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December 14, 2000
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April 19, 1973
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Approved For Release 2001/06/09 : CIA-RDP84-00499R090000110001-3 XQRK DAILY NEVIS 19 APR 1913. , By MAXINE CHESHIRE IThe CIA may now have reason to worry about elec- tronic eavesdroppers but its phone bill is lower. When James Schlesinger Jr. took over as director, the first thing he did was rent long- distance lines on a monthly basis from the telephone company because calls "are 20% cheaper" that way. Schlesinger found some of his spies. so fearful of being overheard that they preferred to go out to It phone booth I with a handful of change. James Schlesinger Jr. . Cute the phone bill Approved For Release 2001/06/09 CIA-RDP84-00499R001000110001-3 NEW YORK TIMES ruo_ ? ') Approved For Relea42001/06/091. IALFKUI '"; 4-00499R001@ar 10001-3 C.I.A. Trained Tibetans in Colorado, New Book APP'011 I, Th P New Yon, TiMP1 WASHINGTON, April 18? The Central Intelligence Agency set up a secret base in the Colorado Rockies to train Tibetan guerrillas in mountain warfare in the late nineteen- fifties, When there was an Up- rising against Chinese rule in Tibet, a new book discloses. In the book, "The Politics of Lying," David Wise, the author, said that the agency began training Tibetan refugees re- cruited in India in 1958 in a deserted World War II Army base near Leadville, Colo. The operation continued into the early months of the Kennedy Administration, he said. A spokesman for the agency said that there would be no immediate comment on the re- When a reporter for The; port, New York Times subsequently; Mr. Wise, the former Wash- began a routine inquiry, based; ington bureau chief of The on a brief news-agency dis-i New York Herald Tribune and patch about the incident, the; co-author of "The Invisible book said, the office or Roberti Government," a 1904 book S. McNamara, who was there about the Central Intelligence -Secretary of Defense, tele- Agency, wrote that the, Tibetan phoned the Washington Bureau training program apparently of The Times and asked thati ended abruptly in December, :the story not be used because; 1961, six months after the Bay icif "national security" reasons. I of Pigs fiasco and a few The Times acquiesced, Mr. days after its cover was almost .Wise wrote, in line with the; blown in an airport near i-general newspaper practice in' Colorado Springs. 'those years of not challenging; Delayed by Bus Accident the Government's definition of ; "national security." The two top news officials' in Washington for The Times in 1061, the bureau chief, James Reston, and the news; editor, Wallace Carroll, said; yesterday that they (lid not re- call the incident. Mr. Reston is aboard a bus at the Army snow . a vice president! camp for a 130-mile trip to a and columnist for The Times, ned by airfield in Colorado and Mr. Carroll is editor and WYOMING NEE, c??:, aver " ? Leadville Grand? Junction 1a1.7,ri= ???,i Ce NEW MS XICO , 0 ',MIAS 100 The New York Times/April 19, 1973 Camp reportedly was in Rockies 130 miles from city of Colorado Springs. "Ironically, It was the snow and the mountains ? the very factors that led the C.I.A. ,to select Colorado for the train- ing base ? that almost caused. the operation to surface," Mr. Wise wrote. A group of Tibetan trainees were loaded Springs, where a large Air Force jet was waiting to quietly fly them out of the country before dawn. "But coming down the moun- tain," Mr. Wise wrote, "the bus skidded off the road in the publisher of the Journal and Sentinel in Winston-Salem, N. C. Jack Raymond, who was de- fense correspondent for The; Times in 1961 said yesterday snow. As a result of the delay that "1 de remember at the time; ' caused by the accident, it was; knowing about the incident daylight when the Tibetan and I don't recall what pre- rived at the field." s at-i ; vented me from writing about; ;o Once there, the book went it. on, overzealous military seeur-I Mr. Raymond, who is now ? associated with, the Aspen In- port's employes around at gun- titute for Humanistic Studies point, but not until at least. in New York., added in a tele- phone interview, ''I'm inclined one of them saw the Tibetans; to think that I didn't have board the jet. enough information about it to Complaints to the -local' write a story. I have no imme- sheriff were made about the' manhandling of the civilians, di(ite recollection of being t.hrown off the story by any- and a few newspaper articles - describing the bizarre encoun-; body*" ter were published in Colorado,' 'Nerve-Racking Moments' Springs' and Denver. But, Mr. his hook, i Mr Wise wrote Wise wrote, the full implica- that the issue Lused some ti on s of thApplioveddPorReteaser201M06109 ? . Agency's new $46-million head- quarters in Langley, Va., be- cause the incident occurred a week after President Kennedy announced the appointment .of John A. McCone as the -new Director of Central Intelli- gence. Mr. 1VIcCone replaced Allen W. Dulles, whose resignation was accepted after the Bay of Pigs incident, Mr. Wiseh e wro dispute between Tibet and China began in the 13th century, Mr. Wise wrote, with China periodically claiming Tibet as part of her territory. Mainland China was taken over by Communist forces led by Mao Tse-tung in 1019, and in 1950 Chinese troops marched into Tibet. In May, 1951, the Chinese; signed an agreement with the; Dalai Lama government for the: occupation of Tibet, pledg-i ing not to alter the existing' political system in Tibet or the powers of the Dalai Lama. However, the agreement also provided for Chinese control Says that nation and; China, the book The secret training operation was hardly a success, Mr. Wise wrote, because the guerrillas "infiltrated into Tibet by the C.I.A. were attempting to bard ass the Chinese, not to free the country; in the long run it is ! doubtful that they made very! much difference. Since 1961 Communist China has ; tight- ened its grip on Tibet." Tibet, like other areas largely popu- lated by ethnic minorities, now has the states of an autonomous; region within China. "Would the nation's security' have been endangered if the! story of the Tibetan operation: had been disclosed in 1961?"; the book asked. "In the wake of the Bay of Pigs, Kennedy; ordered two separate invesli. gations of the C.I.A., and he' struggled to take tighter eon-] through the appointment of a military and administrative,]trol over the agency's opera-I !tions by changing its top lead- committee. During the mid-nineteen-1 ? "Publication of the story fifties, however, Mr. Wise! might have focused public at- wrote, Tibetan guerrillas began: tendon on a number of im- portant issues," Mr. Wise sug- insurgent . warfare against thel ; gested, "including the basic Chinese and officials of . thes question of whether tax money Central Intelligence Agency 'would be used to finance "concluded that the situation 1 i clandestine intelligence oper- offered an ideal opportunity" c ations." A second issue, he for covert United States aid. - I added, 'was whether the,agency In March, 1959, the Dalai 'had a legal basis for operating Lama was forced to flee over! 1 a secret training base in the high mountain passes to India' United States. after a Chinese mortar attack! ; Finally, Mr, Wise wrote, that on his Palace, Mr. Wise; "disclosure might also have led asserted. Intelligence officials; to a public examination of later ,concluded, Mr. Wise' such important questions as wrote, that son-le of the guer-; whether President Eisenhower rillas who had been trained in approved the Tibetan operation, the Colorado Rockies had been ? whether President Kennedy was responsible for guiding the ; aware of it or approved it, and Dalai Lama to safety.' whether the four 'watchdog' Open warfare broke out in' committees of the Congress had Tibet after the escape, Mr. Wise i had any knowledge of what was reported, and thousands of : "d Tibetans were killed and the g?`11g on 'n `sn'ora"'-'." Dalai Lama's government wasI dissolved by the Chinese. In-, ilia's. decision to grant sane- Wary to the Dalai Lama also; increased the pressure between; ------- -- - - ene/A-RDP84- become public. the Central Int elliztence 9TE-CrOV 0001-3 DETROIT, MICH. NEWS Approved For Releas%4001/06/09 : CIA-RDP84-00499R001004010001-3 E 592,616 S - 827,086 Eledronic. By EDWIN G. PIPP News Aerospace Writer Ultra-sophisticated gadgets housed in a ? well-guarded blockhouse-like structure at Wright-Patterson Air Base, near Dayton, Ohio, are rapidly replacing the conventional cloak- and-dagger spy. Among the superspy hardware that the ? United States is now operating is a high-speed computer capable of translating foreign scien- tific and technical documents ? including Rus- sian and Chinese ? into English at a _rate of 305,000words an hour. ? Another exotic unit can convert an ordinary snapshot of a foreign airplane into a three-di- mensional drawing with specifcations accurate to less than an inch. Super sleuth devices are being used daily in the worldwide effort to gather information on what other countries are doing so that United States leaders have data they need to make of [times crucial decisions.. In this electronic age the spy who steals blueprints or secret plans still has a place in the intelligence gathering .activities, but more often than not his information will be obt:ained and confirmed by scientific instruments. ? This worldwide intelligence gathering activ- ity DOW is a $6 billion program for the United States, With-Russia probably spending an equal amount. The livelihood of thousands of Americans, and the success or failure of defense plans for years in the future depend on up-to-the-minute information of what other countries are doing. Development and production of major weapon systems are. stopped or started on in- formation about what an enemy is planning. World technology is moving so fast that a major technological breakthrough in some .weapons can upset the world's balance of P0 wer. Perfection 'of a laser that could destroy bal- Qstic missiles would nullify this type of weapon. A quick means of locating and de- stroying submerged submarines could cripple a nation's sea power. Military planners live with the constant fear that an enemy will develop some new weapon .that they do not have. Hence they demand more and more data on trends that of the other side in its development effort, plus minute de.- tails of equipment already in production. It wasn't many years ago that a photograph or verbal description of enemy equipment was the major means of gathering intelligence. Today these are only minor items in the fast flowing stream of inftiligence coming into the d States. To keep up with weapons techno o q v n st rurnents s cret, new words ai.e , appearing in technical publications to show the mighty effort under way. There are now 10 of these words, each end- int in int, for intelligence, to show the trend. HUMINT ? This is the human element ? the individuals or groups who disclose classi- fied information intentionally or unintention? ally. This can be the oldtime spy, of a talkative scientist at an international gathering. ELINT ? Electronic intelligence can be col- lected by aircraft, ships and ground stations that record transmissions from Other countries for analysis to determine the type of equip- ment producing the signals. RADINT ? Radar intelligence is similar to Elint except that it is radar transmissions that are monitored. During the heavy bombing raids on North Vietnam last year day to day changes were made in equipment, bomber routes and tactics based on Radint and Elint. WORDINT ? This is kiformation from open sources such as technical publications and in- ternational scientific meeting. The machine that translates Russian into English uses this material. What bothers technicians looking for good data from this source is when articles by an author-expert concerning interesting develop- ments in a foreign country stop appearing in public manuscripts. This usually means his subject has taken on military significance and now is secret. MANY AMERICAN MILITARY EXPERTS are irked because one of the Soviet's newest fighter planes is make of large quantities of ti- tanium, a metal that is extremely hard to form, but is much better than aluminum for high-speed aircraft. The American government spent millions in developing processes using titanium in new aircraft and then described them in detail in books that can be purchased by anyone at the Government Printing Office. This was to help American industry in using titanium There is considerable evidence that the Rus- sians used this American know-how in forming titanium for their new fighters. BUNT- ? Infrared data comes from sensors that use bands of the light spectrum not visible to the human eye. These sensors can take pho- tos day or night, had weather or good with data showing up that would not be seen in normal photography. Heat shows up in IR films. In Vietnam IR TELINT ? Telemetery is used extensively in relaying data on missile performance to ground stations during test flights. Big rockets can have telemetery from more than 100,dif- ferent spots going back to the ground in a steady stream of data about the performance. It is common for Russian ships to anchor in the Atlantic near Cape Kennedy during missile launchings, presumably for intelligence collec- tion, including Telint. PHOTINT ? Photographs can come from a wide variety of sources, including spy satel- lites. ACOUSTINT ? Acoustics, or noise from machines, can give away detail 8 of how they are operating because of new advances in rec- ording equipment and other instruments that can analyze these recordings. Thus details of a new jet engine or tank motor can be deter- . mined from the noise it makes. ? OPTINT ? Optical intelligence is one of the newest means of collecting data. It comes from the use of laser beams that help aim mis- siles and bombs. COMINT ? This is information gained from communications such as telephone and radio. - FME ? Foreign Material Equipment is the prize every nation is after. This is the enemy- built tank, airplane, radar set Or other weap- ons system that is captured or for some other reason is available for inspection. The intelligence community also is eager to look at commercial equipment offered for sale by foreign countries because often this .shows the state of the art that -country has i?eached in its production capabilities. The military services each have their own intelligence gathering agencies with the areas they work in well defined. Also there is the Central Intelligence Agency (CIA). There is a broad exchange of datawitivi,nforrriation going to the National Security Council which advises the President. . The Foreign Technology Division (FTD) of the Air Force Systems- Command at Wright Pat- terson is the Air Force agency.. Its mission is to obtain data on the actual and potential technological threats of foreign ? nations. 'Unite o aSe 2001 telligence cwinunitv's activities are ton se- hausted into the outside air through vents. te WOLkOISMY44****3 001 - HS/HC- - te Although APPINWO Fr Approved For Releafs,/ 2001/06/09: CIA-RRE94144499R00111fit 110001-3 21 APRIL )?73 Counterspy Exposes by Dorothy McGhee They (the US government: CIA, police, ,welfare officials, defense department, et al; and private agencies: banks, insurance companies etc.) have been sying and col- lecting data on us for years without our knowledge. But now, we're spying on them and beginning to learn about the scope and methodology of government intelligence operations.. The vehicle is-a new group called Committee for Action? Research on the 'Intelligence Community (CARIC). And they have just put out their. first bulletin, apPropriately called Counter- spy which will provide monthly A source ' of analysis and information on the prac- tices, organization and objectives of US ? intelligence. The first 22 page issue of Counterspy contaias some very lively information: "you can't' tell the people closest to you * an anonymous, but obviously well inform- what you're doing." Now, however, their work together on actively exposing US Intelligence has been liberating. "Being able to talk about it openly among ourselves has really freed us from alot of the fears we had," says Peck. All of the former agents are, of course, under legal constraints from dis- closing the classified information to which they had access while operating in Intelli- gence. But, as they put it, you don't have to reveal classified information to . discuss and to expose the intelligence com. munity. It simply gives a perspective and a basis of analysis." ' The information in Counterspy is care- fully researched from diverse but publi- cally Available documents: newspapers, congressional hearings, budgets, army re- ports and their own anonymous sources The group wants to create a central Intel- .ligence Documentation Center, which would centralize information on US op- erations..They are soon coming out with a handbook on US intelligence which will describe the practical organization and objectives of hundreds of agencies. And, of course, Counterspy will come out monthly. CARIC was responsible for leaking to the Washington /'ost last March the infor- mation about the Committee for the Re- election of the President hiring a George Washington University student to spy on local anti-war activities. CARIC came by this information from their own investi- gation of the Watergate break in, and ?Appfeved For Release 2001/06I sg1ispADPist11o4o4ROool1ooto1 0001-3 HS/HC- Technow-Fascism' Agents. They are Tim Butz, a former or- ganizer for Vi.:tnam Veterans Against the War, who Was in the army in Vietnam - from 1966-1968; Winslow Peck, a veter- an and former Military Intelligence agent for the US Air. Force, who was in Vietnam from 1968 to 1969; Bart Osburn an agent for the US Army Intelligence and Security' in Vietnam during 1967 and 1968 and a . CIA agent until 1970; and Gary Thomas, also a former US Army Intelligence Agent. Osburn, who used to work with the CIA's Phoenix Program, speaks of his former work as "an indiscriminate mur- der program." Peck talks about the in- hibiting effectos of his previous life, ? !ed, letter from a former agent in the mili- tary intelligence who tells of CIA orders "to terminate with extreme prejudice", ,(that,is bureaucratese for murder) a US de= fector who dropped out of military intelli- gence with the names of every principal agent the army had in Western Europe; * a fascinating, detailed Account of FBI involvement in the militant arm of the San Diego Minutemen, the Secret Army Organization, which planned and executed acts of sabotage and terrorism against libel, al and radical groups in that area. An FBI agent, Iloward Godrey, was actually head of the local SAO commando team which organized bombings, espionage and shoot- ings to harass the left wing.. There is evidence that the FBI and a Colonel at Camp Pendleton were involved with the unreported transfer of munitions from the camp to the arsenal of the SAO in 1972. * an eight page reprint of the FBI's own summary of their domestic surveillance, the first public commentary by the FBI on their efforts in this field. Counterspy is being published because, according to the CAI IC organizers, "the American public has the right to know what is being done in their name, and they have the right to stop it. Big Brother and the age of technofascism is here." CARIC is an unusual coalition of four former peace-activists verterans, three of . whom are actually former US Intelligence that there are at least 24 other people who were similarly hired by the Re-election Committee to conduct espionage activities. CARIC is still in the process of tracking those persons down. Counterspy is available for 75 cents an, issue, or $6 a year for individual subscrip- tion, $10 a year for institutions and $75 for agencies of the government. You can become a sponsor for $15, which includes a free subscription. Prisoners and active duty GI's may recieve free copies. You should write to CARIC, Box 647, Ben Franklin Station, Washington DC 20044. Copy -yr C-nint rrnay. 1471.11 pvpil eV! e in IIIC thnro -Or) pro 1 nterrstrO. Approved For Relea4a4001/06/09 : CIA-RDP84-00499R001041010001-3 WILMINGTON, DELA* NEWS APR 9 1973 rit - 44,027 Cl -type operations called embarrassing waste Compiled from dispatches WASHINGTON?Sen. William Proxmire, D-Wis., yesterday called for a drastic reduction in secret U.S. intelligence op- erations overseas, estimating their cost at $6 billion a year and their value greatly exag- gerated. . "Our foreign covert opera- tions have brought little but embarrassment abroad and confusion at home," the sena- tar said. "They should be cut to the hone. In the day of so- phisticated electronic devices, no longer is there a sound jus- tification for covert operations to defend the U.S. from sur- prise attack." Proxmire, a critic of De- fense Department spendin policies, also alleged that tije U.S. intelligence operation h 'switched gradually from co le cting information to becoming involved in the af- fairs of foreign countries. ? "IN too many cases," he said, "we are substituting clandestine operations for , sound foreign policy. Further- more, due to the 'spill-over' effect, it could lead to covert .1 domestic operations." He said, for example, that the responsibilities of the Cen- tral Intelligence Agency have been expanded by "secret interpretive direc- tives" which Congress never sees. Proxmire said the total clas- sified intelligence budget has been estimated at anywhere from $4 billion to $8 billion, but that he thought $6 billion "is most representative." ALSO during the weekend, a study by the General Account- ing Office was made public, showing that the Defense De- partment has given away large amounts of surplus mili- tary equipment to make up for cuts by congress in foreign military aid appropriations. The study was made for the Senate Foreign Relations Committee at the request of Chairman J. W. Fulbright, D- Ark. Fulbright said the investiga- tion show a need for "drastic overhaul of the laws control- ling U.S. military aid policy." The GAO found that mili- tary aid to? 65 foreign countries totaled $38.3 151ilion for fiscal years 1965 through 1972 and that grants of arms and equip- ment classified as excess and loans of ships came to $2.8 bil- lion. T H E auditors calculated that $55 million might have been saved in 1971 by using such excess stocks such as trucks instead of buying new ones to meet military aid or- ders. They said the U.S. embassy and military mission in Tai- wan were unable to account for 105 of the 146 ships loaned to the Republic of China since 1954. [/HC-Vp:gbied For Release 2001/06/09 : CIA-RDP84100499R001000110001-3 Approved For Releatort001/06/09 : CIA-RDP84-00499R001010,10001-3 IIIIIIII111111111111111 FOREIGN BROADCAST INFORMATION SERVICE 111111111111111111 SPKRA I HS/94411 TRANS ???1. *rood For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 4104 /0173 Approved For Releabek001/06/09 : CIA-RDP8*00499R00111W 10001-3 Where There is Success, There is Failure The Central Intelligence Agency is that organization that mobilizes the greatest amount of human and mechanical intelligence in order to serve its cause of world espionage. Yet some of its officials acknow- ledge that not everything goes smoothly; winds do not always blow as the boats of the agency desire. One expert in Central Intelligence Agency affairs, Andrew Tully, says that one of the most serious reversals handed not only American but Western espionage came with the Iraqi revolution in July 1958. Tulli says of the Iraqi revolution, "Dar man were asleep at the time; nothing an make up for that loss. The Central [Intelligence] Agency suffered after this event its greatest humiliation when Allen Dulles had to appear before the American Senate to answer questions about why our men had been caught sleeping with no advance knowledge of Qasim's coup." The Central [Intelligence] Agency, nevertheless, brags a great deal about other of its victories during times of well-known world crises. Allen Dulles himself justifies his failure in the Iraqi revolution, saying that the agency had proved itself several weeks before the coup took place, when, in Jordan, an attempt at a military coup was thwarted. Among the world cries in which the Central Intelligence Agency has played an important role are the Iranian crisis in 1953, when General Mo44deq attempted to do away with the throne of the Shah by using a division of the Iranian army that owed its allegiance to Mo4iAdeq. During that crisis the Central Intelligence Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release OM 1 /06/0 9 : CIA-RDP841,-00499R001001"9001-3 Agency was the first to inform the Shah of the suspicious movements of Mossadeg with certain quarters hostile to the throne (among them his numerous meetings with the TUdeh Party) which preceded his open break with the Shah. There are also other politically valuable roles which have changed the course.of events in many instances, among them the difficult task that was undertaken by a Soviet spy working for the agency. (Allen Dulles gave him the name Andrei.) During the rule of Khrushchev, in 1956, this Soviet spy was able to deliver to the agency a copy of the secret speech which Khrushchev delivered to the Soviet Communist Party, and which was the beginning of the new policy of the Communist Party attacking worship of the individual and opening fire on the Stalinist era for the first time. At that time Khrushchev wanted to deep the speech secret because of his lack of caffidence as to how it would be taken by world public opinion, especially his attack of Stalin. He was also very concerned with the reaction of the Communist parties of the world. This speech became history the day that the Central [Intelligence] Agency gave out a text of it to the press, which spread it to the world. The surprise was out. The other side to success is always failure. The Central Intelligence Agency, in return for each victory, claims that it is inevitable that it meet with many defeats. There is no doubt that one of the greatest defeats met with by the Central Intelligence Agency was the day of the tri-partite agression against Egypt in 1956. During this crisis, American Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releateot001/06/09 : CIA-RDP84-09499R0010W10001-3 intelligence was put to the test. This time, the intelligence men failed to send advance news of the decision of the three hostile countries to attack Egypt. Eisenhowever said of the Suez crisis that the only source from which he heard of the aggression was the press. What ib said about the American failure during the Suez crisis can also be said about the Soviet invasion of Czechoslavakial about which the government of the United States knew nothing, and most likely, the men of the Central [Intelligence] Agelacy themselves, except through the newspapers and radio broadcasts. One of the more controversial incidents in the history of the Central Intelligence Agency was the shooting down of a U-2 plane in 1960 flown by a Central [Intelligence] Agency man, Francis Gary Powers. Another important incident arousing lengthy controversy at the time and even now is reverberating in the halls of the Central [Intelli- gence] Agency, and that is the incident that took place following the , involvement of American intelligence with the former German general, James Gehlen, Itho is described as being the most competent spy in history. 4 He played more than one side turing the post-war era. The Central [Intelligence] Agency has carried out highly original missions. For example, during a world tour by a Soviet mission a lifelike model of the Sputnik spaceship was put on display. While on display in a Western capital, a team belonging to the Central [Intelligence] Agency was able to enter the exhibition room by stealth, remove the spaceship, disassemble it, photograph all its parts, then hand over a complete technical descriptio of the model. They returned the Sputnik to the hall, and the event went on without anyone knowing. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release4,01/06/09 : CIA-RDP84-00499R0010001,0001-3 15 How Spies are Made in the American Intelligence Agency by Samir Hurl [This article is composed of selections from the book by Patrick J. McGarvey? CIA the Myth and the Madness. The first part of the article is-taken from Chapter VIII, Owe My Soul to the Company Store," and tells how McGarvey was recruited into the agency and trained. After recounting these experiences, the article discusses the three main targets of the American intelligence organization, which it takes from Chapter II, the Octopus". It covers the SAMOS satellites on which the CIA depends, as well as the Thor-Agena rockets, and then moves on to discuss COMINT and ELINT operations, all from the same chapter.] The New Director is an Expert in Nuclear Energy It must be pointed out, too, that the Central Intelligence Agency occasionally relies on outsiders for help. These persons are given the name of 'volunteers" since they are not paid for their labors. They are recruited by influential men in the agency who select these volunteers from among directors of large American companies, scientists, writers, or others who, by virtue of their jobs, travel in different countries. They are explained the principle of cooperating with the agency. If they accept, the agency provides them with a list explaining the information it could use. Ordinarily, the setting for these volunteers' activities is in Third World countries and Eastern Europe. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 ? Approved For Relea42001/06/09 : CIA-RDP84110499R0011W110001-3 Among the most recent developments which has occured anong the higher branches of the Central Intelligence Agency was James Schlesinger's taking over last month the task of heading the agency fram his predecessor, Richard Helms. It did not take Schlesinger long before he began to make radical changes in the Central [Intelligence] Agency. He took it upon himself to dismiss three of the agency's top officials. Immediately after that, a great fear took hold of the souls of all division heads and top men working forthe agency. Mumblings began to be heard in the political quarters of Washington concerning decisive other changes to which Schlesinger might resort. An important man in the agency commented on these changes saying that Schlesinger's dismissal of these three employees is an action with far-reaching consequences and extremely serious. He said, "Heads of other important men have rolled in the past. However, this time, things are different. Schlesinger has . carried out the matter very rapidly and has chosen three men considered the most important pillars of the agency, the furthest removed from suspicion." While some American circles are surprised at the speed with which Schlesinger moved, the circles of President Nixon appear to be completely 'satisfied with the rapidity of change. The basic reason behind this satisfaction may go back to the fact that Nixon had commissioned Helms more than a year ago to determine the agency's course of action and regulate its espenses, which amount to six billion dollars annually. At that time, Richard Helms was not able to meet the demands of the American president completely. What made things even worse is that Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release A1/06/09 : CIA-RDP84N0499R0010001301-3 Helms belongs to the Democratic Party, and so does not enjoy mentionable support from the White House. Eighty per cent of the agency's human and financial resources are controlled and its affairs conducted by the Secretary of Defense. It has become known now by all that Laird and Helms were constantly in dispute over diffeiret estimates and opinions connected with the intelligence agency. The new director, Schlesinger, has no former experience in the field of intelligence except for his having shown administrative skill when he headed the Atomic Energy Commission in the United States. James Schlesinger is a man of greater determination and firmness than Helms. He also excels him in following a conservative political policy. Informed .sources sr that Schlesinger's dismissal of three top officials does . not at all mean that he is resolved to do away with most of the agency's old timers. These circles demonstrate their viewpoint by pointing out that Schlesinger put in the place of one of the dismissed old timers another old times, 53 years old, who entered the agency 23 years ago. Other Branches Aid the CIA [Here are listed five agencies connected with the field of American intelligence, with a brief, general description given of each of the following: the Atomic Energy Commission, the Federal Bureau of Investigation; the National Security Agency; Bureau of Intelligence and Research; the Defense Intelligence Agency.] Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release 2001/06/09 : CIA-RDP84-00499R00100011001-3 THE EVENING STAR and DAILY NEWS Washington, D. C., Monday, April 30, 1973 A-15 CHARLES BARTLETT Sihanouk's War With CIA With the enemy knocking on the gates of Phnom Penh, Lon Nol's grudging acceptance of a conciliatory council has the look of a reform that has. come too late. ? Lon Nol is taking help where he can get it, and his belated agreement to readmit Sink Matak to the leadership council is combined with some strenuous overtures to the Soviets. It is a crowning irony of Southeast Asia's complex diplomacy that a leader who wears the brand of an Ameri- can puppet should reach for a lifeline from the Kremlin. The Soviets have, it turns out, been just as wrong as the Americans in calling the turn on Cambodia. It was probably because they desired to ac- commodate President Nixon and lacked a clear view of the Cambodian peasant mentali- ty. So they left Prince Sihan- ouk to the mercies of the Chinese with confidence that he would find no warmth in Peking. But-Mao and Chou En-lai shrewdly treated the god-king like a prince while they enabled him to become an effective guerrilla leader. So the actual hope now is not that Lon Nol's new council will manage to assert Its au- thority over Cambodia. It is more realistic to hope that the council can become the in- strument for a negotiated set- Will rinItl n government with some bal- ance in its future outlook. But even this may be wishful be- cause Sihanouk has written that he will never enter "any coalition or other compromise" with the Lon Nol group. Sihanouk supplies this and other timely insights in a new book called "My War with the ' CIA." While the prince writes with paranoiac intensity about the harassments he has allegedly suffered from Amer- ican intelligence, he writes with the clarity of a brilliant politician about the forces at work in Cambodia and why the Nixon doctrine has not found this to be favorable ter- rain. An important fact illuminat- ed by the book is the resilient , nature of Sihanouk himself. Originally enthroned by the French, who mistook him for a malleable lamb, he commit- ted him.self to the tradition of his namesake grandfather, a fervent champion of Cambodi- an independence. The passion of Sihanouk's ambition to keep his people free of foreign yokes is attested to by the major moves of his career. This was why, after forcing out the French, he gave up the throne in 1955. Ile felt sti- fled by the sycophancy of court life and unable to lead or stimulate the nation. He eliminated the U.S. aid pro- gram in 1963 because he be- lieved it was corrupting the people and impinging upon his options. Ile broke with the United States over a military encroachment on his territory and risked his standing with tho North Viettinti-Wile to Ivo- test their troops' use of his sanctuary. He has pursued independ- ence with a defiant spirit be- cause his outlook, like his people's, has been shaped by , 2,000 years of vulnerability. He seemed in 1971 to have hurt his prospects of regain- ing power by relying on the North Vietnamese army. But he seems to have been vindi- cated by Lon Nol's far greater reliance on American bomb- ers along with South Vietnam- ese and Thai soldiers. "Lon Nol has been," Sihanouk writes, "our best recruiting officer." Sihanouk is not, by his own testimony, making his way back in order to serve as a Communist puppet. Ile writes of "neutrality with nuances" as his objective in foreign pol- icy. This apparently means he will play the game as he did before his overthrow, larding his neutrality with manifesta- tions of a clear preference for his strong Communist neigh- bors. Ile wants to preside over a Socialist, egalitarian society which will not be Communist. lie appears bent on recreat- ing a social structure much like the one he left in 1970. Ile believes in private property for the pheasants and nation- alization for industry. Ile will be wary of Japan's economic penetartion because, as he writes, "the only real guaran- tee for maintaining non-align- ment is to neutralize the forces of internal reaction." This was the weakness of the faction on which the Americans and Soviets bet. It rnitftIntitilpil the forces of in- ternal reaction. It was a poor choice, and its blatant failure makes it important to hope .that the U.S. government, despite Sihanouk's allega- tions, had nothing to do with the machinations which brought it to power. -44 IL; 'ApeiLea or Release 2001/06/09: CIA-RDP84-00499R001000110001-3 Approved For ReWFIT" ISPY""9AUENCIES ARE BEING SHAKEN UP Drastic changes are aimed at ending rivalries and improving the usefulness of U. S. intelli- gence. One result: Some inner workings are being disclosed. The supersecret U. S. intelligence ap- paratus is being rocked from within on a scale never before so visible to the public. What set off the tremor is a major overhaul, now in progress, of the ma- chinery that produces the worldwide intelligence assessments on which crucial national decisions are based. Under James R. Schlesinger, the new Director of the Central Intelligence Agency and overseer, also, of the vast U. S. information-gathering network?mil- itary as well as civilian?significant changes are being made. They have these objectives: ? To shake up the whole system and sharply improve its usefulness to the President and his top advisers. ? To process vital intelligence more effectively, at less cost. Mr. Schlesinger cracked down on CIA, his home base, first. Now he is expected to focus on other parts of the intelligence community?military and civilian. Payroll reductions. In the reorga- nization process, wholesale firings have occurred at the CIA?a cutback, sources say, of perhaps more than 1,000 of the agency's estimated 15,000 employes. Some professionals assert that Mr. Schlesinger is bent on rooting out an "intellectually arrogant" clique that has been riding high in the CIA hierarchy for years. Others counter that the chief purpose of the housecleanings is to enable the Nixon Administration to "politicize" the intelligence mechanism to its own ideo- logical shape?and use Mr. Schlesinger to do it. Both charges are vigorously denied by responsible people on all sides. In- stead, the charges are cited as examples of the bitter bureaucratic infighting go- ing on in Washington?and spreading into the intelligence system. On one front, heated feuding between the CIA and the Pentagon's Defense In- telligence Agency?DIA?is out in the open. 78 14?"WrroilYN_ 1G7- Pentagon intelligence specialists, trying to regain control of assessing military threats to the U. S,, are citing what they characterize as examples of blunders and bias by the CIA. The military critics admit that their own mistakes a decade and more ago obliged the Government to turn to the civilian CIA for the main assessments on military threats. But now, the mili- tary men contend that DIA has been revamped, is more objective?and less of a lobby designed to scare Congress into voting higher defense budgets. Against that background of turbu- lence, Mr. Schlesinger is moving to carry out the sweeping reorganization of the U. S. intelligence community orig- inally ordered by President Nixon a year and a half ago?in November, 1971. Knowledgeable sources say that Rich- ard Helms, now Ambassador to Iran, was replaced by Mr. Schlesinger as CIA Director because he failed to carry out the overhaul mandate to Mr. Nixon's satisfaction. A top man in the intelligence network put it this way: "The President and his national-security adviser, Henry Kis- singer, just didn't think they wore getting their money's worth." The reorganization plan, in fact, is Mr. Sehlesinger's own handiwork. He drafted it while serving as Assistant Director of the Office of Management and Budget. Later, lie was named Chairman of the Atomic Energy Com- mission?the job from which he was transferred to his present post as Amer- ica's "superspy." Like Mr. Helms before him, Mr. Schlesinger is not only Director of the CIA but also Director of Central Intel- ligence?DCI. That makes him boss of all American intelligence operations. New faces. One thing that Mr. Schlesinger has done is to put together what he calls the intelligence communi- ty staff, with offices on the top floor of the CIA headquarters building in a Virginia suburb of Washington. Significantly, two military-intelligence THE U.S. INTELLIGENCE NMI AND WHAT IT DOES James Schlesinger, Director of Central Intelligence, presides over the U.S. Intelligence Board, which sets intelligence requirements and priorities. Represented on the board are? Central Intelligence Agency, top-secret Government organization, responsible only to the White House, collects and evaluates intelligence information, runs clandestine missions abroad, conducts espionage and counterespionage. lease 2001/06/09 : CIA-RDP84-00499R001000110001-3 u. S. NEWS & WORLD REPORT, May 71, 1973 CIA Director James R. Schlesinger, who oversees all U. S. intelligence, desig- nated two military men among deputies. experts have been assigned to that staff as Mr. Schlesinger's deputies. One is Maj. Gen, Lew Allen, of the Air Force, who has been nominated for promotion to lieutenant general. The other is Maj. Gen. Daniel 0. Graham, of the Army, a career intelligence officer. General Graham, who has been dep- uty director for estimates in the Penta- gon's DIA, sounded a call in an article he wrote recently for "Army" magazine advocating reassertion of a dominant role for the military in estimating security threa ts. May 1 was set as the date of his move to Mr. Schlesinger's staff. As the shake-up of the intelligence establishment continues, charges and countercharges are giving Americans a rare look at its inner workings and hot rivalries. For example? ? Military men are alleging that "bi- as" of top-level CIA evaluators colors Final estimates sent on to the President and his aides. One case cited by a critic of the CIA: 'An estimate entitled 'New Order in Brazil' was prepared as a basis for Maj. Gen. Lew Allen Maj. Gen. Daniel Graham policy decisions. Use of the term 'New Order' in the title was like overprinting a Nazi swastika on the cover. It paint- ed the blackest possible picture of the present Brazilian Government, making Brazil look like an imminent threat to the' U. S. If the President had acted on that report, he would have cut all aid to Brazil." ? The CIA is accused of failing to use information it had in hand to alert the White House to Russia's acute food shortage last year. The point made is that the Soviets were able to negotiate a billion-dollar grain deal with the U. S. on terms favorable to the Krem- lin?and unfavorable to the American housewife, who had to pay more for bread. The CIA answers this charge by con- tending that the information was passed along to the Department of Agriculture, which, in the CIA view, failed to act on it promptly enough. ? A military intelligence official says that before the Soviet invasion of Czech- oslovakia in 1968, the CIA director of estimates offered a report prepared for the President saying there would be no invasion. An aide, disagreeing, used various stratagems to avoid forwarding the report. The delay prevented embar- rassment for the CIA when the Russians did invade, but, according to the source, the aide who blocked the erroneous estimate "won no friends." ? In Vietnam, it is now revealed, CIA and DIA were often at odds. For instance, they agreed that some Com- munist arms were reaching South Vietnam through the Cambodian port of Sihanouk- vile, but both were "wildly wrong" on how much. But an official, not in intelligence, recalls that CIA was "much further wrong" than DIA?al- though each was on the low side. ? Another charge by critics of the CIA: After the Tet offensive of 1968, CIA reported Communists had seized vast portions of the countryside, because contact was lost with most sources out- side the cities. This assumption was dis- proved by on-the-spot checks by DIA teams in helicopters. An illustration of conflict between civilian and military analysts: In a recent national estimate, the CIA took the position that Japan would never consider arming itself with nuclear weapons. The DIA argued that the Jap- anese were keeping abreast of nuclear technology and would not hesitate to "go nuclear" if Tokyo felt that was necessary for survival. When the document was brought to Mr. Schlesinger, an insider says, the CIA analysts emphasized that they had put their views first, as the current position, and the DIA estimates were relegated to the back pages. Mr. Schles- inger was said to have,"hit the roof" and to have ordered that the military view be given equal prominence. ? General Graham, in his writing in "Army" magazine, admits serious DIA shortcomings in the past. He charges that Pentagon intelligence has damaged its own status by inflating its estimates of threats to the "worst case" possible? (continued on next page) 0111 Defense Intelligence Agency, coordinating intelligence efforts of Army, Navy and Air Force, assesses armed forces and weapons of friend .Irld foe. OSA National Security Agency codes and decodes U.S, messages, breaks foreign codes, monitors foreign communications. conducts electronic surveillance. State Department's Bureau of intelligence and Research makes sure final intelligence estimates take account of political and economic trends abroad. AEC Atomic Energy Commission detects and monitors nuclear tests by other countries, gathers information on their nuclear capabilities. Federal Bureau of investigation conducts counterespionage within U.S., combats sabote, In addiii@kr,Kftg&PridgfilifilififittOiiiiaie%calirfilDiafttl-MatitSkROielitetintica00*-9ther countries. Copyright tr) 1973, U. S. News & World Report, Inc. .11 ? ??? 70 ?Wide World Photo Overhaul of U. S. intelligence network is creating ten- sion at CIA's massive headquarters near Washington. "SPY" SHAKE-UP [continued from preceding page] in order to get more money from Con- gress. He claims that this tendency has been largely eliminated. ? General Graham also charges that, in the past, military intelligence has been too prone to tailor its assessments to the need "users" have for intelli- gence that "supports the program." Assessing blame. In some instances, blame is being heaped upon both civil- ian and military intelligence agencies. One thing pointed out is that the entire U. S. intelligence community?despite warnings from some agents?refused to believe that Soviet boss Nikita Khrush- chev would dare to risk putting offen- sive missiles in Cuba in 1962. Khrushchev did just that, however, and the "missile crisis" resulted. Some of the military intelligence ex- perts now insisting on a stronger voice in the evaluation of raw data concede that, in the past, the armed forces have been supplied with exaggerated esti- mates of the Soviet threat?such as the "missile gap" of a decade ago that turned out to be nonexistent. It is pointed out, however, that the DIA has had a thorough housecleaning in recent years. "Time to reassert." In his article for "Army" magazine, General Graham wrote: ?`. . . I think the time is ripe for the military profession to reassert its tradi- tional role in the function of describing military threats to national security. Both the military user and the military pro- ducer of strategic intelligence have come a long way since the 'missile gap' days. DIA has hit its stride in the pro- duction of respectable military esti- mates." Many CIA professionals in top and middle ranks are unhappy about the .1.WU 46u1Ig., y I LU LPG 11.9.11. 1 I y anent typical of this view- aware of what all the others are doing. point: 5. Cost experts are combing through P84-0620991140b1W0444(101 4 operations to determine how to use that those who seek to fewer men and spend less money. present intelligence as it "To be continued." Some projects is, rather than as the situa- tion is seen by those sup- porting specific policies, are being plucked out." Aides of Mr. Schlesinger deny that he has any inten- tion of "politicizing" the agency. They point out that at his confirmation hearing before the Senate Armed Services Commit- tee he said he was deter- mined to maintain the in- dependence and integrity of intelligence evaluations. Within the Nixon Ad- ministration, dissatisfaction with the CIA has centered particularly in the Na- tional Security Council staff, which is under the direction of Mr. Kissinger. The main complaint has been that evaluations of raw intelligence often re- flected the biases of top men. To that, one CIA man retorts: "We feel that we do a better job of evaluating raw intelligence without bias than the military does?or, for that mat- ter, than people like Kissinger who are defending a specific policy." The argument is made that?particu- larly since the days when the late Allen Dulles was its Director?the CIA's "con- trolling voice" in the intelligence com- munity has sought intelligence estimates unaffected by the policies of the Ad- ministration in power, the Pentagon, the so-called military-industrial complex, or any other group. Changes in the works. Whatever the merits of the arguments now boil- ing, drastic changes are being made by Mr. Schlesinger. They include: 1. To reduce costs, overlapping intel- ligence agencies are to submit "bids" on operations that are assigned by President Nixon and the National Security Coun- cil. The Intelligence Resources Advisory Committee, set up under the 1971 re- organization plan, is to consider the competing "bids" and accept the least expensive if the bidder can . convince the Committee that his agency can do the job. 2. Mr. Schlesinger is making it clear that he will exercise fully his authority over all of the intelligence services. In the past, this has been a difficult prob- lem for the Director of Central Intelligence, because the Defense De- partment gets most of the money and most of the manpower. 3. As DCI, Mr. Schlesinger will de- cide which of the U. S. intelligence agen- cies?military and civilian?will carry out operations assigned by the White House. are being phased out as inefficient or outmoded. One report indicated a sharp curtailment in clandestine operations. But an insider commented: "They may not talk about these as much as they (lid, but like it or not, these activities are part of the way of life in the world today, and they will be continued." One revision put into effect, by Mr. Schlesinger has to do with preparation of CIA reports requested by the Presi- dent and other high officials. Condensed intelligence. Previously, such requests were answered with de- tailed studies-20, 30, or even 50 pages long. Now, the reports run no longer than three double-spaced pages. A CIA official explained: "Instructions from Schlesinger are to answer the questions asked?and no more. No background. No historical dis- cussion. just keep in mind that the President or the Secretary of the Treas- ury or whoever else asks the questions is a busy man. He rarely has time to read long reports. What he needs is for use right now?today?in order to make a decision." The telephone number of the analyst or working group responsible for the re- port appears on the document, so if more information is needed, it can be obtained without delay. In line with Mr. Nixon's efforts to re- duce federal spending, the intelligence agencies are under orders to reduce costs. Just how much is being spent to piece together the information essential to na- tional security is not a matter of public knowledge. A 6.2 billion cost? Senator William Proxmire (Dom.), of Wisconsin, esti- mated recently that the cost of gather- ing military and civilian intelligence is 6.2 billion dollars a year. But Albert C. Hall, Assistant Defense Secretary for Intelligence, said that Mr. Proxmire's figure is "just plain wrong." Without hinting at the actual figures, Mr. Hall said that the Pentagon's int& ligence budget has been cut by about a third in the last three years. Other sources say that manpower in the CIA and the other intelligence serv- ices, including the National Security Agency, now totals less than 125,000? a reduction of more than 25,000 since 1971. Thus, a money crunch and diminished manpower are added problems at a time of sharp change and open conflict for the agencies which function as the "eyes and ears" of the United States around the world. [END] 80 Approved For Release 2001/06/09 : CIA-RDP84-00499R0010001100014. S. NEWS & WORLD REPORT, Max 7, 1973 Approved For Release 20411;106/09 :ThA131714a0trtircAqaT011474;la In /long Kong, an agent of the U.S. Central Intelligence Agency slips into ? a railroad yard and checks the wear on ball bearings of freight cars coming in from China to try to spot unusual troop movements. Meanwhile, another agent ? goes to the !long Kong central market and buys a large order of calf's liver from animals raised in China to run a lab test for radioactive fallout. In Eastern Europe, a CIA team tries to obtain a sample of a Communist par- ty chief's urine. Purpose: to determine his state of health. The CIA did this suc- ? cessfully with Egypt's late King Farouk but failed recently with Yugoslavia's President Tito. 17HESE are only a few of myriad mis- sions that the CIA has performed around; the world. The agency is also constantly accused of fantastic James ? Bondian exploits that' more often than not it has nothing to do with. The fact is that no nation can any longer:accept Secretary of State Henry Samson's bland dictum of 1929 that "gentlemen do not read other people's mail." In a nuclear-ringed globe, intelligence is more vital than ever. Nor can a world . power automatically limit itself to such a passive role as mere information gath- ering; trying to influence events may at times be necessary. But it can no long- er be done with the crudity and arro- gance displayed in the Bay of Pigs in- vasion of; 1961, or the attempt with the International Telephone and Telegraph Corp. to sow economic chaos in Chile in 1970. To harness the CIA's excesses and yet utilize its immense capabilities for keeping the U.S. abreast of world de- velopments; the ;Nixon Administration has ordered the greatest reorganization in the agency's 25-year history. Cooperate. Reports TitviE's Diplo- matic Editor Jerrold Schecter, who has ; been keeping a watch on the CIA: "For the first time since its founding the CIA is undergoing a thorough shakeup of personnel and redirection of mission. The two main targets of U.S. intelli- gence activities continue to be the So- viet Union and China. But a rapidly de- veloping detente with those countries E has created different demands on the in- telligence establishment. Along with traditional estimates of the missile and ; military capabilities of Communist countries, the White House is insisting on a new' 'emphasis on assessments of their political and strategic intentions. The entire intelligence estimating pro- cess is being refined to include more stress on such developments as Soviet ; and Chinese grain outputs and comput- er advances." To chart this new direction,' Pres- ident Nixon has turned to a tweedy, se 2001/06/09 irriMitANNIMOOP4VArcip 1-3 TIME, APRIL 30, 1973 Approved For Release. 20 Gmcth Cub in February took over as director of the CIA. Aides quote Schlesinger as saying that "the entire intelligence community can produce a better product with a low- er level of resources." In short, the na- tion's spy network should generate bet- ter intelligence for less money. Schlesinger has ordered the firing or forced retirement of 600 of the CIA's 18,000 worldwide employees; 400 more are expected to go by year's end. His aim is to cut costs, eliminate marginal performers, and change the leadership of the agency. Among those who have gone are several of the long-entrenched top deputies of former cm Director Richard Helms, who tended to favor the "operational men," or spies in the field,. over the cerebral analysts, who ponder the intelligence and make policy rec- ommendations. These two sides of the agency, traditionally separated, have or- ders to cooperate more. Paramilitary operations are being scaled down. In South Viet Nam, the CIA's role in the "Phoenix"?or coun- terterror?program has already been phased out. The program used CIA agents to advise the South Vietnamese in the "neutralization," or killing, of Viet Cong officials. Such covert activ- ities arc under the CIA's deputy direc- tor of operation-s, currently William Colby, 53, a former ambassador who was in charge of pacification in Viet Nam from 1969 to mid-1971. Often called the agency's "dirty tricks department," Colby's section con- trols field agents who are involved in clandestine activities, including keeping a watch on the KGB (Soviet intelligence) and working with intelligence organi- zations in Western countries. But Col- by's group is now placing new empha- sis on such activities as getting early warnings of?and curbing?interna- figePerktirdiPtifilM4.9004000 1 , Ira ic. hroug intercepts o commu- nications, the CIA has discovered who ordered the killing of the U.S. and Belgian diplomats in Khartoum two months ago. It also knows the financial sources of the Black Septernbrists, who carried out those assassinations, as well as the murders of Israeli athletes at the Munich Olympics. Rivalry. With the downgrading of cloak-and-dagger operations,. one of Schlesinger's tasks will be the strength- ening of the "leadership for the lintel- ligencel community as a whole," a rec- ommendation that he himself urged on the President in 1971, when he was an assistant director of the Office of Man- agement and Budget. Now, Schlesinger not only heads the CIA but also has ul- timate responsibility for the I entagon s Defense Intelligence Agency, which provides intelligence for the armed forces, and the National Security Agen- cy, which directs spy planes, satellites and a vast communications-monitoring apparatus that cracks Codes and gath- ers data from other countries. Schlesinger, as chairman of the In- telligence Resources Advisory Commit- tee, will be taking a hard look at the combined $6.2 billion (some estimates put it as high .as $8 billion) spent by the three agencies. Nearly half of the mon- ey goes for satellite reconnaissance and spy planes; about $750 million is bud- geted to the CIA. Schlesinger also must watch out for a smoldering rivalry between the CIA and the DIA. The rivalry broke out in the open recently in the form of an ar- ticle in the small (circ. 75,000) month- ly magazine Army, written by Major General Daniel 0. Graham last Decem- ber?before he was picked by Schle- singer to be a member of his five-man Intelligence Resources Advisory Com- mittee. Graham's article contended that the Pentagon should win back from the' CIA. primary responsibility for analyzing strategic mili- tary intelligence. To the em- barrassment of military lead- ers, he conceded that in the past the Pentagon's estimates of Communist military po- tential were vastly ora.rstat- ed, and that the nation's de- cision makers rightly regard- ed those estimates as "self- serving, budget-oriented and generally inflated." But, he wrote, the Pentagon has so greatly reformed and .im- ?proved its analysis in recent ?years that there will be no more "bad overestimates" _like "bomber gaps," "missile gaps," and "megaton gaps." Aided by Graham, who will be the primary link be- CEiy DI) ,f to as la kclItoofftiqor Said he recently to an old c esinger hopes to improve ciA tan : "The trouble with this place relations with the Pentagon. is that it has been run like a gentleman's Under the able Richard club?but I'm no gentleman." 51010?10 () C\ I If 011 Art t? CIA DIRECTOR JAMES R. SCHLESINGER Inducing constructive tensions. Helms, CIA analysts had remained aloof from the military, and there were bit- ter battles between the CIA and DIA dur- ing the Viet Nam War over estimates of enemy infiltration and intentions. To increase accountability within the agency, Schlesinger has told CIA's analysts to sign all their intelligence reports. He hopes that bylines on the blue and white-covered CIA assess- ments will sharpen analyses and make the authors feel personally responsible for their assessments. Schlesinger seems just the man to shake up the CIA. A seasoned scholar, bureaucrat and Republican, he enjoys the confidence of President Nixon. He was graduated sumina cum laude from Harvard ('50), later got his Ph.D. in eco- nomics there, taught at the University of Virginia, and was director of stra- tegic studies at the Rand Corp. He joined the old Bureau of the Budget in 1969, and two years later was named chairman of the Atomic Energy Com- mission. His prodding of utility exec- utives to pay more attention to envi- ronmental safeguards impressed the President. When industry leaders complained. Schlesinger told them: "Gentlemen, I'm not here to protect your triple-A bond ratings." While maintaining traditional secre- cy about clandestine operations, Schle- singer is moving fast to lift the veil of conspiracy that has shrouded the agen- cy. In an unprecedented move last month, he allowed a CIA agent, William Broe,...the former chief of clandestine operatiOns for the Western Hemisphere, to testify before a Senate subcommittee investigating the involvement of the CIA and the International Telephone and Telegraph Corp. in Chilean political affairs.' - As tough-minded as he is candid, _Schlesinger leaves little doubt that he is determined to reform and redefine the Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 - ,? PridemAm4V3,1973 THE WASHINGTON POST' ? ' West German Denies 14 Was CIA Agent Reuter FRANKFURT, West Ger- man, April l2?West German ,technician Trutz Ritter von Xylander,. freed by the Chi- nese authoiities yesterday at- ter more than five years of de- tention, denied on his return here today ? Chinese charges ithat he had worked for the ? !U.S. Central Intelligence . . ? agency. "I have never had any con- 'tact with the CIA, either bo- lero my arrest or now after my reloaso," he told On airport 'press conference after flying here from Hong Kong. Tr-r,F-7 Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release.2001/06/09 : CIA-RDP84-00499R0010011610001-3 THE EVENING STAR and DAILY NEWS A.5 ? Washington, D. C., Wodnitsckly, April II, !9.13 Pardoned. CIA, Sp P.Ze eased by Chin HS/HC- Miro HONG KONG (liPl) ? Trill?. Ritter Von Xylander, 41, a West German jailed since ,1967 on a charge of spying for the United States, crossed the border into, Hong Kong today. - Von Xylander was convicted Oct. 22, 1969, of spying for the Central Intelligence Agency' ' and was sentenced to 10 years in prison. He was .arrested Nov. 17, 1967, while working as an equipment inspector and plant site clerk for the turgi Co., which was erecting a petrochemical plant in the northwestern Chinese prov- ince of Kansu. The West German Embassy in Peking announced Monday that China had pardoned Von Xylander and would release him. He was the last West German known to be held in China, Peking Radio reported on the day of his conviction that Wm Xylander was photo- graphing restricted areas in Lanchow, the provincial capi- tal of Kansu, and collecting important military, political and economic information on behalf of the United States. He was recruited by U.S. agents in West Germany be- fore he went to China in Octo- ber 1965, the report said. Lanchow is known lobe one of the key industrial support bases fbr China's nuclear and missile programs. The German is scheduled to return to Frankfurt in the company of his brother, Horst Von Xylander, who had come . to Hong Kong to meet him. ed For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 A.26 THE EVENING STAR and DAILY NEWS Washington, D. C.," inesday, April 11, 1973 APPrOVIJ For Release..2001/06/09 : CIA-RDP84- 09R001000110001-3 finq n'e 7 By ORR KELLY Star-News Staff Writer :mcs R. Schlesinger, thei ww director of Central Intel- ligence, is giving the military a stranger role in assessing ifireats posed by other coun- tries, 'according to the pentagon's top civilian intelli- nce official. .7 Albert C. Hall, assistant defense secretary for intelli- gence, acknowledged in a in- terview yesterday that "some of the civilians up the river" lit the Central Intelligence Agency) are quite concerned by the new development. ? Ain Hall, who was brought 'into the Pentagon by Defense Secretary Melvin R. Laird two .years ago to strengtheni civilian control over intelli- gence, said he thinks what Schlesinger is doing "is really Clint? sound." ? 'SCHLESINGER, who drew up a plan for revamping the intelligence community when he was at the Office of Man- agement and Budget in 1971, has placed two career sol- diers on his personal staff, "Maj. Gen. Lew Allen, a West Pointer who holds a doctor's degree in physics and who has been active in Air Force nuclear and space pro- graft, became one of ?eblesinger's deputies "for JAMES R. SCHLESINGER the intelligence community" on March 1. He was nominat- ed yesterday for promotion to lieutenant general. Maj. Gen. Daniel G. Graham, a career intelligence office who is now deputy director for estimates in the Defense Intelligence Agency, is scheduled to be- come a deputy to Schlesinger May 1. While Schlesinger is report- edly embarking on a house cleaning to cut about a 1,000 persons from the CIA payroll of about 15,000, he has given his stamp of approval ? at least for the time being ? to the military intelligence oper- ation, Ilall said. "I have told the DCI (Schlesinger) what we are doing, what our objectives- are, and how we are going about researching them in a broad sense ?and he's en- dorsed them," Hall said. TIM; DIA, the key Pentagon intelligence office, underWent a house cleaning of its own ' beginning in 1970, when Lt. Gen. Donald V. Bennett be- came its director. The entire defense intelligence communi- ty has received a further shaking up under Hall. Over the years, there has been a tendency to downgrade the military estimate of ' the threat from other countries ? primarily the Soviet Union ? and for the civilian analysis of the CIA to be predominant, Hall said. "On the civilian side ? up the river ? they were more inclined to regard the Soviet Union as a more peaceful ent- ity than it actually is. Their tendency is to regard what they (the Soviets) do as a reaction to us," Hall said. The military picture tends to make the Soviets look like the fierce guys, and that we've got to catch up, he said. "In analysis of the Soviet Union, one was too far on one . are involved. He did say, however, that an estimate by Sen. William Proxmire, D- Wis., that the nation's annual intelligence bill is $6.2 billion is just plan wrong. , PROXMIRE SAID yester- (lay his figijfS were "in_the roved For ITS/LIC- 3-0 side, the other too far on the other side. I don't want to overstate this, because it was not that bad a situation. But it would be better if they both moved toward the middle," Hall said. VVIIILE the different inter- pretations seemed to provide a broad range of views, the opposite was often the case, , Hall said. Graham, in an arti- cle of the current issue of Army Magazine, said "planners of all services 'coordinating' an intelligence estimate are quite capable of reducing it to lowest common denominator, mush." The goal now, Hall said, is to recognize that "There real- ly isn't one estimate ? that there are ranges of possibili- ties driven by certain circum- stances. "It is important to get the ranges and the circumstances laid out," he said. Unfortunately, he added, many of those who receive the intelligence information would rather have a specific figure than a range of choices. HALL ALSO STRESSED, throughout the interview, that he is seriously concerned about the nation's intelligence budget. Over the last three years, he said, the Pentagon's intelligence budget has been cut about a third. "We don't have all the things covered at all that we'd like to have covered," he said. "When resources are limited, it is no easy way out of that situation." Hall. refused to say how much Nixon spends on intelli- gence or how many people ballpark" and called on $100 million; Army Intelli- Schlesinger to make the ? in- gence, 38,500 and $775 million; ' telligence budget public. Navy Intelligence, 10,000 and He said his estimates of 8775 million; Air Force Intelli- manpower and budget are: gence, 60,000 and $2.8 billion CIA, 15,000 and $750 million; (including satellite launches National Security Agency, and reconnaissance); State 20,000 and $1 billion; Defense Department intelligence, 335 Intelligence Agency, 5,016 and and $8 million. Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release4D01/06/09 : CIA-RDP84-00499R001000,114001-3 U.S. Spying Cost Put at $6.2 Billion Associated Press , Sen. William Proxmire (D- Wis.) said yesterday, the U.S. intelligence community em- ploys about 148,000 persons' and spends about $6.2, billion each year. Renewing his call for dras- tic cuts in the cost of Ameri- can spying and covert activi- ties overseas, Proxmire urged James Schlesinger, new Cen- tral Intelligence Agency, Di- rector, to make public the gov- ernment's entire intelligence budget, which has always been secret. Proxmire said he is not op- posed to a first-rate American ? intelligence operation but does believe that the intel- ligence establishment has swollen out of proportion to national , defense needs and that congressional controls and restraints on it have eroded. He said his cost and man. noWer @Militates Are Het baaad on classified or , official sources and noted that they depict the CIA as smaller in both personnel and budget than at least three other U.S. Intelligence groups. Proxmire's estimates show the CIA with a work force of 15,000 and an annual budget of $750 million. These are his ? other estimates: ? ? THE WASHINGTON ?Onreinottay.Ap.rini.1973 ? ? ? ? National Security Agency, 20,000 and $1 billion; Defense Intelligence Agency, 5,016 and $100 million; Army Intelli- gence, 38,500 and $775 million; Navy Intelligence, 10,000 and $775 million; Air Force Intelli- gence, 60,000 and $2,8 billion, and State Department Intelli- gence, 335 and $8 million. Proxmire said his estimates are "not without error," but nevertheless are "in the ball- park." "These figures ' do not re- flect, however, the coordina- tion that is involved from one organization to another," Proxmire said. "The Air Force, for example, supplies the launch boosters and satel- lites for the highly successful reconnaissance program ,and this is one reason the budget is so high." Proxmire has said previ.? otialy that aeuret ithamotta by intelligence agencies overseas are needlessly involving the United States in the political affairs of other countries at a period when the need for the missions has been greatly re- duced by modern techniques of electronic and aerial sur- veillance. ' d For Release 2001/06/09 :,CIA-RDP84-00499R001000110001-3 4 Approved For Releas IHS/1-1C- 44-0 I \ ' SEN. WILLIAM PROXMIRE Proxmire Asks Cut in U.S. Spying United Press International Sen. William Proxmire, D- Wis., has called for a drastic reduction in secret U. S. intel- ligence operations overseas, estimating their cost at $6 bil- lion a year and saying their value is greatly exaggerated. "Our foreign covert opera- tions have brought little but embarrassment abroad and confusion at home," he said ?yesterday. "They should be cut to the bone. In the day of sophisticated electronic de- vices, no longer is there a sound justification for covert operations to defend the U. S. from surprise attack." Proxmire, who is also a leading congressional critic of Defense Department spending policies, alleged that the U. S. intelligence operation had switched gradually from col- lecting information to becom- ing involved in the affairs of foreign countries, and ex- pressed fear this could be a possible prelude to similar tactics in this country. "In too many cases," he said, "we are substituting clandestine operations for sound foreign policy. Further- more, due to the 'spill-over' effect, it could lead to covert domestic operations." He said that, for example, the responsibilities of the Cen- tral Intelligence Agency have been expanded by "secret interpretive directives" whieh Congress never sees. In a statement issued from his office, Proxmire recom- mended steps which he said would permit trimming as much as $1 billion from the intelligence budget. -00499R00100%100001-3 THE EVENING STAR and DAILY NEWS Washington, D. C., Monday, April 9, 19 73 Approved For Release 2001/06/09 : CIA-RDP84-00499R901000110001-3 Approved For Releas4,2001/06/09 : CIA-RDP84-00499R001044110001-3 'VI , THE WASHINGTON POST Saturday, April t9, 1973 The Washington Merry-Go-Round ? E31 Bureaucracy Engulfs Wounded Knee By Jack Anderson The bureaucratic build-up 'outside Wounded Kneels a testament to the government's way 'of doing things.. No less than 400 federal officials have descended upon the small South Dakota village to nego- tiate, mediate, consult and oc- casionally exchange gunfire with the Indian occupiers. Cost to the' takpayers: around $2.7' million. Yet at this writing, the Indi- ans remain armed and angry, Take the problem of road- blocks, for example. The daily crisis reports from Wounded Knee, intended for Justice De- partment eye's only, tell how armed local residents threw up their own vigilante road- block. Assistant Attorney Gen- eral J. Stanley Pottinger "met with them at the roadblock shortly after it was established but failed to talk it down," de- clares a crisis report. Next clay, the vigilante group refused to 'allow the Community Relations Serv- ice's peace-keeping team into Woubtled Knee, While "no CRS personnel were in Wounded Knee" to restrain the militants, a "most serious incident" took place. Accord- ing to a report, the incident "involved the alleged looting of a rancher's home and cattle by WK (Wounded Knee) occu- pants." Three days later seri- ous shooting broke out, and one militant Indian was crit- ically injured. Still, Pottinger took no ac- tion against the unauthor12ed roadblock. "Pottinger has indi- cated to CRS and at staff briefings,' states a report, "that he' is inclined to arrest the leaders of the roadblock, but most other agencies advise against it for purposes of pub- lic relations or convenience." ? Explaining what is meant by "convenience," the report tells of "a planned .march on WK by clergymen and others (Easter) weekend. The govern- ment would rather have the marchers detained by a citi- zens' roadblock than by an FBI one." The Easter march fizzled, and Pottinger finally ordered the roadblock removed. But meanwhile, he was having trouble with the government's own roadblocks. He obtained an order from Wshington to put all federal roadblocks and bunkers under the command of U.S. marshals. "Previously," notes a report, "the marshals, the FBI and the MA police each manned their own units, and it was dif- ficult to verify and control the repeated incidents of federal vehicles and troops (mostly FBI and BIA police) moving into the WK perimeter." The CRS peace-keeping team has now returned to Wounded Knee. But the Indi- ans and the federal officers are still manning their armed bunkers. As one federal offi- i ? cial put it, "We're now back to zero again." Military Martinet Maj. Gen. Daniel Graham, a short, ramrod-straight authori- tarian, is moving from the De- fense Intelligence Agency to the Central Intelligence Agency to take charge of stra- tegic estimates. He has already alarmed CIA hands by writing in Army Magazine that vital security estimates should be made by military analysts, although he acknowledges that DIA esti- mates have been slanted in the past to please the Penta- gon bosses and the CIA esti- mates have been more accu- rate. The alarm hasn't been al, layed any by reports reaching CIA headquarters of his con- duct as head of the Wakefield (Va.) High School PTA. He circulated a memo, for example, urging that five teachers be fired and eight others be enlisted as inform- ers. He wanted them to keep an eye on suspicious teachers and students. The Graham fac- tion also brought pressure to oust the school's able princi- pal, who finally left voluntar- ily, In one stormy PTA meeting after another, Graham has fought student privileges in- cluding the right to partici- pate fully, in PTA activities. So vehement is he at PTA meetings that some neighbor- hood government officials are afraid to argue with him for fear he'll retaliate against them ? in their jobs. In re- sponse to our inquiries, Gra- ham sent word through his secretary that he, wouldn't speak with us. Inside North' Korea?Vii-? tors just back from North Ko- rea remind us that Kim .11 Sung's Red regime is still one of the most oppressive on earth. They describe the towns as drab, the social life as ste- rile, the people as regimented and the atmosphere as harsh. Individually, the North Kore- ans were friendly and curious. But in the presence ? of others, they became' stiff and strident. Their private opinions sud- denly ? conformed to the rigid official line.- North and South Korean delegations, mean- ? while, are preparing for an- other round of negotiations. Sikkim Strife ? Hush-hush - reports smuggled out of the Himalayan kingdom of Sikkim charge that India is financing riots against the regime of King Palden Thondup Nam- gyal as part of a plot to take full control of his land. The dashing king became a special favorite of Americans when he married a pretty New Yorker, hope Cooke. Lately, demon- strations have shaken his mon- archy, and Indian troops have crossed the border "in the in- terest of law and order." Insid- ers close to the royal family have gotten word to . us that, even as the troops moved in, Indian political officer K.S. Bajpai began to pressure the king to "hand over all power" to India OD 1973, United Feature Syndicate 1 Ap ved For Release 2001/06/09,:'CIA-RDP84-00499R001000110001-3 I HS/I1C- fro HS/HC- vpro Approved For Releaseir01/06/09 : CIA-RDP84-00499R0010084,10)0001-3 ? JOURNAL, 1\9g 8 1973 M ? 66,673 ? 209,501 Tight em n Urged on Intelligence By DOANE IIELICK Congress and the executive branch of the government should exercise virogous con- trol over the nation's in- stelligence-gathering agencies, according to a Brown Univer- sity political scientist. Lyman 13. Kirkpatrick, ? a former high-ranking CIA of- ficial who joined the Brown faculty eight years ago, said strong controls are needed .especially in the field of do- mestic intelligence. "The less we have of do- mestic intelligence the bet- ter," he said. Mr. Kirkpatrick, is the au- thor of a new hook: ''The Intelligence: Foreign Policy and Domestic Activities,". which is scheduled for publi- caton in the fall. , It analyzes the nation's in- telligence Ewan-this and its re- -lationship to the .President, Congress and the public. Mr. Kirkpatrick believes both the executive and legislative branches of the government have at their disposal adequate means of .overseeing intelli- gence operations. "The- whole- point is that they should exercise more ag- gressive controls," he said. Critical of the decision to assign the Army a role in gathering domestic in- telligence during the height of civil unrest stemming irons the war in Southeast Asia, Mr. Kirkpatrick maintains that "the Army shouldn't be in- volved in that kind of busi- ness. Tint is the role of the FBI." The Brown professor served. as a staff officer; assistant director, inspector general and executive director-comp- troller of the CIAssduring his two-decade career with the agency. He emphasized than espionage is only a small part of the agency's work, and as- sumes a secondary role to re- search and the analysis of Politica science profes- sor Lyman B. Kirkpatrick. SI y Uy HUGH S MISER newspapers, government lications and computer outs to to evaluate them ssan ? an intelligence standp6int. , At Brown Mr. Kirps ri teaches courses on Cold War operatons, American miilto affairs and problems of na- tional strategy and policy. The seminar on American military afairs is new this term and was organized with the help of a $143,000 grant from the Carthage Foundation of Pittsburgh. A portion of the seminars will focus on'a case history_of the Vietnam war, using the Pentagon Papers as resource material. Mr. Kirkpatrick rates U.S. intelligence in Vietnam as generally good in the area of strategic matters, but has concluded that tactical Infos- mation was less reliable. "Good tactical intelligence was difficult to come by since the Viet Cong controlled so much of the countryside," be said. Mr. Kirkpatrick said his standard reply to criticism of the CIA for activities such as the Bay of Pigs invasion and to charges that the agency has too much say in foreign policy is that "the CIA does what it is told to do." "As long as we live in a world with intense competi- tion and hostility we need a, good intelligence system," he said. "But intelligence is, as a word, relate. si to military at- /fairs. My conviction is that in- telligence work is closely re- lated to peace," he added. -Arr. Kirkpatrick said the FBI is the only appropriate agency to engage in domestic . intelligence gathering activi- ties and is so designated by federal laws, When the Army entered this field in 1968, its intelligence collecting opera- pparatus tions snowballed to the point that dossiers were being created almost indiscrim- inately, he said. In the field of . foreign in- telligence, Congress has the options to exercise influence and controls through appro- priations, Mr. Kirkpatrick said. Lawmakers such as Sen. J. William Fulbright, chairman of the Senate foreign relations committee, and Congressman' George Mahan, chairman of the House appropriations committee, are Continually placing CIA activities under scrutiny. He said be believes .the CIA has a legitimate role in inves- tigating foreign drug traffic, adding that the agency has been involved in that kind of investigative activity for 25 years. It was recently reported that the agency would broad- en its activities in this field and also use its intelligence gathering resources in an ef- fort to curb acts of terrorism. ved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 LIS/HC- Al2PP 1721S11727.17,7 3:77 Approved For Release01/06/09j: Iftp1Rlal*-00499R001003400001-3 ?The Washington Illerry-Go.Ronnd CIA-Inspire 1 Tibet Raids Wind own By Jack Anderson - gence agents were used to Par- achute American supplies to In ? mountanious Nepal, the Khampas' mountain hiv- . least bloody war is winding (macs, The bright orange sup- America's least known and Ply parachutes were converted down. The warring tribesmen into shirts by the Khampas and the Central Intelligence Agency, which recruited them, are losing interest in the ad- venture. After the fleece-clad Red Chinese legions crushed a re- volt in Tibet in 1959, the fierc- est of the Tibetan clans fled on wiry ponies into the high fastness of Nepal. CIA 'agents slowly gained the confidence of the moun- tain fighters, known as Kham- pas or "warriors," and began organizin ging them against the Chinese. In the cloud-cap- ped regions of Mustang and Dolpa, the Khampas were out- fitted with American saddles, small arms and other equip- on peasants instead of Chinese mein. soldiers. Then, - out of the craggy Thus has a faraway war flared up and died down, vir- tually unknown to the Ameri- can people, whose dollars sup- ported it and whose secret agents encouraged it. Washington Whirl Campaign Finances?We re- cently reported that most of were invited to participate in the Nixon scandals, from ITT a raid on Chinese army facili- to Watergate, were outgrowths ties in Tibet. The Khanma , of the 1972 presidenti:d cam- 'leader claimed he learned his Ipaign and I P e corn ptive English and was trained in rguerrilla tactics in the United :States. We suggested that the tax- In past years, Indian intent- 'payers would be better off if and quickly became a "Red Badge of Courage" in Tibetan refugee restaurants in Khat- mandu. But now the Tibetan refu- gees, when they gather in the restaurants for in uana stew and cakes, are forlorn The American aid is drying up, and the Khampas have to depend on the penurious In- dian intelligence services for supplies. This has so weak- cause it would give the debt- cued them that the Nepal goy. ridden Democrats an even fi- ernment, branding them nanciat break with the Repub- "bandits," has been able to licans in the 1979 presidential move them from the border election. areas. Now when the tribes, " men feel war-like, they prey they earmarked a dollar of their taxes for the political party of their choice. They can do this simply by filling out the Presidential Election Cam- paign Statement, Form 4875. But -a spot check by IRS dis- closed that only two of 29 em- ployees, assigned to assist tax- payers with their returns, bothered to inform the taxpay- ers of the campaign checkoff. This would seem to confirm Democratic National Chair- man Robert Strauss' com- plaint that IRS, under Repub- lican rule, is de-emphasizing the dollar contribution be- highlands, they swooped down into Chinese military encamp- ments in Tibet, disrupting communications and stealing supplies. This distressed the Nepalese authorities, who never authorized the raids and Ifeared Chinese retaliation. - We spoke to sources who method of financing politics in this country. , roved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 JAW. NEWS Approved For ReleaseW01/06/09 : CIA-RDP84-00499R00100U1k001-3 E - 4'34,849 APR 1 0 1973 - ? By Keyes Beech Daily News Foreign Service Morale of the U.S. Central Intelligence Agency, once the highest of any government agency operating in Southeast Asia, has sunk to an all-time, low under the impact of a drastic reorganization under the new director, James R. Schlesinger. ? Most CIA men in the field concede that an overhaul of the agency was long overdue, not only to keep pace with chang- ing times but to eliminate deadwood personnel. Nor have they anything against Schlesinger, a budget-minded man- avement expert who was President Nixon's choice to cut down to size not only the CIA but other government in- telligence services as well. But their greatest fear is that in the process, and tinder an administration that seems to insist on absolute loyalty to the .President, the CIA will lose its most precious assets ? its Integrity and independence of judgment regardless of who is in power. "I have no argument with efficiency and economy," said one senior CIA official and oldtime cold warrior. "But. I would prefer a little inefficiency and room for initiative Instead of seeing the CIA as the best-run agency in the government." ACCORDING TO REPORTS REACHING Southeast Asian _ . capitals, more than 1,SW employes hae been lopped-off tie, CIA payroll since Schlesinger took charge Feb. 2. One divt- ,sion received an 18 per cent across-the-board cut. "For the most part it's the World War II types who are. gettingthe axe ? men in their late 40s or 50s," said one CIA man recently returned from the United States. "But some younger men in their 30s are also losing their jobs. William A. Colby, a one time OSS agent who parachuted Into France in World War II, transferred to CIA when it was born out of OSS and later became director of the 'pacifica- tion program in South Vietnam with the rank of ambassador until he returned to the CIA in a top job, was reported doing all he can to ease the pain for some of the old Southeast Asia hands. Some senior CIA officials are returning to Washington without knowing what their next job will be ? if they have one. Some are slated for retirement, even though they don't know it. Some CIA men are threatening to resign after more than two decades of service. The choice may not be theirs. ONE CIA VETERAN HAILED the dismissals. "It's about time we cut down and got rid o: some of the World War II - types," he said. He is a World War II "type" who escaped the axe. Among the first to be dismissed were such paramilitary men as those who for more than a decade helped run the ? clandestine war in Laos. Unlike career CIA agents, they were under contracts subject to termination in 30 days. They had job security because there was always another war to go to. "Now," as one remarked, "we've run out of wars." Schlesinger's takeover capped a changing of the guard ' that began at least two years before. Attrition and the dis- astrous Bay of Pigs affair took their toll of the World War II derring-do gentlemen-adventurer ? spies and dirty tricks specialists who once dominated the agency. "I'm one of the new breed ? a technocrat," said one top CIA man. , BUT IT WAS THE END of the. Cold War more than any-. thing else that contributed to the decline of CIA influence in foreign affairs. That and the fact that today the most vital intelligence is gathered not by men but by computers and high-flying satellites. The CIA emerged from the Vietnam War looking better than any other brand of government involved in the Indo- china conflict. One reason was that CIA men tried to tell it like it was, not like somebody back in Washington wanted. This was amply proved by the Pentagon Papers. ? Ho /IIC- 9,1f) __Ap:pl-Oved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 J Approved For Releaseq001/06/09 : Cr1i4RDP84;00M91100100Q,100001-3 3 APR 1973 ITT Head Affirms Fund Offer By Laurence Stern Washington Post Staff Writer . ? Harold S. Geneen, chairman of the International Telephone and Telegraph Corp., acknowl- edged yesterday that he twice offered large sums of money ro. 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 around contradictions in previous testimony by ITT officials and other witnesses which Sen. Frank Church (D- Idaho) declared might be the basis for perjury action. ? Geneen said he could not recall making an offer of a "substantial fund" .to a top .Central Intelligence Agency official, William V. Broe, in July, 1970; to finance - an agency effort to stop Allende: - But he stipulated that he would accept Broe's sworn version of their conversation during a late evening meeting in Geneen's room at the Sher- aton Carlton Hotel here. He said the offer to Broe might have been ill-advised, prompted by his "shock" at political developments in Chile where he feared confis- cation by the Allende govern- ment of ITT holdings. The CIA declined his offer, he said, and the matter "died right there." But the offer surfaced ag,ain in different form in Septem- ber after Allende's popular election, Geneen conceded un- der questioning. It came in the form of a proposal con- veyed by ITT to national se- curity adviser Henry A. Kis-, singer and Richard M. Helms, then head of the CIA, to do- nate "up to a million dollars" toward a plan to block Al. Geneen also disclosed that ITT had offered to contribute to the CIA in the 1964 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 television lights Geneen spar- red his Senate questioners. At one point Church, chair- man of the inquiry, exclaimed that testimony on ITT's role was getting "curiouser and curiouser." 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 comnittnication conglomerate's activities in the 1970 Chilean election. In earlier sessions ITT vice president Edward Gerrity said G-eneen'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 MeCone: to fi- nance U.S. government efforts to block Allende's .confirma- tion by Chile's Congress. But the ITT official . who was supposed 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 Si million contribution for development aid to Chile. Geneen himself took the position that the million-dol- lar offer was a "duel" offer: It might have been allocated by the goy ernmen t I owa rd financing an anti-Allende coal- ition in the Chilean Congress, or it might have been usee for Geneen responded: -"That depends on what the second plan was." i " "I don't think I'd ever get. aver the first plan," . Case snapped back. "As the record 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 af the company . . Why was something so serious never aimmunicated to the govern- ment?" Geneen could not explain he 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 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," !, At one point Church inter-1 Liected,' "If all this involved Was petitioning the govern-?' tnent, why did you seek obt 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 meetine. with Broe, the CIA's chief of clandestine services for Latin America, what the distinction was between the clandestine n d 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 lby its intelligence wing, the directorate of intelligence. Thu directorate of plans, for which Bron worked, is mainly !responsible for covert opera tio.w4 such as political or eco- nomic sabotage. lende's confirmation by the ? development aid. "It was in- Chileantendedto he a very open of- Congress. fer," he said. Genemes emissary this time. "If I were 1)r. Allendo," in- was John A. McCone, Helms' terjected Sen. Clifford P. Case former boss in the CIA, an (R-N.J.), "and a non-friend of- ITT board member and also fered a plan to a group of my, a CIA consultant. McCone enemies to enleat Case?or, if first disclosed the mission in Case should win, to -make him earlier testiApprOVeldeR5PREWelaset200-11061.109 i CiArtFIPP8 ate investigators. regard that as provocative." 1-00499FV1E10011 1-IS/HC- 0 10001-3 NEW YORK -DAILY NEWS Approved For Releas6.2,001/06/09 : gliA-RDIft00499R001001114$0001-3 f o By JEFFREY ANTEVIL Washington, April 2 (NEWS Bureau).? International Telephone & Telegraph Corp. President Harold Geneen said today that he was in a state of "shock"- at the prospect of his firm's investment in Chile "going down the. drain" and that is why he offered company meney if the Central Intelligence Agency would try to block the election of Marxist Salvador Geneen told a Senate Foreign Relations subcommittee that the offer was dropped after ? CIA spymaster William V. Broe re- jected it as a violation of U.S. policy. ITT took no steps to keep Allende from. taking power in 1970, Geneen added. "If I had given it more serious - considera- tion," he said of the money of- fer, "I might have rejected it -myself." But Geneen defended his firm's conduct against charges that it conspired with the CIA to in- terfere improperly in the Chilean election. "All that ITT did was to present its views, concerns and ideas to various departments ,of the U.S. government," he said, calling this the firm's "constitu- tional right" in light of its fears that Allende would nationalize the ITT-controlled Chile Tele- phone Co. "If all that was involved was petitioning your government," asked subcommittee chairman Frank Church (D-Idaho), "why did you seek out the CIA?" Church noted that Broe, who met with Geneen several weeks be- fore the Chilean election, was in charge of . CIA clandstine opera-- tions for Latin America. Geneen also testified, in the - final day of hearings on the ITT- Chile affair, that a later ITT offer tithe government of Alp to $1 mi%on was intended for socially constructive projects" in Chile. He said that he hoped the U.S. would come up with a plan to offer Allende technical aid for some other quid pro quo in re- turn for fair compensation for expropriated American business Interests. ITT is claiming $97 million from the federally subsidized 0 v er se a s Private Investment Corp. as a result of Allende's ES/HC- 4ro Allende as president. takeover of the phone company in 1971. ? Church, Sen. Stuart Syming- ton (D-Mo.) and other subcom- mittee members criticized the government Insurance plan. Call- ing ITT's earnings of $450 mil- lion last year "a pretty good profit," Symington said, "I don't see why the taxpayer has to put up this kind of money if in one .'case things go wrong." Symington and Sen. J. William Fulbright (D-Ark.) asked Geneen how .much ITT paid in federal, income taxes on its profit. Geneen called an estimate .of $2 million 'too low" but said he didn't recal the correct .figure and ? would have to suply- it to the subcommittee latter. Syminton charged that big multinational firms like ITT posed a threat to the sovereignty of small countries and were a major factor in increasing anti- Americanism abroad._ 7 . Approved For Release 2001/06/09: CIA-RDP84-00499R001000110001-3 IHs/Hc-,4-4,1 Approved For Releasee2i801/06/0k:Ripi8l704499R00100cklo0001-3 3 APR 1973 Church to Seek CIA Donor an By JERMIAH O'LEARY Star-News Staff Writer Chairman Frank Church, D- Idaho, of the Senate multina- tional corporations subcom- mittee plans to introduce leg; islation that would make it a federal crime for a business organization to contribute money to finance operations of the Central Intelligence Agency. - Church announced this in- tent at the close yesterday of two weeks of hearings into the machinations pf 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 the election and the Chilean economy. ? . But 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 be due to lapses of -time Or memory, or a failure to communicate .among those involved in the sensational ITT documents on ? "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. Gelleell'S testimony was that there were two distinct plias- roved (Filo. Rti1ealsiek2OMOS839 : in MO; One in the summer 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. Broe that Geneen had offered a substantial sum for any gov- ernment plan that would block Allende, although ,he said he did not recall doing it. But Geneen said that money offer "died" when Broe re- jected the offer in July 1970. "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- partments 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, It-N.J., said, "If I heard someone was offering $1 million to defeat rue or make me vote better, I'd take that as a provoca- tion." "That depends on the sec- ond part of the plan," Geneen said. "I don't think I'd get over the first plan," Case replied. CIA-RDP84-00499R001000110001-3 THE CANBERRA TIMES SHAKEAmu-Dy TN ad E o r Releasi4)01/06/09 : Cy\-AKR84409-4S)9R00100(040001-3 :-LJF7 'U.S. New roles for CI WASHINGTON, Monday (AAP). ? The 'Central Intelligence Agency apparently is planning to curtail some of its old activities, not- ably clandestine military operations, and under- take some new ones, such as action against political terrorism and the international drug traffic, the New York Times reported. Since Mr James R. Schlesinger took over as director on February 2 more than 1,000 em- ? ployees of the CIA have received dismissal notices. ? Mr Schlesinger also has authority from President Nixon to reduce man- power as well in the mili- tary intelligence services. During the past two rat's, personnel in the Intelligence establishment as a. whole has been re- duced by about 20% according to reliable esti- mates. , In 1971 there were more than 150,000 people in the military and diplo- matic intelligence services and the CIA. There are . now fewer than' 125,000 according to the estimates, and perhaps no more than 115,000. , The man mainly respon- sible for drafting the Pre- sident's memorandum on reducing duplication of functions and improving efficiency was Mr Schle- singer and he has now been given the authority to put it into effect. Apparently Mr Schle- singer is expected to make the Federal bureaucracy more responsive to the Administration. This objective, has led to charges from some old hands at the CIA that the .agency has been "poli- ticised" by the Nixon Ad in inistration. Mr Schlesinger met this charge, when his CIA appointment was up for confirmation in the Senate, by assuring the Senate armed services committee that he believed absolutely in maintaining the integ- rity and independence of Intelligence estimates. People who know Pre- sident Nixon's attitude say he wants his intelligence information straight even when it is unpalatable. Ther iNgil3rfaVed FtliraR tendency to cut back on CIA paramilitary opera- tion; such as the abortive Bay of Pigs invasion of Cuba in 1961 and the clandestine war still being waged in Laos, operations that have ? sometimes brought the agency as much censure as praise. Operations on a smaller scale, sometimes called ''dirty tricks", reflect the atmosphere of the 1950s, the cold war, period, and seem to? be regarded now as obsolescent. Also with the reduction of', international tensions r eletse 2001/&/09 : HS/HC- Irlap and suspicions, which Is the aim of President Nix- on's dealings with the Soviet Union and China, ? the intelligence community may not need to pay so much attention to the mili- tary capabilities of the major powers. However, there may be new tasks for the intelli- gence community, in an era of negotiation, such as helping to verify nuclear disarmament treaties. ,?? Other new problems for the intelligence agencies include the narcotics traf- fic and political terrorism. CIA-RDP84-00499R001000110001-3 Approved For Releasti2.801/06/09 : CIA-RDP84-00499R0010044,1010001-3 11111,0.11111 H 'OREIGN BROADCAST INFORMATION SERVICE1 111111111111111111111 SPEC AL TRANSLAT ON GDR WEEELY COMMENTS ON NEW CIA DIRECTOR /?Article by Dr Julius Mader; East Berlin, Volksarmee, German,' No 11, March 1973, p 6 _7 .4 April 1973 HS/HC: ved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release2001/06/09 : CIA-RDP84-00499R0010091110001-3 GDR WEEKLY COTENTS ON NEW CTA 1)IR2OT0R /?Article by Dr Julius Mader; No 11, March 1973, p 6 _7 As of December the 220,000 U.S. snoops, spies, and saboteurs have a new boss -- 44- year?old Dr James Rodney Schlesinger. President Nixon had several reasons for appoin- ting this man at precisely this time to the very influential position of CIA director: Schlesinger and Nixon both belong to the reactionary Republican Party. Wall Street Agent As a former professor, Schlesinger. is a. member of'uile East Berlin llolksarmee, German, exclusive American 4-'conomic Society and for many years has maintained close contacts with the millionames of the military-industrial complex through the American Financial Society. Schlesinger is a prominent wall Street agent, whom Nixon in 1969 appointed deputy director of the Office of the Budget, the state monopoly financial control center Ltitj in Washington. aine-e 1971 Schlesinger president4of the primarily militarily-programed Atomic Energy Commission. Santa Nonica Planner of Nassacres Schlesinger is not inexperienced in intelligence work. After 1963 he served for about 6 years as a staff member, i.e.) "director for strategic studies " of the Rand Corporation in Santa Monica, Cclifernia. The Rand jorporation serves as a "think tank" for a--,ressive air force irojecLd. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release4,001/06/09 : CIA-RDP84-00499R00100%100001-3 Here Schlesinger was involved in the completion of studies such as "The Increased Efriciency of Area .pombing" and "The Escalation of the. Use of Atomic Weapons." It is not surprising that Nixon apc(inted Schlesinger CIA director on the very same day that he ordered a ma,-,sive bombing attack on the DIN, Specialist in Subversion With the appointment of this unscrupulous person Nixon has undoubtedly fortified his position regarding a presidential dictatorship. With the help of the CIA, whose sources will of course be kept secret and uncontrolled, Nixon plans to implement the global strategy of U.S. imperialism. Schlesinger is to assist him in various ways. As a strategist of the U.S. Air Force, Schlesinger represents the reactionary military clique in the Pentagon, which is constantly brandishing its sword and playing world policeman. As a militant anti- . communist, Schlesinger was charged with the task of strengthen- ing NATO. He has also been toll to direct the antisocialist activities of NPTO intelligence services, which were expanded in 1972 with no less than 20 billion man's, and to spy on all NATO countries to assess their reliability. As a former economics professor and budget 'expertl Schlesinger is to lead his CTA in the merciless economic war declared by the United States against all c:mpetotors and support the economic expansion of the capitalist world market. Approved For Release 2001/06/09 : CIA-RDP84100499R001000110001-3 Approved For Releast,001/06/09 : CIA-RDP84-00499R001001,40001-3 As a successful manager of the U.S. financial oligarchy, Schlesinger is to insure the increased cooperation of all U.S. and military intelligence apparatuses under his control in antisocialist and antidemocratic subversion. His army of agents still is und,r ord3rs to conduct world- wide ideological diversion, war-inducing espionage, and dangerous sabotage. His agents coups, and thwart U.S. domestic CIA assault troops are prepared are to create unrest, stb.6e popular opposition. The at any hour of the day or night severely to disrupt political detenefor the benefit of U.S. profiteers. At Many Controls With this general directive and Army Intelligence -2'e-rytest} -*gooey* General "alters as deputy director, J.R. Schlesinger has begun his international disruptive activities. Now he is Nixon's "Superman" in mall- positions of control (see sketch) of U.S. state monopoly capitalism: in the Aational Security Council, as chief of heads of all U.S. intelligence agencies, and manager of the intelligence service budget, which in the United Statis amounts to 8 billion dollars annually including ') espionage activities in outer space. However.4 the real international balance of power will sec to it that Nixon's new "man with a dag,7er under his cloakIt does not leave the ranks of the losers. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releasika001/06/09 : CIA-RDP84-00499R00100?010001-3 Committee of the Chiefs of Intelligence Services Chairman: Schlesinger' National Security Council Member: Schlesinger AT 1 ?..!It ES's (1!r" 1-! ir.VAT MflYi-1.1133: OC.1-0,LSWGER f".4.:MO"L77:17i r2R ,fl V(..),7;??.17,,r1..?;(. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Committee for Intelligence Service Finances Director: Schlesinger HS/ININftti4 di N.= YON. TIES Approved For ReleasV,001/06/09% CIA-RDP84-00499R0010042.10001-3 1 APR 19"/3 story behind today's 113miliries...ond tomorrow's. THE CM RIM ITS AWES CE,ITE01. TM MTH STEITES TiE ITIO3LIJ Dy L L PoIcler Pranty, LLS rForce, H3tirel Six weeks before publication, Jack Anderson broke the news on how the CIA tried to get its hands on this book. A revealing book about the "data coordina- tion" agency's key people who unseat governments, "hit and run" in communist areas, do government dirty work, and are truly untouchable. Written by a former liaison officer between the CIA and the Pentagon. A terrifying book? Yes. A nec- essary book? Absolutely. "One of the most important books ever written on the CIA. Fletcher Prouty deftly reveals how the cults of secretism and James Bondism are undermining Ameri- can democracy." ?DEREK SHEARER, contributing editor, Ramparts "Should blow the roof off the CIA's headquarters building. It reveals more of the CIA's history, its clandestine operations and adroit cover-up tactics than any previously published book on the subject, "The Secret Team is a book every thoughtful American interested in public affairs should read, mark, learn and inwardly digest." ?JOHN BARKHAM, Saturday Review Syndicate "A blockbuster.. ,his work might be termed a confession." ?DAVID G. COPELAND, Houston Chronicle' "Not bound by a secrecy oath, he can give us an insider's view of the agency..." - Publishers Weekly $8,95 At your bookseller or by mail: n 1PRENTICE-HALL Englewood Ciitfs, N.J. 07(532 For Release 2001/06/09: CIA-RDP84L00499R001000110001-3 . _ . RADIO-TV MONITORING SERVICE, INC. 3408 WISCONSIN AVENUE. N. W. -:- WASHINGTON. O. C. 20018 -:- 244-8602 PROGRAM: CBS MORNING NEWS DATE: APRIL 2, 1973 STATION OR NETWORK: CBS TELEVISION TIME: 7:00 AM, EST COLONEL FLETCHER PROUTY INTERVIEWED JOHN HART: Before he retired, Air Force Col. Fletcher Prouty spent a lot of his military career as what is called the focal point officer between the Department of Defense and the Central Intelligence Agency. He's written a book which is highly critical of what he calls The Secret Team, which by the way is the title of the book. Since there are frequent references in the book to information in the Pentagon Papers, CBS News corres- pendent Fred Graham, who's been covering the Daniel Ellsberg trial, has joined me for the interview. Col. Prouty, I'd like to ask you first, what is the secret team? COL. FLETCHER PROUTY: You know, there are quite a few people who write about the CIA, and Mr. Dulles has written about' CIA; Lyman Kirkpatrick has written about CIA. The secret team really is the CIA and other parts of the government. The secret team includes, for instance, the participation of the Defense Department, of the White House, offices such as today we have under Dr. Kissinger. I think it's important to point out that in the operational aspects of CIA 'work, the participation of a major part of the government, not just CIA is an important consideration. HART: Well, the secret team's part in such things as the assaSsination of Ngo Dinh Diehm, that sort of thing, the ITT- CIA involvement--alleged involvement?in the election in Chile are pretty well documented. Can you tell us anything about what you think may be going on right now? PROUTY: You mean current operations? HART: That's right, yes. PROUTY:. Actually, most of the things that I knew in current operations ended with my retirement about ten years ago. IIS/HC- yr/1 proved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 ' Approved For Releast,001/06/09 : CIA-RDP84-00499R0010^10001-3 2 Obviously, I've kept in touch with some of the people that are in this business, but some of that might be in the area of con- jecture. I think one of the most important parts is the role of Jim McCord and Howard Hunt in the Watergate case--CIA people, career men, McCord in his area, FBI man--through my friendship with a lawyer, Bernard Fensterwald, we get Mr. McCord moving into a different area in the Watergate thing. This is, you might say, a civilian application of a CIA or secret team type operation. I think it's an example, currently--not of course directed by CIA at this present time, but it's an example of the kind of thing that's done by people under the cloak of secrecy, under security wraps, and in a way that the American people have no way in the world to really know what's going on. FRED GRAHAM: Colonel, could I ask you to elaborate just a minute about--there's been some conjecture in the press about Bernard Fensterwald's role. He is the new lawyer for James McCord, and it's been pointed out that he was--he is a lifelong and at one time very active Democrat, and perhaps one of his motives is to bring out into the open more about the Watergate and the White House's alleged involvement in it. You said you were partially responsible for Mr. Fensterwald being involved here. Can you elaborate as to whether or not that might be true? PROUTY: Well, I've known him for quite a long time. We've discussed this Watergate affair-- HART: You mean Mr. Fensterwald? PRQUTY: Mr. Fensterwald, and it just happens that in my book, I mention an operation in which Jim McCord did quite a bit of work with me and with the Defense Department. As a result, I had the feeling all along that McCord was just not somebody's little wiretapper or debugging man. He's a pro, he's a master at certain things. Allen Dulles introduced him to me.. I have a pretty high regard for his capability. It's much greater, I would say, than the general concept. So I talked to Fensterwald about this, and I believe that the motivation on the part of Bud Fensterwald is purely professional and that he sees that there's much more to be done in the case. I think that's why McCord is working with him now as someone who's willing to get into this case and get to the bottom of things. HART: You seem to know James McCord fairly well. PROUTY: I did at one time. As in the--in one chapter in the book, we write about an airplane that belonged to Mr. Dulles himself, it was his private plane. It was shot down over Russia and a nine-man crew of CIA-Air Force people were captured. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 ' Approved For Releas44301/06/09 : CIA-RDP84-00499R001004V10001-3 3 Mr. Dulles called me to his home that evening and then after a conference with Dick (Vissal?) and others, introduced me to McCord, and said this man is the best man that we have, he's an FBI man, trained in their ways, and trained with the CIA both, he's an expert. So, yes, I've known him since 1959. GRAHAM: Colonel, the incident of the plane being shot down--was that the plane that Jack Downey was on? PROUTY: No, Downy was shot down as part of the Korean War. The one I'm talking about was shot down near Baku. GRAHAM: Well, may I ask you then about Jack Downey's? Of course, Mr. Downey came out from a Chinese prison earlier this month--last month--and he said at that time, without any apparent qualms, he said, I told the Chinese all I knew. Now, how much did that compromise the CIA's activities, to have a CIA operative tell the Chinese all he knew? PROUTY: In the context of what Downey knew during the Korean War and as a young man just out of jail, operating with drop teams over China, I would say that what he knew was good for maybe a week or two weeks in a security sense, but what he knew in terms of the real CIA relationships with the government I think weren't going to hurt things very much. I don't think Downey did anything to hurt the government. GRAHAM: So you don't think Downey did anything repre- hensible in telling the Chinese all he knew? PROUTY: No, one thing that those people in deep security learn is that there are other people involved, other Chinese, let's say, or maybe Koreans, or Americans close into these lines. Now, we try to protect them, of course, try to protect them for par- ticipating in this kind of activity. In that sense you have to guard knowledge. GRAHAM: Let me change the subject. In your book an important point--an allegation that you made, is that the CIA engineered the disclosure of the Pentagon Papers through Daniel Ellsberg, in order to throw favorable light on the CIA's intel- ligence efforts, because the Pentagon Papers do point out that the CIA was quite often right in its warnings that we were being drawn into a quagmire, but Colonel, I was flabbergasted to see your allegation there, in two points, straight out, that Daniel Ellsberg was a CIA agent. What's your source for that statement? PROUTY: Well, you know, Dan Ellsberg called me the other day, more or less reminding me that he had never worked Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Released/A.01/06/09 : CIA-RDP84-00499R001000,10001-3 4 for CIA. A lot of people who work in the peripheral areas-- that's really why I talk in terms of a secret team, are not necessarily paid by the CIA, you might say, or even sometimes don't realize that they are working in support of CIA activi- ties. I wouldn't say either of these applied, but I do know that Ellsberg worked with Lansdale in Viet Nam; I worked with Lansdale for many, many years. I don't think Lansdale really, other than being an Air Force man, ever did much work that wasn't involved with CIA. He was one of their most -- HART: You're talking about retired Major General Edward Lansdale. PROUTY: --Lansdale, right, and I think the affiliation is pretty strong, but the key thing about--going back to your earlier point--the key thing about these papers, the thing that should interest the American people, because they seem to be put forth as a document of the history of Viet Nam, which they are not--these papers are 3,000 pages of narrative, 4,000 documents that they have been culled out. They're not the complete his- tory of even the activities that they portray. Somebody got in there in took out quite a few of those. I used to have file cabinet after file cabinet of it in the JCS, of CIA papers; it was my business to take care of those papers. A lot of them that I knew aren't in these Pentagon Papers. GRAHAM: Well, Colonel, just for the record, though, I called Daniel Ellsberg on the telephone yesterday out in Cali- fornia, and he flatly denies ever having been a CIA agent. Nowy you say in your book flatly he was. Now, which is true? PROUTY: I'd have to talk with him and find out how much he knows about really what he was doing.. GRAHAM: He told me that he denied to you that he was a CIA man and you accepted that. PROUTY: Yes, he told me that--well, he told me that; I didn't answer him. He said that he wasn't a CIA agent, and I think that's pretty simple, itself. Whether he's a CIA employee or whether he's working as a member of the secret team, which is a very close thing-- HART: Well, secret team can cover almost anything, by your description. PROUTY: Ah yes?anything in the area of the CIA opera- tional activities, activities that develop from secret intelli- gence, and are generally in support of clandestine areas, whether Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releasliba001/06/09 : CIA-RDP84-00499R0010041,10001-3 5 clandestine in operational matters, or clandestine in deep intelli- gence. HART: Colonel Prouty, it was never clear to me what intelligence agency you were working for. PROUTY: I was a member of the United States 'Air Force, working for many years in the Office of Secretary of Defense, or in the Office of the Joint Chiefs of Staff. HART: Well the question arose in my mind, as T read your book, which certainly casts some aspersions upon the CIA, many of them, as to what rival agency, whether it was an intelligence agency, or perhaps a military agency, would benefit from this characteriza- tion of the CIA, which comes out very clean as you point out in the Pentagon Papers. Is this a kind of a defense answer? PROUTY: No, that's a good way to put it. I think, per- haps, the best answer is something I read in the news letter-- HART: No, no--excuse me--I mean, by the Department of Defense? is your book an answer PROUTY: .1 think to clarify this, John, the story is that the CIA likes to cover itself as an intelligence organization, and the CIA works very hard to present on one hand that it is an intelli- gence operation, whereas, 80 or 90 per cent of its activities are operational. The Pentagon Papers show that. They talk almost ' nothing about their operations. They usually put them in terms of military operations. They talk primarily of the CIA's intelligence, and at the same time, Mr. Dulles would be delivering an NIL, put out by Sherman Cantor-- HART: And that's no intelligence. PROUTY: Yes. And then he would, at the same time, in the same period of time, be establishing an operation which was almost 100 per cent counter to the NIL, or completely different from that NIL. The Federation of American Scientists, for example, last month, published-- HART: Very quickly, Colonel, we're running out of time. PROUTY: They say that the CIA's best cover is its repu- tation as an intelligence agency. HART: Colonel, I have to interrupt you. We've enjoyed having you, and we'd like to go on, but we've just run out of time. Colonel Fletcher Prouty, thank you very much. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 RA Chl6r?14 Fitk&feetp,e2MORt.CIA-RDP84-00499R00 I cigg,4 1 0001 -3 4435 WISCONSIN AVE. N.W., WASHINGTON, O. C. 20016, 244-3540 FOR PUBLIC AFFAIRS STAFF PROGRAM CBS Morning News ColkTE April 2, 1973 7:00 A.M. STATION UTOP TV CBS Network CITY AN INTERVIEW WITH COLONEL FLETCHER PROUTY Washington, D.C. JOHN HART: Before he retired, Air Force Colonel Fletcher Prouty spent a lot of his military career as what is called the "Focal Point Officer" between the Department of Defense and the Central intelligence Agency. He's written a book which is highly critical of what he calls "The Secret Team" which, by the way, is the title of the book. Since there are frequent references in the book to information in the Pentagon Papers, CBS News correspondent Fred Graham, who's been covering the Daniel Ellsberg trial, has joined me for the interview. Colonel Prouty, I'd like to ask you first what is the secret team? COLONEL FLETCHER PROUTY: Well, you know, there are quite a few people who write about the CIA. Mr. Dulles has written about the CIA. Lyman Kirkpatrick has written about the CIA. The secret team really is the CIA and other parts of the government. The secret team includes the -- for instance, the participation of the Defense Department, of the White House -- of offices such as today we have under Dr. Kissinger. I think it's important to point out that in the operational aspects of CIA work the participation of a major part of the government, not just the CIA, is an important consideration. HART: Well, the secret team's part in such things as the assassi- nation of [name unintelligible] Jim, that sort of thing, the ITT and the CIA involvement -- alleged involvement -- in the elections of Chile are pretty well documented. Can you tell us anything about what you think may be going on right now? COLONEL PROUTY: You mean current operations? HART: That's right. Yes. COLONEL PROUTY: Well act -- actually most of the things that I knew in current operations ended with my retirement about 10 years ago. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 OFFICES IN: WASHINGTON. D. C. ? LOS ANGELES ? NEW YORK ? DETROIT ? NEW ENGLAND ? CHICAGO Approved For Release/IN/06/09 : CIA-RDP84-00499R001000001-3 2 Obviously I've kept in touch with some of the people that are in this business, but some of that might be in the area of conjecture. I think one of the most important parts is the role of Jim McCord and Howard Hunt in the Watergate case -- CIA people, career men. McCord in his area as an FBI man. Through my friendship with a lawyer, Bernard FensterWaql, we got Mr. McCord moving into a different area in the Watergate thing. This is, you might say, a civilian application of a CI -- CIA or secret team type operation. I think it's an example, currently, not of course directed by CIA at this present time, but it's an example of the kind of thing that's done by people under a cloak of secrecy, under security wraps, and in -- in a way that the American people have no way in the world to -- to really know what's going on. FRED GRAHAM: Colonel, could I ask you to elaborate just a minute about the -- there's been some conjecture in the press about Bernard Fensterwahl's role. He is the new lawyer for James McCord, and it has been pointed out that he was -- he is a lifelong and one time very active Democrat, and perhaps one of his motives is to bring. out into the open more about the Watergate and the White House's alleged involvement in it. You said you were partly responsible for Mr. Fensterwahl being involved here. Can you elaborate as to whether or not that might be true? COLONEL PROUTY: Well I've known him for quite a long time. We've discussed this Watergate affair... i GRAHAM: You've known Mr. Fensterwawnhl? COLONEL PROUTY: Mr. Fensterwahl. And it just happens that in my book I mention an operation in which Jim McCord did quite a bit of work with me and with the Defense Department. As a result, I had the feeling all along that McCord is not just somebody's little wiretapper, debugging man, but he's a pro. He's a master at 'certain things. Allen Dulles introduced him to me. I have a pretty high regard for his capability. It's much greater, I would say, than the general concept. So I talked to Fensterwahl about this, and I believe that the motivation on the part of Bud Fensterwahl is purely professional and he sees that there's much more to be done in the case. I think that's why McCord is working with him now as someone who's willing to get into this case and get to the bottom of things. HART: You seem to know James McCord fairly well. COLONEL PROUTY: I did at one time, as in the -- in one chapter in the book we write about an airplane that belonged to Mr. Dulles himself. It was his private plane. It was shot down over Russia, and a nine-man crew of CIA air force people were captured. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releato.2001/06/09 : CIA-RDP84-00499R0010G90 10001-3 3 Mr. Dulles called me to his home that evening and then after a conference with Dick Bissell and others introduced me to McCord and said this man is the best man we have. He's an FBI man trained in their ways and trained with the CIA booth. He's an expert. [Laughter] So, yes, I've known him since 1959. GRAHAM: Colonel, the incident of the plane being shot down, was that the plane that Jack Downey was on? COLONEL PROUTY: No. Downey was shot down in -- as a part of the Korean war. The one I'm talking about was shore -- was shot down near Barcoo (?). GRAHAM: May I ask you, then, about Jack Downey? COLONEL PROUTY: Of course.. .GRAHAM: Mr. Downey came from Chinese prison earlier this month last month -- and he said at that time, without any apparent qualms, he said "I told the Chinese all I knew." Now, how much did that compromise the CIA's activities to have a CIA operative tell the Chinese all he knew? COLONEL PROUTY: In the context of what Downey knew during the Korean War and as a young man just out of Yale operating with drop teams over China, I would say that what he knew was good for maybe a week or two weeks in a security sense, but what he knew in terms of the real CIA relationships with the government I think weren't going to help things very much. I don't think Downey did anything that could hurt the government. GRAHAM: So you don't think Downey did anything reprehensible in telling the Chinese all he knew? COLONEL PROUTY: Well one thing that these people in deep security learn is that there are other people involved, other Chinese let's say, or Americans close in to the lines. Now we try to protect them, of course. We try to protect them for participating in this kind of activity. In that sense you have to guard your knowledge. GRAHAM: Now if I may change the subject, in your book an important point -- allegation -- you make is that the CIA engineered the disclosure of the Pentagon Papers through Daniel Ellsberg in order to throw a favorable light on the CIA's intelligence efforts, because the Pentagon Papers do point out that the CIA was quite out in the right in its warnings that we were being ground [words unintelligible]. But, Colonel,- I was flabbergasted to see your -- your allegation there in two points straight out that Daniel Ellsberg was a CIA agent. What's your source for that statement? Approved For Release 2001/06/09 CIA-RDP84:00499R001000110001-3 Approved For Release /181b1/06/09 : CIA-RDP84-00499R00100008001-3 4 COLONEL PROUTY: Well, you know, Dan Ellsberg called me the other day to more or less remind me that he had never worked for CIA. A lot of people who work in the peripheral areas, and that's really why I talk in terms of the secret team, are not necessarily paid by the CIA, you might say, or even some times don't realize that they're working in support of CIA activities. I wouldn't say either of these applied, but I do know that Ellsberg worked with Lansdale in Vietnam. I worked for Lansdale for many, many years. I don't think Lansdale really, other than being an Air Force man, ever did much work that wasn't involved with CIA. He's one of their most interest.... HART: You're talking about retired Brigadier Gen -- Major General Edward Lansdale? COLONEL PROUTY: Lansdale. Right. And I think the affiliation is pretty strong. But the key thing about -- going back to your earlier point -- the key thing about these papers, the thing that should interest the American people because they seem to be put forth as a document of the history of Vietnam which they are not. These papers are 3,000 pages of narrative, 4,000 documents, but they have been culled out. They're not the complete history of even the activities that they portray. Somebody got in there and took out quite a few of those. I used to have files -- file cabinet after file cabinet -- in the JCS of CIA papers. It was my business to take care of those papers. A lot of them that I knew aren't in these Pentagon Papers. GRAHAM: Colonel, just for the record though, I called Daniel Ellsberg on the telephone yesterday out in California and he flatly denies ever having been a CIA agent. Now you say in your book, flatly, he was. Which is true? COLONEL PROUTY: I'd have to talk with him and find out how much he knows about really what he was doing. GRAHAM: He told me that he denied to you that he was a CIA man and you accepted that. COLONEL PROUTY: Yes, he told me that. Well, he told me that. I didn't answer him. He said that he wasn't a CIA agent, and I think that's pretty simple to solve. Whether he's a CIA employee or whether he's working as a member of the secret team, which is a very close thing. HART: The secret team can cover almost anything by your description. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releatia001/06/09 : CIA-RDP84-00499R001049110001-3 5 COLONEL PROUTY: Yes. Anything in the area of the CIA operational activities -- activities that develop from secret intelliaence and are generally in support of clandestine areas whether clandestine in the operational matters or clandestine in deep intelligence. HART: Colonel Prouty, it was never clear to me what intelligence agency you were working for. COLONEL PROUTY: I was a member of the United States Air Force working for many years in the office of the Secretary of Defense or in the office of the Joint Chiefs of Staff. HART: Well the question rose in my mind as I read your book, which certainly cast some dispersions upon the CIA, many of them, is what rival agency, whether it was an intelligence agency or perhaps a military agency, would benefit from this -- from this characterization of the CIA which comes out very clean, as you point out in the Pentagon Papers. Is this a kind of defense answer? COLONEL PROUTY: [Laughs] That's a good way to put it. I think that perhaps the best answer is something I read in the newletter of HART: No, I mean. Excuse me, but I mean is your book an answer by the Department of Defense? COLONEL PROUTY: I think to clarify this, John, that the story is that the CIA likes to cover itself as an intelligence organization, and the CIA works very hard to present on one hand that it is an intelligence operation whereas 80 or 90 percent of its activities are operational. ? The Pentagon Papers show that they talk almost nothing about their operations. They usually put them in terms of military operations. They talk primarily of the CIA's intelligence. And at the same time Mr. Dulles would be delivering an N.I.E. put out by Sherman Canter's.... HART: National Intelligence Estimate? COLONEL PROUTY: Yes. Then he would at the same time, in the same period of time, be establishing an operation which was almost a hundred percent counter to the N.I.E. or completely different from that N.I.E. The Federation of American Scientists, for example, last month published a... HART: Very quickly, Colonel, we're running out of time. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release,01/06/09 : CIA-RDP84-00499R001000,0001-3 6 COLONEL PROUTY: ...and they say that the CIA's best cover is its -- is its reputation as an intelligence agency. . HART: Colonel, I'll have to interrupt you. We've enjoyed having you and would like to go on, but we've just run out of time. Colonel Feltcher Prouty. Thank you very much, Fred Graham. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release 2001/06/09 : CIA-RDP84-00499R0014100110001-3 Hs APPitlfd THE EVENING STAR and DAILY NEWS VVashIngton, D. C., Friday, April 4.1973 CIA RETIREMENTS ? The Central Intelligence Agency, whose basic retire- ment law includes a numeri- cal ceiling on the number of employes who retire, has ,asked the House Armed Serv- ices Committee to boost the ceiling from 800 to 2,100 for ? the period, 1969-74. ? It says it has a large num- ber of employes Who want to retirebut can't because of the limitation. or Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Relea,.seQ901/06/09--: CIA-RDP84-00499R00-1-0004,10000-1=3? Shift Sought OF CIA Role To Pentagon By Michael Getler ? wilutilogton ['oat Stilt( Wri One of the military's top- ranking intelligence officers has called for a reassertion of the military's dominant role over civilians in the critical business of estimating na- tional security threats to the United States. The case for giving this re- sponsibility to the Pentagon ?rather than the Central In- telligence Agency (CIA) ? and other civilian-dominated intel- ligence agencies?is laid out in a highly unusual article ap- pearing in the April issue of Army magazine. The article is by Army Maj. I Gen. Daniel 0. Graham, cur- rently deputy director for esti- !pates in the Pentagon's De- fense Intelligence Agency (DIA). Graham is scheduled to move over to the CIA on May 1 to join the staff of its new director, James R. Schle- singer. ? Thus, the appearance of Graham's article in public , could indicate that at least part of his new job at the CIA will be to help bring about the return of a major portion of the highly important intelli- gence estimating job to the Pentagon. The estimates of military threats are a major factor in planning the Penta- ' will's annual budget and in the course of U.S. foreig policy. While Graham's article re- flects his. personal judgment, U.S. defense officials say the appearance of the article at this time "was not acciden- tial," implying that it had an official okay. Graham's pending transfer to the CIA has prompted con- cern among some civilian in- telligence officials. They fear that the critical annual Intelligence estimates ? on such things as Soviet missile devel-, See ARMY, Al, Col. 1 ? AZIStoir. ved Fork Trarlisler of CIA Role Sought ' ARMY, From At case estimates can be used to an enemy that exist only on squelch military programs paper. ? ?merits, for example, might just as quickly as to support take technique :on an ,even harder line. them." In other words, he ar-Graham also criticizes the :- of assessing only f' Graham argues, however, goes, overestimating the So- Soviet capabilities rather than ,; ? that the job of judging and de- viet Union's missile capahili- Intentions as well. scribing the various military ties can prematurely kill off threatsProjects by leading bffi- "since World War II the Sovi- the United States U. S. "For example," he says, might face properly belongs to flak to discount the estimates ets haye never, to our know!- the military. And, he states, it entirely. edge, deployed forces,or was the military's own fault? , The inflated intelligence es- fielded hardware as ;as as - through "a series of had over- timates ? also raise problems their total capability permit- estimates later dubbed the for the strategic arms limlta- ted. To. estimate that they bomber gap, missile gap and tions talks where, ha says, would do so with regard to megaton. gap"--that military "the very_ real' possibility" ex- some weapon system in the credibility was shaken and the ists of trading off actual U. S. future would make ,little principal ;lob of figuring out capabilities against those of sense." what the Russians and others were up to gradually was won ?(' ? over by the CIA ? and other agencies. Rutin the past three years, he says, the new Defense In- telligence Agency has "come a long way since the missile gap.". He argues that the quality of military analysis has now improved considerably and that most, though not all, of the military men who use in- telligence have learned not to bend it for their own self-in- terest: or force intelligence an- alysts to do that. "To sum up," he writes, "I , think that the time is ripe for the military profession to reas- sert its. traditional role in the . function of describing military': threats to national security." ' In a key statement that may ' foreshadow some reduction in the CIA's estimating role in favor of ? the Pentagon, Gra- ham writes: "While there will always he a legitimate reason for inde- penderit? judgments from out- side the Department of De- fense'. on. issues of critical im- portance to not decision- makers, there Is no longer a need,. in my judgment, to du- plicate the Defense Intelli- 4. genm Agency's efforts in other agencies." Throughout the article, the two-star general is sharply critical of the military's past history of Usually describing the threat to U.S. security in the worst or scariest' terms. Not only did it produce scepti- cism in government., forcing officials to turn to other intel- ligence agencies, but it actu- ally htirt the military in other ways,,he writes. 90it?IftjklitV46.tteNt 4-00499R001000110001-3 cia 9 Victoi Zorza Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Putting the Military- in Charge of' Intelligence to "coordinate" an estimate produced by military intelligence are quite capa- ble, he says, of reducing it "to the low- est common denominator mush," and to "inoffensive pap." The purpose of this remarkabla con- fession which Graham makes on behalf of his colleagues, if not on his own? for he implies that his own estimates were always right?is not far to seek. He says that by "abusing the intelli- gence process" the military profession- als have "produced the best arguments for taking the responsility for threat description out of military hands," and have caused the decision-makers to turn elsewhere for "objective" assess- ments. It is this distrust of the DIA, which has caused successive Presidents to turn to the CIA, that Graham has' set out to cure. The burden of his argu- ment is that the military can and will now make the right decisions?al- though he does not make it clear why it should be trusted to mend its ways. The decisions about the . defense budget, and about the nature of U.S. forces and weapons development, were always supposed to be made in re- sponse to intelligence estimates of the Soviet "threat." But more often than not they resulted from a mix of budget- An article by the Pentagon general newly appointed to curb the Central Intelligence Agency throws a strong light at the murky fog which envelops the CIA. The article by Maj. Gen. Daniel Gra- ham, which appears in the current is- sues of the Army magazine, strongly urges the transfer of some of the CIA's most important functions to the DIA, the Pentagon's Defense Intelligence Agency. The fact that Graham has been appointed chairman of the inter- agency committee which will ride herd on both the CIA and DIA suggests that the case he presented in his article has been accepted by the White House. What is at issue is not simply a bu- reaucratic conflict between intelli- gence agencies or men ambitious for promotion, nor even a squabble about who is to control the $5 billion spent annually by the "intelligence commu- nity," although all these elements are present in the dispute. The real issue behind the struggle over the reorgani- zation of the CIA concerns the whole direction of U.S. defense policy and, therefore, foreign policy. On the face of it, Graham provides what looks like the first insider's ac- of the perversion of the intelli- gence process by the military in pur- ' ? ? suit of bigger defense appropriations. He admits that military intelligence has often supplied the exaggerated es- timates of the Soviet threat demanded by the defense chiefs?"the bigger the better." And when military intelligence failed to "maximize enemy threats" as instructed, it wai denounced by the brasshats for "wishful thinking." "More often than not," he says, "military intelligence people came to "It is this distrust of the DIA, which has caused successive Presidents to turn to the CIA, that Graham has set out ? to cure." heel under such criticism and stumped hard for the worst-case view." Al- though he believes that this attitude is waning now, "there are Still some old hands" in military intelligence who are so used to yielding to their Pentagon superiors "that they automatically produce threat estimates designed to please, or at least certain not to of, fend." Military planners who profess Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 ary restraints, intelligence estimates, pressures by the military-industrial complex pork-barrel interests and many others. Now a basic change, which is as yet barely perceptible, is taking place un- der the surface. The U.S.-Soviet agree- ments on the limitation of strategic arms, and Mr. Nixon's grand design for a "generation of peace," have brought entirely new factors into military pol- icy. The major weapons programs such as the B-1 bomber and the Trident sub- marine-missile systems which are now pending are V far more costly than any in the past. 'U.S. decisions on V them will depend to a considerable extent on Mr. Nixon's estimate of the effect they have on the strategic balance, and on arms reduction bargaining. ? ? Therefore, if the Pentagon is to have a real influence on the making of de- fense policy, it must wrest control of the intelligence estimates back from the CIA. Even if Graham's apPoint- ment means that his argument about the control of intelligence has been accepted by the White House, the struggle is by no means over. The issues involved in this conflict, which will have a major bearing on strategic arms limitation and disarma- ment, are so momentous that the next battle will be joined almost before the last is over. 43 1973. Victor Zorn HS/I-IC- ferai Approved For 116200 9 : CIA-RDP84-00499Ria0 043010_001-3 a? and Theegiews CROSBY N. BOYD, Chairman of the Board JOHN H. KAUFFMANN, President NEWBOLD?NOYES, Editor A-4 * SATURDAY, April 7, 1973 MILTON WORST Lk unch, Etren 'for ii'fie CIIA It apparently is true that, under the U.S. Code, it is not illegal for a group of corporate executives to sit in a Washing- ton office and conspire, or so- licit federal officials to join a conspiracy, to overthrow the government of Chile. But the United States has a legal commitment under the Charter of the Organization of American States not to inter- fere in the internal affairs of Latin American countries? ' and it is clear that the CIA, ' fired up by In', was trying to do exactly that to keep Salva- dor Allende out of the Chilean presidency. It might be said, of course, that in the end no substantive action was taken. But the tes- timony given to Sen. Frank Church's Foreign Relations subcommittee by CIA and ITT officials.make.s. clear that the reason nothing was done was that no one could devise a plan that they agreed was likely to work. Clearly, the United States, did not desist from interfer- ence in the Chilean election as a matter of policy. In fact, the policy was quite the contrary. What was lacking, as it turned out, was a feasible means. Having become rather cyni- cal folks, we Americans might say to ourselves that this was just another ? ho-ho of those lovable CIA capers, the kind The New Yorker prints funny cartoons about, the kind that got us the Watergate But William Broe, the CIA operative who was at the cen- ter of this Katzenjammer epi- sode, testified that he was act- ing on the authority of the CIA director, Richard Helms. And helms has told the subcommit- tee privately that he never acted on policy matters with- out clear White House instruc- tions. So what we are talking about here are plans drawn up with the knowledge and con- sent of the National Security Council, at the least. And though we have no direct in- formation, it would be naive to think that the President didn't approve, too. ? What makes this story more unsavory than it might be if all we were proposing was to save the Chileans from commu- nism, which we once thought had a certain idealism to it, are the recurring themes of money' and cronyism. The man who got this proj- ect energized is John Mc Cone, paragon of the Anion- can establishment and former head of CIA, who went to Hen- ry Kissinger and to Helms. McCone still is carried as a consultant to the CIA. Did he make his recommen- dation out of patriotism? I'Vlaybe, but it is hard to be- lieve he was not influenced by his membership on the ITT board and his considerable holdings of ITT stock. In fact, he seems also to control large holdings inAnaconda Copper Who could possibly suspect the motives of such a distin- guished establishmentarian? But, let it be said, that if it were anyone else, the ugly words "conflict of interest" ? ethical if not legal ? would certainly be spoken. Indeed, what is so stunning here is that ITT offered the CIA a substantial sum of mon- ey ? much as it offered the Republican party a huge dona- tion when it had an antitrust prosecution pending at the Justice Department ? to in- tercede to protect its property in Chile. Does the AFL-CIO give money to the Labor Depart- ment to influence trade union regulations? Do the pharma- ceutical manufacturers subsi- dize the FDA to get favorable decisions on drugs? It seems to me that the fit- ting response of any self-re- specting public official, when a corporation executive walks into his office waving $1 mil- lion to pay for the overthrow of the government of a friendly country, would be, "Sir, get the hell out of here and don't come back." If he answers by scheduling a meetng to discuss it further, then, Whatever the outcome, he's playing the dirty game. And it's just this game that has made every small country in the world suspicious of us, Certainly, the newest revela- tions will, justifiably, intensify everywhere distrust of what we stand for ed For Release 2001/06/09 :? CIA-RDP84-00499R001000110001-3 Approved For Rele IHS/HCAprevi ' 001 /06/09 : CIA-RDP84-00499R0010014,1K0. EDUARDO FREI ... elected Chile chief SALVADOR ALLENDE ... defeated as Socialist 7 7 01 U.S. Helped Beat Allende in 1964 By Laurence Stern Washington Poet Staff Writer Major intervention by the Central Intelligence Agency and the State Department helped to defeat Socialist Salvador Allende in the 1964 election for president of Chile, according to knowledgeable offi- cial sources. American corporate and governmental involvement against Allende's successful candidacy in 1970 has been the controversial focus of a Senate Foreign Re- lations subcommittee investigation into the activities of U.S. multinational companies abroad. , But the previously undisclosed scale of American support for Christian Demociat Eduardo Frei against Allende six years earlier makes the events of 1970 seem "like a tea party," according to one former intelligence official deeply involved in the 1964 effort. Up to $20 million in U.S. funds reportedly were in- volved, and as many as 100 U.S. personnel. , The story of the American campaign, early in the Johnson administration, to prevent the first Marxist government from corning to power by constitutional means in the Western lIethisphere was pieced to- gether from the accounts of officials who participated in the actions and policies of that period. Cold war theology lingered, and the shock of Fidel Castro's seizure of power in Cuba was still reverberat- ing in Washington. "No more .Fidels" was the guide- See CIA, Al2, Col. I -3 d For Release 2001i00/09::CIA-RbF184-0Ci409.R0010001,1000.1-3 !. ?:? Al2 Approved For ReleaseQ001/06/09 : CIA-RDP84-00499R00100W0001-3 Friday, A pril 6,1973 THE WASHINGTON POST . . . R U.S. Helped eat Allende CIA, From Al post of American foreign policy in Latin America un- der the Alliance for Prog- ress. Washington's romantic zest for political engage- ment in tile Third World had not yet been dimmed by the inconclusive agonies of the Vietnamese war. "U.S. government inter- vention in Chile in 1964 was blatant and almost obscene," said one strategically placed intelligence officer at the time. "We were shipping people off right a iid left, mainly State Department but also CIA with all sorts of covers." One of the key figures in the 1964 intervention was Cord Meyer Jr., the redoubt- able Cold War liberal. He directed the CIA's covert programs to neutralize Com- munist influence in import- ant opinion-molding sectors such as trade unions, farmer and peasant organizations, student activists and com- munication media. At least one conduit for CIA money, the Interna- tional Development Founda- tion, was employed in the 1964 campaign to subsidize Chilean . peasant organiza- tions, according to a former official who was responsible for 'monitoring assistance to Chile from the Agency for International Development. One former member of the IDF board, who quit when he discovered it was financed by the CIA, said: "Some of us had suspected for a long time that the foundation was subsidized by the agency. Then it fi- nally surfaced, and it was impossible to continue serv- ing on it. Nonetheless, what they were doing was conso- nant with President Kenne- dy's policiespibiSiterialithirtsr Reie ?political development.. The foundation is still in existence, although its CIA funding was terminated. It now is financed by AID ap- propriations. Covert financing was ar- ranged for a newspaper friendly to the political in- terests of Christian Demo- crat Frei. "The layout was magnificent. The photo- graphs were superb. It was a Madison Avenue product far above the standards of Chilean publications," re- calledanother State Depart- ment veteran of the cam- paign. One former high-ranking diplomat said CIA opera- tions at the time were by- passing the ambassador's of- fice, despite the 1962 Ken- nedy letter issued by the late President after the Bay of Pigs debacle in Cuba. The letter designated ambassa- dors as the primary author- ity for all U.S. operations within their countries. "I remember discovering one operation within my last week of service in Chile that I didn't know about. The boys in the back room told me it was 'deep cover' and I told them: 'You guys were supposed to tell me everything,' " the former diplomat reminisced. As the 1964 election cam- paign unfolded in Chile, the American intelligence and diplomatic establishments were divided from within over whether to support Frei or a more conservative candidate, Sen. Julio Duran. CIA's traditional line or- ganization, centered in the Western Hemisphere divi- sion and working through the traditional station chief structure, favored Duran in- itially. So did then Ambassa- dor. Charles Cole and the bulk of top State Depart- ment opinion. The remain- I I 61 6 ? hand, leaned toward Frei and 1 the "democratic left" coali- tion he represented. So, re. I portally, did the CIA's Cord ' Meyer. "For a while, we were at war among ourselves on the question of who to supports" recalled a participant in those events. Duran dropped from con- sideration when he lost an important by-election to the Communists, and gradually the entire thrust of Ameri- can support went to Frei. "The State Department maintained a facade of neu- trality and proclaimed it from time to time," accord- ing to one source who plaYed an important Wash- ington role in inter-Ameri- can policy at the time of the election. "Individual officers ? an economic counselor or a political counselor ? would look for opportunities. And 'where it was a question of passing money, forming a newspaper or community de- velopment program, the op- erational people would do the work. "AID found itself sud- . denly overstaffed, looking around for peasant groups or projects for slum dwell- ers," he recalled. "Once you established a policy of build- ing support among peasant groups, government workers and trade unions, the strate- ' ? gies fell into place." ? A former U.S. ambassador ' to Chile has privately esti- mated that the far-flung ? covert program in Frei's be- half cost about $20 million. In contrast, the figure that emerged hi Senate hearings as the amount ITT was will- ing to spend in 1970 to de- feat Allende was $1 million, The number of "special personnel" dispatched at various stages of the cam- paign to Chile from Wash- ington and other posts was calculated by one key Latin American policy maker at the time as being in the range of 100. , AID funds alone were sub- . stantially increased for the year of the crucial election. The first program loan in Latin America, a $40 million general economic develop- " ment 'grant, was approved to 4,.1it/gata P84 -Mt 6a16 III 6 "we ain not want to have a condition of vast unem- ployment as Chile was going into' the election," recalled the former AID official. In addition to U.S. govern- ment ?asistance, Christian- Democratic Party money was being funneled into Chile In Frel's behalf by the Ger- man and Italian Christian Democratic parties. A in on g the important channels were the German Bishops Fund and the Aden- auer Foundation, ivhich were managed by a Belgian Jesuit priest, Roger Vekemans, who has long been a controversial figure in Chile and other Latin American countries. Knowledgeable Americans believe that the European funds had no connection with the CIA programs. But Vekemans was a natural tar- get of criticism by Frei's opponents in the super- heated atmosphere of the time. A 'GitilTD70 LE [IN CHILE ? disruption" in Chile to try to influence R00100QUOtlirle* r. Broe said that, at a meeting with ITT vice president Edward Gerrity in New York, he explored "the feasibility of possible actions by the companies to apply some economic pressure on Chile." Such suggested action, Mr. Brea agreed at the Senate hearings, included withdrawal of technical help and delays in granting credit and in shipping parts. Regarding the CIA's attitude toward such steps, Mr. Broe testified: "These were ideas . . . passed up to me by people who work for me. I went upstairs, I talked to the people upstairs, and I was sent out to check out if they made any sense at all." But Mr. Broe said he got the idea that Mr. Gerrity "did not think it would work" and no action was taken. Charles Meyer, former Assistant Sec- retary of State for Inter-American Af- fairs, told the Senators that the CIA was only exploring options in talks with ITT, and that over-all U. S. policy of nonin- tervention in Chile's affairs was main- tained throughout. Wider investigation. What did all this add up to? The Senate's look at ITT is only part of a broader investigation into the activities of multinational corpo- rations, expected to last several years. But testimony at the hearings could focus the subcommittee's attention more strongly on the part such corporations might play in trying to sway foreign governments and U. S. foreign policy. ITT is one of the largest that will come under Senate scrutiny. With sales of 8.6 billion dollars in 1972, it was the ninth biggest industrial company in the U. S. Its operations in 80 countries em- ploy 428,000 persons. ITT subsidiaries in the U. S. bear such well-known names as Wonder bread, Morton frozen foods, Sheraton hotels, Scotts lawn products, the Hartford Fire Insurance Company. Claim for losses. With the first pub- lished reports of ITT activity in the Chilean election, the Allende Govern- ment broke off talks about compensating ITT for the nationalized telephone com- pany. ITT has filed a claim for 92 mil- lion dollars with the Overseas P-Ivate Investment Corporation, a federal agency that insures investors abroad agairst sev- eral forms of damage, including exp:,,- priation. The claim of ITT is under co!).? sideration by the OPIC. Further testimony by ITT Chairman Geneen was scheduled for arly Still to come was a review by sub- committee to determine if legal ;Aetn should be taken against any wit%esses. Said Senator Church, atter wo wc, 3 of hearings: "It's obvious somebody is lyClg.'r Now COMING OUT of a congressional hearing are new disclosures on a 2%-year-old story of international mystery concerning this question: Did a big multinational corpora- tion, based in the U. S., attempt through the Central Intelligence Agency to block the election in 1970 of Marxist Salvador Allende as President of Chile? The corporation is one of the world's largest?International Telephone & Tele- graph, with connections extending into 80 countries. The CIA's role was detailed in testi- mony, before a special Senate Foreign Relations subcommittee, that offered rare public glimpses into the agency's undercover operations. Fear of nationalization. ITT's big stake in Chile is a telephone company, known as Chiltelco, which reportedly represents an investment of more than 150 million dollars. The company, as ITT had feared, has been nationalized by the Allende Government. Main witnesses before th'e subcommit- tee, headed by Senator Frank Church (Dem.), of Idaho, have been a number of the huge corporation's officials?and William V. Broe, a CIA agent who said he was in charge of "clandestine services" for the agency in the Western Hemi- sphere in 1970. Their testimony largely related to events beginning about midsummer of 1970, when Mr. Allende's chances of winning the Chilean Presidency were being assessed. In the September 4 vot- ing, he gained a plurality. On October 24, the Chilean Congress named him the country's chief executive. Election fund. The testimony was often conflicting. ITT officials acknowl- edged that the corporation had been will- ing to put up a large sum of money to be sent to Chile. But they differed on its intended use. John A. McCone, an ITT director and a former Director of the CIA, said 1 mil- lion dollars was offered "for the purpose of bringing about a coalition against Allende." Another witness said the money was meant for a housing program. A third testified it would have gone for "any program the U. S. might formulate." Funds refused. The CIA's Broe said he was selected by Richard Helms, then CIA Director, as contact man with ITT. Regarding a meeting with Harold S. 66 ?UPI Photo ITT's Geneen. Witnesses said he tried to influence vote in Chile. Geneen, ITT board chairman, Mr. Broe testified: "I told him we could not absorb the funds ? and serve as a funding channel. I also told him that the United States Gov- ernment was not supporting any candi- date in the Chilean election." The CIA came up with this sugges- tion, however, in the period preceding the final selection of Mr. Allende: that U. S.-owned firms work for "economic ?Wide World Photo CIA's Broe. He told about sugges- tions to disrupt Chilean economy. Release 2001/06/09 : CIA-RDP84-00499R001000110003 -3 NEWS & WORLD !'ORT. 119rP 9, ?973 LE1UFCF1 TOJUVK Approvadii6orRele -mia-2n01/06/09 : ClhooDP84-00499R00100111A0001-3 CIA VOnorBan By JERMIAII O'LEARY Star-News Staff Writer Chairman Frank Church, D- Idaho, of the Senate multina- tional corporations subcom- mittee plans to introduce leg- islation that would make it a federal crime for a business organization to contribute money to finance operations of the Central Intelligence Agency. Church announced this in- tent at the close yesterday of two weeks of hearings into the machinations of ITT Corp. ,with CIA and other gevern- 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 the election and the Chilean economy. But 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 be due to lapses of time or memory, or a failure to communicate among those involved in the sensational ITT documents on Chile. HS/HC- kr? pproved For Release 2001/ "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." Ilarold 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 summer 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. Broe that Geneen had offered a substantial sum for any gov- ernment plan that would block Allende, Although he said he did not recall doing it. But Geneen said that money offer "died" when Broe re- jected the offer in July 1970. "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- partments 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 cdalition solu- tion. The $1 million figure was only a measurement of our willingness to join any gov- ernment program." Sen. Clifford Case, R-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 provoca- tion." ? "That depends on the sec- ond part of the plan," Geneen said. "I don't think I'd get over 610/ie fietiORCIRIA*-0049t1R001000116001-3 THE EVENING STAR and DAILY NEWS Washington, D. C., Tuesday, April 3, 1973 ne vvorse rungs %veil Tile beller nized, according to die testimony, at least two meetings with representatives pAckgmpeprr BiaesnkasofAzmaconda, Ken- ii\elyuen4?livAYRVONOSiwtfiPlAbcgrfcakt R-ItitO?tlettoaaia flies like United Fruit and Jersey Stan- week ago, unraveled flie following chro- dard often intervened in the internal nology of collaboration. politics of South American countries. Sometimes, to help promote their for- eign interests, the companies could count on the diplomatic and military le- verage of the U.S. Government. Those days are long past. But executives of the International Telephone and Telegraph Corp., the largest U.S. conglomerate, apparently yearn to carry on in the not- so-grand old tradition. The testimony in two weeks of hearings by the Senate Subcommittee on Multinational Corpo- rations, which showed how ITT and the Central Intelligence Agency conferred on ways to block the election of Marxist Salvador Allende in Chile 2'A years ago, provided enough juicy material to keep any Yankee-go-home propagandist busy for years. Realizing that the company was JULY 16, 1970. Broe met with ITT Chairman Harold Geneen in Washing- ton. The meeting had been proposed to Richard Helms, then the CIA chief, by John McCone, an ITT director and for- mer head of the CIA. Broe said that Ge- neen told him that ITT was willing to put up a "substantial fund" to support a conservative candidate for President in the elections in Chile to be held Sept. 4. According to Broe, at that time the CIA declined the proposal because the U.S. was not supporting a candidate in the Chilean election. SEPT. 4. Allende won a 36% plurality but still had to face a run-off vote in the Chilean Congress Oct. 24. SEPT. 9-10. Geneen told McCone at an ITT board meeting that he was willing to put up $1,000,000 for the U.S. Gov- THE SERVICE DIVISION about to have its $150 million invest- eminent to use in Chile. A few days ment in Chile's telephone system na- later, McCone made offers to both Hen- tionalized, ITT executives worked over- ry Kissinger and Helms of "up to time to devise ways of stopping Allende $1,000,000 to support any Government and tried to donate, through CIA opera- plan for the purpose of bringing about a tives, large amounts of money for an coalition of the opposition to Allende." anti-Allende coalition. The company McCone did not receive an answer. management even considered the old SEPT. 29. Broe then made what insurgent Communist Party strategy amounted to a counterproposal to ITT against troubled capitalist states: fo- Senior Vice President Edward Gerrity ment economic chaos on the principle Jr. Broe said that he discussed with that the worse things get, the better. Gerrity "the feasibility of possible ac- Though ITT and CIA officials deny that tions by U.S. companies designed to cre- any of these plans were ever carried out, ate or accelerate economic instability in such schemes ran against the stated U.S. Chile." Broe mentioned such measures policy of non-intervention in Chile and, as the cancellation of credit lines to in light of the CIA's involvement, raise Chile by American banks, a slowdown doubts as to how firm the policy was. in delivery of machinery spare parts, ac- In an unprecedented move, the sub- tion to force savings and loan institu- committee heard and released the tions to close down, and the withdrawal closed-session testimony of the CIA's of technical assistance. Broe gave Ger- chief of clandestine operations in the rity a list of American companies that Western Hemisphere, William Broe. (It might help in such a plan, "providing was the first time that a CIA agent has the economic course was feasible." Ger- Inc. and Ralston Purina. Thecoritchae.rPcom- panies were not willing to go along with such adventurism. OCT. 24. Allende was elected by the Chilean Congress. Later he nationalized many U.S. companies, including M"s Chilean telephone subsidiary. During the hearings, several wit- nesses gave conflicting versions of the purpose of the million-dollar offer. Con- trary to McCone's testimony that the money was to be used for an anti-Allen- de coalition, Gerrity maintained that it was for constructive programs, such as housing and social development, "to make Allende happy about the Ameri- can presence." Later, Charles A. Meyer, then Assistant Secretary of State for In- ter-American Affairs, repeatedly em- phasized that the U.S. policy towardi Chile during this period was one of strict non-intervention--a statement that seemed to conflict with Broe's testimony about CIA suggestions to create econom- ic disturbances in Chile. "It is obvious," said Subcommittee Chairman Frank Church, "that some- body is lying." Members of the subcom- mittee will review the transcripts of the testimony to decide whether to send them to the Justice Department for pos- sible charges of perjury. For either private companies or the U.S. Government to intervene in a free election is, as Church said, "very im- proper." Beyond the question of propri- ety, the troubling aspect of the ITT af- fair is that it will fan suspicions in foreign countries that multinational corporations commonly use their finan- cial powers to influence foreign political affairs directly. To date, there is little public evidence that other companies have in recent years tried to meddle as ITT sought to do. Senator Charles Percy noted during the hearings that corporations have an obligation to protect their assets and the interests of their shareholders. But, he said, such protection must not improp- erly involve the corporation in the inter- nal affairs of the host country or contra- dict U.S. foreign policy. In Chile, most of the U.S. corporations?except ITT ?have followed that standard, even at a loss. Ford, for instance, simply pulled out of Chile, wrote off a $16 million loss and settled for a $900,000 payment from the federally financed Overseas Private Investment Corp. (cow), which insures multinational corporations against expropriation. ITT now stands to lose whatever compensation Allende had promised to pay; and unless the company can disprove the mounting ev- idence that its loss resulted from its at- tempt to interfere in Chilean politics, it may also lose its $92.5 million claim with the ?Pic. To knock down that ev- idence will be Harold Geneen's task in testi ficAtifiroVedoFtits1401*heSel21:101 /08109i4 bpAIRDputroo2f1Yerayotioto11tirtthis week' 18 1 HS/I-IC-VD TIME, APRIL 9. 1973 Worsporma......arawort. 2 APR 1973 ? PEOPLE OF THE WEEKA Approved For Reledg* 2001/06/09 : CIA-RDP84-00499R00144011L0601-3. ? SH KO G UP THE CIA "NIX UREAUC ACY T ATEST GOVERNMENT operation to feel L. the effects of a shake-up in its estab- lished bureaucracy is the supersecret Central Intelligence Agency. The man behind what promises to be a sweeping reorganization is the CIA's new Director, James H. Schlesinger, who has had this tag pinned on him inside Government circles: "President Nixon's bureaucracy tamer." "Tough guy." Mr. Schlesinger came to the CIA post from the Chairmanship of the Atomic Energy Commission, where he was also looked on as ...tough guy." Says one Government source: ? "At the AEC he turned things upside down at first. Everyone there was up tight. But, in the end, his overhaul improved morale at AEC tremendously. "Now he has started out the same way at CIA?and it looks as if he will get the same results." As with most activities of the CIA, the Schlesinger-ordered shake-up of per- sonnel is being conducted pretty much under wraps. No one in authority is saying?if any- one really knows?bow many of the esti- mated 15,000 on the payroll will be squeezed out before it is all Over. Estimates of a 10 per cent cut have been reported. Knowledgeable sources say that is too high?but it is acknowl- edged that the reduction now under way is the biggest ever at the CIA, which has had others in the past. Improvements ahead. The overhaul is across the board?young and old, peo- ple from all areas of the agency. Every personnel folder is being read. The four main directorates in the agency ?administration, plans, science and in- telligence?are each handling the me- chanics of review ill their divisions. Some tasks are being eliminated as outmoded, no longer needed in the changing intelligence ?vorld ()I' today. But, at the same time, the word is out at CIA that the shake-up is designed to improve American in gathering ?not scuttle it. A slogan that began to be heard with Mr. Schlesinger's Jake- Over was: "Intelligence is Our first Nue of defense." After the initial shock of the reduc-. lions, some CIA officials began to take second looks?and decided that what they saw was laAt; HS/HC-9,r0 ever said the agency would be strength- ened by getting rid of fat and deadwood ?and didn't mind as long as it didn't include him?was right." The critics' view. Not everyone, of course, felt that way. Fears were ex- pressed that the cuts will result in reduc- ing the effectiveness of the CIA, and that intelligence work as a career will be less of an attraction. Said one such critic: "Whoeyq succeeds Schlesinger will have the- job of building the organi- zation back up to be able to do its job." While some outsiders have been named to high posts?notably Generals Daniel Graham of the Army and Lew Allen of the Air Force?high-rank- ing intelligence profession- als are still ill top spots, and a number are being. promoted. For example, the vet- eran William E. Colby, who had been high in the hierarchy as executive di- rector, has been moved up to deputy director for plans. A hard worker, Mr. Schlesinger, 44, was named to the CIA post by Mr. Nixon in December, re- placing It ichard lidl ins, who was appointed Ambas- sador to Iran. The new Director is described as a hard worker, usually on the job from 7 a.m. to 7 p.m. But, an official says, he does not demand that kind of day from those Nvlio work for him. Instead, this source explains: "He makes it clear that vhat he wants is results, not time-clock punchers. As long as the work is done in time, he doesn't bother too much about the hours spent on it." Mr. Schlesinger was a SUSUMU CUM laud(' graduate of Harvard, and got his Ph.D. degree there in 1956. After a year of travel in Europe and parts of Africa and Asia, lie went to the University of Virginia to teach eco- nomics for eight years. Publication of a hook, "The Political EP" him an offer of a job from the Rand Corporation, where he eventually became director of strategic studies. . Mr.?Schlesinger's first post in the Nix- on Administration, beginning in 1969, was assistant director of the Office of Management and Budget. In 1971 he rest; to the Chairmanship of the AEC. Changing atomic policy. Mr. Schles- inger ordered a drastic reorganization of the AEC, resulting in a cutback of its high-level staff. But that wasn't his only impact on the agency. One new job he created was that of ?USN&WR Photo Mr. Schlesinger, as new chief, is presiding over CIA reorganization and biggest-ever cuts in .its payroll. assistant general manager for environ- mental and safety affairs. And he is credited w?ith making the AEC more con- scious of the interests of consovationists in its planning for new uses of atomic energy. "Very fast study." Mr. Schlesinger came to the CIA without background in pU re intelligence \Mil:, 'although he has had much experience in the wide field of world strategy. One official describes him this ?vay: "lie is a very fast study who does his 110111CWOrk." One hit Of 110111('WOrk many associates believe lie learned long ago: How to trans- form a bureaucracy into a well-tuned machine. That apparently was the job President Nixon felt was needed at the le?ala '2 00 Vida* :(6M41508Viiiji.49kitAbh qbb _oi ._01-3 Approved For Release ;291/06/09 : CIA-RDP84-00499R001000110001-3 sof fie VOA le 71 S n Oen ? 2 parft 10 3 .1.A. Apparently Plans Cut in Some Covert Roles By CLIFTON DANIEL Speolat to The New leek Times WASHINGTON, April 1? Under its new director the 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 Intelligence services. These are the Defense Intelligence Agency and the National Secu- rity Agency, which Mr. Schle- singer oversees but does not operate. 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- compdtible 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 Continued on Page. 1, Column 1 Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release 2e2)/06/09 : CIA-RDP84-00499R001000110001-3 C.I.A. MAY CURB SOME ACTIVITIES Continued From Page I, Col. 7 intelligence community. The man principally respon- sible for drafting the Presi- dent's memorandum was Mr. Schlesinger and he has now been given the authority to 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 G expected to do in the Intel- litence community what other recent Presidential 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 't; attitude say he wants ihis intelligence information straight even when it is un- palatable. However, the White House 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 aid recently. That Discouraging Thud - "The thud it makes when It fails 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 intelli- gence 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 America will make every oth- er nation's conflict our own, or make every other nation's future our responsibility, or presume to tell the people 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"?reflect the atmosphere of the nineteen-fifties, the cold war period, and seem to he 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 powers. However, there may be new tasks for the intelligence com- munity in an era of negotia- tion. For 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 intelligence-collectint de- vices to see whether the other side is abiding by the treaty. This is the '"open skies" policy proposed by President Dwight D. Eisehnower at the Geneva summit conference in 1955 and rejected at that time by 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 diplomatic 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?will not "invest" funds in the affairs of third coun- tries on occasion. Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releasts12001/06/09 : CIA-RDP84-00499R001004,1010001L3 3 Sunday, A pail; 1973 . . THE WASHINGTON POST .* TT and CIA on C By Laurence Stern Wanhington Poet Stet Writer 'The most lurid of Marxist 1) p a ganda parables against e excesses of U.S. invert. sm couldn't have been lotted with more heavy- Aided caricature than the -2 saga in Chile, as it has afolded the past two weeks a Senate hearing room. 'There was the giant -nerican corporation con- -Ong with the Central In- lligence Agency to subvert clandestine economic war- re an elected left-wing evernment in Latin Amer- a. 'There, also, was a senior gure of the American in- :strial elite, John A. Mc- 3ne, serving as go-between ^ the CIA he once headed ed International Telephone id Telegraph on whose ard he sits. There was, furthermore, spectacle of ITT execu- Ives lobbying officials of ie National Security Conn- 1, the top-secret policy arm 7 the White House through lich the President directs merican - foreign opera- ns. The case has propelled ito the limelight as CIA's lerational contact eman ith ITT a government' off'- : minc- 9(et 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 multinational and con- glomerate scale of opera- tions. ITT,, the nation's eighth largest industrial tor- ? poration, functions as a global subgovernment more than 70 countries. It reported $8.5 billion in sales and revenues during 1972. Starting with the modest base of the Virgin Islands telephone company at the beginning of the 1920s, ITT rapidly branched out around the world under the dy- namic management of a Danish enterpreneur, Sosth- ,enes Behn, who became a naturalized American citi- zen when the United States bought the Virgin Islands from Denmark in 1917. Corporate Involvement By .World War II, accord- ing to Justice Department records, a German subsidi- ary of ITT was an owner of the company that produced Sem ,JOHN, McCONE . . . interested in Chile the Luftwaffe's Focke-Wulff fighter while an American subsidiary was building the "Huff-Duff" U-boat detector for the U. S. Navy. A f t er the war ITT collected several million dollars in damages from the U.S. Foreign Claims Settlentent Commis- sion for allied bombing dam- age to the Focke-Wulff plants, according to govern? - ment records. And so ITT's problems in Chile came against a back- WILLIAM V. BROE , . . . pushed into limelight ground of broad corporate involvement in international 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. But it is by no means a picture of clear-cut collu- roved-For Release 2901/06409.:CIA-RDP84-00499R0,0109.0'W091.3 lance 07-,f,MT.1477., f,V3,1 4-1 L HAROLD S. GENE . . . painted into cor don. In fact, there was evidence of disarray v the administration t( the assumption of pow September, 1970, of th( elected Marxist goverr In the Western Hemisr as the administratio Chilean President Sal Allende was called. The professed positi the Nixon administrati ward Allende's electio one of strict neutrality was reiterated durin p. , Assistant Secretary of State tions that might be carried istration can only De a suo-.,J for Inter-American Affairs out without the public sane- ject of speculation. The Sen-,? , Charles Meyer _and. foz. _,_? tion of the administration. ate subce nittee does not, , AppmpachvoroR-vmaminvolicwin? piihRtc04-qp.49943zoo too9,2,1001m assibil-,' k ward Korry. , strument because of the pre- ity that i can compel the Yet CIA operative Broe vious approaches of McCone testimony of Kissinger, the testified under oath that his and ITT Chairman Harold man who has all the an?, "operational" contacts with S. Geneen, prior to Al- swers. ITT, which included agency- lende's popular election: But Kissinger, 12 days af.,,, ' drafted and approved plans ter. Allende's popular eleow for sabotage of the Chilean ITT, as Broe testified, tion, is on record as having ?'., ? was the only company that economy, were carried out " expressed serious concern'. with the complete approval contacted the agency and 'over the impact of a Chilean + expressed an interest in the of his superiors. Marxist government on stir.. current situation in Chile." Explore Options rounding countries. His superior at the time ? was CIA Director Richard - M. Helms, who reports to the National Security Coun- cil which in turn reports di- rectly to the President ? through national security ? adviser Henry A. Kissinger. It is inconceivable to those familiar with.' the , tightly managed White House national security sYs- tern that such a mission as Broe conducted with ITT of- ficials in late September, 1970?before the Chilean congress met to ratify Al- lende's popular election? was without full NSC ap- proval. How did this square with the policy of neutrality to which both Korry and Meyer attested? Meyer sug- gested that there was no in- consistency. The govern-. ment maintained the right, he said, to explore options. Subcommittee members reacted with skeptical grum- bles. Had ITT decided to carry out Broe's suggestions, 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 in final balloting, In his conversations with ITT Vice President Edward Gerrity, Broe told the sub- committee, "it was under- stood that he was going to be doing it and CIA was not involved. It was ITT which was looking into the thing." That testimony was cru- cial, for it may have illumi- nated the National Security Council decision in early September, 1970, for dealing The administration may In the case of ITT, the re well have reacted with some cord suggests that Geneen, i trauma to Allende's popular McCone and other corporat&, election victory since, ac- executives had an access to' ': cording to the testimony, top administration officials CIA polls have inaccurately that has created at least a4' predicted the election of his strong isemblance of influ-,J opponent, Jorge Alessandri, ence over policy, candidate of the conserva- / tive National Party. At the time it was pushing The CIA's rejection of for intervention in Chile, ITT was campaigning ac- viously July for intervention Geneen's overtures the Tore- tively in Washington against in Chile could have resulted a pending antitrust action,), from the agency's misread- calling for it to divest itself. _ ing of Allende's election of the $2 billion Hartford In- prospects. By its own testi- surance Co. mony, Geneen's proffer of ITT officials were, ins-: ? "a substantial fund" to? fi- some cases, dealing with the:4 nance an anti-Allende plan same administration men on ' was unattractive to the CIA. the two separate matters. As- What the testimonial pat. it turned out, ITT won its'' tern suggests is that as po- fight on the Hartford case' litical events crystallized in when antitrust chief Rich-C. Chile, the CIA and ITT ard McLaren, now a federal were pursuing increasingly judge, reversed himself and'. congruent goals: further roil- withdrew opposition to thei, lag Chile's already dis- merger. . , -.,. rupted economy, trying to Things may not end up sq promote the prospects of Al- happily for ITT in the Chi-1' essandri in the congres- lean affair. Its claim Upont. sional election run off, ulti- the Overseas Private Invest:Z : mately seeking to block Al- ment Corp. (OPIC), a goy.' lende's accession as presi- ernment agency, for . $92.5 . dent. million in confiscation 1 losses is now in doubt. ?? Kissinger Concern .,.. ITT was pursuing its own Geneen's position in the, . corporate welfare in view of company has not been to- Allende's pre-election vOws tally enhanced by the reve- . to nationalize basic indus- lations on Capitol Hill or" tries, as well as the ITT- the past few weeks. owned Chilean telephone ITT's chairman is due to.- company. The CIA was pur- testify on his dealings with,, suing a softly stated man- the administration and CIA,, date of the NSC to see what over the Chilean affair. 1Iis? It could do to stave off the position, as a result of the., specter of a new Marxist ad- testimony of McCone, Broe ministration in the politi. and ITT executives, is some-,, cally -volatile southern hemi- what analogous to that of ai, sphere. man standing M a corner Just how high the man- -surrounded by wet paint. 1 1.,... Appithvectrearifteldasd400,11,0?109 CIA-RDP84-00499R0b1000110001-3 election in the Chilean con- ' gress the following month as the hemisphere's first or. " 1 Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 TAB Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved mhr Panel By OSWALD JOHNSTON Star-News Staff Writer James R. Schlesinger, , the . new director of Central Intelli- gence, goes before a Congres- s? sional committee today in his first formal legislative appear- ance since reports began to ? circulate) of a major shakeup at the CIA. .' ? Schlesinger's testimony be- ' ? fore the House Armed Serv- ices watchdog subcommittee on the Central Intelligence Agency will, as usual,, be se- ` c r e t. But congressional sources are not hiding their ? expectations that questioning ? will focus on two reported as- pects of an ongoing purge of CIA ranks: ? That the White Howe has . ordered a concerted ideologi- cal attack on the supposedly liberal bias of the CIA's small but elite Office of National'Es- timates, which is nominally responsible for producing the worldwide intelligence assess- ments upon which President Nixon, Henry A..Kissinger and the 'National Security Council base policy decisions. ? That Schlesinger is simulta- neously implementing a White House directive first handed down 16 months ago to stream- line both budget and manpow- er resources in the nation's unwielding $5 billion-a-year in- telligence operation. Ostensibly, the question be- fore the subcommittee chair- man, Lucien N. Nedzi, D-IVfich., is whether Congress should raise from 800 to 2,100 the legal ceiling on the num- ber of CIA employes who may, claim retirement benefits and ? leave office after ' 20 years ' service. But Nedzi left no doubt that Schlesinger will alsobe quizzed on the scope and mo- tive of the intelligence agency purge. "Undoubtedly, ques- tions will be asked about how many men are leaving ? and why," Nedzi said in an inter- view yesterday. Speculations aside, it is still not clear how far Schlesinger's ? new broom will sweep, and to what end. Varying %ports have the 15,000-man agency facing a cutback of from 1,500 to 1,800 e.mployes. One report, which C ?45thiesinger CIA officials sought to mini- mize, said the agency eventu- ally would be cleared of as many as 3,000 underachievers in annual installments of. 1,000. At the same time, some agency veterans close to outgoing Director Richard M. Helms, whose own departure a few m,onths short of retire- ment age gave rise to specula- tion the White House was dis- enchanted with his perform- ance, were reportedly asked to leave on only a few hours no- tice. Sources close to the intelli- gence community are appalled by what one former CIA'offi- cial termed the "peculiar bru- tality" ofSchlesisnger's house-cleaning, and apprehen- sive over what it may mean., But they are far from certain.' One view, expressed by a source of long eperience in the intelligence community, sees a conscious effort to punish the CIA's intelligence assessors by ? cutting back their influencence , and enhancing that of the Pen- tagon's rival Defense Intelli- gence Agency. In this view, the CIA purge JAMES R. SCHLESINGER now in progress was foresha- dowed by the administration's bureaucratic assault earlier this year on the Arms Control and Disarmament Agency, which in quick sucession lost one-third of its budget, 12 staff positions, most of its frontline veteran officials and much of its influence in the new rounds ntroversial CI Shakeup ? of strategic arms limitation talks with the Russians. It is pointed out that the CIA estimators for years now have backed the longstanding disar? mament argument that on-site inspection of Soviet missile fa- cilities is not necessary to en- sure that the Russians are liv- ? ing up to a disarmament' ! agreement. At the other extreme, one former CIA official dismissed the .whole Schlesinger exercise as "a phony operation." So ? far, this source argued, there Is no evidence that any really Important changes are being made. . One indication this ma ir be so is the fact that the newly appointed deputy director of ? i plans?the man n charge of the CIA's worldwide clandes- tine "department of dirty . tricks" operations?is William E. . Colby, the former bead of the American Pacification ? Program in South Vietnam. Despite the CIA's good repu- tation from the Pentagon Pa- . pers as a gloomy but accurate forecaster of events in Indo- rchinar it was Colby's side of the agency's operations that in large part engineered the orig- inal U.S. involvement in Laos and South Vietnam during the early 1960's. More generally, however, ? speculation is focused on the CIA's Intelligence evaluation function, rather than on the ? Operations side. In the main, informed sources are resisting the suggestion that the White House would deliberately at- tack the agency's intelligence estimators simply because the reports they have produced were unwelcome: "This is our last h ? ? ? ," one source said. "A b? ? y inde- pendent enough to say a policy ,is no good if that is what it believes." At the same time, many in- telligence experts concede that the Office of National Esti- ? mates is "old and tired," and out of touch with the needs of , ? Kissinger and his National Se- =ray Council specialists. These close observers of the Intelligence scene note that the Office of National Estimates consists of at most 30 senior officials in the agency. It re- ? mains an elite corps, so far untouched by the purge, and there are no Immediate signs that its chairman, John Hu- izenga, is being asked to retire prematurely.' ? In the 'main, they see the shakeup as motivated more by ? efficiency than by ideology. Helms, the former CIA director, received a mandate to streamline the intelligence community in November 1971, when Nixon announced a re- organization plan of which Schlesinger, then in the Budg- et Bureau, was the main au- thor. On the surface, the plan gave Helms sweeping authori- ty over the whole intelligence community. But during his re- maining year as director, Helms did virtually nothing on this missoin, and his inaction , is viewed as a key reason for his premature departure. There are some signs Helms quietly resented this turn of events and felt he was never ? given the White House back- ing he believed would be nec- essary to tarry out the re- ? sponsibility he was given. It is an open secret that some 85 Percent of the esti- mated $4.5 billion to $5 billion intelligence budget each year' is under the direct control of the Pentagon. But Helms, it is' pointed out by former inti- mates, was never given au- thority to go up against the Defense secretary. Nevertheless, these sources scoff at speculation that the recent CIA recruitment of two highly regarded Pentagon in- telligence analysts ? Maj. Gen. Daniel 0. Graham of the Army and Maj. Gen. Lew Al- - len of the Air Force is a means of putting ideological pressure on the Office of Na- tional Estimates. Graham and Allen, it is pointed out, have been named 'to purely managerial positions on an inter-agency Intelligence Resourpe Advisory Commit- tee, a 'board set up in the Schlesinger-Nixon intelligende reorganization 'of ? 1971, but Which rarely functioned. ' pproovr For Release..20.01/azinti THE EYENTIILY "YVAIV i litigEiP84.-WO499R00100114 'wed -3 ? ? Washington, D. C., Friday, March 30, 1513 Approved For Releasto.2001/06/09 : CIA-RDP84-00499R001004,410001-3 ved For Rel THE EVENING STAR and DAILY NEWS 6-3 Washington, D. C., Friday, March 30, 1973 CIA Sent 'Ideas' ige to ITT ? By JEREMIAH O'LEARY Star-News Staff Writer The Central Intelligence Agency has admitted, through the testimony of one of its agents to Senate investiga- tors, that it generated and passed to ITT a series of ideas for disrupting the economy of Chile during the crucial Chil- ean election period in 1970. William V. Broe, former chief of CIA clandestine ser- vices in the Western Hemis- phere, told the Senate sub- committee on multinational corporations in testimony re- leased yesterday: "They were ideas staffed, they were passed up to me by ? people who work.- for me. I went upstairs (to his CIA su- periors) and I was sent out to check if they made any sense at all." Previous testimony by Broe revealed that he took the eco- nomic disruption ideas and a list of American firms in Chile to New York on Sept. 29, 1970 and presented them to ITT Senior Vice President Edward Gerrity. The purpose of do- ing this, Broe said, was to determine whether the ideas were feasible. But Broe told the subcom- mittee headed by Sen. Frank Church, D-Idaho, that Gerrity was negative toward the pro- sals and said the ideas make aneivis committee released the sec- ond phase of Broe's testimony yesterday, it was unclear who had generated the plans and whether the New York meet- ing was a serious discussion of action that might be taken. Included in the plans Broe suggested to the ITT executive were: that banks should delay or not renew credits; that companies drag their feet on spending, making deliveries or shipping spare parts; that preSsure be created on sav- ings and loan institutions so they would, have to close and that all technical assistance be withdrawn from Chile. Brae also testified about other meetings with ITT ex- ecutives, including one ITT President Harold S. Geneen in Washington on July 16, 1970, at which he said Geneen of- fered a substantial but un- specified fund to support any U.S. government plan to de- feat Marxist presidential can- didate Salvador Alien d e. Broe's testimony was that Geneen said this money was , to be used to back the cam- paign of conservative candi- date Jorge Alessandri. Broe testified that he rejected the offer, just as Gerrity did not follow through with later CIA proposals when Allende fin- ished first in the popular election and was on the verge of a runoff victory, in the Chi- 4180443011004000119001-3 1 Approved For Releasci.2001/06/09 : CIA-RDP84-00499R0010W10001-3 NV:# YORK, N.Y.' VIS MAR 2 1 1973 E - 2,129,909 By JEFFREY ANTEVIL Washington, March 20 (NEWS Bureau)?A vice president of Inter- national Telephone & Telegraph Corp. testified today that company presi- dent Harold S. Geneen met with a top government spy and got Central In- telligence Agency approval for measures aimed at trying to keep Marxist Salvador Allende from becoming president of Chile in 1970. The ITT official, William R. Merriam, who headed the firm's Washington office, told skeptical senators on a Foreign Relations subcommittee that ITT had committed no "improper actions" and did not actually work with the CIA to keep Allende out of power. Merriam said, however, that Ceneen met shortly before the Chilean election with William V. Broe, the CIA's chief of Clandes- tine genius tor tne Western Hemisphere, to discuss ITT's fears that Allende would national- ize its Chile Telephone Company if he became president. ITT later got Broe's approval of a list, sub- mitted by two ITT officials in Latin America, of recommended steps to keep Allende from taking power, Merriam said. Met With-.Nixon Men. . He also confirmed, that he, Cencen .and other ITT officials held a series of meetings in 1970 with top administration leaders, including Attorney General John Mitchell, Treasury Secretary John B. Connally and White House aides, John Ehrliehman, Peter Peterson and Charles Colson. - Presidential Press Secretary Ronald Ziegler refused to com- ment in detail on Merriam's statements, telling reporters only that ''it is the President's view that there were no impro- prieties" by members of his staff. Merriam was the first witness as the subcommittee, headed by Si ii. Frank Chu rch Didaho), opened hearings on the infirm- I for?" Church demanded. of huge multinational c9;-.,,1 "You can read wha Cut-..ate Fare Nixed by CADt Washington, March 20 (UPI) want plied. Merriam said he also sent Henry Kissinger, President Nixon's foreign policy adviser, a letter urging a cutoff in U.S. aid to Chile if Allende were elect- ed. The Nixon administration subsequently took a number of actions against the Chilean leader on the economic and diplomatic fronts. into them," Merriam re- . ?In a move to prevent a ? Atlantic air fare war, the Civil Aeronautics Board suspended today low-eo,tt fares proposed by seven small foreign airlines. TM fares were to take effect April I, but the CAB said the re?,C11L!C yield from the fares would lp too low as compared to fares filed by the two major transatlantic airlines ? Trans- World and Pan American. In today's action, tm CAB rejected fare proliosals filed by Ale Afrique, Fiunaire, Czechoslovakia Airlines, Aer Linte, Iberia, and Transportes Aercos Portugese. porations on U.S. foreign poli- cies and the world economy. Merriam said the recommend a- times in the memo submitted to Broe were not official ITT polieyi and that he had no idea wha the Cl agent's approval signified "Incredible," sputtered Sei Edmund S. Muskie (D-Maine). "If these recommendation4 were not intended to obstruer' Mr. Allende, what were the, HS/HC- 90:k ved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 r,f`rM Approved For Releaa001/06/09 ? cIA-RDP8440499R0010W10001-3 MAR 1973 CIA 400,000 Ch e By Laurence Stern Washington Post Staff Writer - Senate investigators sought to elab- orate yesterday on a report that the Central Intelligence Agency was au- thorized to spend $400,000 for covert propaganda action against Marxist, presidential candidate Salvador Al- lende in Chile during the summer of 1970. The existence of the fund was first broached by Jerome Levinson, counsel to the Senate Foreign Relations Sub- - committee on Multinational Corpora- tions,- during the questioning of former Ambassador to Chile Edward Korry. Korry confirmed that he knew a sen- ior interdepartmental intelligence' group of the National Security Council met to discuss the CIA's strategy to- ward Allende in late May or. early June of 1970. But he referred the subcommittee to CIA Director James R. Schlesinger on the question of whether the NSC policy group allocated $400,000 for co- vert propaganda activities against Allende. The National Security Council com- mittee to which Levinson referred is the government's senior policy forum for covert intelligence operations, and functions under the direction cf Na- tional Security Adviser Henry Kis- singer. "Anything to do with activities of .the CIA, I am not going to reply to," Korry told Levinson. "It is the obliga- tion of the CIA director to advise you." Last week former CIA Director John A. McCone told the subcommittee he had been advised by Richard M. Helms, the agency's director in 1070, that "a minimal effort" bad been authorized in the Allende election "within the flexi- bility" of the CIA's budget. McCone said Helms also told him the senior interdepartmental commit- tee, known as the Forty Committee, had considered the matter and decided that nothing of a major nature should be clone to block Allende's election. The subcommittee is examining whe- ther the International Telephone and Telegraph Corp. exercised improper influence in the Chilean presidential election to stave off nationalization of its Chilean telephone company sub- sidiary, and whether U.S. government. agencies worked in collusion with ITT in an attempt to prevent Allende from assuming the presidency, Korry, in an afternoon of testimonial sparring, declined to tell the subcom- mittee what instructions he had re- ceived from the State Department in the crucial period between Allende's popular election on Sept. 4, 1970, and his installation by the Chilean Con- gress the following Oct. 24. "I have Aloft iviTor,R6,44. -mid Reported tween an embassy and its government," , the former ambassador told the sub- committee. The question of Washington's in- r structions to Korry came in the eon- text of an ITT document in the subcommittee's possessien -1-a copy of a cable from two executives of the firm on Sept. 17, 1970, from Santiago to ITT's New York headquarters. : The message said: "Late Tuesday night (Sept. 15) Am- bassador Edward Korry finally received a message from the State Department giving him the green light to move in the name of President Nixon. The message gave him maximum authority to do all possible ? short of a Dominican Republic- type action?to keep Allende from taking power." Korry said the ITT cable was "erroneous" and that he had not received instructions to .do all he could .to stop Allende. But he persisted in refusing to tell his questioners what his instructions were. 'The former ambassador, who served in Santiago from 1967 to 1971, acknowledged that he did personally favor a strategy to block Allende's election by Congress. This strategy, the tAlessandri Formula," was de- signed to pave the way for election of former Christian Democratic President Eduardo 'Fret. Korry said he discussed the Alessandri Formula with rep- resentatives of American busi- ness in Chile Who were con- cerned about expropriation under Allende. "But there was no concerted effort on their part to sell me or on my part to sell them," he testified. There was strong American corporate support for the plan until it became clear that it did not have enough support in the Chilean Congress. ; The subcommittee announc- ed that it will release the t esti- Mony of the CIA's former chief for Western Hemisphere clan- destine operations, William V. Broe today after it has been 001 /04grisiVAti.14R6iSgav-0614gog is morally .ong o give you ie tails of privileged communication be- - Broe testified for nearly 45 minutes during a closed ses- von yesterday morning on his dealings with ITT hoard chair- man Harold S. Geneen and pther officials of the company In the Chilean affair. Geneen will be asked .o give his ver- sion of those dealings when he testifies on Thursday. F,ro 0100011 172____ Approved For Releaska/301/06/0Pb10-41D13i4V0499R00100010001-3 2 VAR 1973 ,Ex-Erivoy Says the C.I.A. Ordered Polls an Allende By EILEEN SHANAHAN Special to The Ne,r York Times :?. WASHINGTON, March 27? with about 40 per cent of the, "The Central Intelligence vote. Agency commissioned polls to Mr. Korry said that he had determine the probable out- challenged the validity of the polls because they were based 'come of the presidential elec- on 1960 census statistics and ? tion in Chile in 1970, Edward he had felt that more up-to-date M. Korry, former United States information would show less Ambassador to Chile, said to- support for Dr. Allende. day. The Chilean won 36 per cent ' But Mr. Korry would not of the popular vote and was ?later elected by the Chilean Say, under questioning from a Congress under a regular pro- :'special Senate subcommittee, cedure for deciding an election ? whether he also had known a in which no candidate received .:reported decision by the agencyi a majority of the votes. :to set aside $400.000 for prop- The decision to allocate ? aganda activities in Chile $400,000 for anti-Allende prop. 'aimed at influencing the out- aganda was made, according to come of that election. Mr. Levinson, not just by the The winner was Dr. Salvador Central Intelligency Agency but ,Allende Gossens, whom Mr. also by the high-level inter- 'Korry said he had wanted de- agency Government committee t !feated because he relieved that that oversees the agency's pol- Dr. Allende would carry out icy. the Marxist platform o hich -Mr. Levinson indicated that 'n w the money had been earmarked :be ran and would nationalize American-owned businesses in for use in Chile in late June or ;- Chile. early July 1970; the popular ?- Question Raised by Lawyer election was held Sept. 4, 1970. Mr. Korry took the position '. The question about a $400,- that he could not answer ques- 000 propanga fund was ra'sed, tions on the reported fund and ? by Jerome I. Levenson, chief on other matters he was asked counsel to the subcommittee on about today. multinational corporations of the Senate Foreign Relations Declines to Answer 'Committee. On matters involving the - Mr. Levinson did not name C.I.A., he said that the law pro- his source for the assertion that vided that only the agency's $400,000 had been made avail- director could disclose anything ? able to influence the election. concerning its activities. Earlier in the day, however, On questions about instruc- the subtommittee had que.s- tions he had received from the 'tioned, in a closed session, the State Department, he said that . former director of the Central if he answered he would be via- :Intelligence Agency's clandes- lating promises of confidential- tine activities in Latin America,,ity he had made when sworn as 'William V. Broe. Ambassador. Mr. Broe's testimony is to be :made public as soon as top r agency officials have reviewed 'it for previously -unpublished 'information that might dis- close United States intelligence sources or methods. . Results of Polls - According to the Korry testi- mony, the polls that the C.I.A. commissioned showed that Dr. Allende would win the election, which was a three-way race,? 1 HS/HC- 14r? p[ A13 oved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releas64001/067C167-CIA:ftbP844)0499R001004,1010001-3 2 9 MAR 1973 parts, creating pressure on savings and loan institutions to close their doors, and with- drawing technical assistance. CIA Aide LMiltes ir"77 on Fluid Oiler By Laurence Stern Washington Poat Staff Writer A high-ranking Central In-1 Tided by the CIA ? to sup- telligence Agency official has port the candidacy of Jorge told Senate investigators that Alessandri, of the right-wing he was offered--and declined National Party, against Al- ---"a substantial fund" by ITT I lende. board chairman Harold S. In declining the offer, Broe Geneen to block the election said, he told Geneen "we could of Chilean President Salvador I not absorb the funds and Allende in 1970. serve as a funding channel., I In sworntestimony. released I also told him that the United yesterday, William V. Brood States Government was not former CIA chief of elandes-1 supporting any candidate in tine operations in the Western' the Chilean election." Hemisphere, also acknowl- me CIA official asserted edged that he discussed steps that Geneen at no time sug- with In' officials to acceler- gested that the money would ate economic instability in be contributed for housing or Chile at a crucial political pe- agricultural assistance. ITT's vice president for corporate nod for Allende. relations, Edward Gerrity, tes- Broe's testimony, given to tified last week that Geneen an investigating subcommittee intended the money to be used Tuesday under an unprece- for such purposes and not to dented arrangement, contra- infltience the course of the . election. dieted earlier assertions under Under questioning by For- oath by an ITT vice president eign Relations Committee that Geneen had made the Chairman J. W. Fulbright (D- money offer to finance hous- Ark.), I3roe said ITT, not the leg and technical agricultural CIA, took the initiative in at- assistance in Chile. tempting to intervene in the Geneen is due to testify on Chilean election for its "own .his financial offea to Broe on corporate purposes." Monday. Until then, Sen. It was not American policy, Frank Church (D-Idaho) said. Broe said, to influence the yesterday, the investigators Chilean elections in 1970. would not "pass judgment" on the possibility of perjury ac- tion in the ITT investigation. Church is chairman of the Senate Foreign Relations Sub- committee on Multinational Corporations, which is con- ducting, the inquiry. The panel questioned Broe in closed ses- sion '.1'nesday morning and submitted the transcript to the CIA for review. Church said it was uniwecedented for an operating agent of the agency to give sworn testi- mony to a congressional inves- tigating committee. Broe testified that he went to the meeting with Geneen at the Sheraton Carlton Hotel. on I he night of july 16, 1970, un- der instructions from then (71,i. director Richard M. Halms, who was recently re- placed by President Nixon and appoint ed Ambassador , to Iran - The CIA witness said Ge- neen told him that ITT and other American companies raised a political fund to influ- ence the outcome of the 1964 Chilean .election, when Chris- tian Democrat Eduardo Frei came to power, but that John McCone, then the director, did not accept the money. Brae's testimony indicated. that the agency took a more cooperative attitude with ITT in subsequent meetings, fol- lowing Allende's narrow popu- lar plurality on Sept. 4, 1970, but before he was installed by a vote of the Chilean Congress 'the following month. The CIA's endorsement of this economic pressure, said Broe, was designed to discour- age Christian Democratic con- gressmen from supporting Al- lende, a Marxist-Socialist, in the crucial congressional bal- loting on the presidency. "There was a thesis," said Broe, "that additional deterio- ration in the economic situa- tion could influence a large number of Christian Demo- cratic Congressmen who were planning to vote for Allende." He told the subcommittee that ITT executives were neg- ative toward the plan because they 'felt it was unworkable. The maneuver, described in Chile as the "Alessandri For- mula," was looked ? upan fa- vorably by then U.S. Ambas- sador Edward Korry and ITT, as well as by Allende's Chilean opposition, as a means of re- storing Frei to the presidency by setting the stage for a .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. Ile 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 Democrat said he could not clarify the apparent contradiction between Broe's declaration to Geneen that the CIA was not supporting a can- didate in the elction and 'Pine'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." Sen, Clifford P. Case (R- N.J.) also observed that "the' record to me is not cleats"! One possibility under con- sideration is that the policy of the U.S. government under- went change between Broe's first contact with Geneen and his subsequent meeting with Gerrity. McCone testified last week Again at the direction of that Helms had told him in Helms, Broe said, he met with, the early summer or 1970 that Gerrity on Sept. 29 to ex r ploe, a National Security Council with the ITT executive -how- i nterdepartmental group goy- the deteriorating economic sit- exiling CIA covert operations uation (in Chile) could be ac- had decided to take no action At the meeting, Broe testi- celerated ? .." to thwart Allende's accession lien, sretlerAl Broe confirmed that he cLiss to power. 1 i. AriONAifFrtitterddi 2001?000q1.t14410P84t0049.9140010,001,101)01-3 1 c stantia- '-u ' ? ' c w 1 measures as et ' a li'n, a i ever, be con I r oil e d and (ban- McCone,. an In board credits and deliveries of spare 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 imckgrounder in Chicago in which he said, "I don't think we should delude ourseves that an Allende takeover in Chile would not present mas- sive problems for the United States and democratic forces and pro-U.S. forces in Latin 'America and indeed to' the whole Western Hemisphere . . . So we are taking a close look at the situation. It is not one in which our capacity for influence is very great at this particular mornent . . ." 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. But on Sept. 29 Broe, acting with the full consent of his su- periors, endorsed an economic program to frustrate Allende's candidacy in the Chilean Con- gress. Broe testified that he also met with ITT's former - Wash- ington office director Williarn Merriam on Sept. 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" favoring other candidates. "Mr. Merriam, without any discussion of those (proposals), said, 'What do you think of the proposals', and I said I think they are all right," Broe testified. "Then there was no discussion." 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- come of the 1970 election and the extent to which it had the active cooperation of the CIA. Err and a number of other companies contended that their fears of an Allende ad- ministration were prompted, by campaign pledges of the Approved For Release/2001/06/09 : CIA-RDP84-00499R0010^0001-3 Socialist candidate to national- ize basic industries, such as ITrs telephone subsidiary as well as American owned cop- per and bank holddings. Allende's government con- tended that it was negotiating in good faith to compensate ITT for the telephone com- pany until March 21, 1972, when columnist Jack Ander- son published internal ITT documents suggesting that the corporation had actively en- gaged in plans to block the election of Allende. On the day the Anderson papers were published, the Chilean Ambassador to the United States, Orlando Lete- lier, had just returned from Santiago with a counter-offer to ITT, according to Chilean government sources. After publication of the documents, Chile broke off its contacts with ITT. At yesterday's hearing the Assistant Treasury Secretary for International Affairs, John M. Hennessy, said the Nixon administration cautioned in- ternational lending organiza- tions against extending new lines of credit to an Allende government because of its shaky financial condition, He acknowledged, however, that the administration ha d authorized a $10 million loan to the Chilean military last year: "That seems to me from an economic point of view en- tirely inconsistent," observed Case. Replied Hennessy: "I would have to admit there is some inconsistency." Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Releasbaab01/06/0941NAWM446499R0010041,1 0001-3 2 9 nt,R 1373 C.I.A. Aide Says He Gave! Anti-.Allende Plan to 1.7' .T. By E-LEEN SHANAHAN ? d .Spocat to T11,, New York Times WASHINGTON, March 28?An official of the Central' Intelligence Agency-_ has testified that in 1970 he proposed to the International Telephone Ind Telegraph Corporation a series of steps that it and other American companies might take to create enough economic instability in Chile to prevent the election of Dr.1 Salvador Allende Gossens as I President. The testimony came from I William V. Brae, who was in charge of the Central Intelli- gence Agency's clandestine op- erations in Lcit'n America in 1970. Mr. Broe, still a C.I.A. official, said that be had acted with the full knowledge of the man who at the time headed the agency, Richard Helms. 'Substantial Fund' Offered Mr. Broe testified yesterday before a closed session of the subcommittee on multinational corporations of the Senate Foreign Relations Committee. Twenty-six pages of transcript were made public today. The subcommittee and the Central Intelligence Agency are still discussing the release of 18 more pages, but tile subcom- mittee chairman, Senator Frank Church, Democrat of Idaho, said that he thought that the remaining pages were of rela- tively little importance. Mr. Broe also said that Harold S. Geneen, chairman of the board of I.T.T., had initiated the first contacts between his company and the Central Intel- ligence Agency in the summer of 1970. At that time, according to Mr. Broe, Mr. Geneen offered the C.I.A. "a substantial fund" to support the election of Jorge Alessandri Rodriguez, one of two relatively conservative can- -Mates running against Dr. Al- cede, a Marxist who was the candidate of a Socialist-Com- munist coalition. Mr. Broe said that he had turned down Mr. Gcneen's of- fer, as I.T.T. officials testified earlied had been the case. Mr. Broe also said that he told Mr. Geneen that the C.I.A. could notA _"serve as ja funding channel" ifirfPIRY.PaaFHPraft "the United States Government was not supporting any candid date in the Chilean election." A Different Position Later I About three and a half months later, however, Mr. Broe, took a different position with his proposal to the company that steps be taken to create such adverse economic condi- tions in Chile that Dr. Allende might be defeated. What took place between the Geneen-Broe conversation in July and Mr. Broe's conversa- tion with Edward J. Gerrity, senior vice president of I.T.T., was not made completely clear by the transcript. A major charge was that the first phase of the Chilean elec- tion had occurred by the time of the meeting with Mr. Ger- rity, Dr. Allende in the popular vote on Sept. 4, 1973, had won a plurality but not a majority of the popular vote and the final decision lay with the Chilean Congress?which elect- ed Dr. Allende President on Oct. 24. The transcript of the testi- mony line does not show whether it was the increasing likelihood that Dr. Allende would be elected that had changed the apparent position of the C.I.A. or whether other forces had been at work. Inter- national Telephone and Tele- graph Corporation officials had, in the meantime, been talking to the State Department and President Nixon's adviser on national security, Henry A. Kis- singer. Properties belonging to I.T.T. were seized after Dr. Allende took office in Novem- er, 1970. 'Thesis' About Economy Mr. that when he saw Mr. Geneen, about a month before the Chilean Congress date "There was a thesis that additional deterioration in the our coverage of the military C.I.A. operations. economic situation could inlfu. gave no indication they would In releasing the transcript, ence a number of Christian- ;take action. Senator Church said that he Democratic Congressmen woo . Other Matters Contradicted thought it improper for either were planning to vote for private companies or the United Allende" not to do so. Other matters, either con- States Government to inter- The following exchange then tamed in 1.T.T. documents or ?vene in a free election?which took place in the hearing here: testified to earlier by I.T.T. of- the election of Dr. Allende Senator Church: Did you dis- ficials, were also contradicted was, by all accounts. He com- cuss with Mr. Gerrity the least- by Mr. Broe and other wit- ing nesses today. . mented that at the same time bility of banks not renew the ideas for intervention in credits or delaying in doing so? Chief among these was the Chile were being discussed, the Mr. Broe: Yes, sir. assertion that Cent ray Intelli- United States was fighting a Senator Church: Did you disr gence Agency officials had di- war in Vietnam, the stated 100013urpose of, which was to as- sure free elections there. Broe said [in Chile] and in making de- liveries and in shipping spare parts? Mr. Brae: Yes, I did. Senator Church: Did you dis- cuss with Mr. Gerrity the feasi- bility of creating pressure on savings and loan institutions in !Chile so that they would have 1:.o shut their doors, thereby 'creating stronger pressure? Mr. Broe: Yes. Senator Church: Did you dis- cuss with Mr. Gerrity the feasi- bility of withdrawing all tech- nical help and not promising any technical assistance in the future? Mr. Broe: Yes, sir. rectly approached officials of United States banks, suggesting that they cut off credit to Chilean businesses and citizens, Mr. Broe said that "the only company that I had anything to do with in regard to Chile was I.T.T." Officials of the First National City Bank, the Chase Manhat- tan Bank and Manufacturers Hanover Trust, all in New York City, all denied discussing any cutoff of credit with either C.I.A. or I.T.T. personnel. All said, however, that they had been approached by Chil- ean politicians for financial help in the presidential cam- Suggestions Were Rejected paign. According to internal I.T.T. Mr. Broe's testimony left u memorandums that were read unanswered the question of whether anyone in a higher position than Mr. Helms, the Director of Central Intelligence at the time, had known of Mr. Broe's proposals to Mr. Gerrity that the International Tele- phone and Telegraph Corpora- tion and other American com- panies in Chile attempt to cre- ate economic instability there. He was not asked the ques- tion and subcommittee sources said that the reason was that the subcommittee had agreed in advance to limit its ques- tions to the subject of Mr. Broe's contacts with I.T.T. of- ficials. Since rgeulations covering the operations of the Central Intelligence Agency are not made public, it is not clear whether even Mr. Broe's ap- proach to Mr. Gerrity should have been cleared by the so- called 40 Committee, an inter- agency body with members from the State and Defense into the subcommittee's record last week, Mr. Genee rejected Mr. Broe's suggestions because he felt they would not work, Mr. Broe also testified, in contradiction to the contents of other I.T.T. documents, that the purpose of attempting to create instability was not to encour- age a take-over by the Chilean military. Nor, he said, had the C.I.A. made any approaches to the Chilean military, contrary to what appeared to have been re- ported in a memorandum from, William R. Merriam, the head of I.T.T.'s Washington office. The questions and answers on this point were as follows: Senator Church: Did you ad- vise Mr. Merriam that ap- proaches continue to be made to select members of the armed forces in an attempt to have them lead some sort of uprising? Mr. Broe: No. On a number of occasions Mr. Merriam ques- tioned me regarding possible Departments, 'the C.I.A. and action by the military, as this the National Security Council. Was a subject everyone was in- The committee is supposed to terested in. I advised him that approve, in advance, certain ease 20011Y08/09-ilm3IAJIR 8 bility of companies craggRif their feet in spending money Jimelik13? Approved For Releas6.2001/06/02W ellAtRget4S00499R001 001440001 -3 2 MAR :973 Were also open to Mr. McCone, board chairman Harold S. Geneen and lesser company officials. To Senator Charles H. Percy, Re- publican of Illinois, a member of the subcommittee and a former corpora- , tion executive, this seemed only right. The Government, he suggested at the hearings, ought to listen to the prob- lems and proposals of big American- owned companies. Mr. Percy earried , that line of reasoning even further: Perhaps it is also right that the Gov- ernment and companies like I.T.T. swap intelligence. Reports on political developments from I.T.T. personnel in Chile were apparently valuable to the C.I.A.; the agency regularly sent a messenger to the company's Washing- ton offices to pick up the reports as soon as they arrived. Others who took a more critical view of last week's disclosures, how- ever, emphasized that the relationship between I.T.T. and the Government seems to have gone beyond consulta- tion and exchange of information. Testimony disclosed, for instance, that in 1970 the company offered, both to the C.I.A. 'and to Mr. Kissinger, a kitty of $1-million?possibly more, if necessary?to help finance any plan the Government devised that would be aimed at preventing Mr. Allende's elec- tion. There are discrepancies in the testi- mony as to how the money was to be used. Mr. McCone, while admitting that the objective was to help finance "any Government program for the purpose of bringing about a coalition in opposition to Allende," insisted that nothing "covert's was intended. Other evidence, however, hinted at darker plans, including a proposal for stirring up enough violence in Chile to justify a takeover by the Chilean military. Mr. McCone and the other I.T.T. officials who testified last week had ? one broad defense: Nothing actually happened; the Government never de- vised any plan for using Mr. Geneen's proffered $1-million and all the other schemes hatched by lower-level I.T.T. I.T.T. & C.I:A. A Little Plot for Chile? ? WASHINGTON?When Salvador Al- lende Gossens was elected President of Chile in 1970 on a Marxist program, the Nixon Administration appeared to accept the need for calm if hard- headed adjustment to a regrettable ?deVelopment. It was not long, how- ever, before charges began to fly in Santiago of behind-the-scenes American pressure to undermine the Allende regime. A question arose: Was the power of the United States Govern- ment and United States corporations being wielded covertly in a modern version of the old policies of "dollar diplomacy" and the "big stick"? fight on that question is now being thrown in hearings before a special subcommittee of the Senate. Foreign Relations Committee that opened last week. Already, as a result of testimony thus far, certain things seem clear: The United States Ambassador to Chile wanted intervention; so did at least one high-ranking official of the Central Intelligence Agency; and both consulted on that option with the ? International Telephone and Telegraph Corporation (I.T.T.). The subcommittee, headed by Sen- ator Frank Church, Democrat of Idaho, would like to find out if United States policy toward Chile was influenced Improperly in 1970 and 1971 by pres- sure on the part of I.T.T., which owned a majority interest in Chile's telephone company and had other business in- terests in the country. I.T.T. is one of the 10 largest Amer- lean corporations. It operates in scores ' of countries around the globe?a "mul- tinational company," in today's lex- icon. The Senate Foreign Relations Committee is concerned about the ac- tivities of all the "multinationals," and its hearings on I.T.T. represent only the first phase of a study of these companies and their possible influence on governmental policy, a study that will stretch over several years. The testimony thus far shows that one I.T.T. director, John A. McCone, a former head of the C.I.A. and still a consultant to that agency, was able to get an appointment with his successor, Richard Helms, to discuss I.T.T.'s fears that the Allende Government would expropriate its Chilean properties with- out adequate compe_nsation. Other governmeRffreatemileflensey2001/0 Kissinger's door at the White House--e or C.I.A. Officials were rejected at the top. But documents placed in the hear- ing record seemed to indicate that cer. taM overt actions were, in fact, taken without recorded top-level approval. For example, according to one docu- ment, William R. Merriam, head of I.T.T.'s Washington office, wrote a memo to Mr. McCone three weeks be- fore Mr. Allende's final election saying that William Broe, head of the C.I.A.'s clandestine activities in Latin America, had told him that "approaches continue to be made to select members of .the [Chilean] armed forces in an attempt to have them lead some sort of up- rising?no success to date." The same Mr. Broe, who was I.T.T.'s regular con- tact with the C.I.A., was quoted as reporting later on the C.I.A.'s attempts to get United States banks to suspend lending operations in Chile, thus creat- ing economic problems that could bring down the Allende Government. ?EILEEN SHANAHAN 4-00499R001000110001-3 WASHINGTON STAR Approved For ReleaseN8#01/06/09 : a-14981?-a499R0010084,1$0001-3 ? nv F r e.e en te By JEREMIAII O'LEARY Star-News Staff Writer ? The Senate subcommittee on multinational corporations will decide tomorrow how to obtain testimony on its Chilean hives- tigation from Secretary of State William P. Rogers, a Central Intelligence Agency official and other witnesses who might invoke "executive privilege." The subcommittee staff wants to hear from Rogers, an aide said, because it has ITT documents tellincit' about a meeting held in Rogers' office In October 1971, at which the secretary reportedly suggest- ed to representatives of Amer- ican companies that they . might organize a boycott of spare parts shipments to Chile. Rogers also informed the representatives of ITT and other big U.S. firms, accord- ing to the documents, that the Nixon administration is a "business administration" and would try.. to help American busineds with its problem. That problem, in 1971, was a wave of seizures of U.S. prop- ertles by the administration of Marxist President Salvador Allende, ? Rogers Won't Attend Rogers is not expected to respond to the invitation of the subcommittee, headed by Chairman Frank Church, D-Idaho. The State Depart- ment has indicated that a Lat- in American specialist would be sent to testify in Rogers' place. The subcommittee said it would be premature to say now whether it will seek sub- poenas to challenge the gov- ernment on the executive priv- ilege issue. The subcommittee also wants to hear testimony from Ambassador to Costa Rica Vi- ron P. Vaky, former National Security Council aide Arnold Naehmanoff and William V. .Broe, former chief of the CIA's Latin American divi- sion. So far, the subcommittee has contented itself with "in- viting" these individuals to testify. Vaky was Latin adviser to Dr. Henry A.MilitccAlmrillgr Re the Clulean drriYeYiddi o`ti NOWS which the investigation focus- es; and Nachmance, no longer in government, was his sue- - cessor. Neither has responded yet to the subcommittee invi- tation Broe's testimony is in a dif- ferent category because of a federal law cloaking the CIA with secrecy. Broe and his for- mer boss, Ambassador Rich-, ard Helms, already have talked to the subcommittee in executive session. It is understood that the CIA would like to get 13roe's ver- sion of the agency's role in the Chilean affair on the record in some form, but does not wish to set a precedent for the pub- lic appearance of one of its officials. Informed sources say Broe's testimony would confirm that there were discussions be- tween him and officials of ITT about the situation in Chile, but would deny that the CIA was running any operation to stop Allende's election or to induce economic chaos in the Marxist dominated regime. Some officials were reported considering a plan by which the subcommittee could read into the record a question and answer transcript of testimony from Broe without the CIA of- ficial actually appearing at public hearings. These questions, it was said, would cover the discrepancy in testimony heard so far from ITT officials about whether it was ITT or the CIA which was making proposals to bar Al- lende's election or to prevent his nationalization of ITT property in Chile. There also has been a dis- crepancy in testimony from former CIA chief John Mc- Cane and yrr senior vice pres- ident Edward Gerrity about ses ro lem a el n Chile the purposes ITT had in mind for a fund of $1 million it of- fered to the CIA for use in Chile. McCone testified he set up a meeting, as an ITT director, between Broe and ITT presi- dent Harold S. Geneen to dis- cuss ' means of stopping Al- lende from taking power. But Gerrity said the purpose of the fund was to spend it on hous- ing and agricultural projects as a means of softening Al- lende's attitude toward the U.S. corporation. Geneen is scheduled to testi- fy this week, along with for- mer Ambassador to Chile Ed- ward Korry and officials of other companies functioning in Chile. : CIA-RDP84-00499R001000110001-3 Approved For ReleaseV001/06/09 : CIMINEW:44)1M199R0010004,14001-3 2 MAR 1973 EChi llILigemi tia sry TI rffl LI by AT 0 revecn Sc aarfing Daily World Combined Services Harold Geneen. president of International, Telephone & Telegraph Corp.. met in July. 1970. in a Washington hotel with the U.S. government's chief agent for Latin American subversion and espionage. at a time when ITT was said to be trying to block the election of Salvador Allende as President of Chile. a Senate subcommittee was told yesterday. This testimony was given by William Merriam, ITT vice-pres- ident. shortly after a House subcommittee made public docu- ments implicating Vice-Presi- dent Spiro T. Agnew and five other top Nixon administration officials in pressuring the Jus- tice Department to settle its anti-trust suits against ITT. Merriam also said in his testi- mony that Geneen might have discussed ITT's attempts to de- rail Allende in a series of Aug- ust, 1970. meetings with high Nix- on administration officials, in- cluding former Attorney-General John Mitchell. Meeting described According to Merriam, on July 26. 1970. Geneen met in the Sher- eton Carlton Hotel in Washing- ton with William V. Broe. chief of Clandestine Services, West- ern Hemisphere, Directorate of Plans,? of the U.S. Central Intel- ligence Agency. Merriam said he did not know who arranged the meeting, but when he escorted Geneen to the hotel, Geneen introduced him to Broe and told him Broe was HS/IIC-f4fp "the head of the Latin American division" of the CIA. Merriam said he left Geneen and Broe and waited in the hotel lobby; Geneen returned 25 minutes lat- er and ordered him to -keep in touch" with Broe. Before yesterday's session, Sen. Frank Church (D-Idaho, chairman of the Senate subcom- mittee, said it would "seek to ascertain whether ITT and the CIA cooperated in an effort to prevent Allende from being elected President of Chile in 1970." Subcommittee sources said yes- terday that they had "sheafs" of documents on ITT-CIA col- laboration to foment civil strife and insurrection against Allende, who was elected in September, 1970. More revelations due More revelations are expected next week when John J. McCone is scheduled to testify. McCone, former director of the CIA, is now a director of ITT. Subcommittee sources also said that in addition to the ITT-CIA eonspiracy against Chit(, the subcommittee will take up the Justice Department's sudden 1971 decision to drop anti-trust suits against ITT, 10 days after ITT's Sheraton Hotels division offered $400,000 to help finance the Re- publican Party national conven- tion. The probe will also try to find out whether this may have influenced the Nixon administra- tion and the CIA in any action against Chile. A House subcommittee Monday released data prepared by the Securities and Exchange Com- mission (SEC) which implicates, in the ITT-Justice Department "settlement" of the anti-trust actions, not only Agnew and Mitchell but also former Com- merce Secretary Maurice Stans, former Treasury Secretary -John Connally, Nixon aide John Ehr- Hellman, special Nixon aide Pe- ter Peterson, a former Commerce Secretary, and Charles Colson, former special legal counsel to Nixon. Allende and the Popular Unity government in Chile have repeat- edly charged ITT and the CIA with organized subversion. oved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For ReleaseV)01/06/09D2A444?60)300499R0010004.116001-3 4 n qmr-gi to? if? , r 44, n n 0 9 re U LI Li ? lir dig YOQJ ty' U IrtilOikr?51 19 g.'?r aNOTTIC33 Daily World Combined Services ? The Senate Foreign Relations subcommittee continued on efforts by the International Telephone Sz Telegraph Corp. Agency to block the election of President Salvador Allende in Jack D. Neal, the director of victory and have been trying un- international relations for ITT, successfully to get other Amer-- told the Subcommittee on Multi- can companies aroused over the national Corporations on Tuesday fate of their investments, and join that an offer "in sums up to seven us in pre-election efforts." figures" was made to the office of Neal's memo added he had Henry A. Kissinger. Neal, a State contacted then Attorney General Department official for 35 years John N. Mitchell about the matter before joining ITT eight year during a reception at the Korean ago, was vague about what ITT Embassy. hoped to get in return. In another memo, dated Sept. "We were interested in fair 30, 1970, Neal stated: compensation for our property," ? "Why should the U.S. be so Neal said when questioned by pious and sanctimonious in Sept. Sen. Frank Church (D-Idaho) and October of 1970, when over the subcommittee chairman. past few years it has been pouring Memo about Chile the taxpayers' money into Chile, Neal's testimony centered admittedly to defeat Marxism? around a memo he had written Why can't the fight be continued Sept. 14, 1970, to W.R. Merriam, now that the battle is in the home- ITT vice-president. stretch, and the enemy is more In the memo, Neal had said he clearly indentifiable?" "telephoned Kissinger's office The Neal memos confirmed and talked with 'Pete' Vaky, who other documents turned over to is the State Department's Latin the Senate subcommittee by the American adviser to Kissinger." Securities and Exchange Corn- After saying he informed Vaky "we have heard rumors of moves by the Chilean military," Neal said, "Mr. Vaky said there has been lots of thinking about the Chile situation and that it is a real tough one for the U.S. A sum of 'seven figures' "1 told Mr. Vaky to tell Mr. Kissinger Harold Geneen (ITT president) is willing to come to Washington to discuss ITT's in- terest and that we are prepared to assist financially in sums up to seven figures," the memo con- tinued. "I said Mr. Geneen's concern is not one of 'after the barn door has been locked', but that all along we have feared the Allende yesterday to hear testimony and the Central Intelligence Chile in 1970. mission, which show that ITT. the CIA and the Nixon administra- tion's top officials were working _together against Allende. Covered by insurance Of interest is the fact that all of ITT's holdings in Chile were cov- ered by Federal government in- surance, which may mean The U.S. taxpayer will have to shell out up to $100 million to compen- sate ITT for its nationalized property in Chile if ITT can es- tablish that it did nothing to "provoke" nationalization. John J. McCone. who directed the CIA from 1961 to 1965. testify- ing yesterday, admitted he -talked in 1970 about Chile with Richard Helms. the CIA director at that time, but he asserted that Helms told him the U.S. would do noth- ing to prevent Allende's election. McCone now is a director of ITT but he said he was still a "consultant" with the CIA so that he is still under the same govern- ment regulations forbidding dis- closure as to any other CIA agent. roved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 Approved For Release 200446/09 : CIA-RDP84-00499R00100011084610-3 HS/HC- 9(0 I Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 DAILY WORLD 1 r3 MAR 1973 WHY HONOR CIA SPY? It is now openly admitted that John T. Downey was a CIA spy when he was shot down over China in 1952,. although at that time the CIA and the Admin- istration emphatically denied it. In fact, the issue ,made a big stir at the time, with the Administra- tion slandering anyone who refused to accept its lies. Downey has now been freed and has returned to the U.S. A spokesman for the CIA said Downey "has been well taken care of" ? meaning financial- W. The New York Times estimates he is "?fairly wealthy." A man who goes to jail for stealing a loaf of bread in the United States because he is hungry comes out of jail not only as poor as before but branded. CIA spying is a criminal act. Why should it be ? rewarded?. ? ? Newark. N.J... 40,0\ ,?????,?,?,?. 00000000000 ? ? ? WASHINGTON POST Approved For Release 2001106/09 : CIA-FfpNlyy001000110o443 1, ? CIA's Cor Meyer Going tt London Manchester Guardian ? The Central Intelligence ing story. He was one of the Agency's new station chief in London is Cord Meyer, hither- to the agency's assistant de- puty director of plans in Wash- ington. ? The planning department of the CIA is responsible for espionage and clandestine op- erations. Detractors of the CIA call it the "Department of Dirty Tricks." , Meyer was in line for pro- motion to be deputy director of plans?"DDP," the nearest CIA equivalent' of ? James Bond's "M." Instead, according to CIA watchers here, he Is being pro meted to the U.S. embassy in London. They regard this as a "kick upstairs." . In 1967, it was revealed that Meyer was in charge of cov- ertly funding Encounter mag- azine and other organizations. Last summer, he became the object of further notoriety when he asked the New York publisher Harper and Row to show the CIA proofs of a book since published, called "The Politics of Heroin in South- east Asia." The book linked the CIA with the drug traffic in that area. Meyer later denied that it had been his intention to sup- press the book. Few details are known about the nature or extent of CIA operatiens in England. Sources here say that there is a large base for covert action in premises within alew min- utes walk from the U.S. em- bassy in Grosvenor Square. This is the ? headquarters for covert action in western and eastern Europe and the Medi- terranean. It was moved from Paris to London at the time of Gen. Charles De Gaulle's quarrel with NATO and the United States. The CIA works closely with British intelligence and claims not to engage in clandestine activities in Britain. Meyer's career is a fascinat- For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3 most brilliant men a his year at Yale University in the early 1940's. He lost an eye in a Ma- rine landing in the Pacific war and wrote a short story about the experience called "Waves of Darkness." After the war, he became a passionate advo- cate of world government and wrote a book on this subject. He was a hero to the student generation of the late 1940's. He joined the CIA in 1953 at the urging of Alan Dulles. At that time, the Agency was a respectable haven for liberal intellectuals. During, the Mc- Carthy era he was investi- gated for alleged Communist associations but was cleared. In Fact, he had never been a Communist sympathizer. He soon became as ardent for the Cold War as he had been for the United World Federalist movement. Meyer's assignment to Lon- don is seen by CIA watchers as a part of the purge which the agency is experiencing un- der its new director, James Schlesinger. Reports in Wash- ington this week say that the CIA's 18,000 personnel is to be cut by 10' percent by June 30. Schlesinger, a business- man with no intelligence back- ground, is said to be making a through-going reappraisal of the CIA's 'function's and op-