CHILE HAD NO RIGHT TO STEAL ITT PROPERTY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000300090018-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 19, 2016
• Document Release Date: December 20, 2005
• Sequence Number: 18
• Publication Date: March 29, 1973
• Content Type: OPEN

Approved For Release 2006102/09 : CFA=RBP751300380R000300090018-5
? 9 i!".R '1973
WILLIAM F. I3UCRLEYJR.
Ails IiOd
It is by no means obvious
why everyone persists in re-
ferring to the election of Al-,
lende as a purely "internal"
matter. It was never any such
thing, and if only Harold Ge-
neen of ITT recognized the
character of the Allende vic-
tory, why then Harold Gencen
is a lot smarter than most of
the senators who are interro-
gating officials from. ITT and
drinking deep draughts of
sanctimony over ITT's offer
to contribute $1 million to-
wards any government-spon-
sored plan to prevent the in-
stallation of Allende as presi-
dent of Chile.
We are talking about Sep-
tember of 1970. On Sept. 4 Al-
lende won a plurality, which
did not automatically entitle
him to be named president of
Chile. That decision was for
the parliament to make, at a
scheduled session on Oct. 24.
The question is whether ITT
had a legitimate interest in
adding its pressure to that of
others to persuade the parlia-
Rirtht ITT Prerty
N A;
rnent to name someone other
than Allende or, better still, to
call for a new election.
How can the Chilean out-
come be said to have been
purely an internal matter?
The officers of ITT, having
carefully observed the cam-
paign of Salvador Allende and
the promises he made, con-
cluded that he would certainly
proceed to nationalize the Chi-
lean telephone company. By
everyone's reckoning the val-
ue of ITT's holdings was $153
million.
The ITT people were smart
enough to ? anticipate that
when Allende got around to
nationalizing the telephone
company he would offer for it
a small fraction of its ac-
knowledged value. That he
would, in effect, confiscate
the property. In due course,
Allende offered $24 million for
the $153 million asset, proving
the ITT officials to have been
altogether accurate in their
forebodings.
We return to the question:
In what sense is it an
"internal" matter if A decides
to 'steal the property of B?
The fact that A is a country
and B is merely a corporation
says only that B is going to
suffer considerable disadvan-
tages in attempting to cope
with A. It hardly says that B
ought not attempt to cope with
A. ITT did not, as it happens,
mount its own operation in
Chile, attempting to persuade
the parliament not to vote for
Allende. It merely offered to
contribute to any U.S. enter-
prise aimed at the same pur-
pose.
To suggest that foreign
governments are not involved
or should not be involved in
wrestling for the favor of the
majority in swing countries
which are points of contact in
the cold war is simply to beg
the question: How is it that
the Soviet Union and Castro's
Cuba were so interested in the
election of Allende as to spend
millions of dollars and commit
entire communications indus-
tries to the end of electing
him?
What President Allende fi-
nally did to ITT was, very
simply, to take over the oper-
ation of t3 a telephone compa-
ny withotrf .my compensation
whatsoever. Those who are
anxious to make any point at
the expert e of American busi-
ness who say that ITT got
what was seining to it in the
light of its proffered interven-
tion ma1:=! a rather clumsy
mistake. It'was not until the
spring of 1972 that Jack An-
derson published the secret
memoranda revealing ITT's
offer of $1 irdllion to stop Al-
lende. But ii was in Septem-
ber 1971 t'-let Allende simply
took over t,.e Chilean tele-
phone con- any, more or less
without coi:;ment: a clean
theft of $1 A mWion. I do not
believe tli;tt anyone who is a
shareholder of ITT believes
that that act by Dr. Allende is
a purely infernal affair. There
is no internal right of any
country to seal the goods 'of
other people.
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 Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090018-5
2 () i!t'-i 1 iJi3
eel's
lames for Chile
!t C
A.-They were aware I was
meeting with Air. Merriam.
Q.-Did Air. Merriam at that
luncheon, or any other time,
advise you that he was under
great pressure from the head
office in New York to get
something done in connection
with the Chilean political situa-
tion or words to that effect? '
A'v'ashingtoih-The following he-wanted the fund~controlled
are excerpts from the cxami alicl thalineled through the
nation of William V. 131,00, the CIA?
chief of the Central Inlelli- r,,.-Yes, hetlid.
fence Agency's Clandestine
Services for the Western ]lcmi-i, ? ? ?
sphere, on his contacts with, Q.-Did you agree to accept
time. International Telephone the fund offered by Air. Ge-
and Telegraph. Corporation ilcen
concerning the election of Sal- A-No, I did not.
vador Allende as president of Q-I)id you explain to Mr.
Chile in 1970.
Mr. l3roe was the first CIA
agent ever to testify under
oath before a congressional
committee on operational ac-
tivities.
Questioned by Church
The questioner quoted is Sen-
ator Frank Church U)..
Idaho), the chairman of the
Senate Subcommittee on mul-
tinational affairs.
Question-On July 16, 1970,
did you meet with air. Harold
Geneen, the president of the
International Telephone and
Telegraph Company?
Answer-Yes, Sir. A -[\o. It was to support ' . '
1 Did sou discuss hi ith Air.
Jorge Alessandri
t
Iclirector of the CIA] advise
you that Mr. John McCone,
former director of the CIA,
had called him and suggested
that someone on Mr. Helens's
staff meet with Mr. Geneen?
A.-Yes, sir.
D --When v'ou met with [Air
Concert 'rt hvhy the CIA could not A.-Yes, he did.
accept such a fund? Q.--Did you call Mr. Edward
A.-Well I told him we could Gerrity, the ITT vice president
not absorb the funds and serve in charge of government oper-
as a funding chpuine.l. I also ations and public relations, to
told him that the United States arrantle a meeting with him in
hip office in New York city?
!government was not supporting A.-Yes, sir.
I any candidate in the Chilean
election.' Meeting in New York
Q.-During the discussion did Q.-This call, once again,
Mr. Gencon at any time rods- was made under the authority
cats that. the fund that he of your Superiors?
stood ready to contribut was A.-Yes,
to be for, or was intended for. * ? ?
constructive use, technical as- A.-Did you meet Air. (.rerr-
sistancc to agriculture, the
building of houses, or anything ih on September 29 or 30th in-
of that .,h? ct r? his office in New York city?
E. Alessandri, one of the prest- blE actions by I'.S. companies
dential candidates? designed to create nr acecler-
rte economic in~tability ill
A?-Yes, sir.
Q.-In the course of his con- Chile"
versation with you slid \ir. A.-[ explored 'lith Mr,
Geneen advise you that ITT Gerrit the fea~ihilit of liossi?
and other U.S. companies in ble actions to apply shine eco-
tian Democratic congressmen
swung their support to him he
would take office with a man-
date from the m ijurity and he
would be in a eery strong
position.
Worsening :situation
At the Same time the cco-I
nomic situation lead worsened
because of the reaction to the
Allende election and there were
indications that this was
worrying the Ghristian Demo-
cratic congressmen. There was
a thesis that additional deter-I
ioration in the et?cnutntic situa-
tion could influence a number
of Christian Democratic con-
gressmen who v,er?e planning
to vote. for Allcrule. This is'
what was the thesis.
Q.-Did you di? cilss with Mr.
Gerrity the feasi:liiity of banks
not renewing crcdi's or delay-.
ing to do so?
A.-Yes. sir.
Q.-Did you discuss with Mr.
Gerrity the fe;i iiiriity of com-
panies dra;aging their feet ill,
spending money and making
deliveries and hi shipping
snare parts:'
A.--Yes, I did.
A.-Did you discuss with Mr.
Gerrity the fcasiieilit of creat-
ing pressure on savings and
lo,ui insititution;< in Cllife so
that they, would lave to shut
their doors, thereby creating
stronger pressure ?
A.-Yes.
Q.--Did von di e iss with Mr.
Gerrity the fea'ibility of with-
drawing all ted:n;eal help and
not promising airs' technical
assistance in tlu future?
A.,- Yes, sir.
Gclleett, did Air. Geneen askI 1954 had raised an election, nonlie pressure on Chile. Yes,
you for a detailed briefin on fund to influence the Chilean sir.
the political and ceononlic situ-; presidential election which Q.-`Vhat slid you understand
anon .u.) Chile? took place at that time? the purpose of applying cco-
A.-M.r. encen requested ill-i A.--Yes. lie stated that ,h :nolnic pressure to be? -
formation on the electoral situ- group of businessmen had d A -Well, at the time, set)..
ation, such as the status and sired to invest in the 1964 tenibcr 29, the Christian Demo-
Demo-
election and they had con- . crane members of Con gr ess
potential of the candidates and lrlcted Mr. McCoue, who was. b
their parties and the campaign; swin showing indications
as of that date. That is what then the DCI, the director uE sc',l,ing their full support to
to
we talked about. central intelligence, and ho Allencle in the belief that they
would not accept the food. Ile could make a political bar gams
Q,-1)1([. 1ir'. fie'nee11 sat to j had said, no.
assemble an election fund for """""t" ~t can ,CJaulen, llll'1S
I other firms had been in-j---one of the Chilean presidential I volved besides ITT I in 111;11?'
eartdidates, Mr. Jorge E. Riles- I A.--No.
saltdri? ? < e
A.-Yes, he did. Q--Tn September. 1970. did
U.--Did he say that the l you rr?eiv':' a tclepliunc (.;ill!
amount of the fund would be from Air. AVillkimn Mo rison iri i
substantial?
!the APashiut;too office of ITT
A.-Ile indicated he was (-on- linviting you to lunch',
siderutq a substantial fund. I A.-Yes.
Q.---I)id lie mention a spe- i Q.-''.Pere your superiors in
citie fissure:' tthc CIA advised of this and didt
A.-No, he did not. ApproVealrFor4ftllbasel2QO6/'02/69: CIA-RDP75B00380R000300090018-5
.
Q.--Lid Mr. !R[chard] Helmsl
Gerrit' the feasibihh of iossi-
' Q-11 was to sup}tort Jorge 1
 iUi bL0Li )LLi(LI UUlii ALGfI Ini ulrvuib~ii IL>
{" Approved For Release 2006/02/09 : CIA-RDP75B0038OR000300090018-5
OPERATIONS CENTER
NEWS ANALYSIS SERVICE
DISTRIBUTION:
DCI
DDCI
EXD
DCI/IC
DDI
DDS
DDP (2)
DDS/T
D/OCI
ONE
OSR
OSI (2)
Ch/OpsC
PDB
INDICO
CSDO (3)
1W
SAVA
OSD
mea
fe
wh
Brb
Thuermer
Houston
LEGCO
Initial fragments on Church news conference;
more to come.
DATE: 2 8 Mare
ITEM: NO, 2
REF : NO, p
a218
b lby lveyy rlYX
URGENT
ITT-Chile 2nd Lead
WASHINGTOIS AP - Sen. Frank Church, D-Idaho, said today the secret
testimony of a CIA agent discloses that International Telephone and
Telegraph Corp. initiated the idea of U.S. intervention to prevent
the election of President Salvador Allende in Chile in 1970.
Church chairman of the Senate foreign relations subcommittee on
multinaDional corporations, related to newsmen the closed-door
testimony matte Tuesday by V11lliam V. Broe, the CIA agent. Church
said the transcript would be made public as soon as copies can be
prepared .
Church said Broe who beaded the CIA#s western hemisphere
clandestine operations in 1970, testified that Harold S. Genee ITT
board chairmnan, offered 4'a substantial election fundso on July 16,
1970 to support another candidate in the Chile election.
Church said 1-roe testified that Geneen wanted the fund. on behalf of
Jorge Alessanfrl to be controlled and, channeled, throu~I) the CIA.
(,burch said there ~;ias no reference.in the July 16 meeting of Geneen
and ]:roe about a constructive purpose such as housing or
assistance to agriculture in Chile..
These comments represent the initial and tentative reaction of the
Office of Current InteiZigenoe to the attached item from the news
services.
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//C;~ Z,-
 Approved For Relea ,e; 048r/8240,9r Clf,~--RDP75B0038OR000300090018-5
2 C MAR 1973
By JEFFREY ANTEVIL
Washington, March 27 (NEIVS Bureau)-William V. Broe, the Central Intelli-
gence Agency's onetime spymaster for Latin America, appeared before a congres..ional
committee today to discuss efforts to block the election in 1970 of Salvador Allende, a
Marxist, as president of Chile. I --
Broe, identified by officials of
International Telephone & Tele-
graph Corp. last week as an
agent who had met with ITT
officials and approved recom-
mendations designed to thwart
Allende, testified at a closed ses-
other U.S. concerns whose invest-
ments in Chile faced expropria-
tion. The plan was designed to
promote economic chaos there,
according to testimony from ITT
officials.
ITT, meanwhile, offered to
contribute as much as $1 million
for may U.S. government plan
to block Allende's election.
But, company officials have
testified, Broe's proposal was re-
jected by ITT. In the absence
of an official anti-Allende plan,
the $1 million was never spent,
the officials said.
Broe's testimony lasted about
an hour and 15 minutes. Asked
later by reporters if he would
discuss what he had told the sena-,
tors, he replied, "Not a chance,"
then ducked into an elevator.
In another development, an
Anaconda Copper vice chairman,
William E. Quigley, told the sub-
committee today that he had
never discussed with ITT pro-
posals to disrupt Chile's econ-
oiny. Ths contradicted testimony
given last week by an ITT vice
president, John Guilfoyle, who
said he had talked with Quigley
about Broe's five-point proposal.
UPI Telephoto
William V. Broe at Senate
hearing yesterday.
lion of a Senate Foreign Pela-
tions subcommittee which is
probing the ITT-Chile affair.
Subcommittee Chairman Frank
Church (D-Idaho) said later that
he hoped to make Broe's Testi-
mony public if CIA Director;
James R. Schlesinger approves.
Unprecedented Session
Church said Broe's appearance
had been "the first time that any
agent of the CIA has ever ap-
peared before a committee of
Congress to testify as to his
activities."
Ile said the panel had acceded
to Schlesinger's request to have,
the session closed. This, Church
said, avoided setting a precedent
"that could prove harmful to the
national security interests of the
United States."
Broe met with ITT's president,
Harold S. Green, in July 1970
and received regular reports from
ITT officials thereafter. In Sep-
tenmber 1970, a nlotlth before the
Chilean congress ruade Allende's
election official, It row submitted
a five-point proposal for ITT and
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 BALT1:,'.uic. SulV
Approved For Release 2Q -/0~ ; l -RDP75B0038OR000300090018-5
Ex- Voy
e
F~ ent ou t
ITT, Chile
BY GILBERT A. LEwTIIW:SITE
Washington Bureau of 7'he Suit
Washington-Edward M.
Korry, former United States
ambassador to Chile, yester-
day refused to disclose the
orders he received from Wash-
ington during the critical pe-
riod between the election of
Salvador Allende, the Marxist
president, and his confirmation
by the Chilean Congress.
He also declined to answer
questions relating to Central
Intelligence Agency activities
j in Chile during the- 1970 elec-
tion period, although he ac-
knowledged . that as ambassa-
dor he was responsible for
them.
Ironically, Mr. Korry was
preceded on the witness stand
by William V. Brae, chief of
I the CIA's covert operations in
,the Western hemisphere, who
yesterday became the first
agent ever to testify under
oath before a congressional
committee.
Mr. Broe was interrogated
behind closed doors by mem-
bers of the Senate subcommit-
tee on multinational corpora-
tions. They are investigating
alleged political activity by
U.S. business corporations,
particularly the International
Telephone and Telegraph Cor-
poration, to try to prevent the
election of Mr. Allende, who
had threatened to nationalize
basic industry and communica-
tions in Chile.
Mr. Broe, who had contacts
with ITT over the Chilean situ-
ation, was questioned for more
than an hour, and his testi-
mony will be published today
-after review by the CIA.
Senator Frank Church (D.,
Idaho) said: "It's quite a
breakthrough really. I think it
was very much in the public
interest that. Mr. Broc was
permitted to testify.
"Illuminating"
"One of the cardinal ques-
tions has been whether these
activities we are discussing
were a result of the govern-
ment's initiative or ITT's,initi-
swer and other answers that
were illuminating."
He declined to go into detail,
but after Mr. Broe's testimonyl,
members of the panel made
the first references to a $400,-
000 CIA fund for "covert prop-
aganda" operations in Chile.
Mr. -Korry, now president of
the Association of American
Publishers, said he was aware
that an interdepartmental
group, known as the 40 com-
mittee, which controlled covert
CIA operations, had met in
June, 1970, in Washington.
"I can't reply"
Asked if he was aware that
it had sanctioned "limited in-
tervention" involving the ex-
penditure of $N0,000 for covert
propaganda purposes, he said:
"Now I'm in an area when I
am forced to say I can't reply
As far as what you are
asking me about, its the unique
obligation of the-director of the
CIA to respond to."
Asked if he was aware that
the CIA conducted its own
opinion polls in Chile, he again
said: "If it was the CIA which
you allege did something, it is
the director of the CIA who!
He acknowled?ed that he did
tween an embassy and its gov-
ernment. I think this would
have a destructive impact for
many years to come of the
same sort that existed after
McCarthyism, when people
would never dare to put on
paper anything, would never
dare to stick their necks out
for an opinion +' it was not
popular.".
Mr. Korry said he was per-
sonally in sympathy with a
political plan to force Dr. Al-
lende into a run-off with the
former president, Eduardo
Frei but did nothing to support
it.
The memo from ITT's repre-
sentatives in Chile to Edward
J. Gerrity, Jr., a corporation
senior vice president, said:
"He [Korry] has never let up
on Frei, to the point of telling
him `to put his pants on.' "
Mr. Korry said he had only
one meeting with Mr. Frei
during the election period and
did not discuss the situation
with him. He said he in-
structed U.S. officials in Chile
"to eschew actions that could
be considered political."
He said: "The United States
gave up support to any elec-
toral candidate." He also said
that he ignored requests for
funds from three political
camps and that the U.S.
"maintained total hands off"
the Chilean military. There
were no contacts, he said, with
General Roberto Viaux Mar-
ambio. dismissed from the
Army in 1969 for leading an
insurrection of officers, and
considered a likely candidate
to attempt a military coup.
see opinion polls which sug-
gested that Jorge Alessandri..
Conservative National party l
candidate in the election,
would win by more than 40 per
cent. He said he warned
against accepting the polls be
cause they were based on out-
dated election data.
The closest questioning came
on the orders Mr. Korry re-
ceived from the State Depart-
ment about U.S. policy and
actions in Chile while Dr. Al-I
Jende's confirmation was pend-i
;ing.
A memorandum from ITT's
two representatives in Chile in
September, 1970, the critical l
period, said the State Depart-
ment had just given Mr. Korry
'the green light to move in the
name of President Nixon. The
message gave him maximum
authority to do all possible--I
short of a Dominican Repuo
lie-type action-to keep Allende
from taking power."
Mr. Korry said the memo
was "totally erroneous," add-
ing: "There was no green
light," But he refused to say
what his orders were.
He said "I have a deep
abiding conviction that it
would be morally wrong r >r
me to give you the details of
privileged communications ' e-
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