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March 26, 1973
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' MONROE, LA. NEWS?ST4R\0 r) , Approved`Par fielead4/2z005/11/28 : CIA-RDP91-00901 E 15,121 I TT fr Ch A C Thus far, investigating Senators have agreed, there has been no evidence of wrongdoing by the Cen- tral Intelligence Agency in its con- tacts with the International Tele- phone and Telegraph (ITT) in con- nection with Chile's 1970 presiden- tial election. A Senator, who asked not to be identified, said the Senate panel which met with CIA officials is sat- isfied for the tiiriew'rEnith the CIA's explanation that the agency and ITT were merely exchanging information before Marxist Salva- dor Allende won the election. There is nothing wrong with the CIA discussing with corporation of- ficials the economic and political conditions of a country in which said corporation has large invest- ments. And since Marxism, wheth- er of a voluntary or coercive na- ture, is anathema to the free enter- prise system, we cannot be sur- prised if ITT expressed some con- cern over the future of their in- vestment in Chile, and worked, however clandestinely, to protect it, so long as no laws were violat- ed. On that score, a direct conflict in testimony has arisen in the Sen- ate hearings. Former CIA chief s'John A. McCone said \W-dnesday that he went to high administra- tion officials, including Henry Kis- singer, with a million dollar offer from ITT to help finance an oppo- sition coalition to Allende. But the next day, ITT Senior Viva Pre- sident Edward Gerrity denied such an offer was made. Gerrity testi- fied under oath that ITT's million dollar offer was intended to help Allende with low cost housing,and farm programs in the hooe this would improve it rebitinns with Al- lende and dissuade him from expro- Viating its property?not to create a political cabal to keep Allende fr( rn hecoinin,t. President. roved For Rplease 2005/11/#1: dIWIKIDI?i94200916iFk0006011100008-6 nere was no ta...r. in nay way?.,ti,tes. R000600100008-6 STAT shape or form to subvert Allende," Gerrity testified. Three liberal Senators on the committee, Church, Case and Per- cy, expressed bafflement and dis- belief in Gerrity's testimony. And indeed, three volumes of internal ITT correspondence subpoenaed by the lawmakers suggested an inten- sive effort by the, company to keep Allende out of power. This data and some witnesses pictured. ITT as fearful Allende would seize its $150 million holdings in Chile. Pres- sure on the White House, the State Department and the CIA to pre- vent. this was said to be the order of the day. - Allende did, Of course, expropri- ate ITT holdings. Tho company has filed a $92 million insurance claim against the United States to pay for Allende's confiscation of an ITT subsidiary. Multi - national corporations can only operate overseas where the political climate is favorable to free enterprise. And while it is common for. Marxists and other proponents of socialism to yell "exploitation," the fact is that cor- porations do a lot for foreign econ- omies in terms of employment and material uplift.. And Latin America needs that in spades! The United States wants t h e Western Hemisphere free of alien influences, such as Allende's form of socialism. But he was elected by the Chilean peonle, so we could not invoke the Monroe Doctrine. The United States must live with him and so must ITT ? until the Chilean people see the error of their ways, which they are sure to do. Meantime, this much can he said about the current inve:-:tigat!on: it should serve us a v?arnin,,.; to oth- er multi - national corporltions about their activities on foreiat seil. What is good for them may 119.11510N Approved For Release 20c651G VIA-RDP91-00 Role in, C12ile elecilon, passive? kir If \ ki -By 1:tfINALD R. :MORRIS Past News Analyst , Ar.*\.4? ti ;1 k_sJ 'Tli e Senate investigation subcommittee probing allentic,ns that the ITT Corp. tried to prevent the election of President Allende of Chile. and then to make life difficult for him after he was elected, is rasping a number of sensitive nerves. That both ITT and the U.S. government should view with acute distaste the advent of an avowedly Marxist regime. in a major. Latin American nation is understandable. That both ITT and the U.S. government would ardently wish to prevent such an occurrence is also un- derstandable. Tho problem is tiot neither ]TT nor the U.S. govettiment could. !ake a,ty overt step to support, such a wialt without Icing guilty of blatant and outriteous .interference in the do- mestic affairs of a forotm tin tion. apparently was willing to back its wish- es with a ;:t nillltn furd. It a:Kir:wiled the grtvernment to investinfe the posihic 10 P5 of such a sum. It shcertly found lock in . touch with th,i? OA. The a.,:;cney was sympathetic but took no action vis-a-vis ITT beyond, possi- bly, some informal advice. John 1,1cCone. an ITT cir?onr, is- in ths un- comfortable pueition of having beffa a ftirmer CIA director although not during the Allende ca One of the duties the CIA is c1101,7,ed with is coi,?ert action. This is, s;iecifically, inter- ference in the ilowci-tie affairs of other no- linnS? Ttr: t10,7tS not plunge hoc) such activities on its own. 11 1:_;PI:z its thm.chir-.. or- ders from the some place Ina IC?-t of the.e\ec- wive brandi the White liouse and the Notional Security Council. 'When the ,zrivetnini?nt wenld sonrthin.f, lo 1.aptien inch it eanit,i dytT nin,n't it 111,7! ti-ltrIt Ra AiLlnis retOol, I. la CIA. The a.?!,nry in tee c-tb hanch f the government th,,,t can act coveltly. 901R000600100008-6 STA 11 'In (r:1, - caTrii C IL .1 *Li FITS Metone, left, and Chilc's Allende This is known to the executive branch as "having plausible denial," a cherished con- cept. ? Asked to influence a domestic election abroad, the CIA has at its disposal a some- what limited array of techniques. The major consideration is clandestinity. 'The slightest hint of such shenanigans results in a first- class mess deposited on the embassy doorstep whore lin fAa ic D2lartment must clean it up. The risk is hi,7h since foreign politicans are no better than our domestic brand- in keeping their mouths shut. The local CIA field station will be in touch with oppositicot politicians already, not neces- sarily to ohm them hut to Inntiin-T the scene. Over; State Department officials' cannot al- ways medt. easily with those opLosing the host government. diem enters to forward such ortiosition groups, the :yzency usi;dlly c;in fund them. It 11;ir,?: a local ourniilitt or two who may be able article..; in the media. Such are of litritrq (71?,1,w-1v hrtF a c0titi12?1 hut wtrls it atine% It occuirirr.6 tti th,ty itliuifitiicitt fur itiervin is rtDiy pied- dciit lias to live with th,Ri Ai,d so dri,7-.s 1,1e govern- not t.t. Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 2005/11/28 : CIA-RDP91-00 ST. PAUL, 141I., PIONEER PRESS t.,1AR 2 6 1971 - 104,387 S 223,806 Uncle Sam's image in Latin Ameri- ca has been sadly tarnished by the rev- elations of Central Intelligence Agency involvement with activities of the In- ternational Telephone and Telegraph Corporation affecting the internal pol- itics of Chile. ? Every a nit U.S. politician in Central and South America, to say nothing of - Cuba. has been provided with a wealth of new ammunition for charges that the United States gov- ernment engages in secret plots ' terfere in elections and policies, of Latin American countries. The CIA-ITT Mvolvmnents also should revive congressional interest in the proper role of I he Central Intel- ligence Agency and whether it should ? be brought under closer supervision instead of cnioyinti. the cover of al- most total secrecy both ;is to its activ- ities and its expenditures of public fun&. William Merriam, a vice president of ITV, told a Senate committee that ? 01R000600100008-6 ".04,6Fgraftrasuarsamec,~101 a top CIA official approved plans of Ill' to try to block the election of President Salvador Allende of Chile in - 1970. One tactic considered was subsi- dization of an anti-Allende newspaper in Chile. There were other proposals for fomenting violence and "chaotic conditions" in that country to upset the elections. . At one point Merriam referred to CIA executive William Proe as "our man" in the CIA. And John McCone, a former CIA director who later be- came an ITT official, said he present- ed the CIA and high-Administration officials with an prr offer of a million dollar contribution from the corpora- . lion to be used for political purposes in Chile.. Also discussed were proposals 10 llSe U.S. government agencies to sup- ply anti-Allende propaganda to other Latin American countries. This whole affair calls for more (16- i tailed investigation of CIA policies, op- erations and controls by the Congress..1 Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 ST. PAUL PIONEER-PRESS 26 MARCH 1973 Approved For Release 2005/11/28 : CIA-RDP91-00901R00 CIA in ChNe's Pati Uncle Sam's image in Latin Ameri- ca has been sadly tarnished by the rev- elations of Central Intelligence Agency involvement with activities of the in- ternational Telephone and Telegraph Corporation affecting the internal pol- itics of Chile. Every anti-U.S. politician in Central and South America, to say nothing of Cuba, has been provided with a N4xalth of new ammunition for charges that the United States gov- ernment engages in secret plots to in- terfere in elections and policies of Latin American countries. The CIA-ITT involvements also should revive congressional interest in the proper role of the Central Intel- ligence Agency and whether it should be brought under closer supervision instead of enjoying the cover of al- most total secrecy both as to its activ- ities and its expenditures of public funds. William Merriam, a vice president of ITT, told a Senate committee that a top CIA official approved plans of In' to try to block the election of ' President Salvador Allende of Chile in 1970. One tactic considered was subsi- dization of an anti-Allende newspaper . in Chile. There were other proposals for fomenting violence and "chaotic ' conditions" in that country to upset the elections. At one point Merriam referred to CIA executive William Broe as our man" in the CIA. And John McCone. ' a former CIA director who later be- came an ITT official, said he present- ed the CIA and high Administration officials with an ITT offer of a million ? dollar contribution from the corpora- tion to be used for political purposes in Chile. Also discussed were proposals to use U.S. government agencies to sup- ply anti-Allende propaganda to other Latin American countries. - This whole affair calls for more de- - tailed investigation of CIA policies, op- erations and controls by the Congress. ? Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 2005/11/28: CIA-RDP91-00 PROVIDENCE, Ps.. I.- JOURNATMAR 2 (3 1973 .14 - 66,61. S 209 , 501 01R000600100008-6 nfl r !1, ? It? rizA k t 11 [I, k; 11 ? ?The?International Tel:Thout- and Telegraph Co. 4 wanted the Tinited States to Nva'i_.,,c economic wai-fare? or to threaten it ? against Chile in an effort to prevent ? the clectitn'e;f Dr. Salwiclor Allende Gossens aPres- ident of that .country in 1070. The extent of .its pro- posals,hT.: 1-en revealed in a congressional hearing ,although tiv? outlines of the attempt .were - revealed a year ago 1 c1z Anderson, the columnist. The new 'focus o the ITT,'-case raises again the . question of,the relatic of multinational companies to ,foreign .nations. Did I. have the right to meddle in ? Chilean politics in an tempt to prevent expropria- tion. of its properties i. that country? What is, the limit of -propriety for 2.,1 itside corporation when it ..knows .'that: sUCCCSA for political group like Dr. Allende's means expropriation? WRS tha-ppoposal .for cutting off outside, credit t:1 Chile legitimate hind .of activity or..wa3ita7.;,S.en. :7:drnund Musizie sttgges.t- -ed,.an attempt at-":ai? ? HOw much ITT m11E:ter-iced the U.S. gov'ermnent not clear: The.,hcaricygslu -e :revealed that ITT of- ficials'had numerous conferences with U.S. -of- ficials about the Chilean sit' la ion. One ITT Witniss said the CIA official in charg..?. of clandestine ties in Latin America, :William V. Broe, agreed will: the Iel".1' recontz-nendations. involvement of the U.S. government in the internal'poli;.ics of allother nation would be a much more seriolv, mattcr. than anything ITT might have done on ()rm. Erct- v.hen. an ITT official is a former director of ti,c CIA, like jonn,_,' .McCone, +Tao separation. is apt to bcconv,? fuzzy. ? There's no question that poicv toward Chile ' has, been more than chilly t;ast r:ouple of y:..ars. Patt of Chile's c:conc , mic. difficulties kidat, Gtems fro:n the refusal or reluctance. of d othez ? .intA:it-iWom; to provide loans. 'Whether U.S. agents ac- , tivoly 'opposed ,Allencle, ..Washir.gton has It-1de no, bones about its oppesitiOn to the i7o1og-y Marxist Aflcncic rc. , At any r.-tte, attit.,cle has_ inflocitce on Chiletn-v:-.1c1v? Adcock lo.ftist cealltiolt did hotten- in ti;e rot. cut c'ection than had 1r7cn e::nected. His itcJd r th%; youn.c2, ones, is thar, oltH 1?;Iv-, suggostf.d. 't'he couic-uution of re-;arded /-..rocuic;!ns ;),; 1.(ti:r of I.;uin veuinp, 1.1-1 11;1- hcaithy, -r Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 200:11'(1/111T-4191-0090 R000600100008-6 -\ ;?..t (-17) J-43 ryl Pii iTY o I o ;Z o ay Edward Rohrbach c77Cl 77 /7) fi Li Li/ Cbicaeo Tr;bune Press Service WASHINGTON, March 25_ Sen. Charles Percy, no enemy of business, put the question directly: Who did International phone and Telegraph think it -was representing Chil e--a company or country? Did United States foreign policy become a willing tool of ITTs involvement in Chilean internal affairs there to pro- tect its $133 million investment under the threat of expropria- tion posed by Salvador Al- lende's election as President of Chile in the fall of 1970? Tel 1 \ ? 0 0 ertl 7717 / IE IT CAN BE demonstrated that I. T. T. provoked the cx- propriation by its activities in . Chile, the corporation will not be able to pick up its $92.5 million claim. Corp. But the longer-range effort in of the hearings is much more a significant. The hearings rep- resent the first major clash between national governments ?4n this case the United lende chose in a speech at- tacking the U. S. before the United Nations last December in New York. A SPECIAL subcommittee of the, Senate Foreign .11elations Committee .bagan grappling with this question if hearings last week. Testimony is. sched- uled to begin again Tuesday. So far, a succession. of J. T. T. officials have supplied not Much more than conflict- ing testimony and have at- tempted to back off from. mem- os and correspondence detail- ing their anti-Allende efforts. Publication of these incrimi- nating documents a year ago by columnist Jack Anderson touched oft the Senate investi- gation of multinational corpora- tions such as I. T. T. and their role in U. S. foreign policy. At immediate stake in the hearings is whether I. T. T. will be entitled to reimburse- ment from the Overseas Pri- vate Investment Corp., a gov- ernment insurance agency, for seizure by Chile of 1. T. T.'s telephone company subsidiary. States and Chile?and the ant imr!linationals, mostly Arnorican-based business enti- ties which are exerting grow- ing impact on world events. For Chile, the affair was part of -financial and , ic bloeknkle" aga inst the 1 country that has been "terrify- FOR THE AMERICAN gov- ernment, the affair so far has me ant embarrassment and frustration. So had has it come off that. Secretary of State Wil- liam Rogers and a representa- tive of the Central Intelligence Agency vill probably agree to testify in later hearings to help repair the goveynthent's. image. The problem for the U. S.-- and Chile in this ease?is that multinational companies seem I able naw to act largely beyend 1 the control of either host or . home :1,overnment. Yet the United States gov- ernment has the responsibility of standing up for the legiti- mate interests of American ? business abroad, and the prof- its brought back from over- seas operations of multination- als is crucial to this country's balance of payments. And countries like Chile need neat- tutu tic-tints for the technology and capital they bring to raise the sit ndard of living. CIA, and said he set up the. first meetings between I. T. 'I'. and the CIA in 1970. He -.esti- lied that cut of these sessions came a $1 million offer by Harold Gencen, company chairman. This was intended to finance any plan the gov- ernment could come up with to prevent Allende from com- ing to power after he had been elected Chilean President in Sept. 4, 1970. SO GOOD WAS I. T. T. intel- ligence from their employes in South America on what was going on politically inside Chile that the CIA would send over messengers to I. T. T. Washington office regularly to ? pick up copies of their cables. Acaor(ling to MeCone, the way Geneen outlined what he wanted the U. S. goverrmeat to do for I. T. T. with the $1 re;'lion was to "drive Allende out. of his position" by support- Mg a united coalition of the Other two narrowly-defeated po;itical parties that could pre- vent Allem:0 froni tahin;; of- flee in Octol.:er when the an legislature was to rati:y the presidential election. THE iNTERNVOt .r...?Z rola- tionslup that. has developed be- tween the U. S. government and. American multinationnls, and U.0 prohlem that relatrun- ship causes when the ?::rtineli come:, became clear in the testi:rony of John A. ',lc:Cone 1y...fore the subeeinmillee. director of the titen- STAT STAT STAT ingly cite,:tive ill yuentinf, hal Intelligence Aeanev from us from cxtcisitit as a sovereign state." J. T, haard of directdrs. :11e- ? Those were the ?.?rd.i /.1_ Cone explained that he stdl PITTSBURGH, PRESS PA. Approved F8R1Relel*t? 20105/11l128 ''CIA-RDP91-00901R00060 bad a long and success- , ful (.sireer in Chicago \ith Bell & Howell, a .company with extensive foreign dealings. ' In the immediate post-World War II period, he SCI'Ved there in the top executive suite with Harold Geneen, now board chairman of ITT and the sub- committee's key witness this week. Perry's successor as head of & Howell, former former Commerce Secretary Peter Peterson, is cited in the Chile papers and other confidential ITT documents as one of the high government officials the corporation went to for help. Trial To Be Fair It 'ens not surprising, then, that Percy sought, as he said, to lie "fair" to ITT and its high-level witnesses. On Tuesday, atter critical interrogation by other sub- committee members. Percy posed a series of gentle ques- tions to Jack Neal, in' inter- national relations director, en- E - 346,090 S - 744,732 MAR 2 51913- ArA ris:7 7c1 " r14 rg t It 'Ce.)?.di,',ek, ni 1-? P,1 t Senator Finds Chile Stories Hard To Take By THOMAS B. ROSS WASHINGTON -- Midway in the Senate's investigation of the foreign intrigue of the Interna- tional Tele- phone and -Telegraph Corp. . OTT), the big inter- national con- glomerate ap- pears to be losing its only friend in cour 1, Sen. Sen. Percy Charles H. Percy, Percy was the only member of the investigating subcom- mittee who had friendly ques- tions to offer 171' witnesses in the first two days of hearings last Tuesday and Wedne..F.?th.y. But by the time tile hearings adjourned for the week Thurs- day, Percy's tolerance had worn thin. "It just doesnt make any sense to reasonable, rational men." Percy said of 1TT's last explanation of it:; dealings in Chile. "It's just unbelievable." Allende Block The foreign relations sub- committee o ii multinational ; corporations has called in lIT's top lin-ala;?ement to e\- plaIn It thick tile of internal mnanon revealed last year by (j!iuo4 inch Ancieryon and ? the Chle:.c.o 'i They aihorafe ? A;feney 1 l.c nd other ,i, avern ;?.,ces pr.s!si- dent, Salvador Allende. That contradicted the testi- mony of McCone ??lio said the money was designed to pro- - mote a coalition against Al- lende N% hen the I150 presiden- tial election was Mr? \?ii into Chile's Congress because no candidate won a majority of the popular vote. Gerrity said he was "baf- fled" by McCone's testimony and insisted that the money was designed purely for agri- culture and housing in Chile with no political strings at- tached. That did it for Percy. "The implausibility of this story is what bothers tne." he said. "These are problems you would Lila: to the State De- partment and HUD rather than the CIA. Its just unbe- lievable." The critical test of !TVs corporate credibility and Per- cy's corporate credulity will come Thursday when Gcneen ? ailing him to put the corpora- Bell & Howell colleague Bon's case in the best light. Re ross the witness table. Chicago Sun-Times Service On Wednesday, Percy took an cven more friendly ap- proach toward John A. Mc- (-- Cone, and In director, for- mer head of the CIA and, as he revealed at the hearing, still a CIA consultant. 011-pr senators had been critical of 1:FT's intimate connection with the ClA, as disclosed in the Chile memos. Hut Percy insisted it is -cru- cial to maintain a relationship between the corporations and the CIA." He argued that such was the , practice in "all industrial countries, Communist a n d non-Communist" and said he favored the exchange of infor- m a t.i o n between companies that operate abroad and tile spy agency. Social Aid rrr sillior vice prosident Edwa..d Gerrity. told th:: committee that a SI million oitt?r by the uorporilion to the ciA and 11)..-T, ccl to I.!twk Allende's rise to p:o.ver. tint to Pulp nan ith lice smal reconstrition at his courilry. 100008-6 STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 STAii Approved For Release 2005/41213V.\[611Q-71iDP91-00901R0 0 e rl By JF.REMIAll O'LEARY Et;r-Nexs Staff Writer The Senate subcommittee on mtiltinational corporations will decide tomorrow Low to fiJOtain testimony on its Chilean inves- tigation from Secretary of State William P. Rogers, a Central Intelligence Aoency official and other witnesses who might invoke "executive privilege." The subcommittee st a f f wants to hear from Rogers, an aide said, because it has ITT documents telling 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 Rogers also inforrned the representatives of riyf and other big U.S. firms, accord- ing to the documents, that the Nixon administration is a "business rdministration" and would try/ to iielp American. business with its oroble.i.m. That problem, in 1971, was a wave of seizures of U.S. prop- ration of erties by the administ Marxist_ President Salvador All etine. Rogers Won't Attend Rogers is not expected to respond to the invitation of the subcommittee, he a ded by Chate :n a n Iilrank Church, ])-Idaho. The State Depsrt- ment las indicated that a Lat- in American specialist would be sent tc, testify in Rogers' place. Tliesube said it would lie memature to say now v.hetioin it vill seek sub- poelois to challenoe the gov- ernment on tiie, executive priv- ilege iseue. The sulieommittee also want; to 'oeee tcitiinony from Aimbiissiolor ro Costa )i-ica vi- ron P. \O.lcy. feriin?iir National Security t o ceit aleile Arnold Naehinarieff did WlItinm V. Itree, fornao- chief of the CIA's Latin Amel ican Civi- sion. jar, R suhciiiminitteo has contented itioilf with "in- viting.' these individuals to test Hy. Voky was Latin adApprOmed For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Dr. ilenry A. Kissinger during the Chilean election period on which the investigation foeus- es, and Nachmano:If, no longer in government, was his suc- ? cession 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. Bree and his for- mer boss, Ambassador Rich- ard Helms, already ha talked to the subcommittee in executive session. It is understood that the CIA would like to get Broe's ver- sion of the agency's role in the Chilean affair on the record in some firm, 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 refining any operation to stop Allende's election or to induce economic chaos in the Marxist dominated regime. I :Xi.. ::,t;:i1). 1"-%>, rj STAT 00600100008-6 I '-?,) L t the purpaties ITT had in mind for a fund of Si million it of- fered to the CIA for .use in McCone testified he set up a meeting, as an ITT director, between Broe and ITT presi- dent Harold S. Gent-en to dis- cuss means of stopping Al- lende from taking power. Put Gerrity said the purlxise 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 Kerry and officials of other companies functioning in Chile. Some officials were reported consideiiing a plan by which the subcommittee could read into the record a question and answer transcript of testimony from Droe 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 ofiiicials 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 properly in Chile. There also has been a dis- crepancy in testimony from former CIA chief Jolla Mc- Cone 8 7.(1 senior vice pres- ident Edward Gerrity about Leo" 74Li4 rrg: r, h LA STAT WASHING?fON STAR 5 MAR 1973 Approved For Release 2005/11/28 : CIA-RDP91-00901R00 By JOHN M. TAYLOR Special to The Star-News Press reports have lately confirmed that a ? curious development is taking place across the Potomac in the Langley woods. A major shake- of the Central Intelligence Agency ? lag advo- cated, and not infrequently rumored ? may be :taking place. ? According to the reports, incoming CIA - Director James U. Schlesinger is settirg forth . on the largest personnel reduction in the ' agency's history, perhaps as great as 10 per- cent. One source has charaeteri2ed the shakeup as resulting from White House annovanco at the ,?-/- agency's failure, under Richard Helms, to mon- itor its spending in a satisfactory manner. Somehow a purge of CIA on budgetary grounds carries with it an element of paradox; it recalls the jailing of Al Capone for failing to pay his income tax. CIA has been charged with so many sins of omission and COMIlliSSi(11 over the years that it seems somehow incongroous to :bring it to task for overspending. Whatever its genesis, though, the develop- ment is not without significance. And while it is Congress which, over the years, has called for tighter controls over the agency, the inKiative ? today is with the White House. WASHINGTOVS "intelligence community" is an outgrowth of World. War H ? the bureau- cratic response to a conviction that there must never be another Pearl Harbor. To thia end, some half-a-dozen agencies are today involved in some aspect of the intelligence pine. Of these CIA is much the largest and best known, and it enjoys a virtual monopoly on the conduct of secret operations overseas. It is a commentary on the mindless preoccu- pation ?vith "security" which permeates the in- telligence community that the American t a Tay- er does not even have a general idea of how much of his money goes for intelligence. Most estimates place the total at between $3 and $6 billion, of which perhaps $700 million is for CIA exclusively. The agency's vintage years were the 1950s and '6ns. when containmentf o.. ?oromunism was a byword and when in budgetary terms. CIA represented nothing if not a great barrel of money. From the 'nation's campuses the agency recruited the brightest and the best, a defirition then sulliehmtly Ixoad to have encomm?ssed this tt miter. The director of CIA Was tOven con- trol not only over his own agency, hot meity re- flynsible for Hie operations of the various m ary agencies as well. In its operations abroad, the agency's r( we- sent :Aives often rode rouchsbod Over the 7-esi. dent Amorican ambassador, Nylai in ilitiory was (lie senor U.S. represetrat ive utroaci. In tc. Vk'lis once instructed to Nvithhold tin inly4 taut item of intelligence from oor ainbas,:ador to 474, r7 I 600100008-6 lion in question would cause Young to embar- rass himself in a press conference so as to bring about his ouster. Eventually, CIA had its way. ALTHOUGH defenders of the agency con- tend that CIA suffers from an inability to publi- cize its successes, this is at best only partly true. Whenever the agency has suffered a se- vere reversal, it has usually managed to leak word of some success to counteract the bad pub- licity. In 1956, after considerable embarrassment over its failure to provide any warning of the Suez -crisis, agency officials led newsmen on a tour of the so-called Berlin tunnel, from which CIA operatives had eavesdropped on telephone communications in East Berlin. In 1963, at a time when the agency was still smarting over the Bay of Pigs, officials circulat- ed summaries of information it had received from Oleg Penkovsky, a disaffected Soviet Army major who by then had been arrested and executed by the Russians. More recently, agency officials have been accommodating themselves to the national ques- tioning relative to Vietnam; in so doing they have let it be known that the CIA had long been critical of U.S. policy moves there, and have sought to dissociate the agency from those poli- cy decisions which smacked of "escalation." Bat here again a healthy skepticism may be in order. First of all, the Vietnam war was a disaster for the agency in terms of its most critical re- sponsibility, the gathering of intelligence infor- mation not available from overt sources. Ac- cording to a White House study, our intelligence agencies knew virtually nothing about Hanoi's leaders or their intentions, despite the fact that Vietnam had been a priority intelligence target since at least I902. In one memorable instance, IHJ is reported to have excoriated former CIA chief John Me- cone for his inal)ility to generate information on that "raggedy-ass little fourth-rate country," North Viet/thin. Nor did the agency show great prescience in assessing the various policy opt inns open to the United Slates in Vietnam. Considering that it was apparently our renewed lyrithing of last December, teeet her \kith (he mining of I lai- Pho-t, harbor, wl,ich brought back to seri- Ills negotiatioes- in Paris, it is worth not nig that the 1971 White rou, study ejuinjet er;70d ? CIA aa minimiiing the probable elf ects of a min- ing of litiiplaint. THE AGENVY is aware that it has an in- age problem, hot its moves to col rect the prob- lem have done nothieg for the image itself. LI lAl STAT 5 1 W9010)006001000'06-'6- ? Thaiimid, Kenneth youv. Tne r.:;tio!Kdo_ was' v.hell,..?1 cqAczOlip th:it the CIA chief wanteAPIPrOMegia-FAC RogleniSeiKYWAIK144.Rait et# Th?oroq, t le placed, and hoped that witliholding the infer ma- ( Approved For Release 21 -7 VDP91-00 1R000600100008-6 4 es) fl I-... 1.1' 0 . WASHINGTON?When Salvador Al- lende Gossens was elected President of Chile in 3970 on a Marxist program, the Nixon Administration appeared to accept the need for calm if hard- headed adjustment to a regrettable dcs.velopment. 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"? I:Wit 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 lnternational 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 influeliced Improperly in 1970 and 1971 by pres- sure on the part of I.T.T., which owned a majority irterest in Chile's telephone company and had other business iet- terests in the country. I.T.T. in one of the 10 largest Amer- lean corporations. It operates in scor.7s ' of countries around the elobe--a "mul- tinational companY," in today's 1e:- icon, The Senate Foreign Relatioes Committee is concerned about the t e- ticities of all the "multinationals," aecl its hearings on I.T.T. represent oily the first phase of a study of these compel-nes and their possible influerce g'ovet tot-tenth pelicy, a study that will stretch over re'veral years. 'inc testimony ties far shows that one I.T.T. dine or, Jolla A. 1.1c(Ar.o, a former Ileac! of the C.I.A. and s iP a consultant to Piot egeney, was able to get na appointment v.rE a his 5,1e:cies Richard lielens, an di ;cuss C'. as that the Allende Government woeld expropriate its Cl:ih?sn properties kvii adeql1;:te Ii- (I1A ?00 fer ,ivedgrp,r?tiglease 2005/11/28 : CIA-RDP91700901R000600100008-6 1.:overnMental hi singer's door at the White lions:---- were also open to Mr. McCone, I.T.T. 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 carried , 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 Sl-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" was intended. Other evidence, however, hinted at darker . plans, ineiuding a proposal for stirring up enough violence in Chile to justify a takeover by the Chilean military. Mr. MeCone 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. Cencen's proffered $1-million and all the other schemes hatched by lower-level I.T.T. or C.I.A. officials were rejected at the top. But clo,imments placed in the hear- ing record teemed to indicate that cer- tain overt actions were, in fact, taken without recorded toHevel approval. For example, according to one docu- ment, William R. Merriam, head of I.T.T.'s Washington office, wrote memo to hlr. McCone three weeks be- fore Mr. Allende's final election saying that William Broe, head cif 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.1.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 . . Approved For Release 2005/11/28: CIA-RDP91-0 COMM TI,OtEiT M - 219,462 - 268,338 ITT And The Chile Scheme THE EASY WAY John McCone, a former director of the Centrel Intelli- gence_Agettcy and now a?dire7tre'rof ITIO'rnational Telephone and 'I elegraph Co., talks about his efforts to influence internal affairs in Chile makes the whole affair sound like something out of detective fiction. McCone told a Senate subcommittee he carried an offer by ITT to provide one million dollars to the United States government for it to use as it saw fit to prevent the election of Salvador Al- lende Gossens, an acknowledged Marx- ist, as president of Chile. He took the offer, he says, to the new chief of the CIA and to Henry Kissing- e r, security adviser to President Nixon. Kissinger, McCone says, told him "we'll .call you" and then never did call. But the very idea of a corpo- ration trying to induce the government to establish foreign policy ir this way sounds presumptuous, and unjustifia- ble: Granted that TIT had a heavy invest- ment in Chile which it was striving to protect f r o ni Allende's tnnounced plans for expropriation of United States property. That still would Lot justify United States intervention as the hired hand of ITT, or the use of an ITT "gift" to carry out United States poli- cy. THE TESTIMONY by McCone has been followed by that of Edward J. Gerrity, a senior ITT vice president for corporate relations. Gerrity admitted 901R000600100008-6 to the same Senate subcommittee that he had discussed with a CIA agent in charge of clandestine operations in Latin America plans designed to create economic chaos in Chile after the election of Allende. He went into detail as to how this was to be done. Clearly this was another case In which this major corporation w a s trying seriously to meddle in the inter- nal affairs of a foreign government and seeking to use its considerable influ- ence to get the United States, to support its activities. Businesses which invest abroad sure- ly recognize that such investments carry with them some risks. When they are made in Latin America, where revolutions and subsequent expropria- tions of foreign holdings have been carried out frequently, the companies f must be prepared to face such eventu- ali ti?c0s., Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 2005/11/28: CIA-RDP91 PADUCAH, KY. SUN -DEMOCRAT E - 30,040 s - 31,049 MAR 2 5 1973 STAT -00901R000600100008-6 Big Business And World Polities "The business of America is busi- ness," President Coolidge once said. The remark is not as famous as the unfor- tunate one made by "Engine Charlie" Wilson, ex-General Motors head, before a Senate committee querying him as to ' his qualifications to head the WW-2 War Production Board; "What's good for Gen- eral Motors is good for the United States." But it is clear that the chief execu- tives of many of our present-day multi- national corporations agree with both statements ? (multinational being one of those obfuscating terms economists in- vent to replace perfectly good words people already understand. We prefer international.) International Telephone & Telegraph Corp. is one of those international con- cerns. It is the one which offered a $400,000 gift to the Republican National Committee to influence the choice of San Diego as site of the 1972 GOP con- vention ? which President Nixon ordered removed to Miami Beach when word of the offer leaked out ? and was coupled with the fact that ITT hid won a prof- itable anti-trust settlement from the Jus- tice Department as an apparent result of the "gift." Now. ITT is in the news again. Former Go' CIA Director John McCone put it there last week. He told a Senate subcommit- tee lie had conveyed an of rer by ITT that it would provide $1 million to finance any U.S. government effort that might block the Communist Salvador Allende, who had apparently won election as the new president of Chile, from rctually getting the office. McCone said th:it when he was running the Central Intelligence Agency, he periodically received such offers of financial support from p:ivate compan- ies, but that it wit.,...r.,4k1olicy to refuse them. however, he said he did convcy to Presidential Adviser Henry Kissinger this million-dollar proposition from ITT. He said he also talked to then-CIA Di- rector Richard Helms. "I wanted to re- flect to him (Helms) and through him the view of ITT on the problems of the 1970 election in Chile," McCone testified. "Our opinion was that Allende would win, and since his campaign was on the basis of expropriating U.S. properties, includ- ing those of ITT, I felt our government should be alerted to the consequences both for business reasons, and the effect on the American taxpayer." We have here a very interesting ex- ample of how big business ? the inter- national corporations based in the U.S.? seek to use the U.S. government and the U.S. taxpayer to bail them out of the con- sequences of the outrageous risks they have taken in making foreign invest- ments. No doubt ITT would have liked President Nixon to threaten to send in the Marines if the new Marxist presi- dent of Chile actually took over the corn- pany's Chilean properties. McCone's testimony merely confirms Allende's campaign platform. Ile ran as a Marxist candidate on his promise to get rid of the influence of American "multinationals" in Chile, and Chilean voters chose him because of that prom- ise. If ITT and other giant foreign-con- trolled companies hadn't abused their Chilean privileges, the local voters would hardly have chosen a Chilean Communist over U.S. businessmen. The Nixon administration did not take 117's bait; which is to its credit. But this new revelation should alert the Presi- dent to the need for new and detailed federal regulation of foreign investments made by U.S. companies. These involve export of capital, and .should be subject to rules assuring that they are made only in our national interest, and certain- ly not at the expense of the national interest. Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 (?0 ST. LOUIS, MO. POST-DISPATCH Approved For Release 2005/11/28: CIA-RE E - 326,376 S 541,868 MAR 2 5 1973 IN Nes Analysis 2 151 enathr 5 Iry STA P91-00901R000600100008-6 ( k a Car In.- "ITT investigatiot BY RICHARD DUDMAN Chief Washineton Correspondent of the Post-Dispatch WASHINGTON, March 24. ? A new Senate subcommittee has revived the old prosecuting attorney approach and already has struck. paydirt. Its chairman, Senator Frank Church (Dem.), Idaho,' may not turn into another Estes Kefau- ver or a Thomas J. Walsh, but he a n d his subcommittee on Moreover, the subcommittee has shown itself adroit in el- bowing its way against other Far from denying the authen- committees in the proliferating ticity of the documents, the ear- exposure of ITT's - activities in poration's public relatons men domestic plitics and the domes- distributed bound reprints origi- tic affairs of other nations, nally printed in Chile by the Al- The t w o -ye a r inquiry into iende government to spread the mulitinational corporations is word of TIT's infamy. said to have been voted just 10 minutes after the parent For- eign Relations Chmmittee re- ceived work that Senator Ed- in discussing plans, if not in putting plans into action. multinational corporations have ward M. Kennedy (Dem.), Mas- started out after the Interna- sachusetts, w a s interested in tional Telephone gz. Telegraph the same subject. Corp. With some of the same What touched off the inquiry ;persistence a n d thoroughness was the disclosure a year ago that exposed the Dixon-Yates (--by columnist Jack Anderson of t,/ John A. McCone, former di- ticandal and Teapot Dome. documents leaked from ITT rector of the CIA and now an ITT director, wrapped the flag around the corporation and said that 11IT had been defending the free world against interna- tional communis m, just as President Barry S Truman had adopted the Marshall Plan, Se- pretaky F Defense James For- restal had carried out tile Ber- lin airlift and Preident Dwight D. Eisenhower had sent U.S. troops to Lebanon and had used the CIA to assist a?military re- volt irs Ctthtemala. McCone defended the ITT of- fer of $1,000,000 or more to the United States government for use in Chile but insisted that it was for "constructive purpos- es" such as housing or techni- cal assistance to agriculture. Corporation officials said that the reason for distributing the documents w a S. to .overcome distortions that they said result- ed by Anderson's taking quota- tions out of c o n x t. It ap- peared, too, that ITT ofifcials were entirely self-righteous about their anti-Allende efforts. Total salaries of the ranks of I awyers and public relations Men that backed. up the ITT witnesses" at the first open hear- in res this week doubtless far .outweighed the earnings of the five Senators and their staffs, ? but the two sides nonetheless seemed evenly matched. Unlike the usual congression- al hearing, where each Witness is welcomed as an old and re- spected friend and regaled with recollections of earlier times to- gether, each witness was sworn and interrogation got off to a blunt start. files discussing strategies for preventing the elected Marxist government of Salvador Allende from taking office and later for engineering President Allende's overthrow. T h e documents themselves were spectacular enough ? ref- erences to a plan to tell presi- dentin] assistant Henry A. Kis- singer that ITT was prepared to contribute "sums up to seven figures" to the effort to get rid of Anende, for example. Other plans mentioned in the papers were to foment violence and create economic chaos, to open the way for a military take- The Senators departed, more- over. over, from their usual But there was a question as ute rule, under which each gets to whether the memorandums his turn and the thread of the were deliberately exageerated inquiry often becomes tangledHe denied that the fund hrtd by underlings to impress tilde in their imlividual digressions pe been offered for the purpose of suriors vit Nh thei kn r ov..1cdge and gaps in influence policies c r ea t in economic chaos in 1/4...and power instead, two staff attorneys, in Washington and events in Chile' although staff members counsel Jerome I. Levinson and Chitof the IFF and the CIA suggest- associa te counsel Jack A.ed it repeatedly. rn N:!n i s I.;lu, former mdale mc Pr' g s tand ard ly ot Carbi , Senator Clif ford P. Cnse proc edure an-,ong lohlwi!.;ts and (Rep.), New Jersey, who can led the questioinn',;. 011)1 IOreittO attiOltS I thOSe. 5Vh0:;y 1 n!=? ;11:Itg tur, one of them get- be Ithticcwoiomt-nJy blunt Whert I ill ateepeitred as :dgners o f Ii I:1r a new tal-t ,7,ry, asked :`.",e(-0110 tee mernorardums. the other peliiely lett insistently the Ill money was rid intend- ptodilt d the witness. Three da Ys of hrnlinns ed for moce i Iii dii ediatc out ii; ii en the so,-11 brjvm: the "I nators cut ie front put 10:0)' time to tinie, but cinch seemed Sw"'n ci C" to enough opportunity - c a r that IT ami-AllenCe guess at the lime was preparing to , maneuvering v. tis itHt PONS- to %Tip Ott Who WOuld Presi- ask questions (and pnesible get t I ' I ll dent, since Allende had woe the s"ihne"t ForReleatet12005/11/281teCIAADP9T-009011RIAC1600 without. the format ) McCone said that nothing of that sort had been discussed with him by ITT President Har- old S. Geneen or CIA Director Richard Helms. But Mc Cone later testified that the money had been in- tended to finance an anti-Al- lende coalition in the Chilean Congress. Edward Gerrity, ITT's senior Vice President for corporate re- lations and advertising, testified that the purpose seas alWays constructive. Jack D. Neal, the company's director of international rela- tion s, testified that when he made the offer to the assistant secretary of state for Latin American affairs, Chaires A. Meyer, "I didn't elaborate" as to what the $1,000,000 would be used for. Another party to the discus- ,---sions, William V. 13roe, director: of clandestine activities in Latin America for the CIA, has testi- fied only in closed session. It is understood that he has told the subcommittee that the purpose of the ITT money was to use covert means to prevent the election of Allende. As things turned out, the of-. ler was turned down and, ac- cording to McCone, Helms said that a senior interdepartmental committee had decided that nothing of consequence would be done to block Allende from taking office. McCone quoted Helms as saying that a "mini- mal effort" would be arranged within the CIA's own budget. In the background is a ques- tion, important to U.S. taXpay- us as well as to ITT, as to whether the United States ft0V- cl-rment will pay ITT's claim of lf.9nne00,000 for the expropriation of its subsidiary telephone com- pany in Chile. ITT was insured anainst ex- propriation under tile U.S. Gov- ernment's OVer0ati Privote In- vestment Corp., but Liouch has raised the questic,n winnner toe United States Got crisnent 0- mains liable unner !! ;I: can be shown that Il 1 min yak ed the expropraftrt. The Allende goy( rnment promptly ti-pc.nti?d ti lion negotiltions ck,m-c-rAT p:.:ny when Anderson the secret document;, tures, Central letelleet nee Agency majority. - were working do-iely together 00008-6 /12 MINNEAPOLIS TRIBUNE Approved For Release 200/ -00901 ' i?moric5 3 r.] -1 corpo7Elto Hearings On America's giant mull ina - (bona( corporations opened this week ? before a special subcommittee of the Senate Foreign Belations Committee. , The inquiry ? expected to last at least Iwo ycuiS? will look into the influ- ence of those global giants on Ameri- . ca's relations with the Common Mar- ket, Japan, Canada, South Africa and . Latin America.- The committee, headed. by Sen. Frank Church of Idaho, plans to probe corpo- rat ion s' overseas-investment deci- sions, explore relations oil companies and producing and-consum- ing nations and, finally, review the laws affecting such corporations. Among those -likely to be called are the Ford Motor Co., General Electric Co.; International Business Machines Corp. and. the Overseas Private Invest- ment Corp., an agency set up by Con- gress to insure corporations against takeovers by foreign governments. The first corporation in the spotlight. however, was International Telephone and Telegraph (ITT), and if the initial disclosures were a taste of things to come, the Church inquiry may he one ot the most revealing studies that Con- gress has ever -conducted of corporate attempts to influence Americtm for- policy-making. A year ago. ITT' was be subject of a Senate Judiciary Committee hearing into ITT's acquisition of the Hartford Fire Insurance Co. Al about the same time, columnist .lack Anderson pub- lished a series of articles about ITT's involvement ln the 1970 Chilean elec- tions. It \va the latt,,,r su:-)jeci with ivitich the Church commitiiee opened its inVeSligal arts. lit. iry.),;t dkclosere, so far. 1),ts that el ()lie of Ills L..-- \-110 i a ified (Ai We?t? ri? :day that .0 }leery zwc. I le its, !lieu 00600100008-6 rmyi:re. g14, director of the Central Agcncy, a CM - poration offer of a million-dollar ton- t! ibution to? und.nwrite a plan for pre- venting the - election DI Ur. Salvador Allendr.s; a Marxist, as ureAdent of Chile: (There iS? no evidence yet that the Nixon administration ever serious- ly considered the pla.n. lu ui .;:f. Al- lencle!s chances. -Attend'. ?, as and, subsequently, his go? err meat took over ITT business properties as he had promised in his election campaign) McCone, who. was Helms' predeces- sor at the CIA, and still is a consultant to the CIA, denied that the million dol- lars WiiS intended to finance anything "stirreptitious." Reporters at the hear- ings said that Democrats and Republi- cans alike reacted to McCone's ex- planation with considerable skepticism: -1-he affairs of the world's mull?i-na tion: al 'corporations are beyond the com- prehension of the average!:itizen, It is estimated, for example, that. by 1 t1S5 about 300 of those global giants will produce more than half of the world's manufactured goods and services. To- day, American-based firms account for nearly half of total multinational out The, rest belongs to giants based in Western Europe and Japan. Multinational corporations, deal in bil- lions (then resources zn'e greater than many of the world's smaller countries), and already it is possible to talk-of multinational "consortia." As ,G:orge Ball, former undersecretary 'of state and now a senior partner at. Lehman , Brothers. has said: "How can a nation- . al !_,,overnment operate a dowstic ii- and economic policy Wryn. it can't ont.rol i;le decisions of alt the facto-s within ;he economy".'" A year study, a I n-year st udy, no matter. The- problem k goig to be for citi- yens evelywhere ? how to clop laws that will control those expanding corporate giants. Approved For Release 2005/11/28 : CIA-RDP91700901R000600100008-6 Approved-Per--Release--IEGO21A-RDP 91-00901R0 SAN D, ? UNION - 139,739 S 246,007 VAR 24 1973 ? . F4) f771 ?, ni * kft>4 j g , SIAI 00600100008-6 ?Senate investigators said in I McCone said One of the corpo- Washington yesterday that' they 'ration's objectives was to bring ; have been unable to tre-iover about a coalition Allende's. any Wrongdoing -by the Central inpponer,ts to prevent him from IntelliFee. Agency in itsee7-;ii_Itaking , power. Internal ITT tacts with the International memoranda subpoenaed by the Telephone and Telegraph Corp. jsubcommittee contain frequent I (IT'f) in connection with 'Chile's references to ITT efforts to en- 1970 presidential-election. gage CIA help to stop At- m r, e. . ? A senator, who asked now to onu be identified, said a specialiROGEP.S INVITED .Senate panel which met. withl The chairman of the Senate CIA officials apparently is Sat- subcommittee, Frank Church, isifed for the time being withID-Idaho, said he had issued a the CIA's exaelanatnal that the I _, second inyhttion to Secretary agency had ITT merely Prn of State Vm'illiam P. Rogers to. exchanging inC"rmati" beime:testiiy on the matter. Marxist Salvador Allende won However, the state Depart-: The election. Iment said Rogers probably ''I here is nothing unusual would decline, and instead offer; about the CIA exchan7ing infer- to send someone connectedI mation with representatives of :more directly with Latin Amer.. American ; corporations jean affairs. 'abroad,' the senator said, add-; In Santiago yesterday ai ,ing that he saw nothing wrong ,prominent politician said he: with the CIA attempting to ef-I turned clown an offer from an I feet champs in a foreign 'ITT executive to help anti-Mar- try to the advantage of h xjsl. Chileans block the electionj of Allende. United St ties, I OFFER REPORTED - CONTACTS REPORTED Testimony before the Senate The politician, Arturo Matte foreign relations 'subcommittee Larrain, said in a telephone in- en multinational corporations terview that Robert Berrellez, this week disclosed numerous am; IT!' public relations execu- contacts between ITT Lied CIA Ithee, made the offer more than officials dinar the months pre- I two years ago while the elec- ceding Allende's in-Ilion of Allende, a Marxist-So- auguration.. ! cielist, hung in the balance. Former CIA Director john I Matte ',al min was campaign, NleCone, no Idirector of ITT,' Illantiger ter ex-President ! said he set up time nicetines ? Jorge Alesaildri, One Of two including a syyret 11,6,21 1-0001 :1102-1:trXIA candidates running I session bely.een ce:imivir? ietaiuet Allende. hien!. H:trul,.1l oil tutu \- tho ? "'ssitTh`t"ce but-' subcammitie.t (Mei e!' (m\ Nt'ml; not mentioued,"; CLANDESTE,'.: VIlV P'-S le; Matte 1.arrimin raid. "We tweed! Till; Western ilettuspimemet. In down." Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 .i'IASIIIreG C.Voi STAR Approved For Release 2005/4/18WidiAAMP91-00901 (3 LD LINCOLN ge / - As a nation, and as a gov- ernment, how intellige at are we? According to Noah Web- ster, American lexicot rnpher who flourished from i7h3 to 1843, intelligence meeps the capacity to comprehend facts and understand them. A see- end meaning is an age.ney of government to watch nn ene- my nation, el' potential enemy nation, for national defense. And it is estimated that we are spending $0 billion dollars each year on our several in- telligence agencies for such purposes. How intelligent is that? James R. Schlesinger, new. director of the Central intelli- gence Agency, it is reported, has begun the largest person- nel cutback in the his ory of that agency, and also in the personnel of the Notional Security Agency, which scents an intelligent thing to do. However, the cutback, it is said, will be only 10 t arcent across the board. The CIA has approyimately 18,000 jobs and possibly 1,800 of them will be abolished .by June 30, the end of the present fiscal yems The National Security Agerey has about 100,000 employes. and a 10 percent reduction would mean laying off 10,000. Still another agency, much small- er, the Defense Intelligence Agency, has about 3,0.i jobs, and it too is slated for a cut- back, it is said. These intelligence agencies ai-e of the executive 1.)n,nch of the government. But p. hat of the legislative branch--the Congress, Senate and House? it has innumerable investiga- tive and intelligence a e.,L?neies, looldng into ail Idiels of af- fairs, foreirn and d.orPestic, particularly at the present moment. Take, Inc example, the Sen.- ate Ferreira Itelationf Com- mittee undc r the chat ship of Frm. J. Will Fel- brifJit, Ai-hens:1s J), ort. IL is investigating Pri sident er '1 C '4 LI te: k.; Nixon's conduct of the war in Vietnam and had been doing so for a time, with unfortu- nate results, causing a h ngth- ening of the \var by encourag- ing the Hanoi Communists and the Viet Cong in the belief that the anti-war voters in this country would kill off Nixon in the presidential elec- tions and put in his place Democratic Sen. George. McGovern, or some other anti-war Democrat. * Although this tactic failed, Sen. Edward M. Kennedy of Massachusetts continues to belabor this issue, claiming that the war could have been effectively ended at least four years earlier, with the saving of thousands of American and Vietnamese lives. In the bright lexicon of youth, ap- parently there is no such word as fail, especially where the political demise of the Presi- dent is the end desired. . Sen. Sam J. Ervin Jr., North Carolina Democrat, is leading the investigation of Nixon's appointee to be per- manent head of the Federal Bureau of Investigation, L. Patrick Gray III, a former high-ranking naval officer. Gray was handed the job, on a temporary basis, after the death of J. Edgar Hoover, who had been director nearly half a cent ary, the first direc- tor after the creation of the bureau, and who had given it a reputation for great effec- tiveness. Gray has been accused or giving John W. Dean III, pres- idential counsel, reports of I he invest i gat ion of the Water- gate caper, which had been demanded by the Senate Judi- ciary Committee. Dean, it hos born chareed, passed the de- tails of tl,e investieotion alone, to the While Iloese and to important members of the conenittoo few the Re election of the Pr, si,:ent, including former Atty. Gen. John N. This, in view oe n. arvi and other Democratic, anc some of the liberal Republi can senators, was outrageous conduct. In consequence, they are threatening to defeat con firmation of the Cray appoint ment in the committee and ti Senate itself, or failing that, to hold on action indefinitely on the nomination. Then there is the Senate committee investigation of the charge that the International Telephone and Telegraph Corporation?the ITT?of- fered $1 million to be used to prevent the election of Salva- dor Allende, a Marxist, to be president of Chile. John A. McCone, former director of the Central Intelligence Agen- cy, testifying before the Sen- ate Foreign Relations sub- committee on multinational corporations, said he had told two top officials of the Nixon administration?Henry Kis- singer and the then CIA Director Richard M. Helms?, that the ITT was willing to contribute a sum rising into seven figures to defeat Al- lende in a runoff election. Al- lende had been the high man in the first election. * The ITT was afraid that if Allende became president, he would confiscate its S150 mil- -lion telephone company oper- ating in Chile and other hold- ings of tl3e. company. The Nixon administration, however, would have nothing to do with this operation and said so, McCone declared. McCone was named director .of the CIA by President John F. Kennedy after the abortive Bay of Pigs invasion. Edward Gerriiy, an ITT of- ficial appenriv before the sub;.ommittee, flatly denied McCone's versio of the Ill's &alines with aide. Gerrity insisted ITT offered help to Allende, including large fi- noecial aid ll;:s, men-ill:ors of the subcommittee said, ap- peared to them incredible. Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 2005/11/28 : CIA-RDP91-009 IILMi'AUfON, DEL* JOURNAL E 89,875 171.3. mrs and Chile Chile does not have much going for itself these days, except the Senate hearings on ITT :in Washington. Senior officials of the ITT are testify- log in a glare of publicity, perforce spilling unpleasant truths and making fools of themselves .by trying to make fools of their interrogators. ITT had holdings of about .515) million in Chile before the election of Marxist President Salvador Allende, and all evidence indi- cates very strongly that ITT first sought to ward off Dr. Allende's elec- lion and then, when he was elected, to create economic chaos in Chile. ITT, it eierns, had the support of at least some people in the Central Intel- gence Agency, but its various proposals to deal with the "situation" in Chile, even though carried, to the level of at least Dr. Henry Kissinger, the President's foreign policy adviser, v'ere given some consideration and then ap- parently rejected. That should be little cause for satisfaction, however. Of more concern should be the fact that the ITT people had the gall to carry 1R000600100008-6 such proposals to such a level and were, able to get some consideration. On the Matter of what the offer of a million dollars by the ITT to the U.S.. government was supposed to achieve, the corporation is advancing the novel idea that the money was to be used for - "constructive" purposes. John A. Mc- Cone, former and now a . director of ITTC, ompared his cotTora- tion's million-dollar offer to the U.S. government's aid programs for Greece and Turkey, the Marshall Plan, and the Berlin Airlift. "International Common- 1w. declared, has said time and again that its objective is the destruc- tion of the free world, economically, politically and militarily." Yet, the. same ITT is negotiating with The Soviet Union for expanding its busi- ness there. The fact of the matter is that ITT was concerned with its proper- ty and profits, not with ideology, and it attempted to confuse its corporate in- terest with the national interest, doing considerable damage to the latter in the whole ignoble process, Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 LOUISVILLE, KApproved For Release 2005/11/28 : CIA-RDP91-0 901R000600100008-6 COURIER --JOURNA4- *MAR 24 1973 - 239,949 S - 350,303 Former CIA director has a blind spot for 1TT's policy The greatness of a nation is measured by more than its power and its economic might. It is measured also by the respect for that country in all the capitals of the globe. Respect for a nation is the most important factor it can have, and respect for the United States of America has fallen to its lowest point in our history. ?11'1/UR YEARS after that brooding ex- hortation of the American voter, President Nixon returned to the campaign podium to declare victory over the nation's image prob- lem. "Throughout the world today, America is respected," he said last November. One can only speculate whether, as he spoke those words, the dust from the activities of ? International Telephone & Telegraph Corpo- ration ? in trying to manipulate the 1970 Chilean election ? was ticklish on his tongue Certainly now that ITT's million-dollar offer in 1970 ? to back any American government effort against the election of Marxist Salvador Allende Gossens as president of Chile ? has been exposed .in a congressional hearing, Mr. Nixon's claims ,about the American image abroad must taste like dust. Toyr. Nixon's credit, the Inn offer was not accepted: But for leaders around the world who know of ITT's 1972 offer to spend hun- dreds of thousands of dollars to help finance the President's ritual. nominating convention, the fear of American economic imperialism undoubtedly has been reinforced. It did nothing to calm those fears when John v./McCone (former Central Intellig,enz_Agency director and present ITT -Voai?ci member, for heaven's sake) characterized ITT's million-dol- lar offer as something akin to the Marshall Plan and the Berlin airlift. He might as well have claimed the Spanish-American War was fought on principle, not expedience. Rejected other. offers Not content to describe ITT's Chilean in- volvement as defensible, Mr. McCone also vol- unteered the observation that as head of the CIA he had received similar offers from other American corporations, although each had been "summarily rejected." It's curious that Mr. McCone saw nothing extraordinarily wrong with the ITT offer, while he felt called upon to tell the congressmen that similar ear- lier offers had been "summarily" dhinissed by his agency. Perhaps Mr. McCone simply betimes ? with respect to Mr. Allende's takeover of ITT's $150 million Chilean telephone subsidiary ? that Chilean policy violates a notion once advanced presid?nt mcKi4promdifiotRekeatkee2005/11/28 : CIA-RDP91-00901R000600100008-6 United States is one of benevolent assimila-- Perhaps.he doesn't see that Mr. Allende just substituted "Chile" for "United States" and put-the-McKinley Doctrine to work, Of course more is involved here than the spectacle of an. international 'corporation -try- ing to cozen the U.S. government or the spec- tacle of Mr. McCone defending the in- defensible. An equally serious question is Whether such activities as ITT's meddling tend to -remove foreign policy from the control of Congress. Senator Church was so upset by the notion of private financing of America's for- eign involvements that he suggested a law to prevent it. That's one of the things the Senate inquiry into corporate influence in U.S. foreign policy ought to consider. Economic blackmail is never a very attractive or useful building- block for foreign policy. Much less is it a rational choice when the blackmail is directed at achieving narrow, private gains ? such as forcing Mr. Allende to pay more for the tele- phone company he took. The temptation is to counsel the Senate committee to speed its investigation, before ITT rents its document shredder to other com- panies whose activities have yet to be exam- ined. But then ITT itself should have had plen- ty of time to eliminate the evidence, before it was leaked. Which leads to the conclusion that ITT officials simply thought they could get by with disclosure of their Chilean initiatives because the public wouldn't understand or wouldn't care. Joseph Conrad wrote about imperialism when he observed, in Heart of Darkness, ''The conquest or the earth, which mosth. means taking it away from those who have a different complexion or slightly flatter noses than ourselves, is not a pretty thing when yo look into it." Neither is corporate arrogance. WASF.7707,-7 Approved For Release 2002/111/MR CRUZDP91-009 1R000600100008-6 ITT: 'Serving People and Nations Everywhere' The first thing to be said of the Senate's investigation of the I-17 affair in Chile is that, so far, no charge has been made and no proof offered that the Central Intelli- gence Agency actually conspired to prevent Marxist Salvador Allende from being elected president and taking office in 1970. In testimony before a Foreign Relations subcommittee, one ITT official, former CIA Director John McCone, said he transmitted in' presi- dent Harold Geneen's block-Allende proposal to Mc- Cone's "close personal friend," then CIA Director Rich- ard Helms, and to Henry Kissinger as well. Another r official, vice president Edward Gerrity added that some such proposal was made by the CIA's own William Broe, who has yet to testify publicly himself. A pattern of frequent and easy ITT-government contacts has been established, including "25 visits" to the ?State Depart- ment. But all witnesses so far have agreed that the United States did not act on the block-Allende proposals. He did take office. So on the basis of this testimony it would be wrong and unfair to accuse the Nixon administration, - whose disputes with Chile over expropriation issues are a matter of record, of having tried to keep Mr. Allende from taking power. We emphasize the point with the hope of not making the situation seem any worse than it actually is. For the situation?without embellishment?is in fact pretty bad. Whether out of common and reflexive colds war tradition, a custom peculiar to Chile. or ITT's own special style, when the giant company felt it had a prob- lem in Chile in 1971, it went promptly and repeatedly to the innermost corridors of official power. Its problem was its fear that the Allende government might national- ize its telephone company;,Santiago later did nationalize: on grounds (among others) of "rotten service." To save this $150 million property, ITT?by Mr. McCone's word ?concocted the extraordinary notion of giving the CIA up to $1 million to implement an ITI' plan to create enough economic and political disorder to prevent Mr. Allende from taking office. Note well: any citizen or corporation has a right, within certain limits, to petition his government. But have you ever heard of any citizen or corporation offer. ing the government an extra, sum to provide a special service: flouting a foreign government's electoral process at that? It's as though ITT considered the U.S. govern- ment to be, well, a multinational corporation, with varied services to sell to various customers. A concept more defiant of democratic government is hard to imagine. Mr. McCone said he conceived of the $1 million project as being in the same anti-Communist spirit as the Marshall Plan and the Berlin Airlift. His ITT col- league, Mr. Gerrity, expressing surprise at the McCone testimony, said he conceived of the $1 million as "seed money" for a housing project?to sweeten Mr. Allende. The difference is intriguing and, we trust, will be thoroughly explored. ITT has its honor to defend, to say nothing of its $92 million expropriation insurance claim pending before the U.S. government's tax-supported corporate insurance agency. The ITT hearings, the first conducted by Senator Church's new multinational corporations subcommittee, are to continue next week. Subsequent hearings planned over the next three years are to address other aspects of multinational corporate activity. Already, however, enough material has emerged to indicate that the public is woefully ignorant of both the ways in which American corporate power is employed in Washington and its effects not only on the corporate position but on the American national standing abroad. We do not assume that the ITT role in Chile, whatever further inquiry shows that role to have been, is typical of multinational performance everywhere. We trust, moreover, that the Church subcommittee will be as diligent in laying out' the corporations' benefits to Americans and foreigners as it is in indicating the pitfalls in their path. Meanwhile, the rest of the ITT story in Chile needs to be told. Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 2005/11) T8YhialtRA is7D3P91-00901 , .000600100008-6 STAT Gerrity testified Thursday before the Subcommittee on NIultinntional Corporations of the Foreign Relations C(,mmittee. On Wednesday, John A. McCune, onner head ot the CIA. and now an ITT director. testified that ITT had of (eyed SI million to Ingh Nixon Administration officials to help finance the overthrow of the Popular Unity government because of its determination to ie- sloe the sovereignty of Chile and its independence of iruperralixin The scheme was discussed with CIA director Rich- aid helms, Dr. Henry Icissinger, Nixon's adviser on lot'- dli other Nixon ndvisers, and was known lw 'Die CIA agent who dealt directly with Gerrity and Geneen was William V. Broe, in charge of CIA "dirty trieks- in I ,atin America. ?. These subversive activities directed against Chile by n U.S. multinational corporation and the Nixon Adminis- tration working togez.her were calmly related by the con- spirators as if they were normal activities. And, in fact, in the world of imperialism they are. McCone disclosed that, when he had been head of the CIA, he had received similar offers from corporations. He also said he thought that ITT's proposals conformed with U.S. governmental policy. As he put it: "The money (the SI million) was to be channeled to people who support the principles and programs. the United Sta!,es stands for against the programs of the Allende-Marxists- (New Yorh Times, March 22). What the people of Chile want is not decisive. in Mc- Cone's view. That U.S. imperialism has no divine right to interfere in the affairs of other countries to impose its policies apparently never occurred to him either. That helped him in his job as CIA director. Corporations have not acted differently since they entered the period of imperialism. Gen. Smedley Butler. a Marine commander, in 1931, disclosed that: "I spent 33 years (in the Marines).., most of in time being a high-class muscle man for big business. for Wall Street and the bankers. In short, I was a racketeer for "I helped purify Nicaratia for the international banking house of Brown Brothers in 1909-1912. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I brought light to the Dominican Re- public for American sugar interests in 1916. I helped make liaiti and Cuba a decent place for the National City (Bank) boys to collect revenue in. I helped in the rape of ball a dozen Central American Republics for the benefit of Wall Street... In China in It)27 I helped to see to it that Standard 011 went its way umnolested..." It is interesting to note that McCue professed that the "programs the United S',.ate-S stands for against the programs el. the Allendc-Marxists- included the building (4 housing null technical assistance to Chilean agricul- ture! 'Both Democratic and Republican members of the milleommittee reacted with considerable skewicisin.- h;ili'en Shanahan of the New York Time.; reported ' (March 22). Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 2005/11/28 : CIA-RDP91-009 BitILJEPORT, CONN. POST' E 82,722 S ? D5-,633 MAR 2 12;73 r'1"1 r"711 II R 121 S A year ago "ITT" meant. the same thing as ."Watergate" does today: a major embarrassment for the Nixon Administration. With the return of ITT (Interna- tional Telephone and 'Telegraph Cor- poration) to the headlines alongside Watergate, the government has a double headache. A -House investigating subcommittee is probing essentially the same questions as the Senate Judiciary Committee last year: Why did the Justice Department drop its anti-trust suit against ITT? Did the company exercise undue influence on government officials? Did it receive special consideration? The investigators want some ITT files now in possession of the Justice Department. So far they have been turned down. According to the -subcommittee, the files tell of ITT communication with such:figures as Vice President Spiro T. Agnew, Domestic Adviser John Ehrlich- man, former Secretary of the Treasury John Connally, and former Secretary of Commerce Peter C. Peterson. Some of the same names that have been popping up in the Waters-ate case appear here as well: former 'Attorney General John Mitchell, fund raiser and former Secretary of Commerce Maurice Stans, and Charles W. Colson, one-time special counsel to the President. The Justice Department is on the spot. Since Mr. Mitchell and present Attorney General Richard Kleindienst both are involved in the case, suspicion about justice's desire to bring the facts to light is bound to grow until a full disclosure of the records is made. 1R000600100008-6 ITT is also on a hot seat in the Senate. There another subcommittee is ? investigating the corporation's alleged attempts to interfere in the politics oL, Chile. At issue is a $1 million offer made by ITT board chairman Harold S. Geneen to the CIA.?and the White House. The money was to be used to prevent the election of Marxist Salvador Allende as Chile's president. A go- between in this instance was John A. McCone, former CIA :head, now an ITT director. So using a one-time government official to influence his former agency must be regarded as questionable prac- tice. Company documents 2nd testimony by ITT Vice President William R. Mer- riam also tell of an 1S-point plan the firm tried to sell the government. Its - object was to bring about economic collapse in Chile and the ouster of President Allende after he had seized art ITT subsidiary without making com- pensation. ITT had a legitimate grievance ? against Mr. Allende. But tbe. means it chose to combat him were improper and excessive. A company has an inflated idea of its own importance when it asks the United States to interfere with another country's elections and to bring that nation to its knees economically. To the Administration's credit, no evidence. has been produced to suggest it bought either idea. But the very fact the conglomerate could make such proposal:: confirms thst ? it has become too poe,.ei I and 6;71 for the rood of this country. Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 Approved For Release 2005/11/28 : CIA-RDP91-00911 R000600100008-6 NORFOLK, VA. MAR 2 3 1973 - 127,079 S - 174,257 ITT's Foreign Affairs John J. McCone, the distin- guished former Director of the Central Intelligence Agency and currently a director of Internation- al Telephone & Telegraph Corpora- tion, put the best possible face upon ITT's offer of $1 million? tendered through himself?to the White House and CIA to support ef- forts to thwart the election of Marxist Salvador Allende Gossens as President of Chile in 1970. Mr. 11,11cCone's testimony before the Senate Foreign Relations :Sub- committee on Multinational .Cor- porations was consistent with his comments to Business Week, .pub- lished last April.: ITT had tolci the Nixon Administration that it would aid any Government plan to block Dr. Allende's elevation; company officials had ruled out schemes of "economic repression" to protect ITT's $150 million investment in Chile, but were willing to finance an anti-Allende coalition. Mr. Mc Conetold the subcommittee that he thought the company's actions per- fectly proper and in tune with U.S. foreign-policy goals and practices. ITT staff memos published by columnist Jack Anderson a year ago indieated that some ITT offi- cers were willing to have Washing- ton. go to dismaying lengths to pre- vent Dr. Allende from taking office. Some of the memos intimated that the Administration had yielded to ITT's entreaties. However, Ed:- ward J. Gerrity, ITT Vice Presi- dent, yesterday presented another story,. The CIA's director of clan- destine actrv=ilatin America had proposed a five-point plan to bring on economic collapse in Chile, Mr. Gerrity said, but the company would have no part of it. Meanwhile, ITT's discussions with this Government of interVen- tion in the domestic political proc- esses of a democratic and friendly country have deepened suspicions throughout Latin America of the Colossus of the North. Dr. Allende, who does not yet enjoy majority support among Chilean voters, has been able to divert popular atten- tion from his own dismal perform- ance in power by harping upon ITT's behind-the-scenes maneuver- ing?maneuvering that continued 'after he became President: ITT's conduct to protect its inter- ests is understandable, but of du- bious propriety. That the Allende Government's sins against proper- ty are writ large is beside the point: that ITT made secret ap- proaches to this Government to en- courage it to influence covertly the outcome of a free election in anoth- er country is the issue. Americans as well as Chileans have excellent reason to be disturbed. What is good for ITT is not necessarily good for Chile or the United States.' Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 f !I ? ? -7 JOURNAL, M - 66,673 S - 209,501 MAR 23 1.73 Approved For Release 2005/11/28 : CIA-RDP91-0090' 0 rrr 141 n `r .0 Ceki k) sloes-4 By DOUGLAS C. WILSON Journat-Buliciin Washington Bureau . _ ? Washington ? /s. high Inter- pear: Peter Peterson, a "per- sonal representative" to Pres- national Telephone Tele- ident Nixon for trade. mat- graph Corp. official told' ters: Viron P. Valty, U.S. am- - zkeptical Senate investigators bassadur to Costa Rica, and yesterday that the company Arnold Naehmanoff, adviser had offered one million dol- on Latin America to Henry A. Jars for a plan to help Sal- Nissinger. vador Allende during ?Chile's The subcommittee is inves- 1910 presidential elections --- tigating whether JTT tried to . not to help his opponents. influence either Chile's inter- The sf:vorn testimony by Ed- nal politics or U.S. policy to- ward J. Gerrity Jr., 171"s ward Chile. The company senior vice president for car- owned the Chilean Telephone }foliate relations, contradicted Co. --- a 153-Inillion-dollar in- hibit-mall:en given the day be. vestment ? and feared in fore, under oath, by an P1-1' 1970 that it would be expro- director to the same Senate printed if Mr.. Allende, a panel, the subcommittee on Marxist, were elected. multinational corporations. A key issue in the Senate in- Sen. Edmund S. Mitskie, D- vestination is l'IT's ofirr in Iinaine, sai,t .Mr. Gerrity 's eel.- mirt-Septernhcr, to contribute ski of the st0i ,.. also centra, up to One million dollars to dieted the basic; theme of ITT support some plan the U.S. documents which suggested, instead, tinit IIT's mone.y was government might devise with "more lilsely to be used for regard to Chile. destructive purposes, rather The offer was made at a than constructive purposes" critical time in Chile's selee- during Chile's elections. . lion of a new president. Mr. Other senutors voiced the ' Allende had won a plurality seine skept icism, but not a rnasiority ill the The subcomm it tee called country's Sept. 4 election, and yesterday fe-r testimony frail the Chilenn Can es was to decide. hie winner in a runoff Secretary of Stnte V.-illifen 1'. ke. Doeers and William V. 1-11'01', vote Oct. 2-1. former chief of c'encicsoine Mr. Gerrity said yesterday opc.irations fol. the On tri-I-Jee? that it becerne "quite plain" Agency HLafia 1,citexen f-nd Oct. :1 that Sii. Aber! le "was :Meld to be seated as president." cheirman, Sen. Friink Ilevansu of lie seict Gen Claireh, 1)-;:sehcf, told nesee- ? eon preuosed the cum- incr. that fens- firer- :nilTr", ',Any ho cited n entop \.?-he?h Imo boani cle,irnem R000600100008-6 Joan J. meLone, a m ' of. ITT's board of directors ' ter around Oct. 1. We have who served as head of the pledged our support if need- Central Intelligence Agency Ca." Al before joining ITT in 1965. r. Gerrity responded by saying this cable had been Any Government Plan sent before it had become ap-;' Mr. MeCiine said Mr. Gen- parent that Mr. Allende would; eon "told the he was prepared be elected. No senator pointed - to the inconsistency here: Mr, -tc; put up as much . as one Gerrity testified that the mil- million dollars in support of lion-dollar offer was consid- any government plan to bring ered because it had become about a coalition of the op- "quite plain" that Mr. Allende- position to Allende" ? a co- would be elected. Ile also les-. alition "which would be unit- tilted that it was proposed to - ed and deprive Allende of his the State Department on Sept. - position." 12 ? five days prior to the Mr. Gerrity said yesterday cable, which Mr. Gerrity said that he "had never heard that was sent before Mr. Allende's understanding of what the victory seemed certain. money was to -be used for" "Gesture of Farewell" before Wednesday. Senators asked Mr. Gerrity "You wouldn't think that he -about the ITT men's state- (McCone) would lie to us, do ment in the same cable that yOu?" Senator Church asked one of them had talked with Mr. Gerrity. the top adviser to Jorge Ales- "I'm sure he wouldn't, sir,' sandri, the conservative can- the executive answered. dictate opposing Mr. Allende. Mr. Gentler) is scheduled to The ITT men told the Ales- give his own account of the sandri aide at the end of the story to the subcommittee conversation that "we were, next Thursday, as always, ready to contribele Mr. Gerrity did agree with with what was necessary." Mr. McCone's testimony that Mr. Gerrity said he beJl`",?cd the money was intended for this \WS simply "a gestate "constructive" programs in farewell." Chile such as housing and ag. Senator Church told Mr. ricultural assistance. Gerrity it was ''peculiar'' that - 'Confidence fn-Chilo' "in pouring through three The subcommittee was times of documents, we : find not a single reference to any skeptical about McCone's statement Wednesday that Plen that had as its purpose building of houses or giv- this was what ITT was con- . sidering as a Plan to strength- ing technic-fit assistance or en Allende's opposition. It was some other constructive pro- (gill.acem-- not a single refer- day tA hen Mr. Gerrity said :Qr. Gerrity said the offer of this was the plan, and that it a million dollars was made by was meant to demonstrate to even more skeptical yeste.r- Allende that ryr still had Shick Neal, ITT's director of "confidence in Chile." iiaernational relations, to said the idea was to see Charles Meyer, trysn assistant if "we could get something secretary cif state for inter- rping, and go talk to the Al- American affairs and to Jende governrrict.t and see if \',iky. they would be inferested." Mr. Meyer is scheduled to Sen. Charles l'eecy, lJl1testify next weele s:tt-Donee Ano;ficr" it lie was bothered by '?the l--'efeator -lilts ei.iseed froin ol this stofiy, It another ITT nicueorendem, doceni'l bold tosether that ITT (see wi mr. Ne i,1 ,s tr)irif, to eerk with Al- Scpt. whiell complaieed lcude." 10, in Latin America Thirn Li ferity Insensorid plan -to demon- sent. to Mr, (luridly. Sept. 17 knowledge what transpired st rate I() Mr. Alleede and saying that "lir:, et:ft-Allende between IT F and the CIA." Chile that we have confidence ,?flort ihen will said subeominittceif Approve -Foi Release 2005/11/218"!' `CIARDP9147090111 R000600100008-6 .1 his ih, stinp,a the doimee of this members hint iiinoekt ask three other officials to tit- array viven assistance will ha known bet- Ili if the afimini; ti,ifif-n was 'P r taitee 0 mete rf:ective pert during the pre -elect on ivrioci hi assure the defeat of Allende." STAT STAT !vavit--2.-075'n 1/28 : CIA-RDP91- INQUIRER. - 463,503 S - 867,810 . 1973 00901R000600100008-6 STAT The 1,. S. should abandion bananaire?ublic iplonitacy. The International Telephone and Tele- graph Corporation is not running for public office, so we can only hope at the moment that the latest and cumulative evidence of its tinkering with the public process will serve to alert and armor public servants against the dangers that tinkering represents. Nonetheless, the sanguine testimony by former Central Intelligence Agency director John A. McCone about a -frus- trated ITT escapade in banana-repub- lic-era dollar diplomacy is sufficiently appalling to suggest need for a substan- tial Federal reform: American business enterprises should be prohibited, under criminal sanctions, from interfering in the political proc- esses of foreign nations. k * * Mr. McCone, an appointee of Presi- dent Kennedy, testified Wednesday to the Senate Foreign Relations Commit- tee's panel on multinational corpora- tions. He spoke of approaches through to Richard M. Helms, a successor to Mr. McCone as CIA chief, and to the White House's Henry Kissinger by Har- old S. Geneen, board chairman of ITT. The subject was Chilean politics, in 1970. The concern was over ITrs sub- sidiary, the $1S0 million telephone sys- tem in Chile, which Mr. Geneen feared would be nationalized or otherwise dis- turbed by the election of Salvador Al- lende Gossens, a Marxist, who is now President. "Mr. McCone testified that Mr. Geneen "told me he was prepared to put up as much as $1 million in support of any government plan for the purpose of bringing about a coali- tion of opposition to Allende . . . to deprive Allende of his position. It would not be a plan generated by ITT or Mr. Gcneen. I was asked if I supported it. I did, and I came to Wash- ington several days later and told Mr. Helms of the availability of the funds and then met with Mr. Kissinger and told him the same thing Mr. Kissinger thanked me very much and said I'd hear from him. I didn't hear from him and assumed it was national policy riot to do so." To that we say three cheers for good ol' Henry the K, and for all else who had hands in turning down the plan. But the facts that Mr. Geneen came forward with the proposal, and that Mr. McCone, with his vast experience with the top levels of American government, endorsed it, leave deep doubt that the idea is dead. We have some deep philosophical mis- givings, about the ideology and programs of President Allende, as clearly do many Chileans. But we are delighted to leave the problem of resolving those misgiv- ings to Chileans. For it has been demon, strated, we believe beyond rebuttal, that American tinkering in domestic politics of foreign lands produces, beyond all else, perilous mischief ? whether it be in behalf of commercial pelf or well-in- tentioned and underinformed abstract sentimentalities. * * * We are all for American business, or anybody else's, competing for profits' anywhere. We believe the prospect -of profit and the threat of loss generally comprise the most productive and hu- mane economic force man has con- ceived. But if the force and the diplomatic - and covert-intelligence machinery of the U. S. is marshalled behind the interests of such enterprises, they can soon be'' come ferocious power monopolies and intolerable intrusions in the public proc- ess at home and abroad. Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 DAFX PORLD Approved For Release 20b511C11/N :laA-RDP91-00901R000 600100008-6 STAT rfl 0 11 r U[ULlii?U r ?(7.,,j 030 PL.20-;:. CI! L o-rn Daily World Combined Services The Senate Foreign Relations subcommittee continued yesterday to hear testimony on efforts by the International Telephone & Telegraph Corp. and the Central Intelligence Agency to block the election of President Salvador Allende in Chile in 1970. Jack D. Neal, the director of victory and have been trying un- mission, which show that ITT. the international relations for ITT. successfully to get other Amen- CIA and the Nixon administra- told the Subcommittee on Multi- can companies aroused over the tions top officials were working national Corporations on Tuesday fate of their investments, and join _together against Allende. that an offer "in sums up to seven us in pre-election efforts." Covered by insurance figures" was made to the office of Neal's memo added he had Of interest is the fact that all of Henry A. Kissinger. Neal, a State contacted then Attorney General 1TT's holdings in Chile were coy- Department official for 35 years John N. Mitchell about the matter ered by Federal government in- before joining ITT eight years' during a reception at the Korean surance, which may mean 'the ago. was vague about what ITT Embassy. U.S. taxpayer will have to shell hoped to get in return. - In another memo. dated Sept. out up to $100 million to compen- "We were interested in fair 30, 1970, Neal stated: 'sate ITT for its nationalized compensation for our property," "Why should the U.S. be so property in Chile if ITT can es- Neal said when questioned by pious and sanctimonious in 'Sept. tablish that it did nothing to Sen. Frank Church (D-Idaho) and October of 1970, when over the "provoke" nationalization. subcommittee chairman, past few years it has been pouring John- J. McCone. who directed Memo about Chile the taxpayers' money into Chile, the CIA from 1991 to 1965. testify- Neal!s testimony . centered admittedly to defeat Marxism? ing yesterday, admitted he-talked around a memo he had written Why can't the fight be continued in 1970 about Chile with Richard Sept. 14, -1970, to W.R. Merriam, now th'at the battle is in the home- Helms. the CIA director at that ITT vice-president, stretch, and the enemy is more time, but he asserted that Helms In the memo, Neal had said he clearly indentifiable?" told him the U.S. would do noth- "telephoned Kissinger's office The Neal memos confirmed ing to prevent Allende's election. and talked with *Pete' Vaky, who other documents turned over to McCone now is a director of is the State Department's Latin the Senate subcommittee by the ITT but he said he was still a American adviser to Kissinger." Securities and Exchange Corn- "consultant" with the CIA so that After saying he informed Vaky he is still under the same govern- "we have?heard rumors of moves merit regulations forbidding dis- by the Chilean military," Neal closure as to any other CIA agent. 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' ? "I 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- - tinned. "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 Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 J. VILA L,1?12.-3 2 3 MAR 1973 Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 STA] imittee may have left a false. mid - 1970, before the first !"7 i.c..L.,....4?..,, 7, . :, 1",?,_C .:,.....g:., ;impression about the involve-' phase of the Chilean election, 11 . f ,? -I. 0 o `i 1.' ti,L. g4-?.1.8.3 s.1 L 4,... t,,,. g3. . Ls,... L ? Hent of Mr. Mitchell in the; it was for "constrictive" pur- 0...n. ...a ,,, ,... ,g??? ,,,, ,, , ..,,.. /: k...., , 0 _ Of 4-47 0 7 r 4 -,-: -a- .1 1summary indicated thatning. 1 [I.T.T. antitrust suits. I.; poses, such ai low-cost hous- ' ' IL I: Li i if...t:' 01 %L., i tilt: ut 6 "' ' Mitchell had talked directly'. Later, .N-Ir. McCone said, n_ : iwith President Nin about the atter Dr. Allende had won a By EILEEN SIIANATIAN 'suits, contrary to what he tes- iphireility but not a majority of sp,s,i to?ret NCW York l'Imes _ 1 tiled last year. The complete the vote in September, the -WASHINGTON, March 'il'-'?A , , t.' .documents do not sanport the: rnoney was intended to fi- pany, an Exxon subsidiar, I i ti implication -that 1.?,Ir. Mitchell; nalICC an anti-Allende coalition clear-cut conflict in the testi- paid for its take-over of the -- - in the Chilean Crcss, " telephone company owned by discussed the matter with thel ur, maim th'ne-n" ,Ii.inai 'Idchoice/'ch I.T.T. President. !of a president. The newly released documents; Today .0 Gerrity insisted' Mr. r. The plan was never put into also contained details about a: the purpose was always "con- effect in Chile because the Al- ' mony of three officials of the International Telephone and Telegraph Corporation emerged today as a Senate subcommittee continued its inquiry into the company's alleged attempts to party that was to be given in:.structive." lende Government broke off He was asked who made the 1970 at the farm of Rogers! negotiations over the purchase oiler to the Government after C. B. Morton, now Secrettirvi Uni September Cection and he of AtilltieonIgnte tii?lioosne who were toistud it had been Mr. Neal, be present were Harold S.,,trtio made it to the Assistant Geneen, Ili chairman of I.T.T.;,Sioiretary of State for Latin Attorney General Mitchell: Vice American Affairs President Agnew and his wife: ai,d ? Charles A. , 'White House assistant, Peter M. ? Jerome evinson, counsel to high officials and members of- Winton NT. Blount, and other , tao special subcommittee on -Congress. "You know the rea ? _ multinational corporations, then son tor this party," John In read back Tuesday's testimony -Ryan of I.T.T. wrote to his by Mr. Neal on his meeting boss, W. R. Merriam, the head with Mr. Meyer in which he of the company's Washington said "I didn't elaborate." on office, what the Sl-million would be Mr. Morton was a member used for. "We didn't go into of the House at the time and it," he said then. chairman of the Republican The subcommittee chairman, National Committee. Senator Frank Church, Demo- The newly released memo- crat of Idaho, suggested that ranclum also contained a cryp-11 r. Neal should he recalled to tic notation concerning "Dita explain the .discrepancy. Mr. and dollar." Tim re:Cr:ince ob- Meyer is scheduled to testify prevent the election of Salvador; of-the telephone company after Allende Gossens, a Marxist, as publication of internal I.T.T. President of Chile. 1 documents showing company At issue was the question of- plans for interference in the what use was supposed to he; 1970 election. made of the SI-million or more: Among other developments, that the chairman of I.T.T., ! the subcommittee made public offered to the Federal Govern- ? internal I.T.T. documents that ment in 1970?whether it s',-as I bore mainly on the 'company's for "constructive" purposes ori attempts to bring pressure on for covert means to prevent' the Justice Department to set- the election of Dr. Allende., i tle three antitrust suits against Today's hearings also dis- the company. closed that UI. F. officials' They included a toter from . Edward Gerrity, I.T.T.'s senior planned to make a deal with i I vice prei;ident -for corporate re- Dr. Allende, after he became lations and advertising, to Vice President, under which they; President Agnew in which Mr. would be paid full value for' Gerrity said, "I deeply appreci- the telephone company that l?7,.ateyour?assisltance" but did not ' -xpi am :or what. I.T.T. Owned in Chile, even iL Mr. Gerrity then asked for the properties of other Aneri. further help in netting to the viously was to 'Mrs. Pita Beard:next. week. , can businesses were confiscated 1hen Attorney Gcneral, John N. _Whose. internal memorandum , that the company without pa ine-icating yment. -t ? ?Mitchell, "the facts" concern-, w?3 trying to trade finTicial -The idea was to persuade iing the supposed attitude toli support for the 'Republican 1972 Pi e.sident Allende that he could !wtrd LT .T. of Richard W.; cons , eel on tot , clnuo ..,lent of WM World opinion to his side' ,mcLarcn, then head of tne Jus-i , i - , ? ,.. . ! -? by making a "fair deal with vision. Department's antitrust dn; its antitrust suits came to light : I.T.T. and that he would then vision,,. According to Mr. Ger-i a year ago. Tho memo men ray, ...1r. McLaren was out nfl tioned the necessity "to get be able to confiscate the Prop- step with Administration Poli-some feel from Dita as to what crtics of the Kennecott and cies, prcsecuting I.T.T. simply.; is required" without saying Anaconda mining (,,,,m??i?,; because it was big, and more what the money was for. 'with impunitY, using the arpti- 1 1.7;let leTri oe CS It'ea?ricinmetlinioris)juoifonsCoonf-1 went that cooper was a b Conflicting Testimony !Hress than of the Nixon Ad-!! The conflict In, testimony' ninc . national resource and in a dif- Iininistration 1 among various L1.1. oi ncials , The new documents also :that became clear today in- showed that a summary of lolved John A. 1VicCone, former '? them rel,,ased em!lier tins is thead of the Central Intelligence by another Comin?essional coin-;/V4,011eY arid not'ia director of I.T.T., Mr. Gerrity, the senior vice president, and Jack D., Neal, the company's director of international relations. Mr. McCone I ?stificil yester- day that when .id-million was first offered to the C.I.A. in terent category from a tele- phone company. The company inemorandum that disclosed tins plan said, that I.T.T. had "handled thei situation in Peru" in I btS onl the "same basis." T Ciovern-? mem of Presidont In at 5'.1,0,e(r. Alvarado siiteci the of InternatiOnal PclrOleum Coin- STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 r1A 573-77C,ITI Approved For Release 20V5/11i28 : C17-RDP91-00901 2 3 MIIR 973 000600100008-6 !TN Latin Chief em Any Try at Coup in Chi! ITT's vice president in charge of Latin American op- erations, John Guilfoyle, has denied flatly to a Senate Sub- committee that the corpora- tion ever attempted to over- throw the government of Chile. , The Senate subcommittee on multinational corporations had been told earlier this week by L...1 company Director John Mc- Cone ? former head of the CIA?that ITT had offered up to $1 million to support any U.S. government plan that might block the election of Marxist Salvador Allende as - Chilean presicleet. But another ITT executive,. Edward Gerrity, while con- e- firming a $1 million offer, said yesterday he believed it was ? for housing and other con- structive projects that might have moderated Allende's atti- tude toward U.S. companies in Chile. And Guilfoyle testified yes- terday that he would have had to have approved any expendi- ture of ITT funds to affect the outcome of the Chilean elec- tion. No such thing ever hap- pened, GuilfOyle said. Guilfoyle, a businessman rather than a public relations or information specialist for 11 1, told of his conviction that Allende's government had al- ready decided it was going break off negotiations on com- pensating ITT for its seizure. six months before of Ohiltelco, ITT's Chilean telephone corn- - pany. The expose by columnist Jack Anderson of ITT internal ? documents indicating political action against Allende simply ? provided a windfall excuse for ? Chile to break off talks. The picture painted so far by sometimes seemingly con- tradictory testimony elicited from irr witnesses is that: e ITT was in touch with the CIA, the White House, and the Department of Justice before Allende was finally elected in November 1970. o The company offered to contribute $1 million to any plan the U.S. government might have to prevent the Marxist from becoming presi- dent. ? That ITT operatives Hal Hendrix and Robert Berrellez maintained many contacts in Chile with U.S. personnel and Chilean political figures and sent back detailed intelli- gence-type reports and recom- mendations. ? But, in the end, the U.S. government decided to take no action to interfere covertly or overtly in the Chilean electoral process or to coordinate forces to bring about econoniic chaos in Chile. One of the many ITT-memos presented at the hearings dis- closed that ITT officials planned to make a deal with Allende, after he became pre3- ident, under which they would be paid full value for the tele- phone company, even if the properties of other American 'businesses were confiscated without payment, the New York Times reported. The idea was to persuade Allende that he could win world opinion to his side by making a "fair deal" with ITT and that he would then be able to confiscate the properties of the Kennecott and Anaconda mining companies with impun- ity, using the argument that copper was a basic national resource and in a different category from a telephone company. As it turned out, the Allende government, according to Guilfoyle, crippled Chiltelco with what he called "creeping e.xpropriation." He charged that the Chilean government imposed mandatory 40 percent wage increaFos, 145 percent in- creases in fringe benefits and 137 percent increases in corp. rate taxes, while at the same time freezing rates. This, he said, caused a severe cash shortage for Chiltelco. All these events occurred substan- tially before Anderson's disclo- sures of the ITT papers. Guilfoyle testified that it IS clear that "the Chilean gov- ernment simply took advan- tage of Anderson's charges to attempt to justify its failure to pay for the property it had previously seized." Later, in executive session, the subcommittee decided to renew invitations for appear- ance at the hearings of Secre- tary of State William P. Rog- ers, Ambassador Viron P. Vaky, former Latin adviser to the National Security Counsel Arnold Nachmanoff and Wil- liam V. Broe, former CIA Lat- in American chief. The hear- ings on Chile resume Tuesday. Subcommittee chairman Frank Church, D-Idaho, told newsmen that only Broe and ITT board chairman Harold Geneen "can testify by person- al knowledge what transpired between ITT and the CIA." Gerrity testified that the first time he had heard that the offer of $1 million to block Allende's election was when McCone, now an ITT director, disclosed it Wednesday. Sen. Charles Percy, R-I117, said "the implausability of this story (Gerrity's testimo- ny) bothers us. It doesn't hold together that ITT was trying to work with Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 -rrr1ni ' Approved For Release 208,5!,1 : -p?t4-RDP91 -00 _ ? 901R000600100008-6 (- (.? ,1?11 p 6/ ? 7 ) .") /OTT U(.41,F(,11)1, - . 4 (0,1)-' _IL 4.,10 Lf ft tary of sate for intet?-interi- cation action by its behav- Ily Laurence Stern waster:pie.\vie, f can reletions. Cherles ler in Chile, the firm would The purpose of a myster- ee,. Aso unthe?stood to not be entitled to reimburse- ious million-dollar proffer ha % e t old the subcommittee merit of its $92.5 million by ow internal tott?i Tole.. that no such otfet by ITT of claim, phone and Teleeraph Corp. linlniiiil arianaid was eon- Sen. Clifford P. Case(R- vo,ed to him by Neal. N.J,), upon hearing Gerrity's to solve its problems in The key to this conflict Chile became the subject testimon on (,en en's roil- of sharply conflicting t esti- in the sworn test in"tnY or lion-dollar -fund proposal, :\ leCom? and Gerrity will be described it as "I he cover mony in the Senate yester- the testimony of Geneen, d story for the clay." ay. who is due before the sub- Edward Gerrity, ITT sen- Sen. Charles Percy (Hill.) committee next week. ..\ n- ine vice? president for cur- exclaimed, "The implausi- other witness who may play perat e relat ions, told in- bility of this story is what a ertiC'll role in unravelling credulous senators that 111.e bothers me . . . Those are 1.970 proposm by ITT board the , inconsistencies is the problecns you would take to CIA s former chief of clan- chairman liarold S. Geneen the State Department and dt me se IV 05 for tie was intended to promote es i HUD rather than the CIA. western hemisphere, Wit- I bruising and agriculture in It's just unbelievable." t Chile. t-/ Rain v, Brae. On Wednesday f o r in e Sen. Edmund S. Muskle B arrangement between .' r -y (D-Maine) a 1 s o expressed 'i McClung and former CIA Di- -1 Central intelligence Agency - - skepticism. "All the evi- L/1 director John A. ?IcConet? rector Ittic,.'1,thrd 't? liclim; dence on file suggests Blase and ueneen conferrr.' e de- structive rather than eon- seructive purposes," he said. I said he bad trairsmitted to i the White House. and CIA Geneen's offer of a ;avec sum Of money to help finabce a U.S. government plan to block the election of Chil- ean President Salvador Al- lende in 1970. Gerrity, in his appearance before the Senate Forel in Relations Subcommittee On Corporations,- said he was "baffled- hy Mc-(tone's account of what . Gencen proposed to do with the money, e'Phe? lii?st heard about it %vas here yes- terdaY." Gerrity testified. McCraw. in his testimony, also alluded to sueeestions by Geneen that private InOney he provided for hous- tog and social purooses in Chile. But he specifically af- firmed. in response to ques- tions, that Gement "tol(1 me .he was PrePared to Out up as much as SI million ill sup- .1)011 or any government plan for the purpose or twingine about a coalition of 01)P0'it? ? tion to Allende . . to de- prive .1 Heinle of his nosi? lion." Gerrit s testimony wen also in colt:tine with that of a subordinate, .Tace Neal of , ITT's, Washintoon Gerrity said Neal was die- as a -mess:le:0r- to con\ ey Genegnes Moir of t:ocial assistance to die No limed ?:1;111. :tnd 1 ho HIT:i 1'1 hn'IlL P.,111 int$ all?(?;ttly toid OA' tilthcoinniniVn I bun be COniTytni such pl'upHS:11 either to the Whitt' I Intnir in a room at the Sheraton Carlton on the night of July 16, 19711, for the better part of an hour- What trallsPired? in the conversation has not yet surfaced in lite inquiry. On Wednesday, subcom- mittee counsel Jerome Lev- inson posed this que:i-eion to mecone about the Broe- Genech meeting: "Uri- 'mt. Geneen advise him (Brue) that he was willing to assem- ble an election fund for one of the Chileen candidates (opposene Allende.) and that _the fund would be a substan- tial one?" MeCone said he was not so advised. Yesterday, assistant coun- sel Roth,: Blum asked Ger- rity if he knew of a follow- up phone conversation In'- tic-en Geneill and Itroe on July 27. Gerrity said he did not. The subcommittee is ne- ?clutiating with the CIA for Broe's testimony on the july .16 meeting with Geneen and any eubsequent convc?rsa-. lions they may have lied. The s nswers are cror?ial Ii definimt 1TT's dealings w?ith the CIA and perhaps other administration contacts on the cimtroversial Chilean af- linteediately at stake In the co:tie:me of tl:p beatifies is vit- her Ill will be iii- itt to IeilimbursemPtit from the overseas Private !me:5.1min corp., a govrrn? ment iiitency. for L'Irte's sendsee of 1 IT'e Chilean tel- ephot 0 comp:try subsidiary. or State lumartmehApproved Fionfielease12005/411/28 : A former assistant sect..r(... that l'T proviitcd the host goveinment inio the colitis- , It just doesn't make sense," mused subcommittee Chairman Frank clutch' (p- Idaho). "Yon could read and rc-read and re-read these files and never Oct the slightest impression that you plena-ter' to build houses and offer technical assistance to agri- culture." The memoranda from ITT field operatives and between Washington end New York al- lude to efforts to encourage anti-Allende politicians, mit- itary figures and newspapers in an attemt t. to prevent him from getting the presidency in a runoff election hi' the. Chilean Congress after I Won by a narrow plurality the popular election on Su tember 4, 1970. STA SIA ,ttl,:7,k13,11y empluees beth before and after talene control of it in September. 1971. -it the request of Church, ITT yesterday provided the subcommittee with docu- ments impounded last Oc- tober by the Justice Depart- ment dealing with meetines between Genecn and fornte A t t orne y General Joh Mitchell on the conglome ate's antitrust difficultie with the Justice Depar moot. 'I'he troubles stemmed from et forts by former An- titrust Division chief Rich- ard McLaren to force the divestiture hi' ITT of the Hartford Fire Insurance Co., a $2 billion enterprise, and other holdings. The dossier include", a "Dear Ted" note from Ger- rity to Vice President Spiro 'P. Agnew dated Aug. 7, thanking the Vice President for ''your assistance con- cerning the attached memo." The memo describes a meet- ing between Gencen and Mitchell, The note said: "Our prob- lem is to get to John the facts concerning MeLaren's attitude becettle, 115 my memo indicates, McLaren seems to be running, all by himself . . . After you read this, I would appreciate your reaction on how we should proceed." The memo quotes Mitchell as telling Gencon that "the President was not opposed to mergers par se, that he believed some mergers were The Chilean embassy "(id," In earlier press accounts of this merno, based a statement yesterday that only- on eovernment - "S r/Q-"i:Itill''" With Jr t( Pntrb'S of. its content? ?coropensate the firm for loss- witchen is quotell as saying es growing ont of mitionalita- titat "Mr. Nixon was bon of the company. If raid' opposed to "Um- mereer." it hi-ole off the ne.ttottill'olls It had bore atssumed that only tiller publication by col- mil cheit. was ref c r in muftis( ?ltit'it Atillelitton of Ole specifically to the 1T-1.- internal 1 IT P?tpers tlesc-rtli- Hartford lnstirtince merger in icrii-Allencle tied\ hies and AI ('Part'iireloceess.f sentiment of u I I el?leettiivett? soneht to dissol; e. "V, bile Chile \vas holding tu it.stiMnily to tile senate convt?reelion to t:owl 11111 1 .Itulic?iery Committee last with rePreentlitives denied tali:hie to Sam in to is well as in Vete-h- ire:tom tile hitter conseile-fl to overthrew the freeh- (1.110.11! CO\ crwent," tI- c end, The II I' vice president for Westmli 1 henn:TM-1 e op- ertitoms, .1 oh n CIA4-RDR91-(00901(R01)0600100008-6 sponte that retilean authori- ties Neere littras?nlig the tele- , Cenerm ;demi the llitstford (else. rieltnew I- d eel Iti.eeen ??. t.t it'd the ITT head on matters 01 general ant iii tie! The !-',tilicommittee is to I?esiono its lie;o?ing;'filesclav STAT Approved For Release 2005/11/28 : CIA-RDP91-0090 NEW YORK, N.Y. NEWS M - 2,129,909 " c 2,948,736 MtJ 22 i273. -1.- i -7-7,77.1. r. --,!,; (7 .(., c. -;,., ?I ,. ., I , 1..1', , 4 4 0 \i: 1 Li Li \ .2;F ij n /-1,,z r rl .; ( .4-7'4, , .,'.? k..?;:il \.211 ii ;;;' :. STAT 1R000600100008-6 By JEFFREY ANTEVIL :ini 0 - 0 t.,:`.;f t;!;:i; 1..1i=!. Li LI WaashirVion, March 21 (NEWS IThreau)?Former CIA chief John A. McCore, rov a director of the I:nternational Telephone & Telegraph Corp., testified today that ? he transmitted to his successor at the Central Intelligence Agency, Richard Helms, !L__ and to the nresidentIal adviser lIenry Eissinger, offer of 1 million to try to block the election of Salvador Allende as president of Chile. McCone, who Leaded the es- ' tempted to intervene in a U.S. pionage agency !tom 19111 to : ways to stop Allende contained; presidential election. 1905, told members of a Senate i only "destructive recommenda-; Church asked, "doesn't it. fol- Foreign Relatiolis subcommittee firms" such as cutting off U?S? low that that's 'how the Chileans investigitthig the II I Chime Wi 1I aid to Chile and nothing about ; are going to feel' about ITT's that the funds were intended fOI housing or other constructive adivittes . "constructive st cps" such as ; 1?? gra ms. housing and agriculture assist--; ; No Majority for Allende ance to encourage the opposition No Funds were ntssed ; ? ? ' MC no replied teat the ITT to Allende, and not for '`.sur- MeCelle said the million-dol ; intervention was justified be- reptitious or covert" activities.; offer never Materiall/Cd because; cause nearly two-thirds of Chi_ "elide' a 31-if'd.):iSt' b";ame : depended on the U.S. govern-ile'S voters, who cast their ballots Chile's President ia Octoher . . a Disbelief Is Expressed ment's mithding n anti -Allende for _ Allende's two oppon en's in plan, and the Nixon administra- I the D'70 election, "opposed thc But members cf the sulicom- Don decided rNot to interfere in philosophy that was about to be mittee, including Chairiltall Frank the Chilean political situation. I imposed upon them" by the leg- Church (D-Idaho), Clifford P. ITT's involvement was sparked h'Iature? Case (R-N.J.), aml Stuart Sym- lee Fears that Allende W0t11(1 in The IT'P director also told the. ington (D-111ii.), expressed ; tionnlize the ITT-controlled Chil- ! subcommittee it was ''very prob-; helief at McCone's claim. "The din Telenhone Co., as he actually ? able" that he suitti;ested to Helms suggestion has been mioie that did in 1971. The company is now ; Unit a Cl- official ntect with ITT stone more practical and itrime- claiming 1192 million in reinH President; Harold Gelled) to dis diate thoughts were in roind, steh harsement from the federally ii-; cuss the Chilean situation. Thet as hriliing the (Chilean) legis- min tied Overseas Private Invest- Fugge!!tion resulted in a meeting- lature," Case said. In Chili, the mcnt Corp., which insures U.S.! in July 1970 between Colleen and legislitture deets the President . investments abroad. Broe, the chief of clan- '? when 110 candidate receives a ma- .ldcCone told the Senate sub-- ddestine activities in the Western, jority in the general electhm. cemmittee that he saw nothing ! IhtIlltsPhere for the ClA? " Ilie offer, McCone said, was wrong. with ITT's d'i'orts againsti made after Allende had narrow Allende as lone- as they were in lead in the thrte-way popular subport ot U.S. government poll election, but before he was cho- iritsan ;1 not initiated indepein seri as president by the legisla- dently by tile Drip. Ile conceded. Dire. !Inrivever. in reply to a question Church and Symington added! from Church, "1 Av011id persiudly, that a whole series of memos I be very distressed" if a foreign from yrr officials suggesting! gaivcrnment or corporation at? e Approved For Release 2005/11/28 : CIA-RDP91-.00901R000600100008-6 fAILFITh CITIrog@ditor Release 2005/11/28 : CIA-RDP91-00 E ? 4,439 ? 6,600, Sidit{ 2 2 01R000600100008-6 STAT ITT And The CIA If you were a script-writer for Radio Moscow or Radio Peking, the story would seem made to order. Capitalist-imperialist conspiracy to prevent a freely elected President of a Latin American country from taking office atter a democratic election. The reason: to protect the enormous investment of an American company. There is only one trouble with this script, which follows the pattern so closely that it could have been the.product of a Communist propaganda machine. It is not. It really happened. A vice president of International Telephone and Telegraph (ITT) told a Senate subcommittee that a top CIA official had agreed with the recommenda- tions ITT made to prevent the election of a Marxist as President of Chile. John ? t/McCone, who used to. be Director of the CIA and is now a director of ITT, confessed to the same subcommittee that he had. carried an offer from the President of ITT to Henry Kissinger to supply up to ? $1,000,000 of the company's hinds to further any scheme the U.S. government might have in mind , to prevent that Marxist', Salvador Allende, from taking office as President of Chile after he had been elected by the people of that country. McCone says K issinger thanked him, but never took him no on the oiler. I le also added that, when he vies head of the CIA, it was U.S. government policy to reject all such oilers of private assistance. ? It is unclear what the CIA n light have been up to wit bout money. They have plenty ot their own and, according to the ITT officials, were pressing very hard for a strong policy against Allende. The Senate subcommittee is looking into the extent to which multinational corporations like ITT influence U.S. foreign policy. After Allende became President of Chile in November 1970, he took over business properties of ITT and other U.S. companies as he had . promised to do during his election campaign. While the desire of the company to protect the interests of its investors is understand- - able, one may question how far they may be justified in going. The testimony that has been given so tar by ITT officials shows that the company and the CIA worked hand in hand to persuade the State Department and Henry Kissinger to take a hard line against Allende. While this may have been in the company's interest, as it perceived its interest, there is consid- erable question as to whether it would have been in American interest over the long run to interfere with the free demo- cratic process of what is, alter all, a friendly nation. The CIA, under its new director James Schlesinger, has just begun the largest personnel cutback in its history. We hope that the cuts will be concentrated on its 'dirty tricks' department a function which CIA has assumed but which has no specific authorization in law. As to they should stick to the telephone business. Approved For Release 2005/11/28 : CIA-RDP91-90901R000600100008-6 SAN FRANCISCO EXAM:INER E ? 204,749 EXAMINER & CHRONICLE S ? 640,004 MAR 2 2 1M. 'ITT Claims CFA Planned , CAL. 4.arola Geneen. ti JT.T's Lan. Atnesictin adviser to APPr?7giiiiCIFIct09)g5A111/2/'.).(-;11#riKDRAii-AQ9RARODO 00100008-6 4 Zirpo..? Chile Chaos Examiner News Services WASHINGTON -- A high official of the International T el ep hone & Telegraph Corp. said today it was the Central Intelligence Agency that devised a plan to bring economic chaos to Chile. At the same time, Ethi-ard Gerrity, an ITT senior vice president, attempted to re-. pudiate testimony by former ? CIA. director John McCone that ITT. offered $1 million ? to support a possible coali- tion against the presidential -candidacy of Marxist Sail a- do r Allende, whom ITT feared xvould expropriate its pronertt., in Chile. . . Gerrity said ITT rejected the CIA plan ::s unworkal)le and claimed a;i the einnpa- ny NVallted lu di) with ihe St million was build houses. Gerrity told a Senate . sub- . committee he surprised by the testimony yesterday .McCone. who is au I direeton. that the SI militoa was to support a pessible coalition against the presi- dential candidacy of -Mott,ist Salvador Allende. Gerrity said a live noiai plan to induce economic col_ lapse was suggested to him . on Sept. 23, lO?itt. by William Woe, head of 'Latin Ameri- can clandestine services Pot t h e Central Intelitgencc AgclicY. Ile said the Si mill ,n PT sf,ttc.t time. was intetalt?d cm money- for a lniusine zuni tectaical ,t-7:sistanoe gram to whieh atter eiiiiieli)11H. The Saine ttlylie lalictd to Broe. Gerrity sent a mes.nige urged that all U.S. compa- nies -in a position to do so" should close their business in Chile. The .plan included with- drawal of all technical assis- tance. collapse of savings and loan institutions and bank delays or rejection of further credits to Chile. Internal Affairs "Clearly all these recom- mendations are designed to create economic chaos in Chile, are they not?" asked Sen. Frank Church (D-Idaho His Senate For- eign Relations Subcommit- tee is investigating charges of CIA and ITT involvement in Chile's internal affairs. "Yes, sir." replied Gerri- ty. Previous testimony and documents obtained by the subcommittee indicated that the giant corporation. fear- ful that Allende would seize its S17,2 million holdings in the Chilean Telephone Co. n d other interests. put pressure, o n the White Ii ousc, the State Depart- ment and the CIA to help prevent Allende from taking power and then to foment an insurrection against his re- gime. Gerrity c a 1)1 e d Geneen that Droe told him "that of all the companies involved. ours ahne nod been respon- sive and undetnsfancl that problem. The visitor I Elroel added that money was not a problem." Gerrity said he mid neen. who hail met secretly with the CIA official the pre- vious Jul'.. did not believe Uroe's suggestions w er e workable. Very Discreet EMI in a Sept. nu memo- randum to ITT effinials in WashiEnton. Gerrity so I (.1 Goncon -sti.teetts that -,ve he N. or; aiscv,!cl iii handltng Droe." In te tif., int.. about the ITT if St inttnan. Gerrity saiI tick N tin? cum- aatinnat rela- i;cns direcicr in\\ .c;liernan. v, Jim) iii'ted to present the !dial Viren Vaky, then White llouse and to Charles Meyer. assistant secretattty of state for inter-American affairs. Church observed that Neal, in sworn testimony Tuesday, said he "didn't elaborate on the seven figures" nor did he .g.0 into what kind of a plan ITT had in mind in his contacts with government officials. ? Gerrity said . he had in- structed William Merriam, in charge of 1Trs Washing- ton office, as to the nature of Nears mission in relaying the $1 million offer and -I'm baffled- as to Neal's testi- mony. More Questions "I'm baffled, too,' Church - said. decliiring th at he ? would ask Neal: to return as a witness for further ques- tioning, as well as summon Meyer and possibly Vaky. Earlier another ITT of- ficial testified that- he made an implicit offer of finan- cial aid to a Chilean poll- election of Allende. Robert Derrellez, 'an ITT public relations man based in Argentina. told Church's committee yesterday his of- fer was made to Arturo Matte. brother-in-law , and chief advisor to Jorge Ales- sandri. the conservative Na- tional Party president. condi- date, Approved For Release 2005/11/28: CIA-RDP91-00901R000600100008-6 II ri'' ..0 r.77'17;2 11 1 l' t 7' Approved For Release 2 boo : 94-RDP91-009 ?-? to tt 1R000600100008-6 ; A f, f-'31 ri D-31 /.7 L ki Li L)..I Ii 1, !I , k?:::). By JEBEMIAII O'LEARY S:Ar-Ncws St:,11 wiaer A senior Fri' executive said today that his corporation's 1970 offer of Si ir?illion for use in Chile NV aS intended to dem- onstrate to Marxist presiden- tial candidate Salvadore Al- lende that ITT had confidence in Chile and wanted to stay there.. The testimony before a Sen- ate subcommittee by Edward Gerrity. viee president for cor- porate relation s, diff,Jed sharply from what former CIA t/ director John MeCone told the committee yesterday. Gerrity said that the . first time he had hear:: the Interna- tional Telephone & Telegraph .Corp. had offered to supply SI million to block Allerde's elec- tion was when l\lcCone, now an ITT director, disclosed it yesterday. Sen. Charl 05 Percy, It-Ill, a member of the Senate subcom- mittee on multir:,.tional corpo- rations, said "the implausabil- ity of this story 1.mthers us. It doesn't hold to:tether that ITT was trying to work with Al- lende. It's unbelievable that , ITT w?`'Id propose supplying B. Broe once and that the CIA official made sugges- tions to hiM that banks should not renew credits to Chile, that companies should delay shipments there, that pressure be brought on companies to close down and that the United States should withdraw all technical assistance. Church sai dthese sugges- tions sounded to him as if they were intended to create eco- nomic problems in Chile. Gerrity agreed and said Broe told him that money was not a problem. Self-Defeating "I never heard of that Si million and its intended use until I heard ?,Ir. MeCone yes- terday. I had a. different un- derstanding of what it would be used for. It is not my infor- mation that any was made available" for economic dis- ruption in Chile. Gerrity said he did not think Broe's ideas were very good at all and that he didn't see how IT1' could inrillee other compa- nies to follow Broe's sug- gested plan because -it would be self-defeating to induce eco- nomic chaos in Onto." Gerrity further testified that Geneen agreed that the Broe plans were not workable but suggested the CIA agent be handled carefully. "Geneen said to mc it doesn't mal-:e sense," Gerrity testified. "We didn't want any part of it," ITT's two men in Chile, Hal Hendrix and Rob:ert Berrellez, yesterday told Senate investi- gators that they cdered help to election Ice:i of Marxist President Salvador Allende, but they said the. company vetoed their recommenda- tions and nevc'r Hendrix and ]0r1 rd,'i. said as former ne,,vsm,.- th:y were only doing a .ja.) o: reporting this turd for the development of Chile to the CIA instead of the State Department." Gerrity'S testimony ap- peared to be in direct contra- diction .to MeConc's account of the Si Million crier. Giving his version of the $1 million ITT fund, Gerritv said "A was plain ( in the (all of 1970) that Allende was going to be elected. I discussed this ? with ITT President Darold S. Geneen and we considered the chances were 90 to 10 that Al- lende would expropriate our Chilean properties. "Geneen told me that per- haps ITT could demonstrate to Allen& that the company had confidence in Chile and he said we ott..dtt to go to the State Department to see if there. was any plan for private in- dustry to reassure Allende. 'The idea was to get togeth- er with a ,,,roup of other Corn- panics and to help the Chilean economy and reaffirm our c:;iifiance with some projects like low-cost housing, farming and other joint ventures. We said that if the State Depart- ment came up with something along the lines we would put forward a figure of about sev- en figures," Gerrity said. Chan man Frank Church, fl-Idaho, said, "we can't find , any plan for technical assist- ance or housing in the ITT documents we have. Gerrity replied, "in spite of all discussicols, no action was ever taken against Allende." Sen. Clifford Case, H-N.J., asked, "this million dollars was not intended to be d:frop- but only to make Allende hat ,py ahout ? the American presence?" Gerrity said that ITT offi- cials told the State Dcmirt- ment and preAlential national :.-;ccurny Henry that they would partici- pate with whe: compmnes in SUCh a devc't.pria.nt plan "un- der 'our 'ae;d" hut he sail "wo never 0 a response ;aid docid'.?d the U.S.r.overnment was Lot interested," Geticity 1s?tif;e;1 lie had only mot CIA Latin American chief (/OrJ7-IN r7-4 L! 13 for their companv when they sent back dispatches on politi- cal developments. Church said everything they reported was related to political inter- vention. Hendrix testified that one or his recommendations to ITT was prompted by the weak fi- nancial condition of Chilean newspapers inimical to Al- lende, He said he saw the con- servative papers such as El Mercurio getting "thinner" for lack of advertising in the pre-election period, and pro- posed to ITT that it double its advertising in the distressed newspapers to keep them alive. He also said he recommend- ed. that ITT help underwrite relocation centers in Argen- tina for the wives and children of anti-Allende Chilean news- men because these writers wanted to remain in Chile to fight against the Marxist re- gime but were worried about threats to their wives and chil- dren. STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100008-6 771 dl Approved For Release 2005/11 ? CIA-RDP91-C VIA SHOO T 3 POST , 1.1 7:7 j..1_ ..;) d 7) 1 (`-' 0901R000600100008-6 STA STA McCone, wIt o was ap- pointed to the CIIA yv Pres- ident 1,'..conedy in ]9i11, said he ej?:,?.id Helms ?ly,h,?thee tho 1,ovcrninent, intended to do anythinit that mhtlit en, eourK:e support of a Call- &/ al:1ft EP.illf,t Allende) \An) bt.EXi,..1 IC..7' principle basic in thin codatry. 1, 11 (