and passed it on to his Latin American sae- cialis Apparently still hopefu. Gerrity sent the Kissinger note to Gencen with the cbmment: "Believe this is more than perfunc- tory." 'Male Martha Mitchell' Nearly a week after the Chilean Congress voted Al- lende into office, ITT's ap.. parent quest for scapegoats focused first on Meyer. In a memo to Gerrity on Oct. 30, Hendrix wrote that Meyer "ranks very high as the weakest Assistant Secretary in recent times-at least during my 22 years of asso- ciation with the area." Accusing Meyer of show- ing "an enormous lack of imagination," Hendrix said that he and his deputy, John Crinunons. "jointly led the effort to make certain that the U.S. this time did noth- ing with respect to the Chi- lean election." Hendrix and Berrellez fol- lowed this appraisal of Meyer with written assaults against Korry. Berrellez called Korry "a sort of male Martha Mitchell" who "blew his composure with the U.S. news media. lie also charged Korry with having become "hlindiy enamored" of Frei. and thus "his politi- cal evaluation suffered ac- cordingly." Hendrix added that, he felt "fairly certain" from Korry's comments that "lie is trolling for a position ,. ith ITT when he gets bounced by State." Korry, a former Look magazine cor- respondent, is now with the Overseas Private Invest- ment Corp., the U.S. govern- ment's private development loan guarantee organization which now has millions of dollars in claims against it for the U S. copper interests expropriated by Allende. In Chile, meanwhile, the documents linking ITT and the CIA are now proving to be a boon to the Allende government. Among other things, government media are associating iTT and the CIA with the Schneider as- sasination. Gen Viaux and 24 others arrested and con- victed in the assassination plot are still awaiting sen- tencin?. Then revelations ar. un- likely to help ITT in its ef- forts to gain compensations for its Chilean holdings. Discussing the possible re- percussions the corpora- tion's political activities might gave. ITT Vice Presi- d',nt 'Merriam expressed an awareness of the risks but tended to discount them. In a memo on Oct 22. 1970, he wrote: 1. personally, feel that we don't have m':ch to lose one way or the other. unless, of course', our so-called 'pres- sures' come back to haunt us in other Latin American countries. This I also doubt." Sanitized Copy Approved for Release 2011/08/05: CIA-RDP09T00207R001000030017-4