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November 30, 1970
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Approved For Release 2005/11/21: CIA-RDP75B00380R000300100U42-6- LATIN REVOLUTIONS SEEN B i mes , r I )n a Allance - urea - w~ By ROBERT GRUFNBERG St ax Special Writer Non-member Cuba, despite 10 years of "economic disaster," is closer to some Alliance for Prog- ress goals than most countries in t h e :hemisphere . development plan, two experts on Latin America say in a book published today. For this and other reasons, Americans should expect -that "upheaval, experimentation and change will be the rule rather than the exception" in Latin America, and the recent election of- Marxist Salvador Allende as president. of Chile confirms this "basic finding," accordin_lo ~srome I. Levinson ndQuau de. Qn s) Levinson is an Inter-American Development Bank official, and formerly was with the U.S. Agency for International Devel- opment where he was responsi- ble for all Latin American capi- tal loans. De Onis, a correspon- dent in many South American countries for more than 13 years, is stationed in Mexico City. Independent Effort Their book, "The Alliance That Lost Its Way," was issued today by the 20th Century Fund, a 51-year-old nonprofit founda- tion, which said the authors had "complete independence" in making their findings. The aim of the Alliance, found- ed under President John F. Ken- nedy, was to "compete with Castroism by offering economic support and social reform within a democratic framework," the study said, But "in education and public health no country in Latin America has carried out such ambitious and nationally comprehensive programs." The Alliance tried to "kill two birds with one stone and hit nei- ther squarely," said the authors. These targets were removing the danger of revolution, and achieving significant social, eco- nomic and political advance- ment for the millions of Latin poor. Three Main Causes But it lost its way for three major reasons, they say: The United States pursued its own security i n t e r e s t s- especially military-which, in turn, supported authoritarian re- gimes at the expense of those trying to build a more democrat- ic society. There was a major depend- ence on the "narrow" approach of technical education and agri- cultural production, at the ex- pense of expanding literacy and democratic forms of govern- ment. The result was protection of "key elements" of the pres- ent Latin society, instead of bettering the lives of the "mar- ginal masses." The Latin-American demo- cratic left proved "disappoint- ingly weak" and its leaders were subject to constri:t coups d'etat that brought in anti- democratic regimes. The report warned against full acceptance a? this time of the Latin American military "refor- mist" estab'.isiunents, which have been seen by some as the hope for a better society. Suggestlons Made The authors say the United States, in "reformulating" its Latin policy, should: e Limit arms shipments and halt military assistance mis-: sions-including CIA and De- fense `?Sep.ii then ac lvities- and maintain contact with the Latin military only through "well selected" attaches work- ing closely under the U.S. am- bassadors. ? Cease trying to . "lecture, threaten, Of dictate policy" too governments seeking assistance. . ? Halt U.S. Treasury Depart- ment interference with Agency for International. Development lending. At he same time recipi- ent nations-not AID-should de- termine the retails of how mon- ey is to be spent. Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 BEST COPY Available Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 STA sr,~nt P Approved For Relie'as fl.(.laen~' In mia in t , on a free national election for the presidency. If the congress confirms him, he will become the first Marxist to achieve power by constitutional means. After ten years and almost ' $20 billion of United States aid to Latin America, what accounts for such a turn of events? n this penetrating study, undertaken for The fwenticth Century Fund,.lerorne Levinson and Iuan de Onis report on the causes of unrest in Latin America and tell in compelling detail how the ,.. dream of an Alliance for Progress has broken down. Despite American efforts to advance the economic, social, and political development of Latin America, the problems that gave rise to the Alliance in 1961 are still unresolved. Now this main channel of inter-American relations-undermined, deflated, and distorted by events--threatens to increase resentment among the peoples of both Americas. Levinson and de Onfs offer an objcctivd yet '11 critical appraisal of the Alliance for Progress and its influence on Latin American institution. After providing a background of Latin At4ncrican affairs before the advent of the Alliance,the~' authors use key incidents in recent Latin }: u American history as well as interviews with United States and Latin American oficial9 td assess the effect of the Alliance in such cotintrk as i3ra2il, Chile, Colombia, Peru, and Vettezur itt Overall they find that the Alliance ns presently_,;`' constituted falls well short of a perfect blueprint for change in Latin Ame and they conclude with solid proposals tor roving it along the lines of the democratic is is under which it was initially inaugurated by J d r. F. Kennedy. . The authors' findings r informed by a sense of urgency deriving fron- z' ._ir belief that "Latin America is on the cs: i ? of a new decade in which pressures for ccon ;c growth and social change will sorely test ti' ?oliticai strength of the inter-American rcla ions ' Their opinions, analyses, and jrcigments ~v out of long personal association with the AIG, ,a c for Progress, for they have viewed the Ali r ce from its very beginning from the comb nentary vantage points of a United States l0rcT, id official and of ;I New York Times correct ,dent for whom reporting on the Alliance I is been a continuous assignment. The result oe t ;sir combined effort is a book that will likely ? the definitive work on the subject for a long is re to come. 41 1 JERoME LEVINSON, a grac ..r ae of Harvard Law School and a Fulbright Sc c,ar, served with the :` . Agency for international selopmcnt where for four years lie was involvc(4 ith the Alliance for Progress both in Latin An ica and in Washington. JUAN bE ON is, chief of the N ew York I'irne.t?. '' bureau in Mexico City, ha eported for many years from various countrcs in Latin America --from The A/(inure 7'Iral Lost Its 1Vay "The major lesson of the Alliance is that the reach of the United States should not exceed its prasp. Between the overambitious idealism of its development goals and the pointless obsessiveness of its concern for security, the United States really undermined the Alliance before it could get started. When the security issue lost its urgency and when other prohlcros arose. to demand higher priority----the war in Victnam, the need to defend the dollar, the pressure of protectionist lobbies, the domestic urban crisis-the Alliance, was deflated and distorted. The resulting situation is the worst of both worlds, The people of the United States feel that their generosity has not been appreciated and, in view of both domestic inflation and pressing domestic needs, appear unwilling to do more, while Latin Americans generally resent the restrictions placed on use of the funds made available, as well as the patrorizing attitude with which they were often provided.... "It is safe to predict that in the coming decade inter- American relationships will face fresh uncertainties and harsh tests that demand policies much more effective than those of the Alliance decade.. Policy-makers must use greater realism and sophistication in both the making and the implementation of commitments. They must also deepen their awareness of and sensitivity to the internal conflicts afflicting the varied social classes of Latin America. And they must achieve a profound and sure understanding of just what constitutes the national interest of the United States in its relations with its sister republics. 1 8 FEB 119" ILLEGIB Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 C~'3 THE WASHINGTON POST LATE Z?"Vd 44'7Z PAGE The Washington Merry-Go-Round THE WASHINGTON POST Wednesday, ;March :'11972 C 23 iTT Pledged Millions to Stop Alh'nde By Jack Anderson The documents indicate the interest and that we are pre- "Late Tuesda- night (Sept. company got a generally po? pared to assist financially in 15) Ambassador i xiward Korry tPrnatinnal TEjPuhid to seven figures," the finally received - a message le ra T to lite but cool reception from sums memo up says. the State Department . 1 ek the 1970 ele ft- the White House and State "I said Mr. Geneen's con- giving him the -1 en light to ist Chilean rest en or Department ' although Edward move in the naa e of President earn is not one of 'after the -- - -- -- ,.T:..,,.. r fit,,, .,, _ e sa;.a ag coven tautly anti-Allende and ""` ' "?` a" "` -?s "" - - ~friendly to I i-A cause. feared the Allende victory and es" have been trying unsuccess- The offer to spend millions Eve3111 re friendly, however,I fully to get other American was only one of a series of x TA' is T? companies aroused over the high-level conversations ITT ar e. who was then direct ! fate of their investments, and had with the U.S. government of the Latin American division join us In pre-election efforts . in its eleventh-hour pressure of rlandoctine Services. campaign to stop Allende. "Early Saturday morning, I ti CIA ITT M ee ng telephoned Assistant Secre- The huge international con- glomerate was trying to keep Broe is reported to have a Marxist government under rtPi on lv vi ited I ice Allende from seizing its Chil- 1~rPSident F. J- Gerrity. Jr., in can investments, which included ,laic New York officE to urge 60 per cent control of the Chil- hems tary of State for Latin Ameri- can Affairs, Charles (Chuck) A. Meyer, at his office. I re- peated the same rundown ... "I went to a wedding recep- can telephone company. plunge the Chilean economy 1 tion at the Korean Embassy The company's effort, and into chaos and thus nn I late Saturday. I ran into Attor- its fervent hopes fora military a ou a military upr~isi-nj-fm ney General Mitchell; so de- coup, are .spelled out in a re- wou eep Allencle out or cided to mention Chile just in markable set of secret docu- wer case the subject reached him ments from ITT's Washington ueh there is str in a cabinet meeting or other- office. We got the papers de- .A a wise. spite the wholesale shredding dance in the documents t atl entioned ,, to n>r seps " Mr. Mitchell mentioned of files, which the company the,, comnannv was Mrecent visit with has admitted took place in the to heln~h A foment troubilel r. Geneen's the r e Ian' him. He said he could under- Washington office Feb. 24 in *nn ,,;id a ,p? F?? n stand Mr. Geneen's concern 11 0.11 rassing" documents out; of our t hands. One of the men doing the Than are show that offi- talking for ITT in the Chile af- over ITT's Chile investment. ITT Intelligence Report "At this sta; " the key to whether we hay .:t solution b a disaster is 'roi-and how much pressure he U.S. and the anti-Communi:;t movement in Chile can firing to bear upon him in tt a next couple of weeks ... "(Ambassador Korry) has never let up cn Frei, to the point of tellin t him how to 'put his pants oat.' "The anti-1 11kinde effort more than like y will require some outside fl taticial support . We have pledged our sup- port if needed." Twelyp dapw .:. later. 'ity sent Geneen a 1E-lex describing a mee ng in u 713 i e th the CIA's Br=. : iio outline a five-noint ecan+~tnic lan to - thine the _Ch ,,, erns nom_&o a~ tni I'at of 1 the ncamZa e, injolve oui., lone had been, o Ve-and U e._ot-ob 1 he ( - arldr ii _ that Aiab nf tha White ou, Site fair was J.D. (Jack) Neal of Three days later, ITT's DeRartme nt and Central Intel. the Washington office. He re- Gerrity got an on-the-scene in- ported in a Sept. 14, 1970, j telligence report from two ' b ITT. The Amer- memorandum on his conversa- ican ambassador in Chile was tion with Kissinger's office. visited. Attorney General "I told (them) Mr. Geneen John Mitchell was even but- (ITT President Harold 4e- tonholed at a wedding recep- neen) is willing to come 'to tion by a zealous ITT man. Washington to discuss ITT's B Oct.. 16, a:,4ht days before Allende's elec`icn was to be voted on by the Chilean Parlia- ment, ITT was pinning its. waning hopes 'n a military, coup led by feistier Brigadiier, General Robei fir. Viaux. p 1972, United ,w.. -.are sYndiwat* ica. They reported efforts to peiauade lame-duck Chilean President Eduardo Frei to take a stronger hand in the campaign against Allende. Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 Approved For Release 2005/11/21 : CIA-RDP75B 380ROQ !30 100042-6 THE WASHINGTON POST DAT :. PAGE l y ITT Memos Bare Anti- Allende Plotting `Washington Post Staff Writer U.S. interests promoted- and then apparently backed away from-plans for a right- wing military coup in Chile two years ago to prevent the election of Marxist Salvador Allende as 'president, accord- ing to internal memoranda of ITT, the giant international conglomerate. The U.S. government, ac- cording to the ITT papers. first gave a "green light" to the U.S. ambassador in Santia- go-"maximum authority to do all possible, short of a Do- minican Republic type action, to keep Allende from taking power." The U.S. government also promised, according to. the ITT documents, to selected Chilean military leaders "full material and financial assist- ance by the U.S. military es- tablishment" if civil war erupted-even though Ambas- sador Edward Korry charac. terized Chile's armed forces as It is a fact," said an Oct. 16-for ITT said Anderson's first message from Latin America to corporate headquarters in New York, "that word was passed to Viaux from Wash- ington to hold back last week. It was felt; that he was not ad- equately prepared, his timing Former Gen. Viaux is now was off, and he should cool it'! in jail in Chile, charged ? with ,for a later, unspecified date. mutiny against the govern. Emissaries pointed out to him nvent, in connection with the th at, if he moved prematurely and lost, his defeat would be tantamount to a `Bay of Pigs in Phil.' column Tuesday on the Chi- lean episode, alleging a CIA- ITT plot to provoke economic chaos in the Latin American country, was "without founda- preelection assassination of Gen. Rene Schneider, com- mander of the Army. That at- -- r>? ~ - lac P1, euaaluu !as an unsuccessful attempt to to delay, Viaux was given oral stir right-wing resentment and assurances he ld i wou rece ve possibly to touchoff a military material assistance and sup-1 takeover. The ITT documents port from the U.S. and others i ment on the incident and for a later maneuver. It must be noted that friends of Viaux ! Viaux s arrest, but do not say subsequently reported Viaux anything to indicate that the was inclined to be a bit skepti- shooting was inspired by U.S. Interests. cal about only oral assur- ances." ITT, which had more than These and many other less $150 million invested in Chile, sensational glimpses into L.S. has since. lost its major capi- government and corporate ma-1 tall an 80 per cent interest in neuvering in Chile are drawn the Chile Telephone Company, from a new batch of secret ! and is negotiating with ' Al- g e t d ' ) -.... n over cvtu- ocuments from ITT s tiles,! ' a bunch of toy soldiers." obtained by columnist Jack pensatlon for its loss. ITT con- At one point, according to I Anderson and made available tinues to operate two Shera- th e documents, ITT informed yesterday to The Washington ton hotels and a telecommuni the U.S. government that it Post. i cations factory there. would volunteer funds in The copies of 26 memos, Taken as a whole, the ITT "seven figures," $1 million or . messages and staff reports messages from Latin Ameri more, to aid in some unspeci- hint, at many questions which l can agents to Washington and fied way the efforts to keep are left unanswered--What New York suggest a picture of Allende out of power. role did the Central Intelli-,frantic, sometimes bitter, Finally, the ITT documents genre Agency play? How serf- sometimes contradictory cotn- state that in mid-October of ously p munications t the corpo was the military lot en- within deeply was ration trying to find some- 1970--a week before Allende tertained? How would be elected a right- ITT involved? thing that would keep the Chi- wing ex-general named Rob- YasL the White Ann?P ))Pan ^n-- a..,. f th ?+of o e `name ones that Chile, was advised to hold off. In New York, a spokesman have figured in the ITT anti. - - trust episode -!'resident Har-i old Geneen, H a:'hington office vice president W. R. Merriam, public relations vice president; E. J. Gerrity a:ml others. In some n Milos, the ITT executives rei.w-ted a plan for stimulating e< gnomic chaos- which might i; r t urn, have pro yoked a milit. r' coup. But it is not clear tha, the corpora tion embrace(' i he idea fully and acted upon it. Th [x ach ineton oflicPrs ~(tribntPd it to 1L a Y'Pnl-PCP] a_ ! can a n- 4rruction; con- struction projects for fire protection and general administration, pollution abate- ment; wildlife habitat :improvement; (range revegetation and improvement; and fuel modification; watershed res- toration and improvement; land status and landline location; land classifica- tion; and geometronics. The bill would provide additional funding to the Forest Service to enable them to use modern sustained methods of reforestation. By the planting of cut- over lands and by up-to-date methods of cultivation, fertilization, an.d thinning by utilizing modern sustained yield meth- ods of forestry, growth of a Douglas fir tree can be speeded up by 40 percent. This would guarantee adequate lumber for future needs and complete replace- ment of cut lumber. The present lumber situation is very chaotic due to a tre- mendous demand and a shortage of sup- ply. On the long-term basis my bill would help to alleviate this situation. MANAGEMENT OF THE NATIONAL FORESTS i Mr. WYATT asked and was given per- mission to- address the House for 1 min- ute, to revise and extend his remarks and include extraneous matter.) Mr. WYATT. Mr. Speaker, the lumber and plywood markets are in a state of turmoil today with prices skyrocketing and no relief yet in sight. Yet the present chief of the Forest Service has stated publicly that the allowable cut from the national forests can. be increased by 50 percent with adequate funding to grow new forests. The allowable cut is that amount of timber which can be harvested each year and replenished so that the national forest may product timber in perpetuity with no peril of exhaustion. Both the Senate and House Banking Committees called for more intensive management of the national forests fol- lowing exhaustive investigations of soft- wood lumber and plywood supply and price problems in 1969. Similar action was urged by a presidential task force in 1970. But these recommendations were never carried out. Federal timber sales programs return nearly $4 to the Federal Treasury for each dollar invested and that must be a remarkable return for anyone's money. In spite of this, the Forest Service lacks a dependable source of funding to maxi- mize timber production and insure that the forest environment is able to sustain increasing demands for recreation of all kinds. As the major custodian of the Nation's standing sawtimber, the Forest Service needs both dollars and manpower. The need is critical if the national forests are to continue to supply wood fiber at rea- sonable prices to meet unprecedented demands for construction materials to house its people. Surely the richest nation in the world can afford to provide In- tensive management for its forests which have the capacity to provide us indefi- nitely with their bounty. SUMMER JOB PROGRAM (Mr. O'NEILL asked and was given permission to address the House for 1 minute, to revise and extend his re- marks and include extraneous matter.) Mr. O'NEILL. Mr. Speaker, the Presi- dent has announced an interesting new way to close the generation gap between teenagers and adults. He wants to pit them in head-to-head competition for jobs this summer. Mr. Nixon has finally recognized the necessity for a summer job programfor youngsters-a program like the ones we have had- for several years now. In fact, the President has requested, and the Congress has funded, a summer job pro- gram for this year. But now Mr. Nixon tells us he does not want to use the funds we have allo- cated for that purpose. He wants to take the cost of the youth program out of the equally important public employ- ment program which in the past 2 years has provided work for as many as 220,- 000 adults. The beneficiaries of PEP have been the returning Vietnam veteran, the welfare recipient and other unemployed, who have suffered as9, result of the job- lessness caused by Mr. Nixon's economic policies these past 4 years. This PEP - program, you will remem- ber, is another one of those marked for extermination by this administration. Mr. Speaker, I firmly believe that we need a summer job program. But I do not believe that we should bleed the beneficiaries of PEP to pay for it. I think that both programs can stand on their own merits. I think there are places in President Nixon's big-business-oriented budget where we can trim, if we have to, to pay for two vitally important em- ployment programs. As a prominent Capitol Hill colleague said yesterday of the President's high- handed action: This is impoundment and breach of prom- ise. Cities are left with the Hobson's choice of firing the father in order to hire the son. AMERICAN FOREIGN ECONOMIC POLICY-MESSAGE FROM THE PRESIDENT OF THE UNITED STATES The SPEAKER laid before the House the following message from the Presi- dent of the United States; which was read and, together with the accompany- ing papers, referred to the Committee on Banking and Currency: To the Congress of the United States: The Nation is again at peace. We also are firmly on the course of strong eco- nomic growth at home. Now we must turn more of our attention. to the urgent prob- lems we face in our economic dealings with other nations. International prob- lems may seem to some of us to be far away, but they have a very direct impact Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 Approved For Release 2005/11/211 A,-RDP71 O38OROOO3OO1OOO412-6 NEW YGk LIMES DA ~ W / PAGE M.cCne Defends I. T. T. Chile Fund Idea "Denies Company Sought to Create Chaos to Balk Allende Election By EILEEN SHANAHAN Special to The New York Times WASHINGTON, March 21- John A. McCone, former head of the Central Intelligence Agency and now a director of the International Telephone and Telegraph Corporation, denied repeatedly today that a fund of $14nillion or more fiat tfie company had ,o ffered t eiT -U n t_e S Ea G r131nar . use i .Chile Nliad been` intended to fi- nance y li gT`surreptitious." IThe willingness ? of I.T.T. to commit the money to the cause of preventing the election of .Salvador Allende Gossens, a Marxist, as President of Chile was apparently made known both to the C.I.A. and to Henry A. Kissinger, President Nixon's adviser on national security. The person who decided to of- fer the money was Harold S. Geneen, board chairman of I.T.T. Mr. McCone no longer, headed the C.I.A. at the time of Mr. Geneen's original offer, in mid- 1970, though he was still a con- sultant to the agency. He said that as an I.T.T. director he had not been told of the offer until after the first phase of the Chilean election in September, 1970, in which Dr. Allende won a plurality but not a majority. Dr. Allende was elected by the Chilean Congress a month later and took office in Novem- ber, 1970. Subsequently he took over business properties belong- ing to I.T.T. and some other. )United States companies. Mr, McCone was testifying today before a special subcom- mittee of the Senate Foreign Relations committee that is looking into the activities of American corporations that op- erate all over the world. Mr. McCone. said tat at no time. hMr. Geneen con teM- p4ated a le ere uhnd chaos, spl a re Bated rdcom- mendrtions to that effect from various people within. LT. . and other -, thin the Q.I "What he had in mind was not chaos," Mr. McCone said, "but what could be done con-(I structively. The money was to 11 be channeled to peop a Who support the principles and pro- grams'flie ?Inrted states-stands far a ins a programs (tee "''These programs, he said, in- cluded the building of needed housing and technical assist- ance to Chilean agriculture. Both Democratic and Repub- lican members of the subcom- mittee reacted with consider- able skepticism. Senator Frank Church, Demo- crat of Idaho, the chairman of the subcommittee on multina- tional corporations, noted that there was nothing in the scores of internal I.T.T. documents in the committee's possession that indicated the money was for such "constructive uses." Senator Clifford P. Chase, Re- publican of New jersey, asked whether the money might not .have been intended to bribe members of the Chilean Con- gress, who had to decide the', election, since none of the, three candidates had won a majority. Mr. McCone denied) this. Economic Aid Noted Senator Case noted that the) United States had put more!, than $1-billion in economy: aid: into Chile in the decade before the election of Dr. Allende and that he was elected anyway. "How could a man of Mr. Geneen's intelligence possibly think that $1-million for these kinds of purposes in six weeks could make any difference?" he asked, referring to the period remaining before the Chilean Congress decided the election. "I have too much respect fort his intelligence to think that." Senator Charles H. Percy. Republican of Illinois, suggested that another way in which $1- million might have been used to real effect would have been in subsidizing anti - Allende newspapers, which were in fi- nancial difficulties. Other testimony has showed that I.T.T. officials had pro- posed this, but, according ur Latin America, the plan wall come. never approved. Mr. Hendrix, who was an- other of today's witnesses, ex- plained that he had proposed doubling the advertising in such newspapers by Chitelco, the Chilean telephone company owned by I.T.T. But he said this was vetoed by Chitelco officials "and other executives in New York" be- cause they feared the purpose would be too obvious. Chilean Source Cited Mr. Hendrix also disclosed that the source of one of the most widely discussed asser- tions contained in the internal I.T.T. memoranda that have come to light-that in Septem- ber, 1970, the American Am- bassador to Chile, Edward M. Kerry, had received a "green light" from President L iXQn, to_ do all possible short of militgry action to keep Dr. Al idc fwra- taking power-was Chilean, not, American. Mr. Hendrix said that the from a highly placed mmenter of the Christian Democratic, party, which was opposed to Mr. Allende, a man whom he had known and trusted for years. Mr. McCone disclosed that as head of the C.I.A. he had re- ceived offers of financial help, similar to that made later by I.T.T., from various American corporations. Such offers were infrequent, he said, and had always been "summa] rejected." -"` A main point in Mr. Mc- Cone's testimony was that none of the plans for inter- either fering in the Chilean election- by the C.I.A. or by I.T.T. -had been approved by the necessary high officials in company. Propriety Questioned Senator Edmund S. Muskie, Democrat of Maine, expressed concern, however, that the plans were ever "seriously con- sidered." "The instinct for returning to such measures in the future will be very strong and that's what concerns us," he said. Senator Church questioned the propriety of interference by either the American Govern- ment or a company in what ap- peared to be amffreee election, no no ~+s" fi `fTfs'fi t te~ouf-' Mr. Mpene replied that "al- most twt?tdrds of the people of Chile were opposed to Allen- de." The popular vote in the elec- tion had :split fairly evenly among the three candidates, with Dr. Allende receiving a small plurality. Mr. M?rCone said that his general philosophy about pri- vate corporate involvement in situations such as that in Chile was that any action taken taken &mild conform with governmentii policy. That is what I.T. #. was proposing, bell said. .Senator Church suggested that financing of such , activities abroad was poten-' tially so aargerous-partly be- cause it w.+uld put the opera- tions bE vend Congressional oontrol h It it might be wise) tto pass liw forbidding it. _L 7-"T - firs-: Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 THE WASHINGTON POST DATE 23Y121Q,C Y PAG_ ITT Testimony Meets SkeptICIS1,11 By Laurence Stern Washington Post staff Writer The ,purpose of a myster- ious million-dollar proffer by the International Tele- phone and Telegraph Corp. to solve its problem;; in Chile became the subject of sharply conflicting testi- mony in the Senate yester- day. Edward Gerrity, ITT sen- ior vice president for cor- porate relations, told in- credulous senators that the 1970 proposal by ITT board chairman Harold S. Geneen was intended to promote housing and agriculture in Chile. On Wednesday f o r m e r Central Intelligence Agency director John A. McCone said he had transmitted to the White House and CIA Geneen's offer of a large sum of money to help finance a U.S. government plan to block the election of Chil- ean President Salvador Al- lende in 1970. ` Gerrity, in his appearance before the Senate Foreign Relations Subcommittee on Multinational Corporations, said he was "baffled" by McCone's account of what Geneen proposed to do with the money. "The first I heard about it was here yes- terday," Gerrity testified. McCone, in his testimony, also alluded to suggestions by Geneen that private money be provided for hous- ing and social purposes in Chile. But he specifically af- firmed, in response to ques- tions, that Geneen. "told me By 3:irrv Noltchayan-The Washington Post` Edward Gerrity: the million-dollar misunderstanding. he was prepared to put up as much as $1 million in sup- port of any government plan for the purpose of bringing about a coalitioi of opposi- tion to Allende . . . to de- prive Allende cif his posi- tion." Gerrity's testimony was also in conflict with that of a subordinate. Jack Neal of ITT's Washington staff. Gerrity said Neal was dis- patched as a "messenger" to convey Geneen's offer of social assistance to the Na- tional Security Council staff anti the State Department. But Neal has a i r.+ady told the subcommitt.?e that he conveyed no such proposal either to the W lxiie House or State Department. A former asst i.?nt secre- tary of state for i ,t ~?r-Ameri- can relations. Cl a les Mey- er, is also understood to have told the su ie:smmittee that no such offe l,v ITT of humanitarian aic vas con- veyed to him by Neal. The key to t.i conflict in the sworn to cti mony of McCone and Geri it,, will be the testimony c l Geneen, who is due befog . the sub- committee next vvek. An- other witness wh,. nay play a crucial role inuaravelling the inconsistencies is the CIA's former chi f of clan- 'destine services i'or the western hemispi o c?, Wil- liam V. Broe. By arrangemen between McCone and form r CIA Di- rector Richard i. Helms, Broe and Geneen ;:t inferred in a room at they ~'?heraton Carlton on the nif Jr of July 16, 1970, for the 1,0 " er part of an hour. What aspired in the conversatio.i has not yet surfaced in th- inquiry. On Wednesday, subcom- mittee counsel Je; oine Lev- inson ppsed this question to McCone about he Broe- Geneen meeting: "Slid Mr. Geneen advise h -In (Broe) that he was willing it assem- ble an election fursrl for one of the Chilean c? n+lidates (opposing Allende) .and that the fund would be ubstan- See ITT, A12, 1 0l 1 Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 THE WASHINGTON POST DATE PAGJ ITT, From Al tial one?" McCone said he was not so advised. Yesterday, assistant coun- sel Jack Blum asked Ger- .rity if he knew of a follow- ;aup phone conversation be- tween Geneen and Broe on July 27. Gerrity said he did liot. e 71Te auhpnmmi teP is ne. anv su seauen ~nnvPrfia_ Sen. Edmund S. Muskle is they may have had. (D-Maine) a 1 s o expressed The they are crucial in skepticism. "All the evi- sdeinine ITRT'a dealing dence on file suggests de- IA and perhaps other structive rather than con- structive purposes," he said. Sen. Clifford P. Case (It- N.J.), upon hearing Gefrity's testimony on Geneen's mil- lion-dollar fund proposal, described it as "the cover story for the day." -Sen. Charles Percy-(Z-111.) exclamedd, "The imn~_ bi v of this, sto v la what b ers me ? These are prahleimc vnn wn?ld_ahr#o the state 1a Unenr ..P :r,~,__~.and IILM-L r than the CIA. Immediately at stake in ' chairman Frank Church (D- -the outcome of the hearings Idaho). "You could read and is whether ITT will be en- re-read and re-read these files titled to reimbursement and never get the slightest `from the Overseas' Private impression that you planned Investment Corp., a govern- to build houses and offer ment agency, for Chile's technical assistance to agri- seizure of ITT's Chilean tel- culture." ephone company subsidiary. The memoranda from ITT If it can be demonstrated field operatives and between that ITT provoked the host _ Washington and New York al- government into the confis- lude to efforts to encourage cation action by its behav- anti-Allende politicians, mil- ior in Chile, the firm would itary figures and newspapers not be 'entitled to reimburse- in an attempt to prevent him ment of its $92.5 million from getting the presidency claim. in a runoff election by the Chilean Congress after he between Geneer and former won by a narrow plurality in Attorney G u' ral John the popular election on Sep- Mitchell on the conglomer- tember 4, 1970. ate's antitrust cifficulties The Chilean embassy issued with the Justi t t Depart- a statement yesterday that it ment. was negotiating with ITT to The troubles c l e m m e d compensate the firm for loss- from efforts by ecrmer An- es growing out of nationaliza- titrust Division chief Rich- tion of the company. It said and McLaren tc 'orce the it broke off the negotiations divestiture by ITT of the only after publication by col- Hartford Fire nsurance umnist Jack Anderson of the Co., a $2 billion eaterprise, internal ITT papers describ- and other holdin;s ing anti-Allende activities and The dossier is eiudes a sentiments of ITT executives. "Dear Ted" note from Ger- "While Chile was holding rity to Vice Pres=d-'nt Spiro conversation in good faith T. Agnew date i Aug. 7, with ITT representatives in thanking the Vice `resident Santiago as well as In Wash- , for "your assis a ice con- ington, the latter conspired cerning the attac'1 eJ memo." to overthrow the freely elect- The memo descri e a meet- ed Chilean government," the ing between G'o en and embassy said. Mitchell. The ITT vice president The note said: Our prob- for Western Hemisphere op- lem is to get to . ohn the erations, John Guilfoyle, facts concerning '_4"cLaren's told the subcommittee in re- attitude because, as my sponse that Chilean,authori- memo Indicates, VicLaren ties were harassing the tele- seems to be rum ir,g all by phone subsidiary and its himself ... After :'ou read employees both before and this, I would appreciate after taking control 'of it in your reaction oz. how we September, 1971. should proceed." At the request of Church, The memo quote:, titchell ITT yesterday provided the as telling Geneer t iat "the subcommittee with docu- President was not opposed ments impounded last Oc- to mergers per s:1. that' he tober by the Justice Depart- believed some me. gvrs were ment dealing with meetings good." In earlier p r e s s t accounts of this m3 -:r o, based only on governn out sum- maries of its con tents , Mitchell is quoted a: saying that Mr. Nixon was not opposed to "the rte:'ger." It had been asst rr:ed that Mitchell was r e t_ e r r i n g specifically to 11w. ITT- Hartford Insuranc, merger M o L a r e n unsu ?.c ~ssfully sought to dissolve. I itchell, in testimony to the Senate Judiciary Commiiaee last year, denied tr-thing to Geneen about the Hartford case, although he a=-knowl- e'dged meeting witl 1 he ITT head on matters o .eneral antitrust policy. The Subcomimitt e is to resume its hearings 'T" iesday. Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 ..y Q., A c.., ^ ~.-~? Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 THE WASHINGTON POST DATE 2 LMArX," 13 PAG_ The Washington Merry-Go-Round THE WASHINGTON POST Friday, March 2;, :973 D 17 Cambodian Is Ike to Nixon Stralegy By Jack Anderson The success of President Nixon's strategy in Indochina depends heavily upon Cambo- dia's ailing, erratic President Lon Nol, who is now regarded in Washington as the best bet against a Communist take. over. If Cambodia should fall un- der Communist control, South Vietnam would become highly vulnerable to Communist infil- tration, isolation and eventual overthrow. Yet only a few months ago, Washington wanted Lon Nol replaced by a more stable leader. The Central Intelli- gence Agency quoted promi- nent palace sources as saying the Cambodian chief execu- tive had suffered a serious stroke and had taken "leave of his senses." A CIA source used the French phrase, ere esem- sours toia Mat ST k P2iaom enh, had confided sorrow- v at o Nool is a sic R man both physics and -men- that "Ills processes no onger unc- ti naas they once did.,, In another seer-et dispatch from Phnom Penh, the cIA re s - ported that "the Cabinet has cusse f eas3n on o o out of the day tg_] on lust of " ovve ii'bnt 'usiness." Later three ~o ofis mos powerful associa e1 s; hc- eordin to the CIA, urged him Cambodia, reopen its port to tc ive up the presidency and l military shipments and turn the nnttntr a bas C-- int y e o chief of state immediately. Sirik Matak added that a new constitution could be promul- gated quickly and it would be assured that Lon Nol would continue as chief of state. "T.nn Nnl" ra nr+erl the CIA "re plied that he did not Intend to a eh of of afnte at this time (but) . that he wo' uld be mime. minister and head of government and t e new one it itinn as tnd the The policy makers in Wash- ington privately hoped that Sirik Matak, himself, an able administrator, would take over the helm and that Lon Nol could be persuaded to come to America for therapy. But no longer. Lon Nol has now re- gained the use of some of his paralyzed limbs and has sharp- ened mentally although he still isn't the strong, vigorous leader he was before his stroke. But Washington considers him the "cementing factor" who can best hold the shaky Cambodian government to- gether and resist Communist encroachment. The prospects are poor for a Cambodian cease-fire such as have been signed in Vietnam and Laos. President Nixon is anxious, meanwhile, to see the Lon Nol pete in the wor'd maritime in- dustry. The foreign s!7inpers, opt ea- ger to help tieir American competition, resuse to prioride the payroll infclrination'tcaun- tarily. So uni=;n undercover men slip aboard ships from England, Sweden, Brazil, Is- rael and elsewl Ore to buy the information. The data from the individ- ual ships is processed by the Labor-Managet?:eat Maritime Committee, wAi h turns it over to the Ma~tme Commis- sion. Under this clandestine arrangement, the union col- lects a fee from management for its espionag ', and manage- ment collects : subsidy from the governmena. The Maritime Commission, of course, know , all about the espionage but pretends it doesn't. Footnote: T1 is spying for subsidies w, s organized largely by Joe Curran, who re- tired March 1 s fter more than 36 years as pr-s:dent of the National Maritime Union. His pension rights amount to a whopping $1 m:'lion. Dissident union members however, won a temporary re_ training order, which has kept t iie old labor leader from col eating his first payment. The fiesidents' have charged that ,?urran seldom worked during his last years as union chi( i but rather regime remain in power. Fiu f pay lower wages, the govern- spent his time ;i thing off the the Joint Chiefs have warit4d ment makes up the difference Florida coast. that if the Communists grab so American ships can com-' co) 1973, united F :a :re Syndicate guerrilla operations against South Vietnam, the Saigon re- gime could not survive. The President dropped tons of bombs and gambled thou- sands of American lives to prevent a Communist take- over of South Vietnam. That is how Lon Nol suddenly has be- come a key man in the Presi- dent's Indochina strategy. Footnote: The bombing of the nrpsidential pale ef~],ast eekend is believed bathe IA to have been a wild at- temp by e pil ass no_ a urger nal- .aee olot against him as sgme our -rs nut of r i P' nh ve hinted. Maritime Spying U.S. maritime officials don't talk about it, but they rely on espionage to compute subsidy payments to shipping compa- nies. The actual spying is done by a joint labor-management committee. The union fur- nishes the spies, and the ship- pers put up the money. Their secret mission is to sneak sal- ary information off foreign ships. This is needed by the gov- ernment to calculate the dif- ference between what for- eign and American seamen are paid. Because foreign lines Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6 DATE Z3 VW ",12j PAGE 1 II.T.T Officials in Conflict On Purpose of Chile Fund By EILEEN SHANAHAN special to The New York Times WASHINGTON, March 22--A clear-cut conflict in the testi- mony of three officials of the International Telephone and Telegraph Corporation emerged today as a Senate subcommittee continued its inquiry into the company's alleged attempts to prevent the election of Salvador Allende Gossens, a Marxist, as, President of Chile. At issue was the question of hat use was supposed tp be nade of the $1-million or more that the chairman of I.T.T. meet in 1970-whether it was The summary indicated that Mr. Mitchell had talked directly with President Nixon about the suits, contrary to what he tes- -ified last year. The complete documents do not support the implication that Mr. Mitchell discussed the matter with the any, an 'Exxon subsidiary, but! President. paid for its take-over of the The newly released documents al --telephone company owned by'; also contained details about alllli I.T.T. , party that was to be given ins The plan was never put into' 1970 at the farm of Rogers effect in Chile because the Al-1 I C. B. Morton, now Secretary lende Government broke off; of the Interior. negotiations over the purchase Among those who were to of the telephone company after be present were Harold S. publication of internal LT.T. ueneen, th chairman of I.T.T.; documents showing company) Attorney General Mitchell;` Vice ?resident Agnew and his wife; a (plans for interference in the l white House assistant, Peter M. 11970 election. !Winton M. Blount, and other Among other developments, !high officials and members of the subcommittee made public Congress. "You know the rea- or covert means to prevent closed that I.T.T. officials' planned to make a deal with Dr. Allende, after he became President, under which they would be paid full value, for the telephone company that I.T.T. owned in Chile, even if the properties of other Ameri- can businesses were confiscated without payment. The idea was to persuade internal I.T.T. documents that bore mainly on the company's attempts to bring pressure on the Justice Department to set- tle three antitrust suits against the company. They included a leter from Edward Gerrity, I.T.T.'s senior vice president for corporate re- lations and advertising, to Vice President Agnew in which Mr. Gerrity said, "I deeply appreci- ate your assistance" but did not explain for what. Mr. Gerrity then asked for, further help in getting to the! then Attorney General, John N. President Allende that he could win world opinion to his side by making a "fair deal" with~Mltchell, "the facts" concern-i ttit d tot d o I.T.T. and that he would then be able to confiscate the prop- erties of the Kennecott and Anaconda mining companies with impunity, using the argu- ment that copper was a basic national resource and in a dif- category from a tele- phone company. The company memorandum I that disclosed this plan said that I.T.T. had "handled the situation in Peru" in 1968 on the "same basis." The Govern- ment bf President Juan Velasco Alvarado seized the properties of International Petroleum Com- aue se ing the supp ward I.T.T. of Richard W. McLaren, then head of the Jus- tice Department's antitrust di- vision. According to Mr. Ger- rity, Mr. McLaren was out of step with Administration poli- cies, prosecuting I.T.T. simply because it was big, and more interested in the opinions of Democratic members of Con- gress than of the Nixon Ad- ministration. The new documents also showed that a summary of them released earlier this week by another Congressional com- mittee may have left a false impression about the involve- ment of Mr. Mitchell In the I.T.T. antitrust suits. son for this party, John F. Ryan of I.T.T. wrote to his boss,,W. R. Merriam, the head of the company's Washington of ice. r Mr. Morton was a member of the House at the time and chairman of the Republican National Committee. The newly released memo- randum also contained a cryp- tic notation concerning "Dita and dollar." The reference ob- viously, was to Mrs. Dita Beard, whose internal memorandum Indicating that the company was trying to trade financial support for the Republican 1972 convention for settlement of its antitrust. suits came to light a year ago. The memo men- Itioned the necessity "to get some feel from Dita as to what is required" without saying what the money was for. Conflicting Testimony The conflict In testimony ramong various o ials Mr. McCone testified yester- day_ that when $1-million wac f fn the i A in rflid - 9970, be fare the first phase o TV y idan e-Te lion, it w`as foc T cc is ruc~ive" jlur poses. such as J ~w-cons ills. Later, Mr. 1,icCone said, after Dr. Alle?idf- had won a plurality but not a majority of the vote in September, the money was i ntcnded to fi- nance an anti r 4'nde coalition in the Chilean .cngress, which had to make by final choice' of a president. I Today Mr. C rrity insisted the purpose was always "con- structive." He was aske' -vho made the offer to the G :v rrnment after the September .ction and he! said it had 1-n Mr. Neal, who made it ' the Assistar. Secretary of S ate for Lath American Affairs, Charles A. i Meyer. Jerome Levinon, counsel to the special !aibcommittee on multinational, orporations, then read back Tu! sday's testimony by Mr. Neal ci his meeting with Mr. Me er in which he said "I didnt elaborate" or what the $1-_nillion would be used for. "We didn't go into it," he said lien. The subcorrmittee chairman Senator Frans. Church, Demo crat of Idahc., suggested tha Mr. Neal should be recalled ti explain the liscrepancy. Mr Meyer is sch,dated to testif, (next week. - Continued on Page 9, Column 1 Approved For Release 2005/11/21 : CIA-RDP75B0038OR000300100042-6