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March 26, 1973
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Approved For Release 20 2/ CIA P7 -0 MW CIA lil ML 26 March 1973 25X1 SUBJECT: Director's Conversation with Senator Church Re Bill Broe's Appearance Before the Subcommittee on Multinational Corporations. 1. This afternoon the Director called Senator Church in response to his letter of 23 March requesting Mr. Broe's appearance under oath, in public session, before the Subcommittee, at 10:00 a. m. on 28 March. 2. The Director explained that we wanted to be as cooperative as possible and the Senator said he appreciated this and recognized that Broe's appearance created some special problems for us. 3. The Director said that we were prepared to declassify for publication a large part of the testimony that Mr. Broe had already provided the Subcommittee staff informally. He suggested that on 28 March Mr. Broe appear in executive session with the understanding that his testimony at that time would also be declassified for prompt publication, except for possible small sensitive items which could be deleted from the record. In response to the Senator's question the Director said of course there would be no objection to this testimony being under oath. The Director added that we were concerned over the precedent which would be established if an operations officer testified in public, butwe fully recognized the Subcommittee's legitimate interest and the questions involved and wanted to be as helpful as possible. 'N r CIA I `~ L y a u ' ONE Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 10 MNNI Vvcu V VI R=I=420C ? LV ~ L/ i .111.}tlitt ITT LL~SYJ J 17.VVV.7VVLJ-.7 tr 4 4. The Senator said this sounded like a reasonable proposal and he would take it up with his Subcommittee the next day. 5. The Director said he was sending a letter formally setting forth the above proposal, and added that Senator Symington had expressed the view that an executive session would be the best solution. The Senator said he appreciated our prompt responses to the Subcommittee's requests, and remarked that Mr. Broe's testimony was important because the only other person knowledgeable on some of the significant questions involved was apparently unable to recall what was said. JOHN M. MAURY Legislative Counsel Distribution: Original - Subject 1-DD/O 1 - C /WH 1 - IG 1 - General Counsel I - OLC Chrono OLC /JMM: (26 March 1973) CIA 9 TERN L USE ONLY 25X1 Approved For Release 2006/02/09 : CIA-RDP75B00380R000300090023-9 Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 THE EVENING STAR DAT i # 4Jf7 E Z" PA?sE, Testimony by Agent is a First for' By JEREMIAH O'LEARY drive to nationalize ITT prop- the unique aspects of the hear- Star-News Staff Writer erties without compensation. ings on ITT. I would agree, A1n aFrt bo CIA todgy S therefore to ha hl e M i B ' c v r es nger roe s agreement ,. de an un recedented a with the subcommittee about appear before your subcom- eamance before a senate su mittee under oath to present comma ee 7oll uncle Brae's appearance today was testimony limited to his con- what cn described in a letter to Church versation with ITT officials in iZ-n-sI i wen himself and yesterday. It said. 1970 in connection with Chile. erns Cana elephone and "I believe that our discus- "Due to compelling opera- rpganling DO- in recent weeks have in- tional and security reasons lihinal PtPntc4n Qk;,o which we have already appearance of William dicated my desire to cooperate Y V a, ormer ief William to the fullest extent possible cussed, I must request that Mr. Broe's appearance be limited with the subcommittee in the CIALatiz aican ' ' on, to executive session. Further, b ore the erate ubcommit- matter of the ITT-Chile inves. as the subcommittee feels it is free an Multinationa-T-t~i,r - a- tigations consistent with res- desirable to make Mr. Broe's w' behind elfispfi ponsibilities placed on me by testimony public I would be Butt CT1rman Frank Churc law and with the necessity for glad to review his testimony o has won ce au an respecting certain sensitive y _ _._ _ agency relatinn-chine for that purpose. tr, scri muc o e es- suggested that Mr. Broe meet placing on c record tion-nn a'p-answer spssinn ill with you and the staff of your placing on the public record th items wb h b subcommittee in formally is your mu Min- be sed to the public r b y and mittee believes are important an ith n rs. privately to discuss the extent in connection with Its present t of M B'slih o _ operaing agent of ther.roe reatonsips investigation. This procedure siana outgrowth of that meeting, 11"`L'"`" ""'jC`"- appearance undersucl- tives while allowin me th U.S. government operation re- garding the Chilean election outcome. John McCone, former CIA director and now a director of ITT, testified he understood the money was to block Al- lende from taking power but ITT senior vice president Ed- ward Gerrity said he thought the money was for housing and agricultural projects that mightal'np, Al rif41;ease 2006/02/09 CIA-RDP75B0038OR000300090023-9 Mr. Broe responded e near-open conditions. T to su'l- for the flexibility needed to discharge co i ee, classified record to a series of my responsibilities as called ally questions submitted to your for by the National Securit3 was- to-makr=pub}' die, subcommittee staff. I have Act of 1947." fi t to. since reviewed Mr. Broe's an- The subcommittee was to re dav. according_ _ eS. swer to these questions and '~ concluded that most, if not all turn to public session later to Who Initiated Plans? of them, can be declassified day and question former Am Subcommittee officials said for incorporation in the public bassadar to Chile Edward Kos it was obvious that the CIA record if you so desire. ry and two officials oof the An; agreed to this break with prec- Unique Aspects conda Copper Co. edent because the agency is anxious anxious for its side of the ITT "As you know, operating of- controversy to be made ficials of the agency have not public. Testimony in the hear- previously testified under oath ings last week brought to in public sessions. I desire, light inconsistencies in the however, to continue to coop- reported relationship between erate as fully possible with ITT and CIA in connection your subcommittee because of with the election of Marxist Pdesident Salvador Allende in Chile. The major question raised by conflicting testimony is whether CIA or ITT initiated plans whereby the corporation offered up to $1 million to any Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 DATE 27 MIL-15 - ___ PAGE _J O.I.A. AIDE TO TELL OF I.T.T. DEALING& Official to Testify on Chile! in Unusual Arrangement By EILEEN SHANAHAN Special to The New York 71mee WASHINGTON, March 26-1 The Central Intelligence Aiz,ji- ;v and a special Sena snh- c mmit~-t= ? ?`~ tnrlayr inn an unusual arrangement whereby a C.I.A. official morrow about his ilea ings,with! the International Telephone and Telegraph Corporate in ^^ ^rith the ~~'* ca]' connect' Events at issue occurred in 1970 and 1971, before and im-, mediately after the election of President Salvador Allende Gossens, a Marxist. Testimony already heard by the Senate subcommittee on multinational] corporations shows that I.T.T. officials, including Chairman, Harold S. Geneen had repeated contacts with William V. Broe, then the C.I.A.'s director oti clandestine activities in Latin,] America. show that Mr. i ti h! alL possible ste Iz he 41 ign,4 Mir a f's ati_mntc to g~narat,R a take.-' the mili' arv System ilsed Sparingly The aampnts made by _ Ayjltnmmittee. after ex- tended ne otiations with James R E ever ,1 thp C I A. will permit the ,i hliratinn after rpnsnrchip, r,f_Mr Rrne'c tactimnnv before a closed ,ion of the~ub- mn ittoP. I his is the same system that as used last year by the eriate Armed Services Com- inittee in the case of Maj. Gen. John D. Lavelle, who was de- _;oted following disclosures that he had ordered bombings of North Vietnam that were not authorized by his superiors. it is a system for getting essential testimony without dis- closure of information deemed ital to national security and has been used sparingly since it first devised for the Sen- ite investigation of President truman's ouster of Gen. Doug- las MacArthur as the United stances they c uld remember Coniz,ressional Jointl ?~78 r~lr /1n Upp in the 'I en he I expressed ala ov_let! economy was growing faster nePr,ran aythe unary--_o Francis Gary fbp t l-2 rr was shr -and captured by the signs. Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 L Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 THE WASHINGTON POST DATE Z7 IM44G13 PAGE_ CIA Agent To Testify on ITT, Chile By Laurence Stern Washington Post Staff Writer In an nnnreeednthA a et'on,. the Central Intelligence Agency has agreed to ermit isfor~~m~er hief vo er o ra- tiv or emi- M gare to testify- unde oath ,The CIA officialT&"liar .V. l ne_ is schedule tj LAD-Mear at a 9:30 a.m.. e1 nsed s sst' ; of t1_ Senate Foreign Relatigns StilbenmmittPa ilt~na_ ti-anal Cornorat}ona to talk dealings with the In-e tprnatinnal pwith illeth! d Telegraph-M. Broc's testimony, due to be made public later today after review by the CIA, will re- solve one of the central con-, tradictions of the ITT investi- gation. It ITT board an a- rpiri S_ Geneen iii. a S eraton Cprltnn Hotel room night of my 1R, 1g70. The meetinv was arranged b for- r,,Or CIA.- rli ret tnr Jnhn-A-W.C- ~~. an_ ITT board member pd still a CIA ncn1 and by Richard M. Helms Me- Co e's successor s, _heaT of tlQagency. McCone has testified that two months after the meeting he transmitted to national se- curity adviser Henry A. Kis- singer and Helms, at Geneen's request, an ITT offer of as See ITT, A17, CoI. 5 ITT, From Al ITT documents indicate that much as a million dollars to Igoe came up with a plan un- help underwrite a U.S. govern-I der which the company would ment plan to block Chilean] undertake to contact other President Salvador Allende's American firms doing busi- election in 1970. ness in Chile, calling for meas- But one of Geneen's chief ures that would seriously im- deputies, ITT senior vice pres- pair the already fragile Chi- ident Edward Gerrity, has told the subcommittee that Gen- i Ben's offer was to help provide housing and technical agricul- tural assistance after Al- lende's election. Gerrity could not provide the subcommittee with corroborative testimony that such a proposal had been delivered to the government. Arne hag already given the subcommittee a private, un- aworn accoun o and Geneen discussed durlnhe Carlton meeting, It was re- su ably on the strength of tb,a test monothat sucom- mittee counsel erome 1-MAn- I A Mc-Cone rat week so W- i Geneen a not - off?red $roe a large- Swn -1g_ inance tip an -All nd . plan. Mone said he didn't know. h testimony of Broe and former U. ml asG sdoor- to Unile war orry is a~ ex- ec e to ex ore egu on Peet of the plan was that the CIA would have no opera- tional role in carrying it out. McCone told the subcommit- tee that he personally had op- posed any plan under which ITT itself would sabotage Al- lende's prospects of election. However, the former CIA chief said' neither he nor Gen- een had any objections to un- derwriting a "government plan" to achieve the aar e goal. Helms was described by Me- Cone as having felt in the early summer of 1970 that there was little prospedt of blocking the election of Al- lende, a Marxist who had in- curred ITT's enmity by raising the specter of nationalization of the corporation's Chilean telephone company subsidiary. However, after Allende won his narrow popular plurality on Sept. 4, 1970, a major lob- o et er op litical pres pre hying campaign was unleashed was brou ht to bear o" Ip by ITT, according to corporate CTA to invnive_itself_Wiwith 7i' documents, to block his elec- in =ton-All de strategies. Senators familiar with CIA operations doubt that Broe, an tion by the Chilean Congress eral John N. iti?ib-hell during the week following the board meeting. An ITT field ?f leer in San- tiago wired the company's New York heh inuarters on Sept.. 17 that Ambassador Korry two nigh s earlier had received from Washington "the green light. to move in the name of Pi eaident Nixon to do all i osible-short of a Dominican Republic-type; action-to keep Allende from taking power." Korry will be questioned to-i day about the "green light" ca- ble and its origi is One of the authors of the .rl~ssage, ITT; public relations in to Hal Hen-! drix, testified ti i the inform- ation came fru a well-con- nected Chilean Ch istian Dem- lcratic politici-r. not from U.S. governmer: ,,urces. Members of i -w Senate sub- committee wan lo know how information of such a highly sensitive nature baked out of U.S. governmeti . channels into the hands of an t7T official, if indeed the "gr en light" re- port had any ba;as in fact. g anpe trance toll wa,i..marx the ri -s? time a CIA o erative has 1,ei n Perm~t1ed t~ndgr naith hp f a cnn~ressinna1 ;,4limittee.c- ^^ r il i n to .nhenmmitt e experienced intelligence oper- on Sept. 8 and 9, Geneen es. The agency normally ative, would have met with asked McCone to transmit his' carries out its iaison with Geneen and other ITT execu- financing offer to the White Congress throu-'h select pan- tives without instructions House and the CIA. McCone els of the Armen Services and 'from his superiors in the CIA, testified that he talked to Kis- Appropriations committees in notably Helms. Before leaving singer and Helms in the ensu- the House and :-mate. for his new ambassadorial ing few days. Other ITT offi- post in Iran, Helms also testi- cials contacted key staff peo? ,fled at a .closed session of the ple in the State Department multinational subcommittee and National Security Council on the Chilean affair. as well as then Attorney Gen- Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 i t,sterdloy's high -64_.aU-Zv5u p.m. Today's low, 38 at 5:50 a.m. Details, Page B-6. 121st Year. No. 87 Copyright Q 11973 The Event Star Newspaper Co. DATE ~Nii1 C13 WASHINGTON, D. C., WEG1ESDAY, CLINICS FOR FIRST OFFENDERS No. Jail for Addi By PATRICK COLLINS not been made public but one proves to be successful in dis- Another part of the prop ,s;41 Comm Staff Writer i p fpQ~d- ' uw. c?~aa w~ro w(nuld give District pc lice in the 1?iJ.Ralaal.J~~/ . -u in violation or iu~e1I,. profits" i b ons su ,multinationalcorporat - EDWARD KOItRY erformance tional law. mmittee "the ' p Co , of the Chilean economy has been poor and a major reason =for, the present lack of new ,,,lending by the international development institutions." The subcommittee is investi- gating the involvement of the International Telephone & Tel- ,egr-aph Corp. and the U.S. gov- .> vrninent in internal Chilean af- fairs. No New Loans Hennessy said no new loans have been made by the World r ,Bank, the International Fi- -; fiance Corporation or the In- ter-American Development Bank (IOB) since Allende was elected president of Chile. in -,:September 1970. Before 1971, he said, Chile had received more than $270 million in loans from the tiorld Bank group and $312 ai illion from the 1D:B. Allende la's elected in October 1970. Iennessy acknowledged that Treasury is, maintaining coppacts with all U.S. compa- sus affected by Chilean expro- priations, including ITT. He said he had several con- ts with ITT's Washington reptesentatives and that for- rher Treasury Secretary John f 'actual't )Ilx${7i;,- h1e has repudiated t'Dangerous ]Precedent' He noted that the excess profits in copper are attribut- ed to precisely the period when Chile was a partner with the two American copper com- panies. "They thought they had a good deal," Hennessy said. "But if a company loses money, nobody steps in to say that is an excess loss and of- fers to help. Retroactive appli- cation of excess profits is a dangerous precedent." Mcanwh1_e. the committee, he m h[ a T+Y ank Ohu , T,aahn, inn l- it would re ease this afternos- on of IA agent William V-0- ad ia-close-~- in the C: o ec ion )?gn a hairs-breadt g lity in agree-ni in race. Bu fQ"wid c ,runs h lleize and Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 B. Connally had received a visit from ITT president Har- old S. Geneen after the Al- lende government intervened in ITT's telephone holdings in Chile. Soundly Managed Economy The charters of the develop- ment banks include an explicit requirement about the ability of any country to use and re- pay foreign borrowing, Hen- nessy said, adding that a pri- mary condition for lending- which Chile failed to meet- was a soundly managed econo- rny. No amount of external finan- cial assistance can substitute for needed internal measures, Hennessy said, and present conditions make it impossible for funds to be used for the benefit of the Chilean people or with reasonable possibility of repayment. "In the case of Chile there is a general debt repayment problem and particular prob- lems of debt repudiation," Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 NEW YORK TIMES DATE A-b MO PAGE 3 Ex'-Envoy Says the C.I.A. Ordered Polls on Allende By EILEEN SHANAHAN Special to The New York Times WASHINGTON, March 27 ?The Central Intelligence Agency commissioned polls to determine the probable out- come of the presidential elec- tion in Chile in 1970, Edward 10. Korry, former United States Ambassador to Chile, said to- dlay. .13nt Mr Knrry wnnld oat say, under questioning from a s ecial Senate subcommittee, yhether he also had known a )reported by the a enc to set aside $400.000 for n_oCj ands activities in Chile influencing the out- rs of that election - ' The winner was Dr. Salvador Allende Gossens, whom Mr. Korry said he had wanted de- eated because he relieved that r. Allende would carry out the Marxist platform on which ran and would nationalize he American owned businesses in Chile. Question Raised by Lawyer with about 40 per cent of the vote. Mr. Korry said that he had challenged the validity of the polls because they were based on 1960 census statistics and he had felt that more up-to-date information would show less support for Dr. Allende. The Chilean won 36 per cent of the popular vote and was later elected by the Chilean Congress under a regular pro- cedure for deciding an election in which no candidate received a majority of the votes. The decision to allocate $400,000 for anti-Allende prop- aganda was made, according to Mr. Levinson, not just by the Central Intelligency Agency but also by the high-level inter- agency Government committee that oversees the agency's pol- !ley. Mr. Levinson indicated that the money had been earmarked for use in Chile in late June or early July 1970; the popular election was held Sept. 4, 1970. Mr. Korry took the position The question_ ahnnt a s4n0,-that he could not answer ques- n a fund was raisedtions on the reported fund and 1).Z Jerome T Levenson. crilet on other matters he was asked Wunsel tote sub coommittee on about today. i u nn'- 1 c ion nsi Declines to Answer q =unit n.~n~,.,aais in ~E...11,, . nJ T.evi ovinann slid not 11 mg ~,,:,~,~ jti.liairj t ^^ - U:. ............ P-- +1... .. -~n.?+:nn + .. 1 On questions about instruc- tions he had received from the. State Department, he said that if he answered he would be vio- tin, ortivitinc in I atin America, \WTilliom V Broe, Mr. Broe's testimony is to be made public as soon as top agency officials have reviewed 't for previously unpublished Information that might dis- close United States intelligence sources or methods. Results of Polls According to the Korry testi- inony, the polls that the C.I.A. commissioned showed that Dr. Allende would win the election. which was a three-way race $4nn o00 had lien made avail. a 1 fence electtin. Earlier in t e day, however, the cnhrnmmittee had g11PS- ity he had made when sworn as Ambassador. Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 ~ ATE 1~W- C.-13 PAGE CIA $400,000 Chile Fund Reported By Laurence Stern Washington Post Staff Writer Senate investioators.soii hf ..eb- Whorized to suend_$4Q0_000iag_Qg,=t propaganda action against Marxi t prgsi en is caaaWate 'adnr _.Al- lende i ing.. hP sip LPZ of hence of the fund was first broached by Jerome Levinson, counsel to the .Senate Foreign Relations Sub- committee on Multinational Corpora- tions, during the questioning of former Ambassador to Chile Edward Korry. Korrv r - e d that he knew a sen- group of the National Security Con cil me_discuss the CIAs strateev to- Ward AliPndw iai +~ Z qr rl. i~ne of- 192Q. But he referred the subcommittee to CIA Director James R. Schlesinger on the question of whether the NSC policy group allocated $400,000 for co- vert propaganda activities against Allende. The National Security Council com- mittee to which Levinson referred is the government's senior policy forum for covert intelligence operations, and functions under the direction cf Na- tional Security AdviqHenry Kis- singer. "AmNng to d6 iff activities of the r to," ? rrv tolc~lQn. "It is the objiga- ti rg ~?f the CIA director t6 advise ou?" Last week former CIA Director. John A. McCone told the subcommittee he had been advised by Richard M. Helms, the agency's director in 1970, that "a minimal effort" bad been authorized in the Allende election "within the flexi- bility" of the CIA's budget. McCone said Helms also told him the senior 'interdepartmental commit- tee, known as the Forty Committee, had considered the matter and decided that nothing of a major nature should be done to block Allende's election. The subcommittee is examining whe- ther the International Telephone and Telegraph Corp. exercised improper influence in the Chilean presidential election to stave off nationalization of its Chilean telephone company sub- sidiary, and whether U.S. government agencies worked in collusion with ITT in an attempt to prevent Allende from assuming the presidency, Korry, in an afternoon of testimonial sparring, declined to tell the subcom- mittee what instructions he had re- ceived from the State Department in the crucial period between Allende's popular election on Sept. 4, 1970, and his installation by the Chilean Con- gress the following Oct. 24. "I have a deep abiding conviction it is morally wrong to give you the de tails of privileged communication be tween an embassy and its government,' the former a0bassador told the sub committee. The ; gtuettiori of Washington's . In str t4tjoiis' to' i>> e ` nrrec a been at Wor Infer- vise Mr. Merriam that ap rC A ns. .lessandri Rodriguez, one -of national Telephone and Tele- proaehes continue to be made In releasing the transcript, wo relatively conservative can- graph Corporation officials had, to select members of the armed Senator Church said that he idates running against Dr. Ai'- in the meantime, been talking forces in an attempt to have thought it imprope or either to the State Department and them. lead some s 09 of uprising? private companies ru he United ,nde, a Marxist who was the President Nixon's adviser on Mr- Broe: No. Qi ,a n m er St tes Governmen to inter- a national security, Henry A. Kis- of occasions Mr. dam. ques- vene in a free elec t n-which singer. Properties belonging to tioned me regarddng possible the election of or Allende s this ' f D the b il o a?re free elections i here. Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 . action y m itary, a I.T.T. were seized ater r was, by all accounts He c merited took office in Novem was a subject evetybne was In melted that at tb tame time , o'7n terested in. I advised his' that the ideas for int, -i~ ention in our coverage of the ,Irlilitary Chile were being d it ussed, the gave no indication they would, I'United States wa ighting a take action. v, in Vietnam, the stated. purpose og which v as to as- Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 told Senate ,y? rs that -and dec med isz~jLlgbbstazitial l fun y card chairman arc Gem An to block + e e ec on ava r In sworn testimony released yesterday, William V. Broe, former ,CIA chief of Glandes- tine operations in the Western Hemisphere, aJA21 nowt- !edged dicri1ssF,dseps * L1i T T ffirialg to arreler. ate nrtfic~ in,, ;t4hility in Chile at a crucial political pe- riodfor Allende. ,Broe's testimony, given to an investigating subcommittee Tuesday under an unprece- dented arrangement, rnn 4 ed. earlier assertions under TT vice nresid nt that j n en had made the money offer to finance hous- ling and technical agricultural a.-istanpp in Chile. Geneen is due to testify on ,his financial offer to Broe on Monday. Until then, Sen. Frantc Church (D-Idaho) said ;yesterday, the investigators would not "pass judgment" on the possibility of perjury ac- tion in the ITT investigation. Church is chairman of the Senate Foreign Relations Sub- committee on Multinational Corporations, which is con- ducting the inquiry. The panel questioned Brae in closed ses- sion Tuesday morning and submitted the transcript to the CIA for review. urch said it was nn rare r an operating' agent of -tie ency v sworn i- monv to a congressional inv s- Broe testified that he went to the meeting with Geneen at the Sheraton Carlton Hotel on the night of July 16,? 1970, un- der instructions from then CIA director Richard M. Helms, who was rec'entiy re- placed by President Nixon and appointed Ambassador to Iran. i At the meeting, roe testa. fied, Geneen ..offered the sub- stantial fund - which would be control, e d a ~$ p 6d THE WASHINGTON POST CI A Aide. D ITT on Fun d f)f fer By Laurence Stern Washington Post Staff Write r highhigh-rig Central In.! lElhnce Ac nev n ' al as neled by the CJ A -- to sup- port the eandidacy of Jorge Alessandri, of tie righ- wingi National Party, against Al-I lende. In declining the ofier, Broe said, he told Geneen. "we could not absorb the funds and; serve as a funding channel. 1 also told him that the United' States Government was not!, supporting any candidate in' the Chilean election." The CIA. official asserted that Geneen at. no time sug- gested that the money would be contributed for housing or agricultural assistance. ITT's vice president for corporate. relations, Edward Gerrity, tes- tified last week that txeneen intended the money to be used for such purposes and not to influence the course of the election, under questioning by F'or- eign ea lonsflr>Trnrit e Chairman J. W. FuIbrilgHr (D- e saia rrr. no the the in~itiatiee intervene ir to omits "'Pown he corporate purposes." It was not American policy, Broe said, to influence the Chilean elections in 1970. The CIA witness said Ge- neen told him that ITT and other American companies raised a political fund to influ- ence the outcome of the 1964 Chilean election, when Chris- tian Democrat Eduardo Frei came to power, but that John McCone, then the director, did not accept the money. Broe's testimony indieated that the agency took a more cooperative attitrkie vi*.it'h ITT in subsequent nleetixi? fol lowing Allende's narrot pope lar plurality on Sept. 1970, but bgfore he was insta ed by of the Chilean Ccd)gress the fgllgwing month Again at the direction of Helms, Broe said, he met with Gerrity on Sept. 29 to exi,fore with the ITT executive ?iiow the deteriorating economic sit- uation (in Chile) could be ac- celerated ..." DATE Zq' WV_ P AGE Broe confixpied that he dis- cussed` with. Gerrity - sucli measures as curtailing bank credits and deliver;" gi,pat e, parts, creating pressure on j savings . and loan institutions j to close their doors, and with- drawing technical assistance. The CIA's endorsement of this economic pressure, said Broe, was designed to discour- age Christian Democratic con- gressmen from supporting Al- lende, a Marxist-Socialist in the crucial congressional bal- loting on the presidency. "There was a thesis," said Broe, "that additional deterio- ration in the economic situa- tion could influence a large number of Christian Demo- cratic Congressmen who were planning to vote for Allende." He told the subcommittee that ITT executives were neg- ative toward the plan because they felt it was unworkable. The ;maneuver, described in Child as the "Alessandri For- mula," was looked upan fa- vorably by then U.S. Ambas- sador Edward Korry and ITT, as well as by Allende's Chilean opposition, as a means of re-. storing Frei to the presidency: by setting the stage for a newt election. -L "ever can C, jiurch sai of M-- r lar e s - e "im r of-;' tx he w a,,., et , st rivate. cor orations ' } Inca meeting with newsmen, ~emnrra c~ J fraiild not clarify t~L l caRLCddtfon be w an` u e's, tlenlar~i-n to ., io ++ a t;al e eci SeiL i or P. Case (R- Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 THE WASHINGTON POST N.J.) also observed that "thelproposals for covert support record to me is not clear." I to anti Allende newspapers as One possibility under con- sideration is that the policy of the U.S. government under- went change between Broe's first contact ' with Geneen and his subsequent meeting with Gerrity. McCone testified last week well as.1be hiring of radio and televf-9io "propagandists" favoring other candidates. "Mr Merriam, without any discussion of those (proposals), said, `What do you think of the proposals', and I said I think they are all right," Broe testified. "Then there was no discussion." a National Security Council The anti-Allende press and television campaign was pro- interde artmental o o p gr v- up g ernirng CIA covert operations had decided to take no action to thwart Allende's accession to power. In early September, how- ever, McCone, an ITT board member and CIA consultant, approached national security adviser Henry Kissinger and Helms to convey Geneen's of- fer of aid to finance a U.S. government plan to block Al- lende. On Sept. 16 Kissinger deliv- ered a. not-for-attribution press backgrounder in Chicago in which he said, "I don't think we should delude ourseves that an Allende takeover in Chile would not present mas- sive problems for the United States and democratic forces and pro-U.S. forces in Latin America and indeed to the whole Western Hemisphere So we are taking a close look at the situation. It is not one in which our capacity for influence is very great at this ,particular moment ..." An intensive lobbying pro- gram was conducted during mid-September by ITT offi- cials with top administration officials for some form of in- posed by two ITT field opera- tives, Hal Hendrix and Robert Berrellez from Santiago. ITT officials testified that they never put the plan into opera- tion. The purpose of Church's in- quiry is to determine whether ITT brought improper influ- ence in Chile to affect the out- come of the 1970 election and the extent to which it had the active cooperation of the CIA. ITT and a number of other companies contended that their fears of an Allende ad- tions against extending n( w lines of credit to an A11ent a government because of -.i shaky financial condition. He acknowledged, howevc that the administration h a d authorized a $10 million loan to the Chilean military la year. "That seems to me from a'j economic point of view e:; tirely inconsistent," observe I Case. Replied Hennessy: "I woul have to admit there is som inconsistency." ministration were prompted by campaign pledges of the Socialist candidate to national- ize basic industries, such as ITT's telephone subsidiary as well as American owned cop- per and bank holddings. Allende's government con- tended that it was negotiating in good faith to compensate ITT for the telephone com-pany until March 21, 1972, when columnist Jack Ander- son published internal ITT documents suggesting that the corporation had actively en- gaged in plans to block the election of Allende. On the day the Anderson papers were published, the Chilean Ambassador to the United States, Orlando Lete- lier, had just returned from Santiago with a counter-offer to ITT, according to Chilean government sources. After publication of the documents, Chile broke off its contacts with ITT. At yesterday's hearing the .Assista .t .Ti?asury Secretary ington office director Will}am for Iu1~L'a' iuuai Affairs, John Merriam on Sept. 22, a week AL Hen , said the Nixon prior to the Gerrity meeting, admiaistrauuu cautioned in- and gave his assent to ITT ternational ,ending organiza- tervention in Chile. Geneen's offer of financial aid for a CIA operation was rejected. But on Sept. 29 Broe, acting with the full consent of his su- periors, endorsed an economic program to frustrate Allende's candidacy in the Chilean Con- gress. Broe testified that he also met with ITT's former Witsh- Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090023-9 THE EVENING STAR DATE -2!R VIRPK,713 PAGE ~._.._ ExOfficiaI Minimizes ITT-CIA Discussion By JEREMIAH O'LEARY Broe, and ITT senior Vice Frank Church, D-Idaho, chair- Star-News staff writer President Edward Gerrity met man of the Senate subcommit- - - - - .-LI,i.l.Clii of exerting economic pressure was no change in the U.S. gov- C1?1 - f r to the election of t'a policy of not inter- n e o M rxist a "" public tional Telephone: meeting was made pliyes- -t ____ninntion _ tWcen nolicv and The CIA agent, William V. Under questioning from Sen. Asaid. w VU- LU17 n; 4Q. e r aitaGe. t Allende" in the Oct. 24 run- ~ y~. vii election. ,ntplli~Pnc relative to world: ., 4 j ,r }t'ori'ng?,.ChiI at Allende had won a narrow ~"?? =_ t r. ~ d l lit in he Sept. general C 11;g.&Lnlster or anythiri at ~7(~~7Q }~a ~,y ~6."SL"'~35F's.S4'SCC..L7 YY'SY~dS..Yk~''^t p uVla +. ovi ge niesbauuri and Chris- p , that Xtr lie . rc?e - e.Y Theyi ~vpre, o n tian Democrat Radomiro 1o Pg-~ l"aa`i I 4` bxainst feared. Tomic but needed the Ch i r s- , Meyer contended that Broe tian Democratic vote for the t proposed no firm course of ac- runoff in the Chile C anon- tion tion to Gerrity but only sug- gress. gested feasible courses of ac- Broe also gave information tion. He described this as the that appeared to contradict j sort of "free thinking that t i est mony given the subco m- goes into policy making every- mittee e a r l i e r by Gerrity. day from A to Z." Gerrity had testified about an Broe told Senate investiga- earlier offer by ITT to pro- tors that he met with Gerrity vide the U.S. with up to $1 on orders from CI?A Director million to apply to the Chile Richard Helms. situation. Gerrity testified the William V. Broe, former money was to be limited to chief of CIA clandestine serv- constructive projects, such as ices in the Western Hemi= housing and agricultural ex- sphere, testified Tuesday in pansion. closed session under,oath. But Broe said he had met Broe described 'a number with ITT President Harold of meetings he had with top- Geneen in Washington and ranking ITT officials during Geneen had told him ITT was the crucial period of the 1970 prepared to assemble an elec- Chilean election which pro- tion fund for Alessandri's pelled Allende into power. All campaign. the meetings, Broe told the subcommittee, stemmed from suggestoin of John McCone, an ITT director and former CIA chief, to Helms, and from Helms' instructions to Broe. "Did you discuss Mr. Gerrity the feasibility of pos- sible actions by U.S. com- panies designed to create or accelerate economic instabili- ty in Chile?" Church asked. "I explored with Mr. Ger- rity the feasibility of possible Church asked Broe if Geneen had ever indicated "that the fund he stood ready to con- tribute was to be for construc- tive use, technical assistance to agriculture, building of houses, or anything of that character?" Broe replied "No, it was to support Jorge Ales- sandri." Broe said the CIA did not accept the money offer. Earlier in the questioning York meeting was not an ex- change of intelligence but A series of suggestions made by Brae to Gerrity that must have been made with a serious pur- ference th it Gerrity had told Broe at tie New York meet- ing he di:in t think the plan to provoke economic pres. sures wor Id work, but this does not at=ear in the edited transcript :?eleased by the subcommi' i ce. The New York Times re- ported th ,- according to in- ternal IT'l memos that were read into the subcommittee's record week, Geneen re- jected Brt c' , suggestions be- cause he s t they would not work. Sen. Chcrd Case, R-N.J., said the r !c=trd was not clear on whethe - 3roe went to New York specifically to offer the economic. suggestions to Ger- rity. Chui cl: said there was no evidenoe this was a pol- icy adopted by the U.S. gov- ernment but repeated that all Broe's contacts were in ac- pose. ' cord with instructions from 1941 ',d- w his superiors at CIA. '#e g0e; e_r:Chwzh_,said-_i1?e LU-Jaz See CHILE, Page 146 banks should delay or not re- t sti- new credits; that companies +Ii6S?Fpp 1Coad c,' ch drag their feet in spending said, "~,p will ..x him money, making deliveries and S,tel ,po43X~slGm shipping spare parts, creating ?t.liis_..v~ si