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April 2, 1973
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Approved For Release 2001/08/07 : CIA-RDP77-00432R000100:13000-1:2 CONFIDENT! L NEWS, VIEWS and ISSUES INTERNAL USE ONLY This publication contains clippings from the domestic and foreign press for YOUR BACKGROUND INFORMATION. Further use of selected items would rarely be advisable. No. 33 10 APRIL 1973 Governmental Affairs. . . . ? . . . Page 1 General . . ... ... . 0 0 . Page 19 Western Europe. . . . . . Page 24 Near East ? 000000 0 0 0 Page 29 Africa. 00000 0 30 Page 30 Far East. .. 0 0 .0 . . . . . . . Page 31 Western Hemisphere. 0 . . .... . Page 38 CONIFIDENn L Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100.130001-2 NEW YORK TIMES 2 April 1973 C.I.A. Apparently Plans Cut in Some Covert Roles By CLIFTON DANIEL speela te The Nei, York Timoil WASHINGTON, April I? been given the authority to Under Its new director thei put it into effect. He got the job because as assistant direc- tor of the Office of Manage- ment and Budget and later as chairman of the Atomic Ener. gy Commission he earned a reputation for efficiency and effectiveness. Apparently Mr. Schlesinger Is expected to do in the Intel- litence community what ? other recent Preaidential appointees have been instructed to do in more open departments?that is, to make the Federal bu- reaucracy more responsive to the Administration. This objective has led to charges from some old hands at the C.I.A. that the agency is being "politicized" by the Nixon Administration. Mr. Schlesinger met this charge, when his C.I.A. . appointment was up for confirmation in the Senate, by assuring the Senate Armed Services Committee that he believed absolutely in main- taining the integrity and inde- pendence of intelligence esti- mates. People who know President Nixon's attitude say be wants his intelligence information straight even when it is un- palatable. However, the White I16use does want to see less money spent on intelligence, and a better intelligence prod- uct provided. By a better product the White House apparently means among other things a product that answers the questions that senior policy makers are inter- ested in and gives the answers in brief and readable form. "You can't drop a 90-page C.I.A. analysis on a high offi- cial's desk and say 'You've got to read this,'" one such official said recently. That Discouraging Thud "The thud it makes when It falls on your desk is enough to discourage you from open- ing .it," another said. Apparently C.I.A. memoran- dums under the Schlesinger re- gime will number more like three pages than 90 and will have a telephone number to call if the recipient wants fur- ther information. While seeking greater econ- omy and efficiency the intelli7 Fence community is reassess- ing its tasks. 'There appears to be a ten- dency to cut back on C.I.A. paramilitary -operations ? op- erations such as the abortive ? Bay of Pigs invasion of Cuba in. 1961 and , the clandestine war still being waged in Laos, operations ' that have some- times brought the agency as much censure as praise. In his second -Inaugural Ad- dress, President Nixon said, "The time has passed when Central Intelligence Agency is. apparently planning to curtail some of its old activities, ? no- tably clandestine military oper- ations, and undertake some new !ones. These include action against political terrorism and the international drug traffic. Since James R. Schlesinger took over as director on Feb. 2 more than 1,000 employes of the C.I.A. have received dis- missal notices. Mr. Schlesinger also has authority from Presi- dent Nixon to apply what one official calls "a great deal of persuasive influence" to reduce manpower as well in the mill- tary intelligence services. These are the Defense Intelligence Agency and the National Secu-, rity Agency, which Mr. Schle- leinger oversees but does not loperate. In the last two years the in- telligence establishment as a whole has been reduced by something like 25 per cent, ac- cording to reliable estimates.' In 1971 there were more' than 150,000 people in the mili- tary and diplomatic intelligence: services and the C.I.A. There are now fewer than 125,000, ac- cording to the estimates?per- haps \no more than 115,000. Since November, 1971, the vari- ous agencies have been under orders in a memorandum from the President to reduce dupli- cation of facilities and func- tions and make more economi- cal use of their resources, es- pecially in collecting informa- tion., ? Intelligence information these - days is gathered more by ma- chines than by men?by satel- lites and computers rather than by spies meeting informers in bars and alleys. Each intelligence agency seems to want its own machines and some systems have report- edly been made deliberately in- compatible so that each agen- cy keeps its own. For that reason and others it is said here that President Nixon's 1971 memorandum has as yet had no measurable ef- fect on the operations of the Intelligence community. The man iirincipally respon- sible for drafting the Presi- dent's memorandum was Mr. ApprovediPteggMiWATAYORI Schlesinger. and he Itas now er nation's conflict our own, ,Or make every other nation's future our responsibility, or presume to tell the pent* of other nations how to manage their own affairs." That statement seemed to Imply less intervention in oth- er people's affairs, whether by Intelligence agencies or other- wise. , In any event, operations such as the one in Laos, where the .C.I.A. has long given support and leadership to the anti- Communist military forces, are on such a scale that they can- not be conducted secretly, and thus may not be thought suit- able for an undercover agency. 'Dirty Tricks' Wane Operations on a smaller scale?sometimes called "dirty tricks"?Teflect the atmosphere of the nineteen-fifties, the cold war period, and seem to be regarded now as obsolescent. Also with the reduction of International tensions and sus- picions, which is the aim of President Nixon's dealings with the Soviet Union and China, the intelligence community may not need to pay so much atten- tion to the military abilities of the major nowers. -However, there may be new ,rtasks for the intelligence com- munity in an era of negotia- ' tioFtiOr example, the protocol to the Soviet-American agreement on the limitation of strategic offensive weapons provides in Article 12 that "for the pur- pose of providing assurance of compliance with provisions of this treaty, each party shall use national technical means of verification." In plain language, that means that the Soviet Union and the United States may each use its own photographic satellites and other intelligeece-collectint de- vices to see whether the other side Is abiding by the treaty. This is the ."open skies" policy ' proposed by President Dvilight D. Eischnower at the Geneva summit conference in 1959 and relecleri at that, time 14 the Russians. There are also other new problems to attract the inter- est of the intelligence agencies. One is the narcotics traffic. Intelligence is 'a major ingredi- ent in controlling it. Another is political terror- ism, a form of warfare that ,cannot be dealt with by ordi- nary diplematic means or -con ventional military forces. The interest of the C.I.A. in ,these problems does not mean ?that the agency will no longer have an arm that can perform paramilitary functions. ,It also does not mean that the C.I.A.?to use a term hear here?mill not "invest" funds in the affairs of third coun- tries on occasion. 1 : CIA-RDP77700432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 :1TA n ;r1 11-irch 1?73 By JEREMIAH O'LEARY ? Sttit?tftiiii Sinit The existence of ?a hitherto secret CIA propaganda fond of e4000e0 for use in the Chilean ? presidential election of 19';(0 has been brought to light by the Senate multinational cor- porations subcommittee inves- tigating the role of ITT and ;the U.S. government in Chile's 4nternal affairs. I It has been learned authori- tatively that the fund was pro- vided by the CIA for the peri- od prior to the popular election on Sept. 4, 1970, WI1CTI Marxist candidate Salvador Allende won o hairs-breadth plurality in a three-man race. But in- formed sources believe, and former Ambassador Edward Korry testified yesterday, that ell agencies of the U.S.. goy? ernment adopted a hands-off policy in the Oct. 24 runoff.!. which Allende won i the Chi- I lean Congress. ? Jerome I. e 'v inso n, chief counsel for the subcommittee headed by Sen. Frank Chinch, D-Idaho, injected the $400,000 propaganda fund into the hear- ings with a direct question to Kerry, asking the ex-envoy if there was such a covert fund in the pre-election period. Kor- rysaid that was a question the CIA would have to answer. But Korry also testified that everybody in Chile knew the U.S. government wanted to see Allende 'defeated and that only a lunatic weuld have sup, posed otherwise. Ile said he personally favored the so- called Alessandri formula by which the Christian Demo- crats and Conservatives in Congress would combine to elect Jm-ge Alessandri instead of Allende: The formula, which never was applied, then 'called for Alessandri to resign so that outgoing President Ed- uardo Frei could Win in a new national election. Allende had won a plurality ? but not a majority ? in the popular election of Sept. 4, 1970. This put the election in the bawls of the Chilean Con- gress, which selected him On Oct. 24, 1970. 0 CI Fund to Influenc Chile Election Reporte Committee fmembers and aides refused to divulge more about the $400,000 fund, but Kerry's testimony left no doubt that it could harve been used only to finance propagan- da to help defeat Allende. It could not be learned whether the fund is Mentioned in the Impounded testimoney given yesterday in executive session y William V. Broe, who was m charge of CIA clandestine operations In Latin America at the time of the election. The Subcommittee was to re- lease the Ilroe testimony today after screening by CIA offi- ciate. It was the first time In bietery that a CIA agent has ever testified under oath be- fore a congressional contnit- tee. 'the sizbeciaminiltee also re- leased yesterday an internal ITT docninent describing a se- trot meeting Oct. 214 1971, in the office of Secretary of State William P. liogett with repre- sentatives of a number of Amenican corpond ions threat- Oned with exporopriation in Ctile. The memorandum says: "Secretary IlOgers opened the meeting by saying that he and the President had grave concern over the Chilean situ- ation and the expropriations that were taking place. lie stated there appeared to be little leverage that the govern- ment could use against Chile but that they would take all actions open to them. "Ile discussed his meetings With Foreign Minister Almeda (Clodomiro Almeyda) during the opening of the 1114. Ile stat- ed he had never been more 2 (nude to any other diplomat. It Is obvious from the histo- Rogers said he attempted to mess Almeda (Almeyda) to . ry of Chile since the Allende election, Korry said, that the stop the copper expropriations , United States mounted no "hig and filing of excess profits and.,:, ? push" and supported none of. taxes." the three candidates. ? Earlier, Kerry declined to. "All three camps imp- tell the subcommittee, either ; ;preached me for funds, but the In open or executive session, I.S. never responded," Korry what instructions he received ,testified. But when Levinson from the State Department asked him about the CIA prop- during the critical election pe- ?? agenda fund, Kerry refused to answer any questions about ? rind in Chile.' Korry told s Church he was net invoking. the CIA except to say that the executive privilege, although agency was under his control be 'understood there was legal i ? ? ? in Chile. The subcommittee did not pursue the former am- bassador about the seeming discrepancy when lie cut off all questions about the CIA. Kerry declared that he per- sonally favored the Alessandri formula for blocking Allende's election "but I did nothing about it." However, he said he did tell U.S. businessmen in Chile that he favored the plan, explaining, "There is a differ- ence between analysis and ac- tion." Asked about an ITT docu- ment which declared the Chi- lean armed forces had been assured of U.S. support in any Justification for doing so. "This is moral principle ,with me," Kerry said. "Do yott contend that this temMittee has no jurisdie- . lion?" bevirson asked. "No, but I fall back on mymoral commitment. I cannot wreck an institutional process for any reason I can think of here. ?It's a philosophical thing . on my part," Korry said. "I took an oath when I became ambassador. I'm not about to break my part of that bar- gain." Korry said that If he seta precedent by telling the com- mittee about his instructions violence or civil war, Kerry from the State Department it ? :said 116 never made any such might lead to a return of con-. promise even though lie was ditions like the McCarthy era asked for such assurances. With diplomats being afraid to commit anything to paper. ? But Kerry did categorically deny to the subcommittee that lie ever got any "green light" to go ahead with any action short of a Dominican-style in- tervention, as was reported in a message from ITT publicist JIM Hendrix to his superiors. THE LIBRARY JOURNAL 15 March 1.973 PROUTY. tletchcr. The Secret urn',: the ('1 .1 and Its Allies in Control of the UnitedStares and Ow II 'rirb/ 516p. Prentice-11AI. Apr, i?73. $113 I ("72. 13361. IN t AllA110,,..f.f1Vi This book is at iii best when it details CIA secret operatliens. with which the mi tutu is fiimiliar. I he poorer, Anil most extensive, portions 'ITC lliciSe in %%hit b he laboriously. and ??ith alloosiiw reputi lion. explains wily he feels the CIA has greatly vxCeCtli:tt its Iciill inithinilv by conductinr secret ' operati,Ins. lip.' alNo i Faults the hick if quality intelligence analysis. Prouty laims that Friends of this agency hme;been planted in other federal agencies And the military to en- sure that CIA pets its way. Ile maintains that Presidents hilve heen led into major Ithin Is on tin corm-led ptoof of o review iethoiltilet1 fn. libtoty Journol. MAI,. IS. 1973 Korry said he told his embas- sy people to stay away from the Chilean military in the critical election period. Korry testifed that he never heard of any ITT offer of mon- ey to support any U.S. plan to block Allende or cause eco- nomic chaos there. blunders by this practice and cites espe- cialb, the Kennedy move to counter- insurpency warfare in Southeast Asia. The military bias of the former Air Force colonel shows as he attacks the civilian agency. claiming that 131sherg's leaking of the Ventage!, Papers was a CIA plot to make tlic military look bad. A spotty. but interesting book.- George H. ribrary of (*impress Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100.13000112 WASHINGTON POST 29 Mnrhh 1973 CIA A ide Disputes ITT on IdOffer IV Laurence Stern wnAhlnetnn roAl.e1,1( Wrner A high-ranking Central In- supporting any candidate in , lelligence Agency official has the Chilean election." tOld Senate investigators that he was nffered?and declined --"a substantial fund" by Tyr! hoard chairman Harold S. Geneen to block the election of Chilean President Salvador Allende in 1970. In sworn testimony released yesterday, William V. liroc, former CIA chief of clandes- tine operations in the Western .11emisphere, alc.n ii,knowl- edged that. he discus 'rd Melia with ITT offieinis In acceler''' ate. economic instahittlY in Chile at a crucial pot flea! pe- riod for Allende. Broe's testimony, given to an investigating subcommittee Tnesday under an unprece- dented arrangement, contra- dicted earlier assertions under oath by on ITT vice president that Geneen had made the. money offer to finance hous- ing and technical agricultural assistance in Chile. Geneen is (Inc to testify on Monday. Until then. Sen. McCone, then the director, 01 his financial offer to Rroe on Frank Church (Didaho) said not accept the money. ,vesterday, . the investigators Broe's testimony indicated: would not "pass judgment" on that the agency took a more the possibility of perjury ac- cooperative attitude with ITT ion in the ITT ' vestigal ion in subsequent meetings. fol.- Church is 'chairman of the lowing Allende's narrow popu- Senate Foreign Relations Sub- Tar plurality on Sept. 4, 1970, committee on Multinational but before he was installed by Corporations, which is con- a vote of the Chilean Congress ducting the inquiry. The panel the following Month. questioned Broe in closed ses- Again at the direction of : Sion Tuesday morning and Helms. Broe said, he! met. with submitted the transcript to Gerrity On Sept. 29 to explore the CIA .for review. Church with the ITT executive "how said it was unprecedented for the deteriorating economic sit- an operating agent of the nation On Chile) could be ac- agency ? to give sworn testi- eeferafed y such BI-OC confirmed that he dis- tigating committee, cussed with Gerritmony to -a congressional inves- Time testified that. he went measures as cm-tailing bank to the meeting with Geneen at credits and deliveries of spare the Sheraton Carlton Hotel on parts. creating pressure on the night. of .Tuly 16, 1970, un- savings and loan institutions der instrnctions from then to close their doors, and with- CIA director Richard M. drawing technical assistance. mic pressure, said The CIA's endorsement of placed by President Nixon and this econo Helms, who was recently re- appointed Ambassador to t 1- u Broc. wasdesigned o c isco r- -Iran. age Christian Democratic con- At the meeting, Woe testi- Cenern offered the still- gre..ssmen from supporting Al- fled, iende a morxist-Socinlist, in he, co ii Ir fill e d ;, , d omit- the crucial cmigressionnl hal- stantial Imul --- which would - - Wing On the presidency. neled by the CIA ? to sup- "There was a thesis," said port the "mliglacY of Jorge Time, "that. additional deterio- Alessnndrt, of the right-wing The CIA official asserted ? that. Geneen at no time sug- gested that the money would be contributed for housing or agricultural assistance. ITT'S, vitt! ,president for corporate relations, Edwaid Gerrity, tes- tified last week that Geneen intended the money to he uaed for such purposes and not to influence the course of the election. Under questioning by For- eign Relations Committee Chairman .T. W. Fulbright (D- Ark.), Broe .said ITT, not the. CIA, took the initiative in at: tempting to intervene in the Chilean election for its "owil. corporate purposes." It was not American policy, 13roe said, to influence the Chilean elections hi 1970. The CIA witness said Ge- men told him that ITT and. other American companies raised a political fund to influ- ence the outcome of the 1964 Chilean election, when Chris- tian Democrat Eduardo Frei came to power, hut that John The menenver, described In' Chile as the ".Alessandri For- mula," was looked upon fa- vorably by then U.S. Arnbas- saclor Echicard Korry and ITT, as well as by Allende's Chilean (Monition. as a Merino of tn. storing Frei to the presidency by setting the stage for a new election. It never came to pass. Church said yesterday he thought it was "very im- proper" for any American cor- poration to offer a large sum of money to support a CIA in- tervention in an election. He said it was also "improper pol- icy" for the U.S. government to enlist private corporations In the same objective. In a meeting with newsmen, the Idaho Detnoerat said he could not clarify the apparent ,contradtetion between Broe's declaration to Geneewthat the CIA was not supporting a can- didate in the elction and Broe's subsequent endorse- ment of economic pressures designed to prevent Allende from taking office. Broe's tes- timony, he said, "would have to speak for itself." periors, endorsed an economic program to frustrate Allende's candidacy in the Chilean Con- gress. Broe testified that he also met with ITT's former Wash- ington office, director William Merriam on Sent. 22, a week. prior to the Gerrity meeting,' and gave his assent to ITT, proposals for covert support, to anti-Allende newspapers as well as the hiring of radio and television "propagandists'. lfavoring other candidates. "Mr. Merriam, without any discussion of those (proposals). said, 'What do you think of the proposals', and I said think they are all right," T3roe testified. "Then there was nn discussion." The anti-Allende press -and television campaign was pro- posed by two ITT field opera- tives, Hal Hendrix and Robert Berrellez from Santiago. ITT officials testified that. they never put the plan into opera- tion. The purpose of Church's in- quiry is to determine whether ITT brought improper influ- ence in Chile to affect: the out- Sen. Clifferd P. Case (R- come of the 1970 election and . Ni.) also observed that "the .,1 the extent to which it had the -.active cooperation of the CIA. ITT and a number of other , companies contended that 1 their fears of an Allende ad- ministration were prompted by campaign pledges of the Socialist candidate to national- ize basic industries. such as ITT's telephone subsidiary as MeCone testified last week .? well as' American owned cop that Helms had told him in per and bank holddings. .the early summer or 1970 that . Allende's government eon- ' a National Security Council tended that it was negotiating interdepartmental group gov-,'f': in good faith to compensate - -ming CIA covert operations'' ? ITT for the telephone corn- had decided to take no action.: pony until. March 21, 1972, to thwart .Allende's accession when columnist Jack Ander- son published internal ITT documents suggesting that the corporation had actively en- gaged in plans to block the election of Allende. ? ;,.' On the day the Anderson papers were published, the ??? Chilean Ambassador to, the . United States. Orlando Lete- ' Tier. had just returned from Santiago with a counter.offer to ITT, according to Chilean government sources. After publication of the documents, Chile broke off its contacts with ITT. At yesterday's hearing the Assistant Treasury Secretary for International Affairs, John M. Hennessy, said the Nixon administrat ion eantioned in. ternationnl lending orenniza- tions against extending new lines of credit to an Allende government because of its shaky financial condition. the acknowledged, however, that the administration h a d authorized a $10 Minion loan to the Chilean mili 1 a ry last year. "That seems to me from an economic point of view en- tirely inconsistent," observed record to me is not clear. One possibility under con- sideration is that the policy of the U.S. government under- went change between Broe's first contact with Geneen and his subsequent meeting with Gerrity. ration irt the economic situa- National. Pnrty. against Al- tion ',mod influence a large ferule. number of Christian Demo- In declining the offer. Broe cratic Congressmen who were said: he told (ielleen `,'we Could pinmiing to vote for Allende." not absorb the funds and lie told the subcommitte'e serve as a funding channel. I that. ITT executives were neg- also told him that the United ative toward the plan became States Government was not. they felt. it was unworkable, to power. In early September, how- ever, MeCone, an ITT -board member and CIA consultant, approached national security adviser Henry Kissinger and Helms to convey Geneen's of- fer of aid to finance a U.S., government plan to block Al- lende. On Sept. 16 Kissinger deliv- ered a not-for-attribution press backgrounder in Chicago in which he said, "I don't think we should delude ourseves that an Allende takeover in Chile wottid not. present. mas- sive problems for the United States and democratic forces and pro-U.S. forces in Latin America and indeed to the whole Western Hemisphere . So we are taking a close look at the situation. It is not one in which our capacity for influence is very great at this particular moment . ." An intensive lobbying pro- gram was conducted during mid-September by ITT offi- cials with top administration officials for some form of in- tervention in Chile. Geneen's offer of financial aid for a CIA operation was rejected. -Case. But on Sept. 29 Brae, acting Replied Hennessy: "I would with the full consent of his su- have to admit there is some inconsistency." Approved For Release 2001/08/07 : dA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 NEW YORK TIMES 30 March 1973 C.I.A.'s Action On Chile Unauthorized, ExAisie Says By EILEEN SHANAHAN sprtio In The New Yak Ilmeg WASHINGTON, March 29? Charles A. Meyer. former As- sistant Secretary of State for Inter-American affairs, said to- day that, so far as he knew, the Central Intelligence Agency was never specifically author- ized to explore the possibility of using private American. cor- porations to damage the econ- omy of Chile to influence the 1970 election there. . But Mr. Myer. now a Sears Roebuck executive refused to criticize the C.I.A. for discuss- ing this line of action with In- ternational Telephone and Tele- graph Corporation officials, saying that such "exploration" . did not necessarily violate the basic United States policy of noninterference in the Chilean election. ? Strong doubts about the propriety of the C.I.A.'s action were expressed by Senator .1. W. Fulbrip,ht, chairman of the Sen- ate Foreign Relations Commit- tee, and Senator Frank Church. Mr. Church, Democrat of Idaho, heads the subcommittee on multinational corporations that is investigating the activities of I.T.T. in Chile. Senator Fulbright, Democrat of Arkansas, said that it looked to him as though the C.I.A. was "responding to a request by a former director of the C.I.A." rather than to govern- mental policy and was "going off in another direction." Earlier testimony had dis- closed that John A. McCone, former C.I.A. chief who became a director of I.T.T., went to Richard I trims, his soccessor suggest that the Government take steps to prevent the elec- tion of Dr. Salvador Allende Gossens as President of Chile, Dr. Allende, a Marxist, had campaigned on a platform of nationalization of basic indus- tries in Chile, including the telephone company of which I.T.T. was the principal owner. Senator Church asked Mr. Meyer whether the top-level governmental agency that is supposed to approve the intel- ligence agency's operations in advance?it is known as The 40 Committee?had ever "de- cided as a matter of policy that the C.I.A. should explore the feasibility of stirring up eco- nomic trouble" in Chile. "To my certain recollection, no,'' Mr. Meyer replied. But he and subcommittee members engaged in a long and inconclusive wrangle over whether the discussions be- tween an I.T.T. officer and a C.I.A. official constituted "pol- icy" or "action" that required such advance approval. The discussions were held by William V. Broc, former direc- tor of clandestine. activities in Latin America for the agency, and Edward J. Gerrity, the com- pany's senior vice president for corporate relations and adver- tising. They saw each other in New York in late September, 1970, after Dr. Allende had won a plurality hut not a majority of the popular vote. The Chilean Congress had yet to make the final choice of a President; it chose Dr. Allende on Oct. 24. What Mr. Broe discussed with Mr. Gerrity was the possi- bility that American hanks might cid off credit to Chilean businesses slow deliveries as a means of creating enough eco- nomic prOblcins in Chile that members of the Congress would have second thoughts about electing Dr. Allende. A cutoff of technical help was also dis- cussed. Mt. Broe testified that he had given Mr. Gerrity a list of American companies doing business in Chile that might be helpful in creating economic problems, but said he had giv- en no instructions that I.T.T. get in touch with them. Mr. Gerrity and, later on the company's board chair- man, Harold S. Geneen, reject. ed the whole idea because they thought it would not work. Mr Meyer conceded under questioning that if the plan had been adopted it would have constituted a change in the policy of noninterference that would have required ap- proval at a higher level than that of directors of the C.I.A. The director, Mr. Helms, had instructed Mr. Broe to explore the plan with Mr. Gerrit.y. Senator Church said, how- ever, that he was "afraid. that. I.T.T. did ?successfully lobby the C.I.A. on behalf of a covert operation, without policy ap- proval." "That's how this committee's record stands," he added.. Mr. Meyer also testified that. at the intdlieenre neeoey, to lenders end other American WILLIAM r BUCKLEY JR. Chile Ikvii NO Rs. II is by no means obvious why everyone persists in re- ferring to the election of Al- lende as a purely "internal" matter. It was never any such thing, anti if only Harold Ge- neen of ITT recognized the character of the Allende vic- tory. why then Harold Geneen is a lot smarter than most of the Srnalf)VS who are interro- gating officials from ITT and drinking deep draughts of sanctimony over ITT's offer to contribute $1 million to- wards any government-spon- sored plan to prevent the in- stallation of Allende as presi- dent of Chile. We are talking about Sep- tember of 1970. On Sept. 4 Al- lende won a plurality, which did not automatically entitle him to be named president of Chile. That decision was for the parliament to make, at a scheduled session on Oct. 24. 'The question is whether ITT boa a re,litimate interest in adding itt. pressure to that of others to persuade the parlia- Approved ever spelled out to him the purpose for which it offered the Government up to SI-mil- lion for use in Chile, Mr. Gerri- ty had testified that the money was for 'constructive" pur- poses, such as subsidies for low-cost housing, and said this had been made known to Mr. Meyer. Other witnesses and some, internal company memoran- dums indicated that the money ' was for ?-.Liancing an anti-Al- lende coalition in the Chilean Cc ogress. Senator Church. after bear- ing Mr. Meyer's statement about the $1-million offer, said that it was "obvious that somebody is lying and we must take a very serious view of perjury under oath." He said the trans- cript of the hearings would he turned over to the Justice De- partment for review and pos- sible filing of perjury charges. In another highlight of the day's proceedings, Felix Ro- halyn, an I.T.T. hoard mem- ber, disclosed that the board had not been informed of the $1-million offer. He said that in a company of that size ? it is the sixth largest Ameri- can, corporation, with assets in the billions ? decisions in- volving St-million were often made without the knowledge of no one from the company had the hoard. ment to name someone other than Allende or, better still, to call for a new election. How can the Chilean out- come be said to have been .purely an internal matter? The officers of ITT, having carefully observed the cam- paign of Salvador Allende and the promises he made. con- chided that he would certainly proceed to nationalize the Chi- lean telephone company. By everyone's reckoning the val- ue of ITT's holdings was $153 47, -rirwi av We return to the question: In what sense is it an "internal" Matter if A decides to steal the property of B? The fact that A is'a country and B is merely a corporation says only that B is going to suffer considerable disadvan- tages in attempting to cope with A. It hardly says that B ? ought not attempt to cope with A. ITT did not, as it happens, mount its own operation in Chile, attempting to persuade the parliament not to vote for Allende. It merely offered to contribute to any U.S. enter- prise aimed at the same pur- The ITT people were smart pose. enough to anticipate that To suggest that foreign when Allende got around to governments are not involved nationalizing the telephone or should not be involved in company he would offer for it wrestling for the favor of the a small fraction of its ac- majority in swing countries knowledged value. That he which are points of contact in would, in effect, confiscate the cold war is simply to beg the property. In due course, the question: How is it that Allende offered $24 million for the Soviet Union and Castro's the $153 million asset, proving Cuba were so interested in the the ITT officials to have been election of Allende as to spend altogether accurate in their millions of dollars and commit forebodi rigs. entire communications andus- 4? FrlreTe-iiim2001/08/07 : CIA-RDP77-00432R000100130001-2 wArdIT.TRIT^11 STAR 'n tin Ce'h 1973 tries to the end of electing him? Whet President Allende fl- I nally did to ITT was. very+ simply, to take over the oper- ation of the telephone compa- ny without any compensation whatsoever. Those who are' anxious to make any point at' the expense of American busi-' ness who say that ITT got what was coming to if, in the light of its proffered interven- tion make a rather elltraq mistake. It was not until the spring of 1972 that Jack An- derson published the secret memoranda revealing 1TT's offer of $1 million to stop Al- lende. But it was in Septem- ber 1971 that Allende simply took over the Chilean tele- phone company, more or less without comment: a clean theft of $153 million. 1 do not believe that anyone who is a shareholder of ITT believes that that act by Dr. Allende is a purely internal affair. There is no internal right of any country to steal the goods of other people.. WASHINGTON POST AP1'11 1073 IT Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001:2 By Lewis D. Dinguid vs000Atuni, em?t rerehoi aerator. SANTIAGO, March 31?Ch1- le5 President Salvador Al- lende is now convinced that the U.S.. government con- Spired; along with ITT, to pre- tent his election in 1970, ad- visers close to. the president say. ? As a result of testimony at tecent hearings in Washington Allende reached this conclu- Von and broke off important talks between Chile and the United States, sources here $ald. No date was set for the tesumption of the talks, which concerned the major outstand- ing problems between the two countries. The ,hearings on ITT's activities in Chile were held by a special Senate sub- ilommittee investigating ? the tictivities of multinational cor- horat ions. , Until now, the sources here qny, Allende had interpreted the Internal intuit Telephone ftnci Telegraph documents that. Columnist Jack Anderson re- , fettled last year as implicating imiy the company, even though they referred to meet- ings between ITT executives tind the Central Intelligence . Agency's top agent agent in Latin America. ? ? The documents and last week's hearings indicated that. ITT worked actively to pre- Vent the .Chilean Congress from confirming the election Of A lb:nde, a Marxist, who had tailed to win the popular-vote absolute majority needed for outright election. During his Campaign Allende had pledged to nationlize major foreign holdings in Chile. ?tLN. Speech In a speech to the U.N. Gen- eral Assembly in December Allende bitterly deno.tmced ITT as plotting against Chile, but he avoided implicating the U.S. government in any such Activity. One item from the hearings that is said to have helped to convince Allende of U.S. in- volvetnent was a report., not ton firmed in the hearings, that the N al Mita; Security Council had allocated $400,000 fer covert propaganda action against Allende during the 1970 presidential campaign.. The report, in a Washington- datelined dispatch from the correspondent of the Commu- hist Party newspaper El Siglo, was apparently based on a tptestion risked by subcommit- tee counsel Jerome Levinson miring the testimony of Ed- ward Korry, who Was U.S. am- III/swifts to Chile in 1979. (=rings [Levinson asked Kerry if the NSC had approved the $400,060 fund, but Korry said he could not answer any ques- tions concerning "the aativi- ties of the CIA."] Bilateral Talks The U.S.-Chile talks in Washi ngl on that were broken off were mainly concerned with debt renegotiation and Chile's refusal to compensate American copper companies and ITT for nationalized prop- erties. The talks, which began in a good atmosphere in Decem- ber, resumed March 22 just as CIA. and ITT officials were testifying. The next day they were suspended anew. Mem- bers of the Chilean negotiat- ing team said that the hear- ings were the main cause. ? Chile's ambassad,or to the United States, Orlando ?Lete, her, who heads the negotiat- ing team, returned to Santiago this week to inform Allende on the talks and the hearings. ' Letelier is to go back to Washington next week with Foreign Minister Ciodomiro Almeyda, who is scheduled to address a meeting of the Or- ganization of American States. Almeyda is expected to spell out Chilean efforts to reach an agreement with the United States on the copper issue, and to accUSe the Americans of failing to respond. Such a speech would break the tmderstanding that led to the talks, since it was agreed that their content should not be revealed unilaterally. In ef- fect. the ? Chilean negotiators divnieed their position in con- versat 'OTIS yesterday. They said that Chile has' of- fered to submit the question of compensation for the cop- per companies an interna- tional panel, under proVisions of a 1914 treaty with the United States. The huge copper mines of Kennecott and Anaconda were nationalized in 1971 under constitutional amendment ap- proved unanimously by the Chilean Congress. Nationalism had renehed such a level here that even the right-wing party supported the move. Under the amendment, Al- lende was authorized to calcu- late the amount of "excess profits" the companies had. taken out. of the country and; deduct this from their com- pensation. Ilk calculations of excess profits far exceeded the book value of the mines, and the companies therefore received no payment. Chile's position in its negoti- erai U.S.-Chile Tr 1 lc s at ions with the United States was that another constitu- tional amendment would he required for the copper com- panies to receive payment. . If Allende were to ask for such a payment, the domestic political results would he dev- astating. But the Chileans ar- gued that if an international panel were to rule in faver of the companies, some payment would be politically feasible, [The magazine Chile Today, whose principal columnist was a member of the Chilean dele- gation to the talks, published an article today saying that the talks "ended in a total impasse," UPI reported. The article said that the United States "adopted from the very beginning a hos- tile, obstinate attitude which became threatening at the end." [State Department sources in Washington said that the United States had not rejected the idea of using the 1914 treaty or any other mechanism that might lead to "a mutually acceptable solutioh" of the problems between the two coun- tries. Bid they added that the United States was not interest- ed in any "cosmetic, time-con- suming and nonproductive de- vices," and expressed hope that a solution could he found ? "sooner rather, than later." [The sources said the United : States did not consider the bi- lateral talks at an end and. was willing to resume them at any [The sources said the Senate hearings did not establish any. wrongdoing on the part of the U.S. government, and should not stand in the way of find- ing a solution "that would fully respect the legitimate Interest of all parties:1 ?ITT Takeover In the meantime, the Chi- lean government is preparing calculations for the nationali- zation of ITts majority share in the $1.50 million telephone company here. A constitutional amendment to allow site}, nationalization is now going through the lengthy legislative process. To' date it has also been receiving unanimous support. The U.S. position. appar? ently, is that Allende should I begin now to seek authoriza- tion, Lou- payment of the cop.' per companies, since the proc- ess is slow. The impasse over copper is already more than two years old. During most of this period, Chile has achieved a de facto suspension of some $900 mil- lion in debts to the United States. But new credits Chlie needs in its deepening eco- nomic crisis have long Once been suspended. i . Another U.S. object:104 to use of the 1.914 treaty If:Oat either side can refuse to ae, cept the final arbitration on the ground of overwhelining national interest. Chile's' posi- tion is that the treaty pr ' posal 1.11 Is at least an initiative Ade In good faith, and that It s up to the United States NI accent or offer an alternative. Good, Faith . With. the trr hearings now raising the question of good faith on the part of the U.S. government, the Chilean team Indicated that it will make no move to renew the talks.. ' Allende has established 'a special task force to study the Washington testimony for pos- sible folloWup in Chile. lie is reported to believe that Amer- ican efforts to prevent. his tak- ing power were carried out with the connivance of opposi- tkm politicians here. Under consideration is a plan to use the ITT issue to consolidate support for the president in the opposition- dominated Congress. One of the Ironies of the ITT case is that. the company continues to do considerable . business here. Phone Company The.operatton of Its mOjor. holding. the phone company, was taken over by the govern- ment in 1971. Company and. Chilean government sonree4 alike indicated that they were near agreement on compensa- Min when the Anderson tioru-. ments were printed, and the' Chileans broke off negotia- tions. When the documents came nut, Allende said privately, "This is the first CIA plot that benefited the victim." Indeed, the seeming confirmation of relentless Marxist charges against the imperialists was a political windfall for the presi- dent. Allende (1111PITI1 the doeu- melds prinINI in hoot( form, and the hook became a best- seller overnight. Then Allende announced at a !muse rally that the governmeot would "expropriate the urr." Later he clarified his slate- sayInc that. only the phone company was involved, Other IT'I' properties here are two hotels, Avis car rentals, small international telf ice, and a. pbmw eritlipment, OW. S Approved For Release 2001/08/07: CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Sunday, April 1,1973 THE WASHINGTON POST fl Sembl By Laurence Stern Waphinstfrn rt Staff ??'rlier , The most lurid of Marxist propaganda parables against the excesses of U.S. imperi- alism cnuldn't have been , plotted with more heavy- handed caricature then the 'ITT saga in Chile, as it has unfolded the past two weeks :in a Senate hearing room. There was the ? giant American corporation con- niving with the Central In- Jelligence Agency to subvert . by clandestine economic war- :fare an elected left-wing :government in Latin Amer- ica. There, also. twit a senior 'figure of the American in- ,dustriel elite. John A. Me- Cone, serving as go-between :for the CIA be once headed and International Telephone :and Telegraph on whose board be sits. There was. furthermore, the spectacle of ITT execu- tives lobbying officials of the National Security Coun- cil, the top-secret policy arm of the White 'louse through which the President directs American foreign opera- tions. The ease has propelled into the limelight AS CIA's operational contact man with ITT a government offi- cial with the most tantaliz- ing job title in town, Wil- liam V. Broe, chief of clan- destine services, Western Hemisphere, of the CIA's . Directorate of Plans. The centerpiece of this In- triguing jigsaw has been ITT itself, whose motto? "serving people and nations. everywhere"--well describes its multinatismal and con- glomerate scale of opera- tions. ITT, the nation's eighth largest industrial cor- poration, functions as a global subgeyerninent in more than 70 countries. It reported $0.5 billion in sales and revenues diming 1072. Starting with the modest hose of, the Virgin Islands telephone company at the beginning of the 1920s, ITT rapidly branched out around the world ..onder the dy- namic menagement of a Danish enterpreneur. Sosth- cues Beim, who became a naturalized American citi- zen when the United States bought the Virgin islands from Demnark in 1917. Corporate Involvement fly World War Ii, accord- ing to justice, Department records, a German subsidi- ary of ITT Wig an owner of the compeny that produced on Chile: A influence Over the Luftwaffe'a Rieke-Wulff fighter while an American subsidiary was building the' "Huff-Duff". U-boat detector for the 1.1, S. Navy. After the war ITT collected several million dollars in damaged' from the U.S. Foreign Claims Settlement Commis- sion for allied bombing dam- age to the Focke-Wulff plants, according to govern- ment records. And so VT'T'e problems In Chile came against a back-, ground of. broad emporia& involvement In Internet:Ionia relations. Two weeks of public hear- ings by the Senate Foreign Relations Subcommittee on. Multinational Corporations have provided a rare glimpse of the interrelation- ship between corporate in- terests and public policy in: the conduct of U.S. foreign relations. Bet it is by no means a picture of clear-cot collu- sion. in fact, there was some, evidence of disarray within the administration toward' the assumption of power in September, 1970, of tbe first elected Marxist government, in the Western hemisphere,, as the administration of Chilean :President, Satyr:dart .Allende was called. ? .The professed position of the Nixon administration te- ward Allende's election was :OW! noulrolity, 'T'his' was reiterated dm int! the, _Senate bearings by fonner' Assistant Secretary ef State for Inter-American A ffait'S e'lilrles Meyer and former Ambassador to Chile Ed- ward Korry. Yet CIA operative ITiroe' testified under oath that his "operational" contacts with ITT, which included agency- drafted and approved plane for ?saboteee of the Chilean economy, were carried out with the complete approval of his superiors, 'Explore Options His superior at the time was CIA Director Richard M. Helms, who reports to the National Security Conn- ell which in turn reports di- rectly to I he President through national security. adviser Henry A. Eissinger. ; It is inconceivable 10 those familiar with the lightly, managed White .House national security sys- tem that such a mission as, iirhe emultictrti With ITT of- ficials In tate ,September, 1970?before the Chilean congress met to ratify Al- lende's popular election? was without full NSC ap? prove]. How dtcl'this square with, the policy of neutrality to which both Korry and Meyer attested? Meyer sitg; gested that there was no ;to consistency. The govern- ment maintained the right, he said, to explore options. Slibcommittee membere reacted with skeptical grttm- bles. Had ITT decided to carry out Broe's suggeStionso? Chairman Frank Church (D Idaho) pointed out, the "option" would have become. *an Operational policy. ITT, as it turned out, felt the plan was unworkable. As formulated by Broe and the agency, it would have been up to ITT to execute on its own. The gist of the plan was for a group of American companies, under ITT prod- ding, to use their financial clout to accelerate?as Broe testified?"the deteriorating economic situation" in Chile. The objective was to turn wavering Christian Democratic congressmen away from Allende irt final balloting. In his conversations with ITT Vice President Edward Gerrity, Woe told the sub- committee, "it was under- , stood that be was going to " 1w doing it and CIA was not I involved. It was ITT which was loolring into the thing." That. testimony was cru- cial, for it may have illumi- nated the National Security Council. derision in early September, 1070, for dealing with Allende's imminent election in the Chilean con- ? gress the following month . as the hemisphere's first constitutionally chosen: Marxist chief of stole. The indications ih the in- vestigation, never publicly confirmed by a government Witness, were that the CIA was authorized to explore various covert options de- signed to prevent. Allende from taking power. These actions fell in the shadowy region bet open jefhlte pot- !icy and clandestine opera-. tions that might he carried Out. without the public sanc- tion of the administration. ITT was the chosen In- strument because of the pre, vious approaches of McCoile and ITT Chairmen Harold S. Gowen, prior to Al- lende's popular election. trr, ns Broe tpsfified, "wag the only company that Polk contacted the agency end expressed an interest. In the current situation in Chile." ? The administration may well have reacted with some trauma to Allende's popular election victory since, ac- cording to the testimony, CIA pone have inaccurately predicted the election of his ., opponent, Jorge Alessandri, condidate of the conserve-, tive National Party. The CIA's rejection of Geneen's overtures the pre- viously July for intervention 'In Chile could have resulted from the agency's misread- ,ing of Allende's election prospects. By its own testi- twiny, Geneen's proffer of "a substantial fund" to fi- nance an anti-Allende plan was unattractive to the CIA. ' What the testimonial pat- ' tern suggests Is that. as po- litical events crystallized in C h 11 ei the CIA and ITT were pursuing increasingly -.congruent goals: further roil- . ing Chile's already sits- ' Hinted economy, trying to promote the prospects of Al- essandri in the cengres- ,? sional election run off, WU- - mately seeking to block Al- lende's accession as preS1- '. dent. ITT was pursuing its own, corporate welfare in view of 'Allende's pre-election vows to nationalize basic Indus- ' tries, ns well as the irr- owned Chilean telephone company. The CIA was pur- suing a softly stated man- date of the hISC to see what It could do to stave off the specter of a new Marxist ad- ministration in the politi- cally volatile southern hemi- fr's inhere. Jost how high the man-, date ran within!! the istraiion can only be a suh tect of speculation. Tlw Sen- ate subrommittee sloes mit I even entertain the possibil-, ity that. it can compel the,, testimony of Kissinger. the man who hos all the an- swers, But Kissinger, 12 (toys a0 ter Allende's popular flee/ tion, is on record as having expressed serious concern' over the impact of a chttenn! Marxist government on stir., rounding reunifies. In the ease of ITT, the re. cord suggests that (lpnecrt.' Wenn(' and othef corm): at executives had an access to' top ntlminictrat ion offiriatN. that hoc prettied al leost strong ,robloopp HI lotto 6 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Once over poliey. At the ii"w it wns pushing for intervootion in Chile, ITT WAR eampaigning ac- tively in washinelon agaInst r d n g ant It melon: caning for it to divest itself' of the $2 billion Hartford surante ITT officials were, In some eases, dealing with the, same Administration men on. the two separate matters. As!. It. turned out ITT won field. on the Hartford ease' when antitrust. chief mat McLoren, now a federal - judge, reversed himself and withdrew opposition to the merger. Things may not end op .s.o'1,1 happily for ITT 1in the Chi=.:. lean affair. Its claim upon the Overseas Private Invest- ment Corp.. (OPIC), a gov-; ernmcnt agency, for $92.5. million in confiscation ? losses is now hi doubt, Genee.tes position in ? the,1 company has not, been to- tally enhoneed by the rave:J. lotions no Capitol 11111 of the past few weeks. 1TT's chairman iS due to;i testify on his dealings withl the ndmieistration and CIA; over the Chilean affair. His) position, as a result of the!, .testimony of McCone, Broe. and ITT executives, is some-.I what analogous to that of ae man standing in, a cortier: stirrounded by wet paint. ?- WASHINGTON STAR 2 April 1973 LITT 31 Can't Uecalli Chill WASHINGTnN STAR 27 March 1973 issei ?ea 0 esill.rnon A and, ?,1r441 By JEREMIAH O'LEARY Star-News Staff Writer An agent of the CIA today made an unprecedented ap- pearance before a Senate sub- committee to tell under oath what he knows about the rela- tionship between himself and International Telephone and Telegraph Corp. regarding po- litical events in Chile. The appearance of William V. Broe, former chief of the CIA Latin American division, before the Senate Subcommit- tee on Multinational Corpora- tions, was behind closed doors. But Chairman Frank Church, D-Idaho, has worked out an agreement with CIA Director James Schlesinger so that a transcript of much of the ques- tion-and-answer session will be released, to the public prob. ebly within 24 hours. No operating agent of the CIA has ever made a congres- sional appearance under such near-open conditions. The sub- committee, which already has interviewed Broe informally WS to make public a declassi- fied copy of that transcript to- day, according to aides. Who Initiated Plans? Subcommittee officials said It was obvious that the CIA agreed to this break with prec- edent because the agency is anxious for its sidle of the ITT- Chile controversy to be mado public. Testimony in the hear- ing between ITT and CIA in connection with the election of Marxist President Salva- dor . Allende in Chile. The major question raised by conflicting testhnony is whether CIA or ITT initiated plans whereby the corporation r rilagu By JEREMIAH ol,EAny Star-News St af(Wrifer ITT Chairman Harold S. Geneen today told Senate Investigators he had no recollection of offering a financial contribution to CIA agent William V. Broe for support ala democratic candidate before the 1970 Chilean election bu "accepted" that he might have done so. However, Geneen acknowledged directing that the State Department and Dr. Henry A. Kissinger be informed that ITT was willing to assist financially in any U.S. gov- ernment plan to protect. American investment. in Chile aft- er Marxist Salvador Allende's election seemed certain Approved For Release 2001/08/07 vein offered up to $1 million to any U.S. government operation re- garding the Chilean election outcome. Schlesinger Letter John McCone, former CIA director and now a director of ITT, testified he understood the money was to block Al- lende from taking power but HT senior vice president Ed- ward Gerrity said he thought the money was for housing and nericultneal projects that might mollify Attend() in Ida drive to nationalize ITT prop- erties without compensation. $chiesinger's agree me nt witi the subcommittee about Dive's appearance today was described in a letter .to Church .yesterday. It said: ? "I believe that our discus- sions in recent weeks have in- dicated my desire to cooperate to the fullest extent possible. with the subcommittee in the matter of the ITT-Chile inves- tigations consistent with res- ponsibilities placed on me by law and with the necessity for respecting certain sensitive agency relationships. "It was in this spirit that I suggested that Mr. Broe meet with you and the staff of your subcommittee in formally and privately to discuss the extent of Mr. Broe's relationships with officials of ITT. As an outgrowth of that meeting, Mr. Broe responded for the classified record to a series of questions submitted to your subcommittee staff. I have since reviewed Mr. Broe's an- swer ' to these questions and concluded that most, if not all of them, cart be declassified for incorporation in the public record if you so desire. Unique Aspects "As you know, operating of- ficials of the agency have not previously testified under oath in public sessions. I desire, however, to continue to coop- erate as felly possible with your subcommittee because of the unique aspects of the hear- ings on ITT. I would agree, therefore, to have Mr. Broe appear before your subcom- mittee under oath to-present testimonw (limited to his con- versation with ITT officials in 1970 in connection with Chile. "Due to compelling opera- tional and security reasons which we have already dis- cussed, I must request that Mr. Broe's appearance be limited to executive session. Furilier, as the subcommittee feels it is desirable to make Mr. Broe's testimony public I would be gl;:d to review his testimony for that purpose. "I am certain such an ar- rangement would result in placing on the public record the items which your subcom- mittee believes are important in connection with its present investigation. This procedure would, I trust meet your objec- tives while allowing me the flexibility needed to discharge my responsibilities as called for by the National Security Act of 1947." The subcommittee was to re- turn to public session later to- day and question former Am- bassador to Chile Edward Kor- ry and two officials of the Ana- conda Copper Co. lat3r that year. Gencen's testimony today before the Senate Subcom- mittee on Multi-national Corporations drew a sharp dis- tinction between his July 1970 meeting with Broe in Wash- ington and 1TT's decision to "risk reasonable additional funds" in September when Allende appeared assured of the presidency. The kind of U.S. government plan ITT was willing to support financially, Geneen testified, "would offer Allende a quid pro quo for priceeding with nationalization in a manner that would privide for a long-term recovery of U.S.. investments. Of course, our thinking was very preliminary , and we had no specific plans but we did think that some socially constructive joint private industry and govern- ment projects could be part. of the overall plan. "SUCH A PLAN might well envision the willingness on Our part and others risking additional reasonable funds in ; order to safeguard the very large amount which were at risk." "The amount of up to seven figures." Gcnnen said, "was intended to show a serious intent and to gain scrims : eitAntOMMIRIN 11'0' 0130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 LUNPON -HITS 22 March 1973 Affi honv Thomas reports on hc ITT affair in Chile- fffow tight a grip do TFiCelati ;la's have ?i US foreigu policy? A Congressional investigation negotiations within Gatt this into the impact multinational "Wm"' Corporations have on foreign Many Administration officials policy has begun this week now believe President. Nixon with sensational documentation will have to agree to a signifi-: on the clandestine operations cant increase in United States of the International Telephone .taxes on the foreign profits of. and Telegraph Corporation in. United States multinationals if . the trade Bill is to pass into law.. ITT internal documents pro- s Against this backdrop, the ITT (Need at the hearing indicate, hearings could not have come at at the very least, close links between this huge conglomer- ate company and the Central Intelligence Agency during 1970 in an effort to secure their com- mon objective of frustrating the results of a popular election which brought Dr Salvador Allende, a Marxist, to power as president. The hearings have predict- ably provoked immense interest and while it is undoubtedly true politicians enjoy the limelight: the hearings are viewed with decidedly mixed feelings by the more serious members of the Senate Foreign Relations Com- mit I 02.5 Stlh-COrliinit tee on molt butt banal corporal ions. They see t he investigation. which is expected to stretch over three or four years, as an important one and they are wm vied the ITT hearings could distort their purpose by giving the study orosecutor-verms-de- fetulams overtones. 'There is also some concern about the impact the hearings themselves could have on for- eien policy. with the ITT revela- tions causing a wave of anti- A inericattism in Chile which could ripple throughout Latin merica. In the United States itself the investigation is yet another sig- nificant pointer to an increasing itatirmat suspicion that the in- of United States multi- tuitional corporations do not always?or even visually?coin- cide with the wider national interests of the United States. It follows closely on the heels I a separate study by a Senate I Mance Committer ..ult-cometiii- tee which included a table ineasoring the gross animal site s of American multinationals against the national products of Do Piro oat ions. On the basis of 1970 , tatistics, ceorrat Motors was bigger than Smith Africa. Exxon Cm nova- tion than Denmark. Ford than Austria, Shell than Ow Phillip, pines, and ITT than New Zea, laud, Portimal or Peru. These and other such reports, lot:ether with trade union resent. merit which is encapsulated by elogan " export of jobs have bind a comulative impact on the United States Congress. This is expected to in fillenCe the eaetion of legislators to the It ado legislation proposals pre- slolem Niynn plaits to sobrnit in r,epat mint) for nmitilateral El worse time for the United States multinationals. not least because they give substance to socialist and Marxist arguments about a very. intimate relation- ship between government and big business in the modern capitalist state. .ITT's internal documents re- veal a succession of meetings be- tween its senior officials and Mr William Broe, whose formal title is Chit( of Clandestine Services, Western Hemisphere. Dime- torate of Plans, Central Intelhi gence Agency. In one memorandum, Mr William Merriam. the ITT vice-, president. reports of October 9, 1970, op a lunch he had " with our contact at the McLean, agency ". McLean is a surburb of Washington DC which con- tains the CIA headquarters and Mr Merriam has since confirmed the " contact" was Mr Broe. According to Mr Merriam, Mr Broc was " very, very pessir mistic " abon tthe chances of the Chilean Congress refusing to en- dorse the victory of Dr Allende in the Chile presidential election. lie further reports that no progress bias been made in per- suading American companiesi including General Motors and Ford, to cooperate in some way, as to bring economic chaos in Chile and adds: "Undercover efforts are being made to bring about the bankruptcy of one or two of the ma ior savings and, loan associations. This is expec- ted to trigger a run on the banks and the closure of some fac- tories, resulting in more Intern- ployment." The intention of all these efforts was, aoraretitly. In panic the Chilean Congress into award- nig the election to Mr Jorge Allesandri, a right-wing candi- date who trailed Dr Allende in the oopolar vole. Mr A IlesamIri was prepared to resign immediately god so open the way for Presideot Frei, the retiring President, to run in a two-way contest against Dr Anemic, The documents also reveal in- telligence reports to the com- pany in which the characters of prominent men are analysed with chilling candour. A report from FET's Chilean office des- cribes Mr Edward Korry, the Oleo American Ambassador to Santiago, aS a man who has a habit of" saying one thing to one person and a different story to his next visitor ". Mr Charles Meyer, the theft NEW YORK TIMES 28 March 1973 Ex-Envoy Says' the COLA. dPrdered Polls on Allende By EILEEN SHANAIIIAN Seedni la The Nev./ Yolk /1111t9 WASHINGTON, March 27close United States Intelligence 'Sources or methods. The Central Intelligence -, According to the Korry testi- Agency commigsioned polls to ninny. the polls that the C.I.A. determine the probable out- commissioned showed that Dr. come of the presidential : Allende would win the election, tion in Chile in 1970, Edward M. Korry, former United States. Ambassador to Chile, said to- day. But Mr. Korry would not say, under questioning from a special Senate subcom.ittee, whether he also had known a reported decision by the agency to set aside $400,000 for prop- aganda activities in Chile e aimed at influencing the out- come of that election. The winner was Dr. Salvador 'Allende Gossens, whom Mr. 'Korry said he had wanted de- feated because Ile relieved that ,Dr. Allende would carry out Ithe Marxist platform on which !.he ran and would nationalize *American-owned businesses in -Chile. Question Raised by Lawyer The question about a $400,- 1.000 propanga fund was raised Mr. Levinson indicated that whieh was a three-way race, with about 10 per cent of the vote. Mr. Korry said that he had ,tallenged the validity of the polls because they were based ion 1960 census statistics and ' he had felt that more up-to-date information would show less support for Dr. Allende. The Chilean won 36 per cent of the popular vote and was later elected by the Chilean :.Congress under a regular pro- cedure for deciding an election in which no candidate received a majority of the votes. The decision to allocate $400,000 for anti-Allende. prop- aganda was made, according to Mr. Levinson, not just by the Central Intelligency Agency hut also by the high-level inter- agency Government committee that oversees the agency's p0t- ie9. :by Jerome T. Levenson, chief the money had been earmarked for use in Chile in late June or early July 1970; the popular election was held Sept. 4, 1970. Mr. Korry took the position that he could not answer ques- tions on the reported fund and on other matters he was asked about today. On matters involving the C.I.A., he said that the law pro- vided that only the agency's director could disclose anything concerning its activities. On questions about instruc- tions he had received front the State Department, he said that if he answered be would he-vio- lating promises of confidential- ity he had made when sworn as Ambassador. ,counsel to the subcommittee on -multinational corporations of the Senate Foreign Relations Commit tee. Mr. Levinson did not name his source for the assertion that $400,000 had been made avail- able to influence the election. Earlier in the day, however, the subcommittee had ques- tioned, in a closed session, the former director of the Central Intelligence Agency's clandes- tine activities in Latin America, William V. Broe. ? Mr. Broe's testimony is to be made public as soon as top agency officials have reviewed it for previously unpublished :infortnation that might dis- assistant secretary of states for inter-A merican affairs is described as charming, e(egant, Witty and yanking " very high as the weakest assistant secre- tary iul recent times ". 'Ube reports eller, extend to au clot ailed atialysis of the health of Dr Allende. ITT headqoarters are informed: " Ile has kidney trouble. lie has had hepatitis twice, arid it left hill] with chronic liver problems. He has soffered a heart attack, and two minor strokes that left the right side of his face partly paralysed. Ile is also known as a heavy drinker, and of course this aggravates his physical pro- blems ". But what is most likely to com- promise 11"1"s standing in less developed countries are the documents which profess to dis- close intimate advance know- ledge of plans for a military coup in Chile by lite then Gemo Rohm-to Vianx. Mm E. J. Gerrity, no I IT senior vit e president, was informed in a metno ft nin the ITT Chilean office on. October 16, 1970: " It is a fact that word was passed to Vial's from Washitoonl) to hold back last week. It was felt he was not adequately oleo:tied. his timing sac off, arid he shoed(' 'c not it for a later, unspecified date. Emissaries pointed out to hint that if he moved orematittely anti lust, the defeat would be tam:mu-mot to a Boy of Pigs ' in Chile ". Eight flays alter this internal MC1110 Cellerni rtelle Sehtleidet, the commander in chief of the Chilean Army, was assassinated and Getter:11 Viattx was later con? viered of ulottitic his death. Three revelation,: and e which will become ottl?lir clot inc the f.:mogressiotial ltrorinr, --are going to reverberate aromul Latin America, Africa and Asia For many years to comi0. Oilier multinational corpot a. //rr going to ,offot in ilio had ota,11 ?Icy trto coo viticingly tlettionct tat,' t11:11 behaviour ic erm and not the qiortri, Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100.130001L2 WASHINGTON POST 1973 .11 Cad April ITT A if inns Fir lid Otier By Laurence Stern rom, Si aft Wrtfrr Harold S. Colleen. chairman of the International Telephone and Telegraph Corp.. acknowl- edged Yesterday that he twice offered large sums of money to the U.S. government in 1970 ? to block the election of Chi- lean president Salvador Al- lende. The ITT executive, reputed to be the nation's highest paid corporate officer, gingerly stepped ;ironed contradictions in previous testimony by ITT officials and other witnesses . which Sen. Frank Church (D- Idaho) declared Might he the basis for perjury action. i -Concert said he coeld not ,recall making an offer of a hsithstantinl hind" to a top irentral Intelligence Agency official. wminm V. Broc, in ..ltily, 1970. to finance an 'agency effort to stop Allende. i But he stipulated that, he woeld accept Woe's sworn Iversion of their conversation timing a late evening meeting in Geneen's room at, the Sher- tit on Corti on Hotel here. tie said the offer to Proe might, .hove horn ill-advised, prompted by his "shock" at political developments in Chile where he feared confis- cation by the Allende govern- ?trient of ITT holdines. The CIA declined his oller, he s;,id, and the matter "died rirdit there." Nit the offer surfaced again in different form in SePtcm, her after Allende's mender election, GellN' 11 C011er.stled 1,111. OCT' onrcdioning, It came in it he form of a propoSai con- veyed by ITT to national se- curity adviser Henry A. singer and Richard M. Helms, then head of the CIA, to do- nate "up to a million dollars" toward a plan to block , Al- lende's confirmation by the ? Chilean 'Congress. Geneen's emissary this time was John A. McCone. Helms' former boss in the CIA, an ITT board member and also a CIA consultant. McCone first disclosed the mission in earlier testimony to the sen- ate investigators. Geneen also disclosed that, ITT had offered to contribute to the CIA In the 1,904 elec- tion when Allende lost to Christian Democrat. Eduardo Frei. The offer, he said, was turned down, as was the 1970 proffer to the agency. For three hours under hot , tcleviston lights Geneen spar- red his Senate questionerS. Al one point Church, chair- man of the inquiry, exclaimed that. testimony on ITT's role was getting "curiouser and curl miser." Geneen was flanked by two lawyers and a bodyguard. Be- hind him sat a row of ITT's top corporate -officers, His testimony marked the closing session of the inquiry by the Senate Foreign Relations Sub- committee on Multinational Corporations into the giant communication conglomerate's aelivities in the 1970 Chilean election. , In earlier sessions ITT vice Ipresident Edward Gerrity said Geneen'S second offer of a . fund "up to seven figures" was for some form of devel- opment aid In housing or agri- culture. He was never aware, said Gerrity, of the purpose disclosed by McCone: to fi- nance U.S. government efforts to block Allende's confirmii-, Bon by Chile's Congress. But the ITT officiel who was Opposed to convey the offer of development aid to the. White House and State, Department said yesterday he had never been instructed to. make such an offer. "I passed on the message I received," said Jack Neal of ITT's Wash- ington office. Gerrity conceded he might have failed to pass along that ITT was ready to underwrite' A $1 million contribution for development aid to Chile, ; Geneen himself took the 'position that the million-dol- lar offer was a "dual" offer: i It might have been allocated by the government toward financing an anti-Allende coal- ition in the Chilean Congress, or it might have been used for development aid. "It was in- tended to be a very open of- fer," be said. . "If I were Dr. Allende," in- terjected Sen. Clifford P. Case (B-N.J.), "and a non-friend of- fered a plan to a group of my enemies to defeat Case?or, if Case should win, to -make him vote straight?then I would regard that as ProVeCative." Gepeen. responded: "That depends on what the second plan was." "I don't think rd ever get. over the first plan," Case snapped back. "As the recprd now stands." said Church, "the beneficent plan, the constructive propo- sal, was never communicated to the government and died somewhere as it was being Passed down to subordinates al the company ?. . , Why was something so serious , never communicated to the govern- ment?" Geneen could not explain the communication lapse with- In ITT. , In his prepared statement Geneen said he used. the mag- nitude of "up to seven figures" In order "to show a serious WASHINGTON STAR 3 April 1973 Church to Seek CIA Donor Ban By ,IERMIAlt O'LEARY Star-NeWs Stan Writer 'Chairman Frank Church, I)- Idaho, of the Senate multina-. tional corporations SUIX0M- ? mittee plans to introduce leg- islation that would make it a ? federal crime for a business, Organization to contribute money to financd operations of the Central Intelligence Agency. Church announced this in- tent, at the close yesterday of two weeks of bearings into the machinations of ITT Corp. with CIA and other govern- ment agencies in the internal affairs of Chile. The hearings produced testimony that ITT and CIA approached each other at different times in the Chilean election period of 1970 with suggestions for affecting the outcome of Ihe election and the Chilean economy. Bilt Church indicated that the subcommittee would not pursue his threat to send the transcript of the hearings to the Justice Department on ? suspicion of perjury: Church announced last week that he believed "someone is lying" when testimony of ITT execu- tives appeared to conflict, with that of U.S. government wit- nesses and other ITT officials. Church said the inconsisten- 'cies now seem to he due to lapses of time or memory, or a failure to communicate am ong those involved in the sensational ITT documents on Chile. "I feel the wider the dis- tance between big business!' and the CIA the better for all concerned," Church declared. "Legislation to accomplish this may be one of the better outgrowths of these hearings. We cannot have this inces- tuous relationship between, the CIA and U.S. companies operating abroad." Harold S. Geneen, ITT board chairman, occupied the witness chair for most of yes- terday as the subcommittee wound up the hearings. Geneen's testimony was that there were two distinct phas-- es to ITT's thinking on Chile in 1970: One in the sumtner when Marxist Salvador Al- lende was campaigning on a platform of expropriation that ITT believed would cost the corporation its $153 million investment; the other during the autumn when Allende looked to be a sure winner requiring only confirmation by the Chilean Congress. Geneen accepted testimony of CIA agent William V. Woe that Geneen had offered a ? substantial sum for any gov- ernment plan that would block Allende, although be said he did not recall doing it. But Gencen said that money offer "died" when Broe re- jected the offer in July 1970. - intent and to gain serious at- tention from the Govern- Ment." In presenting ITT's role in the Chilean affair, Geneen said, "all that. ITT did was to Present its views, concerns, and ideas to various depart- ments of the U.S. government. This is not only its right, but also its obligation." Al; one point Church inter- jected. "If all this involved was petitioning the govern- ment, *by did you seek out the CIA?" Geneen responded: "Because I think they are good suppliers of information In this area." The ITT chairman said he did not realize in meeting with Broe, the CIA's chief of clandestine services for Latin Americo, whet the distinction was between the clandestine and intelligence services of CIA. The purpose for which he requested the meeting, Geneen said, was to get cur- rent information on political developments in Chile. Normally intelligence brief- ings by the CIA are provided by its Intelligence wing, the directorate of intelligence. Thc directorate of plans, for which Broe worked, is mainly responsible for covert opera lions such as political or eco- "The next offer was entire- ly separate and had a dual purpose," Geneen testified. ? "The offer of $1 million was openly presented to two de- partrrients of government (The National Security Coun- cil and the State Department). . It was to make Allende more receptive to us and other' companies if he Was elected or to help the Chileans arrive at a democratic coalition solu- tion. The $1 million figure was only a measurement, of our willingness to join any gov- ernment program." Sen. Clifford Case, Tt-N.J., said, "If I heard someone was offering $1 million to defeat me or make me vote better, I'd take that as a piovoca-' tion." "That depends on the see- ond part of the plan," Geneep said. ? "I don't think I'd get over the first plan," Case replied. 9 Approved For Release 2001/08/07 : CIA2R1314746432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 FIF NEW YORK TIRES, SATURDAY, MARCH 24, 1973 ernarks by Principals in Water ate Swint In The Nnn.'inrk TImmt WASHINGTON, March 23 ?Following are the text of a letter from James W. Mc- Cord Jr. to Chief Judge John sirica of the United States District Court and excerpts from prepared statements by Judge Sirica made in sen- treeing six 1Vatergate con, spirators and from a state- meet at .c fencing by one of them, E. Howard Runt Jr.: James W. McCord Jr. Certain questions have been posed to me from your honor throegh the probation officer. dealing with details of the rase, motivations, intent, mitigating circum- stances. In endeavoring to respond to these questions. I am whipsawed in a variety of legalities. First, I may be called before a Senate com- mittee investigating this matter. Secondly, I may be involved in a civil suit, and thirdly there may be a new trial at some Mere date. Fourthly, the probation of- ficer may be called before the Senate committee to pre- sent testimony regarding what may otherwise be a privileged communication be- tween defendant. and judge. As I answered certain questions to the probation officer, ,it is possible such answers could become a matter of record in the Sen- ate and therefore available for use in the other proceed- ings just described. My answers would, it would seem to me, violate my Fifth Amendment rights, and possibly my Sixth Amendment right to counsel and possibly other rights. Penalty for Noncooperation On the other hand, to fail to answer your questions may appear to be noncoop- eration, and I can therefore expect a much more severe sentence. There arc other considera- tiOns which are not to he lightly taken. Several mem- bers of my family have ex- pressed fear for my life if I disclose knowledge of the facts in this matter, either publicly or to any govern- ment represent alive. judge Sidra Whereas I do not share Statement on sentencing their concerns t.o the Same degree, nevertheless, I do he- G. Gordon Liddy: lieve that retaliatory meas- The court, at this time, ores will he taken against wishes to briefly state some my aml my of the; considerations which friends should I diSOOSe 110 , I ti trt it% Sett- potential offenders. 1. There was political pros- the knowing and dchhc?rme sure applied to the defend- violation of laws deserves a , ants to plead guilty and re- greater determination than a 'main silent. 'simple careless or uncompre- i 2. Perjury occurred during bending violation. the trial in matters highly It is appropriate to con- material to the very struc- sider, in addition, the nature tore, orientation and impact of the misconduct, and the of the Government's case, gravity of the offenses corn- and to the motivation and in- mated. The indictment con- tent of the defendants. tains two counts of burglary, 3 Others involved in the a serious crime. Other counts Watergate operation were not identified during the trial, when they could have been those testifying. 4. The Watergate opera- tion was not a C.I.A. opera- tion. The Cubans may have been misled by others into believing that it was a C.I.A. operation. I know for a fact that it was not. 5. Some statements were unfortunately made by wit- ness which left the court with the impression that he was stating untruths, or withholding facts of his knowledge, vvhen in fact only refer to Title 18 United States Code Sec. 2511 con- cerning the privacy of oral and wire communications. The Senate report on the bill which included what is now Sec. 2511 contained the fol- ' lowing statement: 'The tremendous scientific and technological develop- ments that have taken place In the last century have made possible today the widespread use and abuse of electronic surveillance techniques. As a result of these developments, privacy of communication is 'seriously jeopardized I? honest errors of memory these techniques of survei - were involved. lance. No longer is it possible 6. My motivatinns were dif- for each man to retreat into remit than those of the his home and be left alone. others involved, but were not Every spoken word relating limited to, or simply those of- to each man's personal, fered in my defense during martital, religious, political or the trial. This is no fault of commercial concerns can be my attorneys, hut of the cir- intercepted by an unseen cumstances ender which we ? auditor and turned against , the speaker to the auditor's advantage." Sec. 2511 was designed to prevent this great evil. Ob- viously, however, it. has not stopped these defendants from knowingly committing the acts of which they stand convicted: From the evidence presented in the course of these proceedings, the court has reached the. opinion that the crimes committed by these defendants can only be . described as sordid, despic- `ble and thoroughly reprehen- . 511;1'4 court has also consid- ered the purposes to be served by imposing sentences in this case. In view of the foregoing, and taking into account. the background of the defendants, it seems obvious to the cOurt that rehabilita- tion is not the principal pur- pose to be served. Nor is it appi-oprinte to impose sen- tence here with the intent of satisfying someone's de- sire for reprisal. In this matter, the sentences should. be imposed had to prepare my defense. Private Talk Sought Following sentence, I would. appreciate the oppor- tunity to talk to you private- ly in chambers. Since I can- not feel confident in talking with an F.B.I. agent, in testi- fying before a grand jury whose U. S. attorneys work for the Department of Jus- tice, or in talking with other Government representatives, such a discussion with you would be of assistance to me. I have not discussed the above with my attorneys as a matter of protection for them. I give this statement free- ly and voluntarily, felly real- izing that I may be prose- cuted for giving a false state- ment to a judicial official, If the statements herein are knowingly untrue. The state- ments are true and correct to the best of my knowledge and belief. with an eye toward a just punishment for the grave of- fenses committed and toward the deterrent effect the sen- tences might have on other such facts. Such retaliation teneing decisions in this Numerous other considera- could destroy careers, in- ca.4,. . ? tines, both favorable and un- come, and reputations of per- In the first instance, it favorable to the defendants, sons who are innocent of seems Hear that. the defend- halm played a part in the any guilt whatever, ants realized, at the time court's decisions. ite that as it. may, in the they acted ' that. their con- interest of justice, and the interest of restoring faith in the criminal justice system, which faith has been severely damaged in this case, I will Stlie the following to you at this time which I hope may be of help to you in meting duct violated the law Now, it is true that "ignorance of the law is no excuse" and that one may he held ac- countable for a failure to obey the law whether he has read the statute books or not. Despite this fact, how- ever, the court believes that jest ice this case. Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Statement on Sentencing Hunt, Bernard L. Bar- ker, Eugenio It. Marti- nez, Frank A. Sturgis, and Virgilio R. Gon- zalez. With respect to the five iencing defendants who have. entered guilty pleas, the court finds that it requires more detailed information before it can ? make a final determination of the sentences to be im- posed. The court will there- fore implement at this time, the provisions of Title 18 United States Code Sec. 4208(B): The effect of the court's ruling, then, is this: ?irst: Each of you five fendants now before me provisionally committed the maximum sentence imprisonment prescribed law for your offenses. Second: A study will be conducted under the direc- tion of the Bureau of Prisons. Within three months, the court will be furnished with the results of this study to- gether with any recommenda- tions made by the director of the Bureau of Prisons. Should more than three months be required, the court may grant time for further study up to an additional three months. Third: Once the Studies with respect to each defend- ant are completed and the court has analyzed the infor- mation contained therein, the court will make a final dis- position of your cases. The court will have basically three alternatives: (1) to af- firm the sentence of impris- onment originally imposed, that is, the maximum sen- tence, (2) To reduce the sen- tence of imprisonment as the court deems appropriate, or (3) To place the defendant on probation. In any case, the terms of sentence will begin to run from the date of original commitment. .1 have carefully studied this pre-sentence reports and the trial transcripts. Among - other timings, I have taken into consideration, and will keep in mind, the fact that each of you voluntarily en- tered pleas of guilty. On the other side of the scale, how- ever. is the fact that none of I you have been willing tol give the Government or other appropriate authorities any substantial help in trying this case or in investigating the activities which were the subject, of this case. Now I want to speak plainly about this matter. You will all no doubt be given an opportunity to pro- vide information to the grand jury which has been, and still is, investigating the "Watergate affair" and to the Senate Select Committee On presidential Campaign Activities. I sincerely hope that each of you will take full advantage of any such opportunity. My sentiments in this re- gard are identical to those expressed on February 25th of this year by Judge War- ren J. Ferguson. R United States District Jiidge In 1 Os tie- are for of I by 10 ?Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Angeles, California, and a man for whom I have the highest admiration. Judge Ferguson has before him a matter which is. in many re- spects, analogous to this Case. That proceeding grew out of certain unlawful transac- tions revealed a few years ago involving a onetime ser- geant major of the Army. This man and others pleaded guilty before Judge Fergu- son on the 28th to an Infor- mation charging them with fraud and corruption Irt the. operation of United States military clubs in parts of Eu- rope, Vietnam and the United States. At the time of the plea, Judge Ferguson made a statement which I am going to read now. He has stated the matter ex- ceptionally well. "There are various sen- tencing philosophies to deter other people from commit- ting crime, to deter the de- fendant himself from com- mitting other crimes against the Government, to rehabili- tate people and all of the other various philosophical reasons why judges sentence people. "In this case. for various reasons which are not neces- sary for the court to express from the bench, I ant more concerned that the activities to which you have pled guilty will not occur in the future by any other sergeant of the Army, sergeant major of the Army, any master ser- geant of the Army, or any. staff sergeant of the Army or anybody else in the Mili- tary system and I don't know whether or not the three of you are isolated in-, cidents of the things to which you have pled guilty and whether or not it is the system which permitted this activity to take place. "The things we say here, if I can paraphrase a great President, will not be long remembered. You and I are individuals and life is pretty slender and what I do to you basically is not going to af- fect other sergeant majors in the Army and another war that comes along in our future, and they will come. , "But I want to do all I. can to insure that in future .wars or future military op- erations that the system, the system itself, prohibits the conduct to which you have entered your guilty pleas. Because if that is accom- plished then there has been a benefit to the Government, No Gain From 'Flesh' "I don't think the Govern- ment wants a pound of flesh nut of you. That is very little benefit to the Government. That is very little benefit to society. That is very little benefit to anybody except an expression that society does not approve to the things you have entered your guilty pleas to. "But you will pass on and there will be other people taking your place and Wool- ridge will be forgotten about and Higdon will be forgotten about and nobody will re- member Bass as ? individuals. There will be a flurry of pub- licity as a result of your guilty pleas. ;laterally, but in a week or so it will he forgotten about, "But you sec, I don't want it forgotten. So I have told your attorneys that the sen- tence that I will impose upon you?and I am making no promise of leniency; I want that clearly and positively understood; I atil making no promise of leniency?but.the sentence I will impose will depend primarily on whether or not yr.A1 cooperate with the permanent Subcommittee on Investigation of the Unit- ed States Senate and if you are asked to testify and give evidence before that perma- nent subcommittee and if you testify openly and com- pletely, regardless of' what the implications are to your- self or to anyone else or to ' the system so that the branch of the Government which can take corrective action is able to take action .so that this activity simply does not occur again, then I will take that into consid- eration because I want to see something beneficial to, the Government come out of these proceedings. Now, I don't know what the subcommittee will do but I fully expect you to cooper- ate absolutely, completely and entirety with whoever from that subcommittee, whether it is a Senator, or whether it is a staff investi- gator. Whoever it is who in- terrogates you, you will openly and honestly testify. Now I believe that the "Watergate affair," the sub-, ject of this trial, should not be forgotten. Some good can and should come from a rev- elation of sinister conduct whenever and wherever such conduct exists. I am convinced that the', greatest benefit that can come from this prosecution will be its Impact as a spur to corrective action so that ? the type of activities re-,, vealed by the evidence at trial will not be repeated in our nation. For these rea- sons, I recommend your full cooperation with the grand! jury and the Senate Select Committee. You must understand that; I hold out no promises on hopes of any kind to you in, this matter, but I do say that, should you decide to speak, freely, I would have to weigh that factor in appraising what sentence will be finally; Imposed in each case. Other , factors will, of course, be. considered, but I mention; this one because it is one, over which you have control., E. Howard Hunt Jr. I stand before you, a man convicted first by the press,, then by my own admissions, freely made even before the beginning of my trial. For 26. years I served my country, honorably and with devo- tion: first as a naval officer, on the wartime North Atlan- tic, then as an Air Force of- ficer in China. And finally,: Its an officer of the Central: Intelligence Agency combat- ing our country's enemies abroad. In my entire life I was, never charged with a crime, much less convicted of one. Since the 17th of June 1972, I lost my employment, then. my beloved wife, both int consequence of my involve-: ment in the Watergate affair.; Today I stand before the bar,. of justice alone, nearly friend- less, ridiculed, disgraced, de-1 stroyed as a man. These have been a few of the many tragic consequences' of My participation in the: Watergate affair, and they i have been visited upon me in I overwhelming measure. What I did was wrong, un- questionably wrong in the' eyes of the law, and I can ac- cept that. For the last eight months I have suffered one ever-deepening conciousness of guilt, of responsibility for my acts, and of the drastic penalties they entail. I pray. however that this court?and the American people?can; accept my statement today, that my motives were not? evil. .1 An 'Honorable' Life . The offenses I have freely1 admitted are the flrst in a: life of blameless and 'honor- able conduct. As a man al-; ready destroyed by the cm-, sequences of his acts I can, represent no threat to ours society, now or at any con.' ceivable future time. And as ? to the factor of deterrence, your honor, the Watergate. case has been so publicized. that I believe it fair to say. the American public knows that political offenses are not, to he tolerated by our socie- ty within our democratic system. The American public knows also that because of what I. did, I have lost virtually everything that I cherished in life?my wife, my job, my 'reputation. Surely, these tragic consequences will serve as an, effective deterrent to any- 'one else who might contem-: plate engaging in a similar' ? activity. The offenses to which I pleaded. guilty even before trial began were not crimes' of .violence. To he sure, they, were an affront to the state, but not to the body of a man or to his property. The real' victims of the Watergate cony spiracy, your honor, as it hat turned out, are the conspira= tors themselves. But there are other prospective victims. Plea for the Children Your honor, I am the father of four children, the youngest a boy of 9. Had my. wife and I not lost our em- ployment because of Water. gate involvement, she would not have sought Investment, security for our family IA Chicago where she was killed last December. My Children's knowledge of the reason for her death is in- eradicable?as is mine. Four children without a mother. t ask they they not lose their father, as well. Your honor, I cannot be- lieve the ends of iiisticti would be well served by in, carcerating me. To do so would add four more vic- tims, to the disastrous train of events in which I was in 'volved. I say to you, in all candor, that my family des- perately needs me at this time. My problems are unique and real, and your honor knows what they are. My probation officer has dis?- cussed them with me at some length. I have spent almost an entire lifetime helping and' serving my country, in war and peace. I am the one who now needs help. Throughout the civilized world we are, renowned for our American, system of justice. Especially honored is our judicial con- cept of justice tempered with: mercy. Mercy, your honor,, not vengeance and reprisal, as in some lands. It is this: revered 'tradition of mercy that I ask your honor to re- member while you ponder my fate. Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 eft MIDI ?Tref STAR 26 earth 1973 'Hy JEREMIAH O'LEARY Stnr.Nevcs Stncf Writer 'DiSillIIMODIDerit set in early for James W. McCord with the Woe that befell him after the Watergate burglary. ,Several times after his or- rest in June, according to sources close to the political Controversy, the 53-year-old former security chief for Pres- ident Nixon's re-election com- mittee was on the verge of blowing the whistle on the whole operation. ? He now seems on the verge of telling everything he knows about who ordered the burgla- ry and hugging of Democratic National Committee headquar- ters to U.S. District Judge John J. Sirica. McCord, a silent type. of than with e solid background as an Army officer and as an agent for the FBI and CIA, kept his thoughts largely to himself after he and his four-man "Cuban contingent" were caught inside the Water- gate offices of the Democratic party. But those who were in con- tact with him say that it be- ceme increasingly apparent that McCord was feeling aban- doned. betrayed and expected to pay an unacceptable price for loyalty to his preceptors. "Ile came very, very close to speaking up several times during the investigation and trial," said one source. "It bothered him that nobody tame forward to offer him a deal." The picture painted of Mc- Cord by this source was that of a man who bad done what he was told to do and had gotten caught. But the source said McCord evidently antici- pated he would get more as- eurances than he did of securi- ty for his family or something solid in the way of promises for a fairly short prison term. It obviously bothered him, from his own words in the bombshell letter to Judge She- en, that there were others in- volved in the conspiracy who were never implicated public- ly. He and the four Miamians, along with defendants E. How- Mei Hunt and G. Gordon Lid- dy, were being asked to face ;punishment alone and in what 'be considered an atmosphere of pressure and perjury. More- over, McCord felt he could not trust either the U.S. Attor- ney's Office or the FBI to hear his story. McCord, according to insid- ers, felt badly about implica- tions that the Watergate affair for the CIA. may have been a CIA opera- It is understood that the four tion and was troubled about seem to accept that they are possible harm to his former going to remain in jail and agency's reputation. In addi- they are prepared to do so as tion, as be suggested in his long as their families are tak- letter to the judge, he felt en care of. Those who have compassion for the fear Miami talked with them say their Men who thought they were on state of mind has not changed a mission for the CIA and since their arrest. found themselves at the center They are not expected to o fa major domestic political break their silence until they of a major domestic political see that the promises made to them cannot be fulfilled, but McCord evidently expected' insiders say they really don't the chief prosecutor, Asst. have much to offer in return U.S. Atty. Earl J. Silbert to for leniency. While McCord tergate operation and may cite e ' 'grand jury and pre-trialsources of pressure and por- es of the case with some kind sons who allegedly committed of deal. . perjury, the four Miamians Those who have talked with, are said to know only Hunt. Henry B. Betliblatt, attorney e McCord say that he seemed to for the four Miamians said tod anticipate that he Would be ay he has not seen' them ? offered a prosecution recome there for about two weeks and that mendation for an easier sen- .?ere are DO plans for seeking ' tence in return for some mea-. a court hearing to show that , Sure of cooperation from him.; they were pressured or off- ? These sources say no such of- ered either money or dere- fer was made by the prosecu- tion. endy to plead guilty. Liddy, former finance coun- Rothblatt held to the opinion sel to the Nixon campaign that his clients may have committee, is likened by those been offered inducements to close to him since his arrest as remain silent about their rale a "soldier" who is not waver- ing in his determination to and contacts in the Water- gate affair, but be said he ? approach him during the may know of others in the Wa- take 'his punishment: a $40,000 fine and from 6 to 20 years in prison. Liddy was silent, even at his sentencing. Hunt, no longer the swash- buckling former CIA agent and White House operative, had opted to plead guilty, along with the Miami four, but in the end be pleaded for mer- cy because he had lost "my wife, my job, ney reputation." Unlike Liddy, Hunt and McCord, who supposedly went into the Watergate operation with full awareness of what they were doing and why, the Miami four are said by asso- ciates to have never known precisely why they were on the Watergate caper. Bernard Barker, Frank Sturgis, Eugenio R. Martinez and Virgilio R. Gonzalez are described as men who knew Hunt from the Bay of Pigs era in Florida when they were ac- , tive in the anti-Castro move- Meat, and knew Hunt as a government man, a CIA agenf. bad no true knowledge that -such offers were made. The previously mentioned figure of $1,000 a month for each of the four for as long as they remained in prison, B,othblatt said, was probably just "a figure pulled out of the hat." He agreed that their only ! contact was probably with Hunt and speculated that Hunt might have encouraged them to believe that they and. their families "would be taken care of" when the furore over the case died down. He said he knew of no secret meetings in Arlington Towers at the time of the trial and said it was well known that bath he and Barker had taken apart- ments there during that period. ? "They have not. approached Me about re-opening the case on the grounds of any obstruc- tion of justice, such as an offer of money of reduced They were accustomed to sentences later, and I have clandestine operations and not approached them," Roth- may even have considered blett said. their -act of burglary was a He characterized published patriotic deed. They had bro- reports that said that he did ken the law for the U.S. gov- intend to re-enter the ease and ernment before. McCord's let- seek a bearing as being "an ter unequivocally states they out-of-date version of an off- were deceived into thinking the-record discussion" he had the Watergate operation was with reporters. Bolliblatt said he had discussed this possi- 12 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 bility weeks ago led that it became a dead issue when his clients decided to plead guilty and take their sentences. Whether the four Miamians will continue to maintain their silence remains to be seen, Bothblat teed, addiarl that they don't knew meth more about the Watergate ease than their involvement at the Hunte McCord level. McCord was said to have seen little of the Miatei group except for the actual operation of planning the Watergate break-in and then carrying it out. WASHINGTON POST 27 March 1973 iN -n I kAH JrilaTqfr,"9 1MT1 - iLP By Bob Wondward and Carl Bernstein Witshinnton pont Staff Writ rrn Senate sources confirmed yesterday that Jatnes W. McCord Jr. has told investi- gators that two high aides :of President Nixon had ad- vance knowledge of the Watergate bugging. A Re- publican source desmibed McCord's allegations as "convincing, disturb but g and supported by some documentation? That source said IVErCord had described the nature of the documentation but had not yet shown it to investigators. The two officials named by McCord were presidential counsel John Dean III mid former white House aide .leb Stuart Magruder, who was first. acting director and then the No. 2 man in Mr. Nixon's re-election drive. Watergate conspirator Mc- Cord, formerly 1 he security chief for Mr, Nixon's re-elec- tion committee, made the charges against Dean and Magruder in long sessions Friday and Saturday with in- vestigators from the Senate select committee probing the Watergate Imeeine and other alleged acts of political espio- nage and sabotage. McCord Implicated Dealt In I he planning or the blwrioc! mu' imlicated that IVI:wrteter commitiell perjury at the Watergate trial when he fltti he had no knolvteae f the before the Jam- 17 arrests a t the Demort Watergate headquarters, the sonrces said. President Nixon, who lost summer assigned Dean to con- duct a White 1 low-e invertiva. Hon of the Watergate lint:gleg, personally telephoned Ids Approved For Release 2001/08/07 : CIA-RDP77-00432R000100.13000112 counsel yesterdny and express- ed "nbsolute rind. total confi- dence" in Dean, according to Presidential press secretary . Ronald L. Ziegler. "Following that conversa- tion." Ziegler said, "and bnsed on Bine conversation, I will again flatly deny any prior knowlelge on the part of Mr. Dean regarding the Watergate, matter." -Magruder. who served as the deputy to Mr. Nixon's cam- paign mtmager, former Attor- ney General John N. Mitchell, had already denied McCord's allegations. In other developments yes- terday: ? Sen. Lowell P. Weicker (R-Conn.), one of the seven members of the Senate Water- gate tommittee, said he has established ledependently that White House aides were in- volved in the bugging, as well as other sabotage and espio- nage activities against the Democrats. Weicker said he has no evidence that President Nixon condoned such "illegal practices that demean the American process," but the senator expressed "a thor- ough disgust with the men around the President." ? Assistant United States Attorney' Earl J. Silbert said last night the government had offered to drop most of the charges against McCord in re- turn for full cooperation in proSecution of the case. Sit-, bert said the offer was made before the Nov. 7 election and McCord turned it down. In addition, Silbert said he would issue a full statement on the negotiations with McCord to- day. ? During a closed-door meeting, members of the Sen- ate's Watergate investigating committee were briefed on McCord's information and 'voted to allow live television and he confirmed telling Sen- ate investigators that Dean and Magruder had previous knowledge of the bugging. . ? ? White House press sec- retary Ziegler confirmed a re- port that Dean called acting FBI director L. Patrick Gray III shortly after Gray told a Senate hearing that Dean had "probably" lied to FBI agents In the Watergate investigation. Gray refused Dean's request that he "correct" his state- ment, Ziegler said. He said President Nixon still supports Gray's nomination, which ap- pears to be in grave danger of being rejected. ? Attorney General Richard G. Kleindienst said McCord's allegations have contained "nothing new so far that was not covered by ?iir investiga- tion" of the Watergate bug- ging. "I'm just as certain as I can be that Magruder and Dean didn't know anything about it," Kleindienst said. A Justice Department spokesman said the FBI received no leads suggesting involvement by Dean in the bugging, and that Magruder's role in the cam- paign had been scrutinized by the ?FBI and grand jury with- out any criminal charges being brought against him. ? It was learned that mem- bers of the Senate Republican leadership have advised the President to permit Dean to testify before the select in- vestigating committee at pub- lic hearings. The President has said that he will not let Dean jor any other present or former Mille House aide appear be- 1 fore any congressional cone mittee. Sen. Vireicker's - comments appeared to reflect increasing unhappiness among 'Senate Republicans abeut the White House. Another GOP senator, who asked not to be named, described the recent Water- coverage of the committee's gate disclosures as "absolutely upcoming hearings. Sen. Sam appalling+, and said "the Pres', J. Ervin, chairman of the sesi dent would he well advised tol lect committee, said the hear-, clean out his house." ings definitely will begin he. Weicker, who has been Con- fore May and other members ducting his own inquiry into the Watergate ease and relat- ed matters since his appoint- ment to the select committee, said his preliminary informa- tion alone is sufficient "to come forth with some sort of sensational disclosures." Senate sources familiar with Weicker's inquiry said he has developed "Pretty hard , evi- dence" on White Home in- velvement in the bugging and other undercover activities. In comments to reporters expressed hope they will begin in two or three weeks with McCord as one of the lead wit- nesses. ? E. Howard Hunt Jr., an- other Watergate conspirator, was reportedly considering providing information about the hugging, but will refuse to voluntarily talk to the Senate committee because of a fear of leaks in the press, according to a source close to Hunt: ? G. Gordon Liddy, who the government alleged was the "boss" of the Watergate ow a- ti a- yesterday,latsprc Wf ievelicic oltatrionobosetrytielde lion. took the Fifth Amend- law "is not the only issue in-. nl"t " "es yesterday as he volved, although some people' appeared before the federal in the administration would grand jury which yesterday like to have it drawn that way, reopened its investigation and as narrowly as possible." He asked him about the possible added: "It's just as bad in my Involvement of others, book for certain persons at ? Washington Star-News the presidential level to con- Staff Writer m Mary eGrory sone illegal psssitses . . I said that she encountered Mc- " don't Rive a damn if there's a Cord yesterday coming out of a Cleveland Park (IA1506 "Does the Watergate lead di- rectly to the President?" 'Weicker was asked. He replied: "Well, I am not pre- pared to go ahead and name any names unless I have the facts to back it up, Do I think that I will have the facts find 'Will there be other names? The answer is yes." "Other names . in the White House?" the senator was asked. "That's right," he replied. "Do I have a broader picture that I am trying to substantiate? The answer is yes. Do I think it goes beyond Watergate? The answer is yes. Somebody had to start it. Somebody had to abet it. Mr. Hunt and Mr. Liddy and Mr. McCord i et al, didn't just get together in a barroom one night and decide they were go- ing to do something gratuitous . for the Republican Party. Two sources familiar with what McCord told Senate in- vestigators confirmed ele- ments of a Los Angeles Times' account of McCord's state- ments, including allegations that: ? Other persons, probably higher up in the White House and the Nixon campaign or- ganizations also had knowl- edge of the hugging and would later be named by Mc- Cord. ?During his testimony at the Watergate trial, Magruder should have told of Dean's and his own involvement. ? ? Watergate conspirator Hunt persuaded tile four de-, fendants from Miami to follow his lead and plead guilty at the Watergate trial. ? McCord himself was pres- sured to plead guilty, but did not. If McCord's allegations art true, they contradict testi- mony at the trial by Magru- der, who said he authorized the payment of about $235,000 to Watergate conspirator Liddy. Magruder said the money was only to be used for "legal" and "ethical" security operations. Magruder also testified that Dean recommended Liddy for the job as general counsel to the Nixon committee, empha- sizing that Dean had noted that Liddy, an ex-FBI agent, would be useful to assist in any "Intelligence-gathering" problems. McCord Met with the Sen- ate Watergate committee's , chief counsel, Samuel Dash, after a court bearing Friday during which McCord said in a letter that he had knowledge of "perjury," "political pres- sure" and the Involvement of others in the Watergate. Dc Van L. Shumway. a spokesman for the Committee for the Re-election of the Pres- ident, said yesterday that the leaks from the Senate investi- gating committee "are irre- sponsible and almost unfor- giveable." ( "It is a star chamber pro- ceedine, innocent per- sons are ehaiged." Slim/may law on the books against it or aid. Ile snid it Is 4'unimnrinahle" that the in- formation wne leaked to the rims without the knowledge of ThiSh. Dash has denied leak- ing the inforemtion. At a press conference Sun- day, Dash announced that he and McCord find met in two long tripe,recorded sessions Friday and Snturday; (hieing .which McCord "named, names" and began "supplying a full and honest account",of the bugging operation. After yesterday's meeting of The select Watergate investi- lilting committee, Sen. How- ard Bakek Jr., the ranking Re- !publican on the panel, said the members were convinced that the leak did not corne from .the committee or its staff. Bak- er said Dash had called the press conference to honor Mc- Cord's regriest that his cooper- ation with the committee be announced. ? Meanwhile, at the U.S. Dis- trict Court building here yes- terday, Watergate conspirator Liddy invoked the Fifth Amendment 20 times in testi- mony before the grand jury.', Liddy, who has been sen- tenced to six years and eight months for his role in the 'break-in and bugging of the Democratic Party's Watergate headquarters, was called be- fore the federal grand jury In- vestigating the incident- and questioned by federal prosecu- tors about. the possible in- volvement of others, according to the official minutes of the one-horn, 15-minute session. ' Principal Assistant United States Attorney Fsp-I J. Sil- bert, the chief proseetttor in the Watergate trial, refused to comment when asked whether Dean would be called before the grand jury or whether Ma- gruder, who testified prior to the trial, would be called back. In a related development, Daniel E. Schultz, the attorney for the four Miami defendants who pleaded guilty at the Watergate trial, issued a state- ment denying a story in Sun- day's Washington Post. The story quoted informed sources as saying that New York attorney Henry B. Both- Matt, formerly the attorney for the four men, planned to re-enter the case to seek a new trial on grounds that they were pressured to plead "We have no desire to have Mr. Rothblatt re-enter this case on our behalf," acording to the statement released by the four men, Bernard Is Barker, Frank A. Sturgis. Eugenio R. Martinez and Virgin() Gonza- lez. The statement said that "no such motion as 'as described in the article . . . is hying con. templated." The statement did not deny that the boor men were pressured to plead guilty. , It is known that Bothblatt visited his termer clients at least twice after Jan. 12 when be {VW: fired as their nil r,61ey because be would mit tel them plead guilty. ediffor Release 2001/08/07 3SA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 THE ECONOMIST MARCH V, t973 Vr atergate ng turning at the The moment may be near for President Nixon to unleash another .of those salvoes of decisions and innovations with which, from time to time during his Presidency, he has reasserted and shored up his dominance in American politics. -Rio many things are going .? wrong at once for him to be able comfortably to float with the current much longer. Prices seem out of hand and the incomes policy has lost its plausibility. The curious relationship of the first Nixon Administration with the International Telephone and Telegraph Corporation, a matter which might by now have been forgotten, is floating on the surface again because of the inves- tigating labours of two congressional committees. These, incidentally, have caught some. of Mr Nixon's former servants in apparent falsehoods. Mr L. Patrick Gray, the President's nominee to be head of the Federal Bureau of Investigation, runs into worse and worse weather in the. hearings on his appointment by the Senate Judi- ciary Committee. By now his confirma- tion looks improbable, and the hearings are also having sonic side-effects. Mr Gray put the White House in a difficulty last week when the committee was examiiM-ig his judgment in trusting the counsel to the President, Mr John Dean, to monitor the FBI investigation of the bugging of the Democratic party offices in the Watergate building last June. One of the men since convicted, Mr Howard Hunt, turned out to have had an office in the White House at the time. 'Mr Dean denied to Mr Gray that he knew whether this was so or not, at a time when Mr Dean had seen to it that Mr Hunt's office was cleared out, his safe forced and his papers and effects put in Mr Dean's office for safe-keeping. Under questioning last week, Mr Gray conceded that Mr Dean had " probably " told him a lie. Presi- dent Nixon's spokesman was in the undignified position on Monday of having to defend the reputation of the White House counsel against Mr Gray, while reaffirming the President's sup- port for Mr Gray's nomination to be head of the country's chief law enforce- ITICIlt agency. Another side-effect of the Gray hear- ings was that one of the men convicted in the Watergate trial, Mr John McCord, read about them and noted that the FBI last summer was passing the minutes of its Watergate interroga- tions directly to Mr Dean, who was passing them straight on to President Nixon's re-election organisation. Mr McCord drew the conclusion that the foxes were in charge of .the henhouse. As the day approached when he was to receive his sentence, he was ponder- ing whether its severity might not be mitigated if he offered to disclose Washington, DC .10011/01,..?21?11 matters on which he had been silent at his trial. Mr McCord wrote to the judge asking to talk to him alone, because, he said: I cannot feel confident in talking with an FBI agent, in testifying before a grand jury whose US attorneys work for the Department of Justice, or in talking with other government representatives. The judge, Mr John Sirica, read out Mr McCord's letter in open court and put off sentencing him till Mr McCord had had a chance to talk. The letter offered answers to questions which Judge Sirica had asked in vain at the trial. The defendants, said Mr McCord, had been put under" political pressure" to shut up and plead guilty. Perjury was committed at the trial. Witnesses who could have identified other persons involved in the Watergate break-in did not do so. Mr McCord went off on bail, and during the week- end talked at length to the staff director of Senator Ervin's committee of inquiry into last year's campaign practices. Mr McCord, a seasoned former agent of the Central Intelligence Agency, now 54., who signed up under contract to do security and intelligence work for the Nixon campaign organisation, has undoubtedly something to tell, and it is likely to extend beyond the Water- gate operation to some of the other unconventional activities that marked the campaign. But he does not look like a prime mover and his knowledge is probably limited. A more. important person, and prob- ably better informed, is Mr Gordon Liddy, not so long ago an ambitious, busy lawyer with a record of service in the Treasury and the White House, who was chief law officer to the Presi- dent's re-election committee and might now have been high in government office if the Watergate raid had not gone wrong. Like Mr McCord, Mr Liddy refused 4.13 plead guilty. Unlike, him, he has persisted in refusing to talk, and Judge Sirica rewarded him with a severe, not to say savage, sen- tence of 20 years in prison, of which he is obliged to serve an actual mini- mum of six years and eight months, together with a fine of $4o,000. The idea behind the sentence, said the judge, had nothing to do with rehabilitation : it was to punish Mr Liddy. From Mr Liddy the judge turned to the remaining five defendants, those who had pleaded guilty, and gave them provisional sentences Of .enormous extent?four of 4o years and one of 35?with an admonition to co-operate in telling what they know before he' has them back in three months' time' for their definitive sentences. Four of these ifive are not likely to know much : they are 'froth Miami, have 'been involved in the affairs of the Cuban emigris from the Bay of Pigs onward, and seem to have thought .that.they were working for the CIA to prevent a take-over of the United States by friends of Mr Castro. The fifth, Mr Howard Hunt, may know. more. On Wednesday he was granted immunity from further prosecution. Now, unless he testifies, he risks charges of contempt. Judge Sirica, who used to' be thought of as a somewhat unadventurous. judicial luminary, has...limn a great disappointment to the political authori- ties. His refusal to be hoodwinked and made a fool of at the trial was evidently not anticipated, and he has now iput all but one of the defendants under heavy pr,-.3sure to disclose, to the extent that they know, by whom and as part of what operation they were hired and directed. Somehow it must have been possible for the damage of the Watergate affair to have been contained more effectively than it has been: but how i'. Evidently a campaign of disruption was embarked upon against the Democrats at a time when President Nixon's advisers were still not quite sure of his re-election. That the Watergate bugging was only a part of it is well established. Under- cover activities require undercover financing, and the consequent general impression of contempt for law and for propriety is poisonous.. How much President Nixon himself knew about it is 'totally uncertain ; it is only plain that the poison weht high up in the Administration's hierarchy. Suppose,. that, when the arrest of the team in: the Watergate building brought to light that something improper was g6ing nut Mr Nixon had decided to confide in the public," had admitted a complex of irregularities committed in his name' and had annonncM some disciplinary dismissals, promising that nothing of the kind would happen again. The, immediate drama 'would have .been fiercer, but he a:vould have survived and he would have been re-elected. For some reason not yet clear, Mr Nixon decided not to take that course but to treat the Watergate affair as an isolated aberration due to the stupidity of a few small men exceeding their instructions: It was not a position that could be sustained. As a result, his servants have been drawn into a series of evasive denials leading to downright, untruths. Had Mr Nixon taken the other course nine months ago, the Democrats might have made a little. more cam- paign capital at the 'time. But now, in the wake of their pathetic defeat in the, presidential contest, they are get. ting a new lease of life, smelling a new battle on more favourable terrain and even drawing unity from it. At the same time a number of conflicts between the executive branch and Con- gress are coming to a head and .i\ir Nixon needs all the congressional :zilies he can get. The spirit of his natural allies in Congress, both Republicans and conservative Democrats, is being soured by the poison spreading from disclosures of unlawful campaign prac- tices, corrupt money-raising and indis- Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2,_ erect connections between some persons in or formerly in the Administration and some business concerns, together with the demeaning lies and evasions which the. existence of such things '..makes necessary. it has all happened terribly quickly. As next year's elections draw ? near and unless something changes, many Republicans in Congress will begin to run for cover. WASHINGTON POST 29 March 1973 0 1 To conclude that President Nixon has resigned himself to the adverse course of domestic politics would almost certainly be an error, as Mr David Broder pointed out this week in a commentary in the Washington 'Pest. Mr Nixon has powers and opportunities of action available to ? nobody else. lie can change course, introduce innoira- dons and steal the opposition's clothes, as he has done before. lie can even clean house in an ostentatious manner, if he chooses. The alternative, to sit tight, defying Congress and where necessary ignoring the courts, is prac- ticable for him as a second-term President, but it would have tunate effects which he, without ;1004 can see as clearly as anyone...,. By Bob Woodward and Carl Bernstein wnmonicom eosi Staff Writers James W. McCord Jr. testified under oath yesterday that he was told by his principal superior in the Watergate con- spiracy that former Attorney General John N. Mitchell had personally approved plans to hug the Democrats' head- quarters, according to Senate .sources. McCord testified that his coconspirator and former White House aide, G. Gordon Liddy, told him that Mitchell had approved the plans and budget for the bugging while Mitchell was still serving as attorney general in February, 1972, the sources said. According to the sources, McCord indicated that he knew of additional illegal wiretaps but. would not discuss them with the Senate Watergate committee unless he is granted immunity from further prosecution. McCord also said that be had been told by Liddy and former White House consultant E. Howard Hunt Jr., an- other conspirator, that presidential counsel John W. Dean lii and former White House assistant Job Stuart Magru- der had advance knowledge of the. bugging operation, ac- cording to the sources. In addition, the sources reported, McCord testified that be received "second-hand information" that Charles W. Colson, then special counsel to President Nixon, knew too' that the Democrats' Watergate headquarters were to be placed under illegal electronic surveillance. . Colson has denied any advance knowledge of the bug- ging. McCord's testimony was delivered in a 4?-hour, closed- door meeting of the Senate's select committee investigat- ing the Watergate bugging and related acts of political espionage and sabotage. It. came as Him!. was appearing before a grand jury at the same t hoe. (Details on Page A221. McCord' is scheduled to appear again before the Senate committee next Wednesday. presumably when the com- mittee will vole whether to grant him immunity from fur- flier proseen I ion. (Inv Senate sourer said that McCord's testimony about. the alleged involvement of the high presidential aides was hearsay because his knowledge came from Liddy and Hunt. Another of the sources said that McCord was very posi- tive about the information be received from Liddy about Alitchell. "There was complete communication between McCord and Liddy about the subject, the source said. That source, however, cautioned that McCord's informa- tion was not sufficient to prove illegal involvement of oth- ers in the celebrated conspiracy. The sources said that McCord, the former security co- ordinator of the Committee for the Be-election of the President, provided leads in his testimony that could pro- vide additional information about alleged involvement of those presidential aides. In addition, the some-.es said that McCord had . indicated that .he could provide other substantiation of his charges. The sources described the Involvement of Mitchell, Dean and Madruder?described by McCord?as "active," in the words of one, "meaning that they not only knew about it but. were involved in aspects of it.." . DeVan L. Shumway, I h e press spokesman for the Com- mittee for the Be-election of the President, also denied last night, as he has in the past, that any of the officials named by McCord had any advance knowledge of the Watergate bugging. , "Well, T think that again that these are allegations that are being leaked cut of a com- mittee without anyone. bring there to face his accusers and that these allegations are false, patently false. I think we've made that clear in the past," Shmrtway said. Shumway said the allega- tions have all been publicly denied previously by Mitchell. Magruder. Dean and Colson and "I cannot believe these 'nhlegaflo, to he anywnpre near the truth." Simmway said that the allegations Were not surprising "considering the circumstances under which they were made." Asked by a reporter if by Circumstances he meant the tact. that MeCord is facing a prison sentence. S'humway said: "Yes. that would be one of the eircHmstaners." Mitchell previously has de-- nied any advance knowledge of the Watergate bugging.. He could not he reariehed for com- ment last night. Commenting on the 41/2-hour session with McCord. Sen. Howard 14. Baker (II?Tenn.), the acting chairman of yester- day's meetine. said that. Me. Cord was coo ierati'p and Approved For Release 2001/0 . - - _0100130001-2 'vided "significant information -,... covering a lot of territory." Hunt and McCord?both for- mer CIA employees?have been implicated in apparently unprecedented spying and in- telligence gathering opera- tions conducted against radi- cal political movements, the news media and the Demo- cratic Party. i Included are disruptive ac- tivities aimed at Sc,,. Edmmul IS. Miiskir (II). Maine), the im. tial frontrunner for his party's presidential nomination: spy- ing and a bugging attempt against Sen. George S. McCoy ern. (D-S.D.), the eventual nominee; seeking out informa- tion on the personal life of Sen. Edward M. Kennedy: an alleged attempt to discredit ITT lobbyist, Dita Beard's con- troversial memo linking the company's antitrust settlement with a contribution for the Re- Publican' convention; an inves- tigation of syndicated colum- nist Jack Anderson: investiga- lions of leaks to the news me- dia that, according to Time Magazine, included tapping re porters telephones: and infil- tration of radical student, groups and the Vietnam Vet. erans Against, the War. The latest. round of Water- gate developments began last Friday when McCord, limn and the five other Watergate conspirators were scheduled i to be sentenerd hy Chief U.S. 'District Alder John J. Sirien. ' In open court, Strict, read a letter he had received from McCord who said he knew of "political pressure," "perjury" and the involvement of others in the Watergate. , That afternoon and again on Saturday afternoon, McCord met voluntarily in secret ses- sions with Samuel Dash, the chief counsel of the Senate's Watergate invest 'entitle. rum- miller. Dash then announced Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 on Sunday at an unusual' press conference that. McCord bad "named names" of others who allegedly had advance knowl- edge of the hugging of the DemerratS Watergate head- quarters. hut Dash refused to dierlosesthe tonnes, ? .On Monday. The Lori 4nge-1 les Times first reported, and other Senate sources later confirmed, that. McCord had named presidential counsel Dean and termer White House nide Magruder as having ad- vance knowledge of the bug- ging. McCord then asked that he he allowed to testify under oath in the seven members of the Senate 'Watergate commit- tee. and yesterday's sessiqn was arranged. Magruder again denied to, .The Wellineton Post last night! WASHINGTON POST 29 March 1973 that. he had any advance infor- mation about, the Watergate bugging. Asked shout reporla from some of his friends that Magruder Might he' made a "sacrificial lamb," in the Water- gate case, Magruder answered: "You mean by the White !Iowa I haVe ahattittlely no reason to suspect that. I'm not worried." The four persons named by McCord were all high-ranking presidential advisers or assist- ants during the first four years of the Nixon administra- tion. ? Mitchell was the princiriM architect of Mr. Nixon's suc- cessful 1968 campaign stra- tegy and resigned as attorney general to serve as the Presi- dent's campaign manager In the 1972 election. He then re- signed as campaign manager two weeks atter the Watergate bugging, citing his wife's de- mands that he leave politics as the reason. Dean, the director of all White House legal matters, re- ports directly to President NIX- fiti anti 11, rt. Tiklatman, the ' White House chief of staff, tie Is the only one of those named by McCord who still holds a White House or cab- inet position. It was Dean who recom- mended to Magruder that Liddy be hired as general cotinsel of the Committee for ,the Re-Election of the Presi- dent., according to Magruder's 'testimony at the Watergate trial. I Magruder, a former key assistant to Haldeman, left the !White House to become the Hunt, Granted Immunity, Talks ? By Eugene L. Meyer wnehingten rest SIAM Writer 'Watergate conspirator E. Howard [hunt Jr. testified be- fore a federal grand jury for four hours yesterday amid in- ions that he is cooperat- ing by answering questions asked by government, attor- neys. limit at first invoked the :Hail Amendment, in answer to six questions. He was then taken before Chief U.S. Dis- trict Judge John J. Sirica, who granted him immunity from further prosecution and sent him back to the grand jury. It could not be learned if Hunt's testimony pointed to the involvement of others in (hr Watergate affair or other alleged acts of political espion- age and sabotage against the Democrats in the 1972 presi- dential campaign. Hunt also testified for about Ro minutes Tuesday afternoon but principal Assistant U.S. All MileY Earl J. Silbert de- clined then, as he did yester- NEW YORK TIMES 29 March 1973 A PLOT IS FEARED BY MRS, MITCHELL I Mrs. John N. Mitchell said no Tuesday that she thought Isomebody was trying to make her husband "the goat" for the Watergate scandal, and that she was, not going to let that happen. "I fear for my husband," the former Attorney General's wife said. "I'm really seared. 7 have a -definite reason. I can't tell you why. But they're not going to pin anything on him. I won't 10 them, and I don't give a damn who gets hurt. I can name names." Mrs. Mitchell telephoned The day, to give any idea of what Hunt was telling the grand Jun:. Hunt is to resume testi- fying before the grand jury to- day. A source dose to Hunt said yesterday that the 55-Year-old former CIA agent may he will- ing to provide information about political spying beyond the Watergate. To date the prosecution has taken the pos- ition that what spying and dis- ruption it has heard of does not violate any federal law. Hunt has been implicated in spying operations directed against the two leading con- tenders for the Democratic presidential nomination last year, Sen. Edmund S. Muskie ID-Maine) and Sen.. George McGovern (D-S.Dak.). In addition, Hunt was in- volved in gathering informa- 1 tion on the personal life of Sen Edward M. Kennedy (1)- Mass.). FBI files also show that Hunt met secretly with irr lobbyist Dna Beard last March at. the /might ef the controversy over the govern- New York Times. She seemed Ito have worked out exactly what she wanted to say. She said that she phoned because ?she was frightened. She would not say of whom. "If you hear that I'm sick or can't talk, please, please, get your reporters out to find me," she said. "Somebody might try to shut me up." She said that she felt yester- day just as she did last June when she was 'thrown to the floor and stuck with a hypo- dermic needle in Newport Beach, Califs during what had been a telephone conversation with a reporter. Mr. Mitchell ?was in California for campaign I That incident occurred the Iweekend before Mrs. Mitchell ? told a reporter that she had given her husband an ultimatum to reign as bead of President !Nixon's re-election campaign or lose her. ? 16 ment's settlement of an anti- trust case with the giant con- glomerate. Prior to granting immunity to Hunt yesterday, Strica asked Silbert to have the court stenographer read the .questions Hunt refused to an- swer on the grounds that he might incriminate himself. ? A reading of the grand jury ? minutes showed that. Silbert had asked Hunt if anyone else had prior knowledge of the June 17 break-in at the Demo- cratic National Committee's Watergate headquarters be- sides the seven Watergate defendants; to whom logs of wiretapped conversations were given; where Hunt got $8,500 that he gave to a lawyer only hours after the police ar- rested five men inside the Watergate; whether Hunt. had received more than the $8,500 and whether he had employed anyone for political espionage In addition to Thomas Greg- ory, a college student Hunt paid to spy on Muskie and Mc- Govern imadmiarters. Sirien also announced yes- Mrs. Mitchell has accused Steve King, a security official, of throwing her to the floor, kicking her, and jerking the telephone cord from the wall. Mr. King was later elevated to head of security for the Com- mittee for the Re-election of the President after his boss, James W. McCord Jr., the former se- curity chief, was arrested in the hugging attempt at Democratic National Headgearters. "King and !Leal Jahlonsky called ljterbertl Kalmbach that day," Mrs. Mitchell said yester- day. "Kalmbach is the Presi- dent's personal lawyer. Has anyone ever explained that?" Lea Jablonsky was then Mrs. Mitchell's secretary. It was reportedly Mr. Kalm- bach who took Mrs. Mitchell to the hospital in Newport Beach a short time after the incident. Mrs. Mitchell said that it was the first time she had named Mr. Kalmbach, President Nix- Interim manager of President Nixon's re-election campaign until Mitchell took over, est campaign manager. Magruder then was Mitchell's principal deputy. After serving as direc- tor of Mr. Nixon's Inaugural Committee, Magruder war; IIRMad to a ettb,ofilt11101 peat in. the Commerce Department by: the President. Colson, who recently left the White House to enter privale. law practice, was special coun- sel to the President, reporting directly to Mr. Nixon arid to Haldeman. Colson r9com-. mended that another of the men subsequently convicted In the Watergate conspiracy, Hunt, he hired as a Whit House consultant Hunt worked under. Colson foe et least part of his White Ilotiset tenure. Grakl: et) Uily terriay that he "sees no need to go forward" with a private, conference with convicted Watergate defendant James W. McCord Jr. sinee McCorsl. will be called by the grand ? jury and is giving information to Senate select committee in- vestigating the Watergate af- fair. Hunt, whose final, sentence has been deferred by Siriea to see if Hunt cooperates by giv- ' ing information, faces a maxi- mum possible sentence of 15 years in jail and a $40,000 fine. ?'G. Gordon Liddy, the only tine of I he seven Watergate de- fendants to receive a final sen- tence. must serve a minimum of six years and eight months in jail and it a fine frt $40,- '000 Hunt, who was taken to court, from D.C. jail in hand- cuffs. was apparently returned: 'there last night In 'the riwtrt ers the shares With the live oilier !Watergate rompirators w h I are in jail. A jail official said he had "no lest ructions- to find new quarters for tient. on's lawyer and a Republican fund raiser, and that "he was very much involved." She said, too, that F.B.I. agents were present at the time but would not identify them. "McCerd probably bugged our apartment," she said. "In fact, tan sure of that. We were 'bugged in Rye for sure, and these men, not the E.R.L. came with ? their little gadgets and found them. That was some time in 1968." Mr. King, who is now a spe- cial assistant to Secretary or Agriculture Earl L. Butz, said he stood by his earlier com- ment about Mrs. IVIiteheirs allegations. "I have denied them, generally," he snid. Ef- forts to reach Mr. Mitchell and 1 Mr. Kalmbach were unsticerss- Iful. Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 NEW YORK TIMES 4 April 1973 Liddy's Jail Term Raised for Defiance Of Watergate Jury By WALTER RUGARER . SprciAttollreNmYmkTimel WASHINGTON. April 3--G. Gordon Liddy. a key Participant in the Watergate. conspiracy, was found in contempt of court today and sentenced to up to IR months for refusing to an- swer a grand jury's questions about the case. Liddy, who waS convicted in january of spying on the Demo- Oats last year, balked at an order to testify that was issued Friday by Chief John J. Sirica ? Of the Federal District Court here. ' Among more than 30 ques- tions ljiddy declined to answer were several dealing with whether "any other persons" had prior knowledge of the raid on the Watergate offices of the Democratic National Committee last June. ? Liddy, former counsel to the Finance Committee to Re-elect the President, was described by the Government during his trial as the "boss" and as the "mas- termind" of the Watergate ope- ration. Today's contempt pen- alty was added to the term of 6 Years, 8 months to 20 years he had already received. Liddy has been described as the source of many of the state- ments delivered secretly to a Senate committee last week by James W. McCord Jr. NicCord, who was also convicted at thej trial in January, is said to have; cited earlier confidences hyl Liddy in mentioning to the Sen-i afors the names of a number of ranking advisers to President Nixon. There were the: following ;other developments, in the 'Watergate affair today: 4iThe seven-member Senate panel, moving to stop further leaks of testimony, canceled a closed session with McCord and announced that until he ap- peared publicly, only its staff would hear his allegations. 4lSenator Lowell P. Welcker Jr., a Connecticut Republican who is a member of the corm mittee, said IL R. Haldeman, the White House chief of staff, should accept responsibility for the scandal and offer his resig- nation. cliticCord, who testified pri- vately in civil litigation related to the Watergate affair, was scheduled to appear Thursday Kefore the grand jury that sought to miestien biddy. Liddy made several appear- ances before the 23-member grand jury last week and was granted immunity from further prosecution by Judge Sirica af- ter invoking his Fifth 4kmend- ment right- to avoid self-in- erinnnation. Under Federal law, the im-i munity grant strips a. witness of his constitutional protection and compels him to answer questions. But Liddy cited his pending appeal of last Janu- ary's conviction and remained mute. Judge Sirica sent biddy to the District dr Columbia jail until he was willing to testify, providing that the sentence would end with the term of the grand jury or in 18 months; whichever came first. The usual term for a. grand jury here is 18 months, and the panel investigating the Water- gate ease is scheduled to sit for nine more months. Its life can he extended. Thos, continned silence by Liddy wilt mean at. least nine extra months in prison, and an extension of the current grand jury or defiance of a new panel could mean a greater penalty. Judge Sirica stayed execution of Liddy's earlier Sentence "to give meaning and coercive Im- pact to the court's contempt powers in the interest of pro- tecting the court's integrity. The longer sentence will re- sume after the end of Liddy's contempt term, Judge Sirica ordered. The judge's requirement that. .Liddy's contempt sentence be served in the district jail rather than in the more amenable Federal Coneetional Institution at Danbury, Conn., was viewed as applying extra pressure. Liddy NIS lost weight and has engaged in at least one fist fight during Ids stay in the overcrowded city institution. Earlier, .he won Judge Sirica's recommendation that he go to Danhitry, The grand jury miestions Liddy refused to answer were react at today's contempt pro- ceedings. They included several dealing with "logs" kept by eavesdroppers on conversations heard on the Democratic party telenhnne:;. He refused to say whether he was familiar with the logs OT whether he had received any of them from Alfred C. .Baldwin 3d, a Government witness who compiled them and on one occa- sion took them to the offices of the President's political or- ganization. McCord is understood to have informed the Senate's Watergate committee that he had delivered the wiretapping information to Liddy and that he had seen copies of it on Liddy's secretary's desk. Liddy was also asked during the grand jury proceedings whether anyone not already convieted had "participated in any way" in the bugging, Whether anyone had sought his "advice or help" on it, and whether he knew its purposes. The Senate committee's de- cision not to hear secret testi- mony catne a day after the White House press secretary charged that the panel had been plagued by "irresponsible leaks of tidal wave proportions." The panel, under Senator Sam J. Ervin Jr., Democrat of North Carolina, met for less than half an hour at the Capi- pproved For Release 2001/08/07 fol. No specific rnensures to end the leaks were disclosed, but Mr. Ervin said he had "re- minded the committee" of the importance of confidentiality.' i He also told reporters after Ithe session that he thought the 'leaks had come from MeCord and his lawyers. One of McCord's attorneys, 'Bernard Fensterwald of Wash- ington, denied this and said he and his client had been "equally concerned" about the dis- closures. Some of the dis- closures were accurate, and some were "completely inac- curate," he added . In canceling tomorrow's se- cret session, Senator Ervin said the panel "does not anticipate" more closed meetings with Mc- Cord "or any other individual from whom the committee may seek information." "It is commonly expected in 'investigations of this kind that all individuals will cooperate fully with the investigative staff in preparation for public hearings," the Senator said. The staff, he added, is "relatively NEW YORK TIMES 4 April 1973 small" and presumably legs leak-prone. Mr. Ervin was asked how soon the committee would be- gin public hearings with Mc- Cord and others. His answer was, "soon after about 10 days." Senator Weicker said fit a breakfast meeting with report- ers that he had no evidOCe that Mr. Haldeman had partici- pated in or directly ()Merely ;any specific illegal acts. . 13itt he asserted that tjhe White House official had ben aware of "a disruption crew" ,at the Committee for the. Re- election of the President during last year's campaign. "I think clearly he has to ac-. cept responsibility as chief of Staff," Mn. Weicker said. Mr. Haldeman oversaw "the person- nel and the policies" of the committee, the Senator de- clared, and it would be "quite proper" for him to offer to re- sign. The White House declined comment on Mr. Weicker's sug- gestion. rial by Leak and Hearsay By James Reston WASHINGTON, April 3--The White - House is complaining bit terly these days that members of its staff are be- ing smeared by leaks and gossip in the , Watergate case, and there is obviously something to the complaint. It would, of course, be easier to : sympathize if the While House had ? been as concerned with the civil rights of the people who were bugged and burglarized at the Watergate as it is , about the civil rights of its own peo- ple, but even so, their people are en- titled tb fair treatment: regardless of whether they are fair to their suspi- cious accusers. ' The leaks have been coming either from unidentified members of the Sen- ' ate Watergate investigating committee, or their aides, or from lawyers appear- ing before the committee, who are passing on unsubstantiated testimony from James W. McCord Jr., one of the conspirators, who claims his informa- tion came from G. Gordon Liddy and . E. Howard Hunt, two other men con- victed in the Watergate conspiracy. This is hearsay. "evidence" at least three times removed. And yet, by con- stant repetition, it harms the reputa- tions of some or President Nixon's closest associates because it amounts ? to the charge that they were in on the Watergate conspiracy and thus broke _their oath of office. Twenty years ago around here, this trial by leak and gossip used to be : called "McCarthyism" and the word . has now gone into most standard die- : da-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 NEW YORK TIMES 29 March 1973 tionarics as meaning, "1. The practice of making public and sensational ac- cusations of disloyalty or corruption, useally with little or no proof or with doubtful evidence. , .." The Watergate and the McCarthy episodes were quite different ? even McCarthy at his worst, never bugged Democratic headquarters but the headline-hunting still continues in the Senate, and lately the Watergate has been producing its own "public and sensational accusations ...usually with little or no proof...." Senator Sam Ervin of North Caro- lina, the chairman of the Senate inves- tigating committee, is undoubtedly within his rights to reject mr. Nixon's, definition of "executive privilege" as' "executive poppycock" and to insist that members of the White House testify, not on their relations with the President, but on their relations, if, any, with the Watergate conspirators: ? But if the integrity of the Senate is involved in trying to get the Pres- ident's aides to talk, it is also involved in trying to get the members of his committee to keep quiet about the gossip they hear in secret testimony until the whole committee has deter- mined that it has enough corroborated evidence to investigate the charges in public. Senator Ervin agrees with the doetrine. of Senatorial discretion and restraint, though it is seldom practiced.' in Greene v. McElroy, which came' out of the McCarthy era, Chief Justice Earl Warren, speaking for a majority. . of the Supreme Court, insisted that, when action by the Government seri- ously injures an individual, "the evi-, dr.nce used to prove the Government's case must be disclosed to the individual so that he has an opportunity to show that it is untrue. "While this is important in the case of docuthentary evidence," the Chief Justice continued, "it is even more im- portant where the evidence consists of the testimony of individuals whose memory might be faulty, or who, in fact, might be perjurers or persons motivated by malice, vindictiveness, intolerence, prejudice, jealousy. . . ." Watergate is not, of course, pre- cisely the same case, for the Ervin committee is trying to get the White, House staffers to the Bill to hear the evidence and comment on it; but the principle is the same: that the accused should not be damaged by unsubstanti- ated evidence, and this is happening now before the facts are in. , This raises hard questions, too, for the American press, which was criti- cized for years after the McCarthy period for turning over its front pages to his unsubstantiated charges. Once Senators talk about McCord's testi- mony, and it is broadcast all over the country, about all the reporters can do is emphasize that the charges are "hearsay," and this has been done. Nevertheless, as the Watergate case is just beginning on Capitol Hill, there is a problem of fairness and due proc- ess, which requires more respect from the White House and the Senate com- mittee than it has been getting. A crime has been committed and Key Watergate Figure James Walter McCord Jr. ..-.? Sp.n1A1 to The New York Tloi,1 ? WASHINGTON, March 28 ?Ever since the police ar-I rested five men inside the headquarters of the Demo- cratic National Committee: headquarters last June, in- Vestigators and the curious have been asking questions: about them ? particularly about the chief of the break- In squad, James Walter McCord Jr. Who was McCord working for? What was his role at the . Committee for the Te-elec- tion of the President? How much did he know about who ordered the Watergate operation? Where did he come from? Only a few of the ques-' Hotta about the Watergate affair and about the man have been answered. Pre-, sumably some of them were asked again today when Mc- Cord testified in private be- fore a select Senate commit- tee. , McCord was an emploYe of the Central Intelligence , Agency for more than 20 years. Some say he was just a technician, a subordinate , whose days were consumed assigning guards, guarding safes and generally securing the C.I.A. headquarters den in the woods atiang ley, Va. Others say he was the chief of all security for the agen- cy. "He was the No. 1 man," L. Fletcher Prouty, a retired Mr Force colonel, asserts, "I was introduced to Mc- Cord by Allen Dulles [the former C.I.A. director] who said. 'Here is my top man,'" recalls Mr. Prouty, who has just written a book, "The Se- cret Team," about his years in intelligence work. The introduction came at a meeting concerning an in- vestigation of the shooting, down of a United States Air Force plane over the Soviet, Union in 1959. McCord was such a good interrogator, Mr. Prouty says, that, from tho questions he asked the crew when it re- turned, he was able to find a picture and identify the So- viet intelligence agent who had questioned the airmen. Man In the News Watery AMA shrouds Meg Cord's private life. He was born somewhere in Texas? those who know will not say definitely where or when. When he was arrested on :tune 16, 1972, McCord told the police he was born Oct. 9, 1918. He did not give the place. Later, bail records in- dicated he was born July 26, 1924. These data would make the baldish McCord, who has kept his sturdy physique, either 48 or 54 years old. Reperts have (loafed around Washington that he and his wife, Sarah, are both graduates of Baylor Univer- sity, but officials there say he never attended the school. The first concrete bit of ,James McCord's biography begins with the Federal Bu- reau of Investigation, where he began as a clerk in 1942. He was still a clerk when, in 1946, he left, for what rea- son has not been determined. In 1948 he returned to the bureau as a special agent. Aid for the Handicapped McCord joined the C.T.A. in 1951 and is believed to have played a role in the abortive Bay of Pigs invasion of Cuba in 1961. Little else is known of his work in either agency. More is known about Mc- Cord's life after his retire- ment in 1970. He went to his pastor, the Rev. Walter C. Smith of the Rockville United Methodist Church in suburban Mary- land, and sald he wanted to spend half a day each week working for the church. Mr. seven men have been convicted of It. The larger question of who instigated, and financed the !crime has not been established, and this concerns nothing less than the integrity of the American. political process. ' After all, both the White House and the Ervin committee say they want to get at the facts and restore confidence in the political process, but so far we've not been getting witnesses from the White House to ascertain the facts and we're not getting substantiated evidence but. hearsay from the com- mittee. Smith, -who said McCord at- tended church every Sunday with his family before he was jailed, set up a program for older members of the congre- gation to meet once a month for a "social fellowship." McCord, who has a re- tarded daughter, Nancy, also spent many hours working to help handicapped children. He was the chairman of a, group called Concerned Citi- zens for Exceptional Chil- dren, and he volunte&ed to help get A new wing for his daughter's school, the Ken- nedy Institute, in Washington. "They are just a lovely family, and wonderful neigh- bors," according to one house- wife living on the cul-de-sac in Rockville where the Mc- ? Cords reside in their $38,000 brick home. Taught at College The neighbors say the Mc- Cord's soli, Michael, is a junior at the Air Force Aced- .emy and that their other daughter, Carol Anne, attends the University of Maryland. ? McCord taught at nearby Montgomery College for two% semesters in 1971. The course. , "Industrial and Retail Secu- rity," was described in, the school catalogue as "the his- torical, philosophical and legal basis of government and industrial security programs In a democratic society." McCord now has a new secret. During the 16 days when he was on trial he 'spent hours writing in a spiral notebook in the court- room. When asked what he was writing, McCord, a gre- garious man, even during the I trial, would smile but would not answer the question. Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 ? Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 BALTIMORE DEWS AMERICO 25 MAR 1973 triara'L r Playor ,.: i o TI r. 11 II ! ? -177) T o . , Ity MILTON FRUDENHEIM ifb.fr--1) ti , LT ? Run Oil ek...Y 1- : PARIS ? (CDN) ? A Le- "ad.n per cent Middle East "They see the dollar slid- into marks in February. money. d 20 per cent banks frig, so they shop around and :barest". hanker in Beirut ad- an ans Arab money will continue to a high-roller customerget the best deal available on regard the dollar with great ' from Abu-Dhahi or Qatar: representinc everybody else." Europeans are eattng itchy a short-term loan of dollars. skepticism even after the lat- "Get out of dollars. Buy gold,'Euro-dollars cost about S to 10 est switch to floating values, a deutschemarks, yen." about the 111111thlf1101,11S, most which? isn't top money trader in London The Teles clatters with the of which arc 1 American, per cent a year, French finance tr;Inister Val- much when diVided by 12 for a believes, message to a Swiss hanker in ery Giscard DI staing says 30-day loan. . Zurich. He pulls SS million you can'tbiatew enntaa r ny "Once confidence in the dol- from the Arab's secret num- ' "Changed into marks, these lar has been lost, it is not bered account and goes to treasures overseas for taking borrowed dollars added to the easy to kid yourself and get it work. steps to avoid losina money on pressure. This is pretty close hack," this E n g Ii s h m a n . In 20 minutes, the money the falling dollar. Otherwise, to what is meant by specula- warned. they'll hear about it from th6 tion.a ;has been split up and part of borne office, . Ile. thinks the pressure will The businessman often is an let up only wit n the American lit is sent aeain by Telex, to " n.0 r.icrarA harl thiq In en v ' Frankfurt with a buy - order . t . c. . lin multinationals: ? transplant from Winnetka, eN::Int'elee-enlYthe 1-6! S. csgoldawiT;'(710, aim the .neer sire of the ordinary enough 41-year-old 'from German marks From the Zurich bank to its German "There are no exact fig.. Ill- paid S10,000 a year and is i?eopened or when dollar.s. The ,German commercial tires al,at , , , .. , ? ?lable " Pr said "hut expenses to shepherd his coni- ., .;?- aelin bcc.nnle -COnVCrtthle. correspondent bank. the combine.d treasuries of pany's tens of millions. Ile Inca ?-i-, , -iecial Drawing Rights . only the 1 eto. w, (...st companirls tells himself he is protecting (SDR) if not gold. ban li adds up the day's orders and goes to the central bun- the company against next desbank, wl-,ich is stuck with "There are no known buy- scattered around the. Nvorld the dollars ? G billion in the Even so, he is helping to ers of dollars in sight for any must amount , to something tvPrVc tiollar clurnn ? February Hoed, then 2.7 IA $250 billion. . like drive the American money predetermined rate," he said. Politically-set rates will be lion in one day, March 1.. "By comparison. French re- dow.n. subject to new losses of confi- Runa against the dollar serve.s at this ninmnt are Then there are those Arab r forced two d''.'ealltations and something on the order of 110 oil moguls. Ac,cording to one denc.e, he believes. However, Citibank's Pettit months. Treasury Sec. George ate? amounts arc available." you see what Illas". forecast Middle East oil cram- ?thinks that after nine money three c.risea In the last 15 billion. So tries are heading for 130-bil- Schultz flew to Europe for two Giscard said, lion-a-year-income. crisesaw ay i rsoi nn cl e f i xle9d 67, the r a te.ss should emergency me.raings recently A e P- "Needless to say, expert in Euro "Those crises were all -with free world finance minis- y, a large . halo. ) with one of the bieeeat Amen- one-way, with. the pressure to- tcrs. . I part of these funds could not can hanks says the multna. The ministers solemnly possibly be absorbed in their ward the downside. It ttaS tionals do S2f1.; billion gross in- easy to het on the outcome. - ! blamed "speculative move- internal economies," says ternational business in and "Now, with floa:Ina ra'es, mcnts of funds" ? operators Horace Bailey, head of petro- making a buck by getting rid !cum division of Chemical relatively smail amounts will with Europe every year. Overseas executives of big move the markets and prea-. of dollars. . business and even small ones Bank. "Speculators. hell!" corn" turn to the "Today's Money"' As a result, it is quite pos. sure "-ill come from the other side,?too. It is gaiag le be very Icolumn every morning. They sible that the treasuries of a to get your fingers mented a Frankfurt banker with a Henry Kissinger ac- .play a game called "leads and few Middle East governments easy 'lags ? leading with early pay. could have a surplus by the burned." . cent. "Those guys are just . ' of as much as New risks may discourage being prudent." intents of bulls in atrong cu any money operations by small r- end of the 19705 ' Frederick Pettit, vice presi. 1"ney, German marks. Swiss S175 billion, far exceeding operators like ecuired Amen- dent in charce of First Nation- lor Beleian francs, and lagging af cucnums u I everat ion obfe rfoorree i genx.pheerl di- diyiderds. Some of them bar- says cans livine in Europe on La S. at City bank's Paris branch, ;ott setihn their debts in d says "just about everybody" !Weaker money, dollars, Ital. enced, Sat:di Bailey estimates. Arabia. which will ac- rowed dellars on their stocks is in the money market now, ;ian lira, British pounds. and henes to hey rnaeks last including corporate treasur. , v.1-IC th ep. aa we laerang on count for neaaly half of the !, private individuals, cell- dollar mountain, wants to in- month. After the devalolizion, ers a fiaterioe dallar market, say St "downstream" in the they C" Id add to their in bankers, smallm compa- i ? leen, 1-rh. 1 to Froi. 11, di United Stlics and other con- 'ed capital to make up for lost rues . oil.rich sheikhdoms, dis- nai co !ar is would have count-store chains, commodi- r:ro: 10 per cent with the suming dollar buyine power. s But this pTd just mi countrie. eht be more foreign ty purchasers and commer. devaluation, a nice gain for money than even the trillion. cial banks.' , the, company. aim U. S. economy would He divides the remainder ? Multinational companies, But the. monev manipulation goes further. "Sig companies care to swa? llow. like IBM. 1TT Volkswagen Libya, a hotly nationalistic ' - have lines of credit at num- per rent of the latest dollar hers of banks, banker explained. " a Brussel Oil producer with billions in the banks, was widely credit- and Nestle, accounted for GO s flood, a Frankfurt source esti- ed with helping swell the flood mate5. Approved For Release 2001/08/07 : 8A-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 NEW YORK TIMES 4 April. 1973 Smuggling of Drugs In False Legs Laid To Two Colombians Two Colombians hobbled into Federal Court in Brook- lyn on crutches yesterday, each with a leg missing and each charged with smuggling cocaine and marijuana stored in the hollowed-out parts of their confiscated artificial limbs. A third suspect, a Colom- bian ,woman, was also accused of taking part in the smuggling of $1-million worth of cocaine from Bogota to Kennedy Inter- national Airport. Acting on confidential infor- mation, customs agents took the three into custody Monday night. They also arrested a fourth member of the group on charges of carrying a false passport. The agents took flee of the suspects, William Ochoa, 25 years old. to St. Vincent's Hos- pital in Manhattan, where physicians removed his plastic left leg. Inside, they said, they found one kilo (2.2 pounds) of cocaine wrapped in plastic bags. The suspect told them he had lost his leg during a guer- rilla uprising in Colombia two years ago. Agents said they found six ounces of marijuana in the ar- tificial right limb worn by Jaime Zapata -Reyes, ?another suspect, The woman, identified as Mrs, Lenore Jaramillo, 34, was allegedly found to be wearing three girdles, each concealing quantities of plastic-wrapped cocaine totaling one kilo. Agents reported that each sus- pect had more than $400 and return tickets to Bogota. United States Magistrate Vin- cent A. Catoggio held each in $100,000 bail. Expressing con- cern over the missing artificial limbs, which had been described as damaged, he directed that customs agents return them in goo condition. The third man was identified as Oloniel Pineda, 36, who was arrested on charges of carrying a [also passport. his arraign- ment wag deferred. NEW YORK TIMES 31 March 1973 Dig Aids Heroin Seizure SAN FRANCISCO, March 30 (IIM) ? A German shepherd named Zorro sniffed out 44 pounds of heroin yesterday in the largest heroin seizure in West Coast history. Agents ar- rested Tang Knang Hook, 38 years old, who he claimed two suitcases at San Francisco In- (creational Airport. The heroin was estimated to he worth V;4- 'nillien in street value. LONDON TIMES 28 March 1973 American expert raises spectre of West's oil supplies being cut off From David Spanier Amsterdam. March 27 If there is one issue which excited the delegates to the Europe?America conference it is that of oil. More than trade policy or monetary reform, it has an elemental simplicity about it, which is compelling. Certainly oil is likely to figure at the top of the translatlzmtic agenda in the coming decade. All new subjects need a prophet of doom, especially if they are to make headway among liberal intellectuals, and in Or Walter J. Levy, the Europe- America conference found its Cassandra today. Dr Levy, who is a noted American oil consul- tant, has a quick answer to those who feel he may overstate his forebodings. " If there are any alternatives, I have not heard of Ahein.". ? Dr 'Levy Starts from the basic and unrhymed assumption that front now on until the early 1980s Iteited States energy needs will only be able to be met by very substantial increases in oil imports. most of which will come from the Middle East. Oil im- ports by Europe ami Japan will also rise x,ery heavily. The total value of United States net impm ts of energy materials, rooctly inav easily reach $18,00nte to $24.000m (f.7,200m to L9,600m1 a year by SIIINGTnN STAR 22 March 1973 RAY CROMLEY 1980. The figure for European Imports is pot at $23,000m to $31,000m, and Japan's at $12,000m to $16,000m. ? On the other side, the revenues likely to accrue to Middle East producing countries are esti- mated at about $40,000m a year by 1980. Dr Levy spent little time on figures today, beyond noting that the Middle East oil pro- ducers would be in a very strong position indeed, as well as being very rich. Meanwhile, the posi- tion of the international oil in dustry has drastically declined From the beginning of 1970 they have not been able to bargain as reasonably equal partners They have been continually over ridden by the producing cow; tries, as witness the latest re opening of the currency agree mon on oil pricing and the sharp change in Iranian policy. The threat, according to Dr Levy, is that if the oil companies do not accept what the Organisa. Lion of Petroleum Exporting Countries (Opec) says, the West cannot depend on its oil sup- plies. The flow may well be stopped. What, then is to he done " You can't have a situation where the most important raw material that moves in inter- national trade, where most im portant financial consermences arise., where negotiations on a current basis change overnight Applying One of the most incompre- hensible campaigns Sen. J. W. Fulbright and some of his col- leagues have waged of late is their attempt to strangle the U.S. techhical-aid program to foreign police departments. Their sledgehammer at- tempts to kill the program, entirely (successful for a few days a while back) has spurred them to new oblique efforts. Yet consider these points: ? If we are to cut back on , terrorism ? tis when Olympic athletes or American and.oth- er diplomats or others are arrogantly killed in cold blood, it is essential this coun- try assist in training more ef- ficient police worldwide: Oth- erwise, terrorists c an cow moderate officials and ham- per (or even prevent) peace- ful solutions In Alit 'Middle East, Southeast Asia and oth- er troubled areas. Then add in what terrorists do to the abili- ty af men and nations ttioper- ate In dignity. ? arrangements concluded yester- day, without the active firm, continued, organized support of the Atlantic community and Japan. . . .What is needed is a common policy not only with the European Community. but also between the Community. , the United States and Japan." A common policy might en- compass 10 objectives, it was suggested : 1 Study and review of damand and supply, including diaersifi. cation. 2 A research prngramme for developing new resources, in. eluding atomic energy. 3 Invest. merit review and incentive and guarantee programmes for such resources. 4 Review of importing arrangements and criteria for them. S Contingency plans for stockpiling, rationing, and shar- ing supplies in any emergency. 6 Research on conservation and economy. 7 Review and coordite ation of development, assistance to producing countries. 8 Review of prices, costs, and foreign ex? change costs of nil imports. 9 Review of producing countries' revenues and their world impact. 10 Review of producing (flew tries' trade and interdependence with importers. Dr Levy concluded by propos- ing that a new hiah level energy council should be set up by the West to pursue these tasks. " not as a prelude to conhamtation with Opec., btu as the only way to avoid such a confrontation." the Sledgehammer O If we are to reduce the flood of heroin pouring into this country with such alarm- ing results, we must intensify (not eliminate) technical as- sistance to foreign constabu- laries, and patrolmen con- cerned with this problem. ? If we are to Put a damper on the police brutality cos- ' tomary in so many lands, we must have advisers to pass on to their associates around the world the knowledge that ter- rorism and cold brutality are counterproductive and that police forces are moss effec- tive when the policeman on the beat becomes involved in helping his community. ? And finally, if we are to prevent future Vietnams, lo- cal police forces must be trained not only on how to prevent local terrorism, but in ways to better relations be- tween the police, the govern- ment and the community. This reporter has seen first hand in four countries the 20 dramatic effects of such U.S. advice on the actions of total police. Perfection has not been reached but, as one na- tive liberal put it, anything the Americans do must end up in making things better in less torture and brutality. The police aid program, of course, requires improve- ments. But the baby cannot be thrown out with the bath wa- ter. What these senators should be doing is attacking aspects of the aid program they believe are harmful. They should' be suggesting improvements. Do they believe we are sending the wrong men abroad? Or are they getting the wrong training? 'Mese are the problems the senators should be attacking. ? Instead they're determined on the meat-cleaver approach using scare words and rumors passed on by propagandists for totalitarian groups. Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 BALTIMORE SUN 1 April 1973 9 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 S nv 5111ITARD Berne. The day when Soviet police commis- sars trade tips with the FBI on a crimestoppers' hotline may be here sooner than you think. And- when it comes, the "switchboard" will be Inter- pol, the little-known police liaison agency that celebrates its 50th birthday this year. To date, only Yugoslavia among the I East bloc countries is part of Interpol's network of 114 member nations. But Romania is seeking admission. If its bid , is approved?and insiders rate it a shOo-in this October when the agency holds its jubilee in Vienna?it may well sienal a broader detente between police officials in East and West. At least Mat s me way Interpol spokesmen view things. Until recently the Soviet bloc regarded Interpol as something of a Western stooge. Indeed, it. remained largely a European message center after its founding in Vienna following World War I. Though officially "nonpolitical," its bureau chiefs are even today often for- mer police Chiefs of member countries. The present general secretary in Paris, for example, is Jean Nepote, previously chief of France's national police. Nor could Communist nations forget Interpol's Nazi past. In 1933 Hitler pro- posed a Gestapo chief, Gen. Reinhard Ileydrich, to head the agency. Despite 0 protests from Europe's demoerntic coun- tries, the later "protector" of Poland was elected to the post. Thus Interpol's usefulness to the Allies Ceased. Even though General Heydrich was assassi- nated in Prague in 1942, the Allies shunned the organization until 1946 when they revamped it completely. In recent years, though, Interpol has taken on a distinctly Third World color- ing. The Europeans and Americans no longer command a majority. Regardless of the Wines involved, social justice ranks high on the agency's agenda. South Africa, for example, never has been a member; nor is it likely to become one. "It's doubtful that the Third World would ever accept it," explains Jean Benoit, the Swiss Interpol bureau chief. This turn of events understandably pleases the Kremlin.. It also gives Ro- mania's imaginative foreign policy plan- ners needed elbow room to justify their "opening wedge" in teirms of socialist ideology. How fully the socialist and capitalist police forces cooperate is, of course, dependent ? on factors beyond Interpol's control. Politics already hinders Interpol's effectiveness in the Middle East and anywhere else that war threatens. Inter- national terrorism remains a touchy problem for the agency as long as some Arab states condone it. But at inter pol world congresses, where Iraqis and Is- raelis sit alphabetically cheek to jowl, CHRISTIAN SCIENCE MONITOR 27 March 1973 er with Iriterpol. as Mr. Benoit notes, "there's been no war yet." In fact, Interpol membership allows neighbors like the Israelis and Arab states a go-between if they're not on speaking terms. "Israel can file a report with us," Mr. Benoit says, "and then we transmit it to Cairo, Beirut and so forth." This at least permits top-level ' cooperation in nonpolitical matters like drug-running, however round-the-horn it may be. Interpol obviously plays a key role in furnishing vital background data on skyjacking commandos to govern- ments facing ransom ultimatums. After an Arab-Israeli shootout at Zurich's Kb- ten Airport a few years ago, Arab agents helped identify the Palestinian terrorists. "Whether they answered everything as fully as possible or not, I couldn't say," Mr. Benoit admits. But he insists that Interpol has no Middle East problem. The admission of Romania and even- tually;olber East bloc countries to Inter- pol poses a new puzzle to the agency: how to. cope with refugees and escap- ees? What happens when a Romanian flees to, say, Austria? Is he a criminal, as Interpol agents in Bucharest will likely claim? Or is he a political refu- gee, as the fugitive himself will proba- bly insist? And what if he is both? Interpol would clearly prefer to dodge such sticky cases. Yet East being East and West being 'West, the prospect of its soon becoming mired in the complex political-asylum controversy is a near certainty. Center to treat uese youth on dru s opens in am itgok By Gerry Coffey Special to The Christian Science Monitor Bangkok, Thailand A drug-treatment center for American youth in Thailand ? the first of Its kind ? outside the U.S. ? opened in Bangkok recently. Under the auspices of the Special Actions Office for Drug Abuse Prevention (SAODAP) in the Executive Office bf the President, the program is set up to treat youths with drug- related problems and adolescents Identified as susceptible to drug use. Although official figures are kept closely under wraps, relaibie sources place the number of deaths in Bangkok due to drug abuse at an average of one American youth per month. SAODAP officials visited Bangkok last August to analyze the problem, establish a "health care response model," and discuss with members of the American community here the steps for establishing the treatment center with U.S. Government financing. An experienced SAODAP initiating team led by Miss Joan Donley is currently in Bangkok to help select and train competent local members of the community to operate the center. Its board of directors Is made up of locally stationed military and civilian medical officers. As the program develops, it might evolve into a regional center to take care of similar situations in neighboring countries, Miss Donley indicated. "The program is not necessarily limited to Americans but primarily focusing on Amer- icans," she told parents and teachers from the International School of Bangkok at an introductory meeting. The center will offer out-patient treatment for individuals, groups, or families, plus resident treatment for adolescents who need to be temporarily removed from home or school, she said. It will be operated on a 24- hour basis. A close working relationship will be main- tained with the schools and with the presently existing "rap house" and "hot line" to meet any crisis which might develop. Approved For Release 20048/07 : CIA-RDP77-00432R000100130001-2 ? Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 ircrineulm., Apra 4, 1073 THE WASHINGTON POST Marquis Childs The U.S. 'Trade Deficit Like a mirage seen In shimmering desert heat is the vast wealth of the oil sheikdoms in the Persian Gulf. When in the next decade the United States must import up to 30 per cent of all the oil we use, their take will Increase from roughly $10 billion a year to $30 billion or more. That tidy sum will be at the com- mand of sheiks whose desert princi- palities are sparsely populated and whose peoples make few demands. The leverage in world finance and diplomacy this will give these auto- crats is reason for dark foreboding in Western capitals, foremost among them 1Vashingt on. Besides the sheik- doms there are the leading oll pro- ducers such as Iran making up a tqtal overall of 75 to 90 billions of dollars, yen, sterling and francs by 1980. How will they spend these vast sums? In a speech in Paris recently, Thornton F. Bradshaw, president of Atlantic Richfield, put this question to a leading British politician. Brad- shaw said all he could think of was that they would come into the stock market. rind buy all of General Motors, all of MM. all of General Electric. After thinking for ? a moment his British friend replied: "Splendid! You let them buy Gen- eral Motors. You let them buy IBM. You let them buy General Electric. And then you nationalize." This was, of course, meant as a laugh. In a serious vein Bradshaw made what for an nib man was an here, tical proposal. He suggested sharply increased taxes on cars according to horsepower to discourage large cars. THE ECONOMIST MARCH 24, 1973 in Energy He would encourage the use of gaso- line taxes for building mass transit syStems in cities. A gasoline shortage is jusf around the corner, it is likely to be acute with the beginning of the tourist sea- son. The motorist scurrying from pump to pump to fill up his tank will be a common sight. Prices will rise sharply and there may even be an attempt at. rationing which promises to be both too late and too little. Short of a direct attack on the great god horsepower and the status symbol of the Cadillac and the Lincoln Con- tinental, the pinch will grow worsel from year to year. Far from stimulat- ing production of the motor car, as 'was the goal when the excise tax was removed, the objective should be just the opposite. Detroit, is saying proudly that this will be an 11 million car year. City streets 1hre already so clogged that traffic moves slower than a walking pace. The one man, one car commuter is a familiar phenomenon coming in from the suburbs to the center city. The Plain, hard fact is that for all the chirrupy talk about. the boundless resources of oil, gas and shale within the continental United States, nothing can be done to relieve the pinch with- in domestic confines for at least a decade. Government controlled prices for natural gas, the rising cost of exploration, a complex web of cir- cumstance makes any quick change all but impossible. An illustration of the time lag is Atlantic Richfield's discovery of the largest field in North America in arta n y for dearer oil Alaska in 1988. Company geologists first visited the North Slope In 1949. Conservationists blocked construction of the Trans-Alaska pipeline in fed- eral court. The United States Supreme Court has declined to overrule the lower court injunction. This means that only Congress can act to decide whether construction of the line on government .owned land can procce'd. This is hound to be a lengthy business as .ecologists take up the challenge in Senate and House. Oil from the North Slope enuld at most slightly ease the shortage ahead. That conieritig word ecelogy has helped to snarl, the energy tangle. Conservationists fight the construction of refineries that could despoil tho shore line. Drilling for off-shore oil resulting in such major spills as thlit in Santa Barbara brings stout resist- ance. It is all part of a confused nod troubled picture which may or may not be sorted out by President Nixon's long-awaited energy message. The recommendations he makes will ;have to be approved by Congress. In the current state of hostilities between the two branches of government that could mean further. delay. By 1980 the United States trade deficit in energy?imports of gas and he over $17 billion n year. That is a daunting addition to the already lopsided trade balance. We should no longer pretend that we Can use up 35 per cent of all the oil con- sumed lb the world without. paying What may he a prohibitive price. - el 1973?United realure Srn4lcate The delicate peace between the oil companies and the Middle East oil producers is cracking. Better prepare for another hike in oil prices Algeria has shattered the pleasant dreams of that handful of optimists who had convinced themselves that with the participation " issue largely settled the international oil industry could look forward to a period of relative calm. Algeria proposed at the meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna last Friday and Saturday that all current price agreements between the oil companies and the OPEC countries be scrapped and negotiations begun from square one. This came as a bombshell whose reverberations arc going to be felt throughout the oil world for a long time to come. The proposal was vetoed by the Saudi Arabians but not before a good many of the other oil producers had strongly supported it. It will take only one or two clashes on sensitive issues and moderate countries like Saudi Arabia will probably no longer be able to sit on pressures from the radical oil countries, nor may they want to. The upshot will be another increase. in the price of crude oil. Participation agreements have still to be negotiated in Libya and Algeria and the I3asrah .oil field in Iraq, but the really sensitive spot is Iran, which chose to make its own, quite different sort of deal with the companies. By settling for a new and unique management structure for Iran's oil facilities, the Shah won a point from the 22 companies that is going to be politically useful to him at home. The new structure will have little visible effect on day-to-day operations, but it will put them under a nominally Iranian umbrella. Since, in financial terms, Iran will get exactly what the participation countries will receive, the Shah can claim, with some justice, that he has been given more by the oil companies than they gave under the participation agreements to Saudi Arabia's Sheikh Ahmed Zaki Yamani and his clients. The Yamani group, consisting of Saudi Kuwait, Qatar and Abu Dhabi, could not care less about how much political mileage the Shah makes at home out of his agreement. But if, as a result, they arc asked awkward questions in their own countries, they are going to come right back at the oil companies demand- ing that their agreements be reopened so that the Shah can be put back in his place, which, in their opinion, is a clear number two in the oil world. This is by no means the only sensitive spot. The Arabs are watching like hawks to make sure that the Iranian agreement, whose details are still being negotiated, will give Iran exactly what they arc getting and not a cent more. Saudi Arabia, Kuwait, Qatar and Abu Dhabi are also concerned about certain ambiguities in the agree- ment reached recently between Iraq and the Iraq Petroleum Company following last June's nationalisation Arabia, Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 . nf the Kirkuk field. By way of compensation, Iraq is delivering crude oil to the company over a 15-month period in T c)73-74, making it impossible to put an exact value to the oil. Along with some other grey areas of. the Iraq-IPC agreement, it is difficult to estimate whether Iraq will be paying more or less compensation than the other Arab oil countries will under the participation agreements. If, the oil companies get rather more com- pensation from Iraq, no one will worry. ? If they receive less, the other, countries will be on the collective over-:7 stretched neck of the companies in a flash. Another spot was made tender by President Nixon's :announcement that he is drafting a proposal that will encourage the oil-importing countries tb act collectively in their dealings with the oil-producing Countries. Sheikh Yamani, who is probably the best friend (he west has in the present situation, is alarmed at the prospect of pressure from Atnerica and other countries. If pfessure is exerted, he has warned' publicly, the west an 'forget about Saudi Arabia, for one, raising its oil production in the coming years to suit the west's needs. Saudi Arabia hardly needs more income than is already provided by its present production. of about 6m barrels, a day, so why should it, as has been suggested, raise production to 2om barrels in the late 1970s to help its customers if they are going. to act nasty anyhow .? It would be different, the Saudis feel, if they were threaten- ing to hold back production, but they point out that they feel a responsibility to supply the west .with the oil it, needs until alteenative fields can be developed. ? In the present sellers' market, it 'is doubtful whether the consuming nations can get together. anyhow. Sonic of them, notably France, play their own games in the Middle East, but. even if they did not the sheer weight of commercial competition would make effective co- operation difficult. President Nixon's initiative, instead of improving matters, is likely to reap the kind , of publicity that worsens them. ? In large measure the developments which. have put the oil-producing countries so firmly in the driver's seat have arisen out of the, levelling.off of Ainerica's own oil pro- duction. Even if Alaskan oil is brought to market within the next few years, American production will not be able to keep up with expected increases in demand, although these increases will probably not be as large as formerly thought: fuel' conservation and economy arc going to .beconte increasingly, fashionable in America. ? , President Nixon's only way to change , the balance back in the oil Consumer's favour is to initiate a pro- ? gramme that will once again make America independent. 'of imported energy. This is why his promised energy' message will probably be the most important event this year for the energy industries. If it is not, it will be, .their biggest disappointment. ',There is not much that America can do to reduce it dependence on Middle East oil before the. tgflos,:bn ,it will, make all the difference whether America's depen- dence is seen as transitory or something that is likely to, go on indefinitely. Mr Nixon should aim for a Middle course in his message, Unlike the space programme, with which it is sometimes compared, an energy programme cannot avoid stepping on the toes of powerful, established Interests,. which is why sonic of the most important politicians in the .Nixon Administration and Congress are doing what they can to influence the President's message. Mr Nixon, a political animal if ever there was one, might weigh the opposing factions against each other and decide there would be little political advantage in going much beyond a fine-sounding speech. But that would create large problems with the international energy' industries. r The other extreme, tt crash programme for alternative' fuels, is well within America's capability, but it is argued that it might even exacerbate current problems by creat- ing a panic and driving oil prices up even faster than they are likely to. go up anyway.* According to reports in -Washington, 'Mr ? Nixon's energy. speech has been written for some time, but his advisers disagree among themselves as to ?hoW strong its main. provisions should be. It is easy to gec why they are having so much trouble. WASHINGTON POST 31 March 1973 Mexican Preside...A Urges Canadians Help Curb Whihinational Fin s By Claude Lemelin Special to The WashIrmton Post OTTAWA, March 30 ? The President of Mexico, Luis Eeheverria, pressed today for coordination of Canadian and ? Mexican efforts to control foreign investments and curb the powers of multinational :corporations, most of them 'dominated by U.S. Interests. 1 In an address to the Canadi- . an Senate and House of Com- ?mons, Echeverria pledged Mex- ican support "to any initiative that is taken to draw up an ob- ligatory code of 'conduct that will regulate the actions of .multinational companies and establish.guidelines for the do- mestic legislation of the na? Lions concerned." He warned: "We cannot. se- :cent the action of multina- Jonal companies when they pre not bound by the soy- Creignity of the nation or when they are harmful to the real ticeds and aspirations of coun- tries." "We want to take advantage Approv of their positive contribin ions, for their own benefit and that of our population. We are not interested in fostering an ap- parent industrial progress that: only benefits large consord Hums that are not hound by, our national goals." The Mexican president, who is on a five-day state visit to Canada with his foreign minis- ter and other officials, met, yesterday with Prime Minister Pierre Elliot Trudcau, Exter- nal Affair's Secretary Mitchell Sharp and Energy Minister Donald AIN:Donald. They dis- cussed their countries' legis- lative approach to curbing for- eign investment and each gov- ernment's bilateral relations with the United Slates, which is t he major trade partner for troth Mexico and Canada. For the mos;: part, discus- sions focused on ways to de- velon closer ties between Mexico and Canada, especiallY, through Increased trade and economic cooperation. Each country has attempted In' re- ed For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 cent years to diversify its in- ternational outlook to 'escape from what It considers too exclusive a relationship with the United States. Echeverria's visit to Ottawa is the first stop on a Month- long world tour that. will take him to Europe, the Soviet Un- ion, to Europe, the Soviet Union and China. The Mexican president told the Canadian Parliament "Only dangerous fatalism could lead us to 'believe that the interna- tional community should be structured in the future in accordance with old.systems? of denomination and that the only possible way of change would be to redefine spheres of influence. Such a belief would be facing the future with a 19th century outlook and condemning ourselves to. dependence." Echeverria welcomed Can: ada's recent diplomatic open- ings toward Latin America.' Though Mexico is convinced that full Canadian member- ship in the Organization of American States would he useful, he said his govern- ment respects Canada's rex: sons for joining only as a per- manent observer. "We share many or th,e doubts that rightly concern Canada with respect to this organization." the president said: "We realize that Its de- cisions only appeared to b61 democratic and that ideologi: cal intolerance frequently di- verted this inst it id ion f ronii its ObjeCtiVeS." 23 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100130001-2 - NEW IORK TIMES 1 Afitil 1973 u.s4Europe 118?11111W1111~1.11/SNO Old Friends :Drifting Ao Amsmirnyvt?The signs of slip- page .along the European-American seam had become uncomfortably visi- ble a year ago. It was no longer the old theme, echoed as often as the ? Mischievous shepherd ?boy's "wolf," that the alliance was, in "disarray." ? The growing concern WAS that the, Atlantic partnership was wearing out, that even as the United States was growing less hostile to its Russian and Chinese antagonists, it was grow- ing less friendly toward its friends. Some of the people who had spent much of their adult lives constructing the institutions of a postwar world based on America's new-found Strength and Europe's traditional Civilization felt that something should be done about the erosion. So last week they convened the Europe-American Conference here. The purpose was to discuss the prob- lems of a changed international land- scape; not to negotiate; so there was little effort to attract officials pos- tossed of the power of decision. But there was hope of developing the kind of high-level intellectual momentum which can influence . policy. That Meant a reunion of what has come to be the loose but recognizable Atlantic "Establishment." By and large, the establisitmenta- Hans were there?among the Atneri- tans, George Ball, Nelson Rockefeller, John McCloy, John Tuthill, 'Eugene Rostow; among the Europeans, Joseph Ltms, Dirk Stikker, Walter Hallstein, Kurt I3irrenchbach, Eric ? Blumental, Roy Jenkins. But it became all too quickly evident that the Atlantic. concept has aged, It was not renewing itself and the dangerous affliction of nostalgia was Setting in. "Where is the succes- sion?" complained a devoted European Atlanticist. . The new generation of leadership bad not appeared in Amsterdam to continue the relay. There was no single reason. Partly, not enough .new names had been on the list. Why? Partly, because the younger people who have come to prominence and influence are interested in quite dif- ferent matters. "I. don't see why we should bribe them by offering more windy talk about pollution, and minorities, and women, and the Third World," said the European veteran, "The key issues for us are still security. economic. ROI', political cooperation, making the West- ern world work." There was some despair, some sober fear, and It good deal Of frustration among men and women who had '