U.S. TOOK 'EXTRAORDINARILY SOFT LINE' IN ALLENDE'S FIRST YEAR, ENVOY SAYS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09T00207R001000020108-4
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: August 9, 2011
• Sequence Number: 108
• Publication Date: September 16, 1974
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4
NEW YORK TIMES
. Took `Extraordinarily Soft Line'
U.S.'
.S
In Allende's First Year, Envoy Says
By PETER KIHSS
In the late Salvador A4nde
Gossens's first year as Presi-
dent in Chile, the United States
pursued "an extraordinaryly
soft line" and tried to develop
a "modus vivendi" wit'. the
P/ Vw a wit n
Mr. Korry, 52 years old, was price of copper provided enough
e in dollars for Frei."
h
i
om
s
interviewed at h
last I Mr Worry sai(
Y
N
liff Manor
.,
.
,
Briarc
Thursday after disclosures of
Congressional testimony by
William S. Colby, Director of
Centrrt Intelligence.
Mr. Colby reportedly testified
that the agency was authorized
to spend more than $8-million
clandestinely from 1970 to 1973
to "destabilize" the Marxist re-
gime. Acc-)rding to Washington
reports, $7-million of the au-
thorized amount was spent.
lefist Government, according to
former Arbassador Edward M.
Korry.
Mr. Korry says hat when Dr.
.'.ilende reneged on one agree-
ment and "proceeded to break
almost every assurance he had
volunteered," he warned the
Chilean leader of "the in-
escapable consequences of pro-
voking American enmity," at
least in terms of blocking inter-
national credits. That was in
September, 1971, just about a
;month before Mr. Korry's ap-
pointment in Santiago ended.
Mr. Korry described efforts
during his ambassadorship to
cooperate with Dr. Allende's
regime to back up testimony he'
gave last year to a Senate For-
eign Relations subcommittee.
He contended that his testi-
was heinv wrongly
challenged as potentially mis-
leading in the latest disputes
over Central Intelligence Agen-
cy activities in Chile. -
Mr. Korry, who was Ambas-
sador from October, 1967,
through October, 1971, had told
the subcommitt(le: 'The United
States did not seek to pressure,
subvert, influence a single
member of the Chilean Con
gress at any time in the entire
four years o: my stay. No hard!
line toward Chile was carried
out at any time."
He said in an interview with;
The New York Times, that in
sofar as his own period asl
Ambassador was concerned, "I',
stand by that statement un-'
conditionally." In his use of the
word "influence," Mr. Korry
said, he meant to deny any
attempt to "influence in the
sense of bribery."
Succeeded In 1970
Dr. Allende won a niu:ality
in a three-way presidential
election on Sept. 4, 1970. He
was confirmed as President by
the Chilean Congress on Oct.
24, and was inaugurated on
Nov. 3, 1970. In October, 1971,
Mr. Korry was succeeded as
Ambassador to Chile by Na-
'thar.icl i)a?.'is, who was still
serving when a military coup
fled to Dr. Allende's ouster and
ldeath in September of last year.
Support for Center
"When I launched the soft
line toward , Allende," Mr.
Korry said, "I also believed
unswervingly that the United
States should support some of
those who were committed to
democracy and its practices as
understood in the United States
as well as in Chile [to help
them; to survive. The kinds of
people that I had in mind were
nonextremist, nonmilitary pracx
titioners of center democracy."
Mr. Korry said he had warned
in a September, 1970, cable
gram shortly after Dr. Allende's
h a no
w
pealed against the decision,
warning that Mr. Frei would
"start nationalizing copper
companies" and would resume
trade relations with Premier
Fidel Castro's Cuban Govern-
ment despite inter-American
sanctions-as it then did. . ,
The United States, Mr. Korry
said, had already decided. inl
1968, during the Johnson Ad-;
ministration, virtually to avoid,
any new guarantees of Ameri
can investment in Chile. He said
the reason was that Chile had,
a disproportionately high per-
centage of such United States'-
guarantees on a worldwide
basis. 1
In 1969, he said Washington
refused to-go along with busi-
ness opposition to. Chilean na-
tionalization of copper com-
panies. In 1970, he said, Wash-
ington "put the Chilean mili-
tary off limits" to embassy re-
lations and "refrained from
financing any party or candi-
date." Under the Chilean con-
stitution, Mr. Frei could not
elr ctton that t ere
chance of any political or other succeed himself.
intervening event preventing I Mr. Korry held that it
Allende from being confirmed would betray both his govern-
as President or inaugurated in ment oaths and Chileans whose
November." lives would be endangered to
"I gratuitously inserted, not;jdiscuss details of Central In-
once but more than once." he ' telligence Agency activities.
added, "the strong statement!', But he declared that in testi-
that if anyone were to be con- ,moray before a Senate Foreign
templating a United States in-I; Relations subcommittee last
tervention of any kind--directiIyear, he significantly "never
or indirect-to bar Allende's denied" C.I.A. funding for some -
assumption of power, its conse- programs-and had referred,
United States interests than the
Bay of Pigs, both in and out-
side of Chile."
Frei's Election Backed
The administrations of both nist program," he said. After he
Presidents John F. Kennedy and' warned against any effort to
Lyndon B. Johnson, Mr. Korry (block Dr. Allende's confirma-
d
to support the election of Ed-
uardo Frei Montalva, a Chris-
tian Democrat, as President in
'Anti-Communist Program'
The United States In 1969
and 1970 "was continually
carrying out an anti-Commu-
tion or inauguration, he say
he took part in consultations in
Washington in October, 1970,
on three potential policies:
"A-conscious effort to work
"Congress was fully aware of out a modus vivendi; B-seek
the policy of stopping Allende (correct but minimal relations;
The Administration of Presi-
dent Richard M. Nixon. he said,
decided in March, J969-while
Mr. Frei was Still in off u'--
against signing agreements Mr.
Korry had negotiated for 540-
million in standby loans to Chile
cially decided on the middle
"correct but minimal" line. In
fact, Mr. Kerr,' said, all three
lines were followed.
00796
/; J
STAT
Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4
 Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4
NEW YORK TIMES
On- hIs own, he said he of-
fered to work with Clodomiro
Almeyda Medina. Foreign Min-
ister in the Allende Govern.
ment, "prag-natically, problem
by problem"-and in, secret, to
have greater latitude.
The first result, he said, was
that the Chileans agreed to buy
at an acceptable. price a plant
-of the Northern Indiana Brass
Company..
Also, he said, there had been
x'800-million in outstanding
Agency for international Devel-
opment loans by the United
United States to Chile, and
"tens of millions" under these
were kept flowing that. first
year.
Bank Loan's Agreed
On his recommendation, he
said, the Nixon Administration
consented in 1971 to two Inter-
American Development Bank
loans to Chile totalling $11.6-
million.
He said he told Allende offi-
cials that the United States
iwould consider new bilateral
help if there was no "undue
hostility or irrationality," but
had added that Congressional
requirements for audits would
probably be unacceptable to'
the Chileans. '
The "high points of this
early period of good working
relations," Mr. Korry said,
were' agreement.. early in April,'
1971, for Chilean purchase of
Bethlehem Steel Company iron
mines with 15-year bonds "in
the $20-million bracket" and
then in May, 1971, for Chilean
purchase 'of a Cerro Copper
Company mine.
The Cerro pact, he said,
would have averted a $14-mil-
lion outlay by the United
States in. Overseas Private In-
vestment Corporation antiex-
propriation insurance.
Thirty minutes before it wa&
to be signed, Mr. Korry said,
President Allende delayed it
under pressure from "the most
extreme of the Marxist-Lenin-
ists in his coalition"-and kept
stalling it until the coup.
Mr. Korry said he had looked
on the Cerro pact as a prece-
dent for potential agreements
on properties of the Anaconda
and Kennecott copper com-
panies and the International
Telephone & Telegraph Com-
pany, which involved United
States antinationalization guar-
antees with 'taxpayer exposure
'of between $300-million and -
$500-million."
In July, 1971, Mr. Korry said
he went to Washington and
obtained approval from William
P. Rogers, then the Secretary of
State, and "no objection" from
Henry A. Kissinger on behalf
of the National Security Conn-
(!ii to offer another idea. Thiv,
he said, was to be "in my name
only" at the outset, to avoid
drawn-out bureaucratic delays.
It would have' had Chile pay;
for nationalizations in low-;
interest, 25-year notes. The
United States Treasury would
'back these with its "fuill faith
and credit" so that each'-com-
pany could then readily dis-
count the rotes for cash in
banks. A similar plan this year
let the Treasury back Israeli
'bonds for arms purchases, Mr.
Korry . said.
00797
Sanitized Copy Approved for Release 2011/08/09: CIA-RDP09T00207R001000020108-4