BOOK BLAMES ALLIANCE FAILURES ON U.S.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000300100042-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 21
• Document Creation Date: December 19, 2016
• Document Release Date: September 12, 2005
• Sequence Number: 42
• Publication Date: November 30, 1970
• Content Type: NSPR

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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.
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 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"
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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.
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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
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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 priv.ai 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-:
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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
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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.
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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
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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
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