VIP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84-00499R001000110001-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 77
• Document Creation Date: December 9, 2016
• Document Release Date: December 14, 2000
• Sequence Number: 1
• Publication Date: April 19, 1973
• Content Type: NSPR

Approved For Release 2001/06/09 : CIA-RDP84-00499R090000110001-3
XQRK DAILY NEVIS
19 APR 1913.
,
By MAXINE CHESHIRE
IThe CIA may now have
reason to worry about elec-
tronic eavesdroppers but its
phone bill is lower. When
James Schlesinger Jr. took
over as director, the first
thing he did was rent long-
distance lines on a monthly
basis from the telephone
company because calls "are
20% cheaper" that way.
Schlesinger found some of
his spies. so fearful of being
overheard that they preferred
to go out to It phone booth I
with a handful of change.
James Schlesinger Jr.
. Cute the phone bill
Approved For Release 2001/06/09 CIA-RDP84-00499R001000110001-3
NEW YORK TIMES
ruo_ ? ')
Approved For Relea42001/06/091. IALFKUI '"; 4-00499R001@ar 10001-3
C.I.A. Trained Tibetans in Colorado, New Book
APP'011 I, Th P New Yon, TiMP1
WASHINGTON, April 18?
The Central Intelligence
Agency set up a secret base
in the Colorado Rockies to train
Tibetan guerrillas in mountain
warfare in the late nineteen-
fifties, When there was an Up-
rising against Chinese rule in
Tibet, a new book discloses.
In the book, "The Politics of
Lying," David Wise, the author,
said that the agency began
training Tibetan refugees re-
cruited in India in 1958 in a
deserted World War II Army
base near Leadville, Colo. The
operation continued into the
early months of the Kennedy
Administration, he said.
A spokesman for the agency
said that there would be no
immediate comment on the re- When a reporter for The;
port, New York Times subsequently;
Mr. Wise, the former Wash- began a routine inquiry, based;
ington bureau chief of The on a brief news-agency dis-i
New York Herald Tribune and patch about the incident, the;
co-author of "The Invisible book said, the office or Roberti
Government," a 1904 book S. McNamara, who was there
about the Central Intelligence -Secretary of Defense, tele-
Agency, wrote that the, Tibetan phoned the Washington Bureau
training program apparently of The Times and asked thati
ended abruptly in December, :the story not be used because;
1961, six months after the Bay icif "national security" reasons. I
of Pigs fiasco and a few The Times acquiesced, Mr.
days after its cover was almost .Wise wrote, in line with the;
blown in an airport near i-general newspaper practice in'
Colorado Springs. 'those years of not challenging;
Delayed by Bus Accident the Government's definition of ;
"national security."
The two top news officials'
in Washington for The Times
in 1061, the bureau chief,
James Reston, and the news;
editor, Wallace Carroll, said;
yesterday that they (lid not re-
call the incident. Mr. Reston is
aboard a bus at the Army snow . a vice president!
camp for a 130-mile trip to a and columnist for The Times,
ned by airfield in Colorado
and Mr. Carroll is editor and
WYOMING NEE,
c??:,
aver
"
?
Leadville
Grand?
Junction
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NEW MS XICO ,
0 ',MIAS 100
The New York Times/April 19, 1973
Camp reportedly was in
Rockies 130 miles from
city of Colorado Springs.
"Ironically, It was the snow
and the mountains ? the
very factors that led the C.I.A.
,to select Colorado for the train-
ing base ? that almost caused.
the operation to surface," Mr.
Wise wrote. A group of
Tibetan trainees were loaded
Springs, where a large Air
Force jet was waiting to
quietly fly them out of the
country before dawn.
"But coming down the moun-
tain," Mr. Wise wrote, "the
bus skidded off the road in the
publisher of the Journal and
Sentinel in Winston-Salem,
N. C.
Jack Raymond, who was de-
fense correspondent for The;
Times in 1961 said yesterday
snow. As a result of the delay that "1 de remember at the time;
'
caused by the accident, it was; knowing about the incident
daylight when the Tibetan and I don't recall what pre-
rived at the field." s at-i
; vented me from writing about;
;o
Once there, the book went it.
on, overzealous military seeur-I Mr. Raymond, who is now ?
associated with, the Aspen In-
port's employes around at gun-
titute for Humanistic Studies
point, but not until at least. in New York., added in a tele-
phone interview, ''I'm inclined
one of them saw the Tibetans;
to think that I didn't have
board the jet. enough information about it to
Complaints to the -local'
write a story. I have no imme-
sheriff were made about the'
manhandling of the civilians, di(ite recollection of being
t.hrown off the story by any-
and a few newspaper articles -
describing the bizarre encoun-; body*"
ter were published in Colorado,' 'Nerve-Racking Moments'
Springs' and Denver. But, Mr. his hook, i Mr Wise wrote
Wise wrote, the full implica- that the issue Lused some
ti on s of thApplioveddPorReteaser201M06109
? .
Agency's new $46-million head-
quarters in Langley, Va., be-
cause the incident occurred a
week after President Kennedy
announced the appointment .of
John A. McCone as the -new
Director of Central Intelli-
gence. Mr. 1VIcCone replaced
Allen W. Dulles, whose
resignation was accepted after
the Bay of Pigs incident, Mr.
Wiseh e wro
dispute between Tibet
and China began in the 13th
century, Mr. Wise wrote, with
China periodically claiming
Tibet as part of her territory.
Mainland China was taken over
by Communist forces led by
Mao Tse-tung in 1019, and in
1950 Chinese troops marched
into Tibet.
In May, 1951, the Chinese;
signed an agreement with the;
Dalai Lama government for the:
occupation of Tibet, pledg-i
ing not to alter the existing'
political system in Tibet or the
powers of the Dalai Lama.
However, the agreement also
provided for Chinese control
Says
that nation and; China, the book
The secret training operation
was hardly a success, Mr. Wise
wrote, because the guerrillas
"infiltrated into Tibet by the
C.I.A. were attempting to bard
ass the Chinese, not to free the
country; in the long run it is !
doubtful that they made very!
much difference. Since 1961
Communist China has ; tight-
ened its grip on Tibet." Tibet,
like other areas largely popu-
lated by ethnic minorities, now
has the states of an autonomous;
region within China.
"Would the nation's security'
have been endangered if the!
story of the Tibetan operation:
had been disclosed in 1961?";
the book asked. "In the wake
of the Bay of Pigs, Kennedy;
ordered two separate invesli.
gations of the C.I.A., and he'
struggled to take tighter eon-]
through the appointment of a
military and administrative,]trol over the agency's opera-I
!tions by changing its top lead-
committee.
During the mid-nineteen-1 ?
"Publication of the story
fifties, however, Mr. Wise! might have focused public at-
wrote, Tibetan guerrillas began: tendon on a number of im-
portant issues," Mr. Wise sug-
insurgent . warfare against thel
; gested, "including the basic
Chinese and officials of . thes question of whether tax money
Central Intelligence Agency 'would be used to finance
"concluded that the situation
1 i clandestine intelligence oper-
offered an ideal opportunity" c ations." A second issue, he
for covert United States aid. - I added, 'was whether the,agency
In March, 1959, the Dalai 'had a legal basis for operating
Lama was forced to flee over!
1 a secret training base in the
high mountain passes to India' United States.
after a Chinese mortar attack!
; Finally, Mr, Wise wrote, that
on his Palace, Mr. Wise; "disclosure might also have led
asserted. Intelligence officials; to a public examination of
later ,concluded, Mr. Wise'
such important questions as
wrote, that son-le of the guer-; whether President Eisenhower
rillas who had been trained in approved the Tibetan operation,
the Colorado Rockies had been ? whether President Kennedy was
responsible for guiding the
; aware of it or approved it, and
Dalai Lama to safety.' whether the four 'watchdog'
Open warfare broke out in'
committees of the Congress had
Tibet after the escape, Mr. Wise i had
any knowledge of what was
reported, and thousands of : "d
Tibetans were killed and the g?`11g on 'n `sn'ora"'-'."
Dalai Lama's government wasI
dissolved by the Chinese. In-,
ilia's. decision to grant sane-
Wary to the Dalai Lama also;
increased the pressure between;
------- -- - -
ene/A-RDP84-
become public. the Central Int elliztence
9TE-CrOV
0001-3
DETROIT, MICH.
NEWS
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E 592,616
S - 827,086
Eledronic.
By EDWIN G. PIPP
News Aerospace Writer
Ultra-sophisticated gadgets housed in a
? well-guarded blockhouse-like structure at
Wright-Patterson Air Base, near Dayton, Ohio,
are rapidly replacing the conventional cloak-
and-dagger spy.
Among the superspy hardware that the
? United States is now operating is a high-speed
computer capable of translating foreign scien-
tific and technical documents ? including Rus-
sian and Chinese ? into English at a _rate of
305,000words an hour.
? Another exotic unit can convert an ordinary
snapshot of a foreign airplane into a three-di-
mensional drawing with specifcations accurate
to less than an inch.
Super sleuth devices are being used daily in
the worldwide effort to gather information on
what other countries are doing so that United
States leaders have data they need to make
of [times crucial decisions..
In this electronic age the spy who steals
blueprints or secret plans still has a place in
the intelligence gathering .activities, but more
often than not his information will be obt:ained
and confirmed by scientific instruments.
? This worldwide intelligence gathering activ-
ity DOW is a $6 billion program for the United
States, With-Russia probably spending an equal
amount.
The livelihood of thousands of Americans,
and the success or failure of defense plans for
years in the future depend on up-to-the-minute
information of what other countries are doing.
Development and production of major
weapon systems are. stopped or started on in-
formation about what an enemy is planning.
World technology is moving so fast that a
major technological breakthrough in some
.weapons can upset the world's balance of
P0 wer.
Perfection 'of a laser that could destroy bal-
Qstic missiles would nullify this type of
weapon. A quick means of locating and de-
stroying submerged submarines could cripple
a nation's sea power.
Military planners live with the constant fear
that an enemy will develop some new weapon
.that they do not have. Hence they demand
more and more data on trends that of the other
side in its development effort, plus minute de.-
tails of equipment already in production.
It wasn't many years ago that a photograph
or verbal description of enemy equipment was
the major means of gathering intelligence.
Today these are only minor items in the fast
flowing stream of inftiligence coming into the
d States.
To keep up with weapons techno o q v
n st rurnents s
cret, new words ai.e , appearing in technical
publications to show the mighty effort under
way.
There are now 10 of these words, each end-
int in int, for intelligence, to show the trend.
HUMINT ? This is the human element ?
the individuals or groups who disclose classi-
fied information intentionally or unintention?
ally. This can be the oldtime spy, of a talkative
scientist at an international gathering.
ELINT ? Electronic intelligence can be col-
lected by aircraft, ships and ground stations
that record transmissions from Other countries
for analysis to determine the type of equip-
ment producing the signals.
RADINT ? Radar intelligence is similar to
Elint except that it is radar transmissions that
are monitored.
During the heavy bombing raids on North
Vietnam last year day to day changes were
made in equipment, bomber routes and tactics
based on Radint and Elint.
WORDINT ? This is kiformation from open
sources such as technical publications and in-
ternational scientific meeting. The machine
that translates Russian into English uses this
material.
What bothers technicians looking for good
data from this source is when articles by an
author-expert concerning interesting develop-
ments in a foreign country stop appearing in
public manuscripts. This usually means his
subject has taken on military significance and
now is secret.
MANY AMERICAN MILITARY EXPERTS
are irked because one of the Soviet's newest
fighter planes is make of large quantities of ti-
tanium, a metal that is extremely hard to
form, but is much better than aluminum for
high-speed aircraft.
The American government spent millions in
developing processes using titanium in new
aircraft and then described them in detail in
books that can be purchased by anyone at the
Government Printing Office. This was to help
American industry in using titanium
There is considerable evidence that the Rus-
sians used this American know-how in forming
titanium for their new fighters.
BUNT- ? Infrared data comes from sensors
that use bands of the light spectrum not visible
to the human eye. These sensors can take pho-
tos day or night, had weather or good with
data showing up that would not be seen in
normal photography.
Heat shows up in IR films. In Vietnam IR
TELINT ? Telemetery is used extensively in
relaying data on missile performance to
ground stations during test flights. Big rockets
can have telemetery from more than 100,dif-
ferent spots going back to the ground in a
steady stream of data about the performance.
It is common for Russian ships to anchor in
the Atlantic near Cape Kennedy during missile
launchings, presumably for intelligence collec-
tion, including Telint.
PHOTINT ? Photographs can come from a
wide variety of sources, including spy satel-
lites.
ACOUSTINT ? Acoustics, or noise from
machines, can give away detail 8 of how they
are operating because of new advances in rec-
ording equipment and other instruments that
can analyze these recordings. Thus details of a
new jet engine or tank motor can be deter- .
mined from the noise it makes.
?
OPTINT ? Optical intelligence is one of the
newest means of collecting data. It comes
from the use of laser beams that help aim mis-
siles and bombs.
COMINT ? This is information gained from
communications such as telephone and radio. -
FME ? Foreign Material Equipment is the
prize every nation is after. This is the enemy-
built tank, airplane, radar set Or other weap-
ons system that is captured or for some other
reason is available for inspection.
The intelligence community also is eager to
look at commercial equipment offered for sale
by foreign countries because often this .shows
the state of the art that -country has i?eached
in its production capabilities.
The military services each have their own
intelligence gathering agencies with the areas
they work in well defined. Also there is the
Central Intelligence Agency (CIA). There is a
broad exchange of datawitivi,nforrriation going
to the National Security Council which advises
the President. .
The Foreign Technology Division (FTD) of the
Air Force Systems- Command at Wright Pat-
terson is the Air Force agency..
Its mission is to obtain data on the actual
and potential technological threats of foreign ?
nations.
'Unite
o aSe 2001
telligence cwinunitv's activities are ton se- hausted into the outside air through vents.
te WOLkOISMY44****3 001 -
HS/HC-
- te
Although APPINWO Fr
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21 APRIL )?73
Counterspy Exposes
by Dorothy McGhee
They (the US government: CIA, police,
,welfare officials, defense department, et
al; and private agencies: banks, insurance
companies etc.) have been sying and col-
lecting data on us for years without our
knowledge. But now, we're spying on
them and beginning to learn about the
scope and methodology of government
intelligence operations.. The vehicle is-a
new group called Committee for Action?
Research on the 'Intelligence Community
(CARIC). And they have just put out their.
first bulletin, apPropriately called Counter-
spy which will provide monthly A source
' of analysis and information on the prac-
tices, organization and objectives of US
? intelligence.
The first 22 page issue of Counterspy
contaias some very lively information: "you can't' tell the people closest to you
* an anonymous, but obviously well inform- what you're doing."
Now, however, their work together on
actively exposing US Intelligence has been
liberating. "Being able to talk about it
openly among ourselves has really freed
us from alot of the fears we had," says
Peck. All of the former agents are, of
course, under legal constraints from dis-
closing the classified information to which
they had access while operating in Intelli-
gence. But, as they put it, you don't
have to reveal classified information to .
discuss and to expose the intelligence com.
munity. It simply gives a perspective and
a basis of analysis." '
The information in Counterspy is care-
fully researched from diverse but publi-
cally Available documents: newspapers,
congressional hearings, budgets, army re-
ports and their own anonymous sources
The group wants to create a central Intel-
.ligence Documentation Center, which
would centralize information on US op-
erations..They are soon coming out with
a handbook on US intelligence which
will describe the practical organization
and objectives of hundreds of agencies.
And, of course, Counterspy will come
out monthly.
CARIC was responsible for leaking to
the Washington /'ost last March the infor-
mation about the Committee for the Re-
election of the President hiring a George
Washington University student to spy on
local anti-war activities. CARIC came by
this information from their own investi-
gation of the Watergate break in, and
?Appfeved For Release 2001/06I sg1ispADPist11o4o4ROool1ooto1 0001-3
HS/HC-
Technow-Fascism'
Agents. They are Tim Butz, a former or-
ganizer for Vi.:tnam Veterans Against the
War, who Was in the army in Vietnam -
from 1966-1968; Winslow Peck, a veter-
an and former Military Intelligence agent
for the US Air. Force, who was in Vietnam
from 1968 to 1969; Bart Osburn an agent
for the US Army Intelligence and Security'
in Vietnam during 1967 and 1968 and a .
CIA agent until 1970; and Gary Thomas,
also a former US Army Intelligence Agent.
Osburn, who used to work with the
CIA's Phoenix Program, speaks of his
former work as "an indiscriminate mur-
der program." Peck talks about the in-
hibiting effectos of his previous life,
? !ed, letter from a former agent in the mili-
tary intelligence who tells of CIA orders
"to terminate with extreme prejudice",
,(that,is bureaucratese for murder) a US de=
fector who dropped out of military intelli-
gence with the names of every principal
agent the army had in Western Europe;
* a fascinating, detailed Account of FBI
involvement in the militant arm of the
San Diego Minutemen, the Secret Army
Organization, which planned and executed
acts of sabotage and terrorism against libel,
al and radical groups in that area. An FBI
agent, Iloward Godrey, was actually head
of the local SAO commando team which
organized bombings, espionage and shoot-
ings to harass the left wing..
There is evidence that the FBI and a
Colonel at Camp Pendleton were involved
with the unreported transfer of munitions
from the camp to the arsenal of the SAO
in 1972.
* an eight page reprint of the FBI's own
summary of their domestic surveillance,
the first public commentary by the FBI
on their efforts in this field.
Counterspy is being published because,
according to the CAI IC organizers, "the
American public has the right to know
what is being done in their name, and they
have the right to stop it. Big Brother and
the age of technofascism is here."
CARIC is an unusual coalition of four
former peace-activists verterans, three of .
whom are actually former US Intelligence
that there are at least 24 other people who
were similarly hired by the Re-election
Committee to conduct espionage activities.
CARIC is still in the process of tracking
those persons down.
Counterspy is available for 75 cents an,
issue, or $6 a year for individual subscrip-
tion, $10 a year for institutions and $75
for agencies of the government. You
can become a sponsor for $15, which
includes a free subscription. Prisoners and
active duty GI's may recieve free copies.
You should write to CARIC, Box 647,
Ben Franklin Station, Washington DC
20044.
Copy -yr C-nint rrnay. 1471.11
pvpil eV! e in IIIC thnro
-Or) pro 1 nterrstrO.
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WILMINGTON, DELA*
NEWS
APR 9 1973
rit - 44,027
Cl
-type operations
called embarrassing waste
Compiled from dispatches
WASHINGTON?Sen. William
Proxmire, D-Wis., yesterday
called for a drastic reduction
in secret U.S. intelligence op-
erations overseas, estimating
their cost at $6 billion a year
and their value greatly exag-
gerated.
. "Our foreign covert opera-
tions have brought little but
embarrassment abroad and
confusion at home," the sena-
tar said. "They should be cut
to the hone. In the day of so-
phisticated electronic devices,
no longer is there a sound jus-
tification for covert operations
to defend the U.S. from sur-
prise attack."
Proxmire, a critic of De-
fense Department spendin
policies, also alleged that tije
U.S. intelligence operation h
'switched gradually from co
le cting information to
becoming involved in the af-
fairs of foreign countries.
?
"IN too many cases," he
said, "we are substituting
clandestine operations for ,
sound foreign policy. Further-
more, due to the 'spill-over'
effect, it could lead to covert .1
domestic operations."
He said, for example, that
the responsibilities of the Cen-
tral Intelligence Agency
have been expanded by
"secret interpretive direc-
tives" which Congress never
sees.
Proxmire said the total clas-
sified intelligence budget has
been estimated at anywhere
from $4 billion to $8 billion,
but that he thought $6 billion
"is most representative."
ALSO during the weekend, a
study by the General Account-
ing Office was made public,
showing that the Defense De-
partment has given away
large amounts of surplus mili-
tary equipment to make up for
cuts by congress in foreign
military aid appropriations.
The study was made for the
Senate Foreign Relations
Committee at the request of
Chairman J. W. Fulbright, D-
Ark.
Fulbright said the investiga-
tion show a need for "drastic
overhaul of the laws control-
ling U.S. military aid policy."
The GAO found that mili-
tary aid to? 65 foreign countries
totaled $38.3 151ilion for fiscal
years 1965 through 1972 and
that grants of arms and equip-
ment classified as excess and
loans of ships came to $2.8 bil-
lion.
T H E auditors calculated
that $55 million might have
been saved in 1971 by using
such excess stocks such as
trucks instead of buying new
ones to meet military aid or-
ders.
They said the U.S. embassy
and military mission in Tai-
wan were unable to account
for 105 of the 146 ships loaned
to the Republic of China since
1954.
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FOREIGN
BROADCAST
INFORMATION
SERVICE
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SPKRA
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TRANS
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Where There is Success, There is Failure
The Central Intelligence Agency is that organization that mobilizes
the greatest amount of human and mechanical intelligence in order to
serve its cause of world espionage. Yet some of its officials acknow-
ledge that not everything goes smoothly; winds do not always blow as
the boats of the agency desire. One expert in Central Intelligence
Agency affairs, Andrew Tully, says that one of the most serious reversals
handed not only American but Western espionage came with the Iraqi
revolution in July 1958. Tulli says of the Iraqi revolution, "Dar man
were asleep at the time; nothing an make up for that loss. The
Central [Intelligence] Agency suffered after this event its greatest
humiliation when Allen Dulles had to appear before the American Senate
to answer questions about why our men had been caught sleeping with no
advance knowledge of Qasim's coup." The Central [Intelligence] Agency,
nevertheless, brags a great deal about other of its victories during
times of well-known world crises. Allen Dulles himself justifies his
failure in the Iraqi revolution, saying that the agency had proved
itself several weeks before the coup took place, when, in Jordan, an
attempt at a military coup was thwarted. Among the world cries in which
the Central Intelligence Agency has played an important role are the
Iranian crisis in 1953, when General Mo44deq attempted to do away with
the throne of the Shah by using a division of the Iranian army that owed
its allegiance to Mo4iAdeq. During that crisis the Central Intelligence
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Agency was the first to inform the Shah of the suspicious movements of
Mossadeg with certain quarters hostile to the throne (among them his
numerous meetings with the TUdeh Party) which preceded his open break
with the Shah.
There are also other politically valuable roles which have changed
the course.of events in many instances, among them the difficult task
that was undertaken by a Soviet spy working for the agency. (Allen
Dulles gave him the name Andrei.) During the rule of Khrushchev, in 1956,
this Soviet spy was able to deliver to the agency a copy of the secret
speech which Khrushchev delivered to the Soviet Communist Party, and
which was the beginning of the new policy of the Communist Party attacking
worship of the individual and opening fire on the Stalinist era for
the first time. At that time Khrushchev wanted to deep the speech secret
because of his lack of caffidence as to how it would be taken by world
public opinion, especially his attack of Stalin. He was also very
concerned with the reaction of the Communist parties of the world. This
speech became history the day that the Central [Intelligence] Agency gave
out a text of it to the press, which spread it to the world. The surprise
was out.
The other side to success is always failure. The Central Intelligence
Agency, in return for each victory, claims that it is inevitable that it
meet with many defeats. There is no doubt that one of the greatest
defeats met with by the Central Intelligence Agency was the day of the
tri-partite agression against Egypt in 1956. During this crisis, American
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intelligence was put to the test. This time, the intelligence men
failed to send advance news of the decision of the three hostile countries
to attack Egypt. Eisenhowever said of the Suez crisis that the only
source from which he heard of the aggression was the press. What ib
said about the American failure during the Suez crisis can also be said
about the Soviet invasion of Czechoslavakial about which the government
of the United States knew nothing, and most likely, the men of the
Central [Intelligence] Agelacy themselves, except through the newspapers
and radio broadcasts.
One of the more controversial incidents in the history of the
Central Intelligence Agency was the shooting down of a U-2 plane in
1960 flown by a Central [Intelligence] Agency man, Francis Gary Powers.
Another important incident arousing lengthy controversy at the
time and even now is reverberating in the halls of the Central [Intelli-
gence] Agency, and that is the incident that took place following the ,
involvement of American intelligence with the former German general,
James Gehlen, Itho is described as being the most competent spy in history.
4
He played more than one side turing the post-war era.
The Central [Intelligence] Agency has carried out highly original
missions. For example, during a world tour by a Soviet mission a lifelike
model of the Sputnik spaceship was put on display. While on display in
a Western capital, a team belonging to the Central [Intelligence] Agency
was able to enter the exhibition room by stealth, remove the spaceship,
disassemble it, photograph all its parts, then hand over a complete
technical descriptio of the model. They returned the Sputnik to the hall,
and the event went on without anyone knowing.
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15
How Spies are Made in the American Intelligence Agency
by Samir Hurl
[This article is composed of selections from the book by Patrick
J. McGarvey? CIA the Myth and the Madness. The first part of the
article is-taken from Chapter VIII, Owe My Soul to the Company
Store," and tells how McGarvey was recruited into the agency and
trained. After recounting these experiences, the article discusses
the three main targets of the American intelligence organization,
which it takes from Chapter II, the Octopus". It covers the SAMOS
satellites on which the CIA depends, as well as the Thor-Agena rockets,
and then moves on to discuss COMINT and ELINT operations, all from
the same chapter.]
The New Director is an Expert in Nuclear Energy
It must be pointed out, too, that the Central Intelligence Agency
occasionally relies on outsiders for help. These persons are given the
name of 'volunteers" since they are not paid for their labors. They
are recruited by influential men in the agency who select these volunteers
from among directors of large American companies, scientists, writers,
or others who, by virtue of their jobs, travel in different countries.
They are explained the principle of cooperating with the agency. If
they accept, the agency provides them with a list explaining the information
it could use. Ordinarily, the setting for these volunteers' activities is
in Third World countries and Eastern Europe.
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?
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Among the most recent developments which has occured anong the
higher branches of the Central Intelligence Agency was James Schlesinger's
taking over last month the task of heading the agency fram his predecessor,
Richard Helms. It did not take Schlesinger long before he began to make
radical changes in the Central [Intelligence] Agency. He took it upon
himself to dismiss three of the agency's top officials. Immediately
after that, a great fear took hold of the souls of all division heads
and top men working forthe agency. Mumblings began to be heard in the
political quarters of Washington concerning decisive other changes to
which Schlesinger might resort. An important man in the agency commented
on these changes saying that Schlesinger's dismissal of these three
employees is an action with far-reaching consequences and extremely
serious. He said, "Heads of other important men have rolled in the
past. However, this time, things are different. Schlesinger has .
carried out the matter very rapidly and has chosen three men considered
the most important pillars of the agency, the furthest removed from
suspicion."
While some American circles are surprised at the speed with which
Schlesinger moved, the circles of President Nixon appear to be completely
'satisfied with the rapidity of change. The basic reason behind this
satisfaction may go back to the fact that Nixon had commissioned Helms
more than a year ago to determine the agency's course of action and
regulate its espenses, which amount to six billion dollars annually.
At that time, Richard Helms was not able to meet the demands of the
American president completely. What made things even worse is that
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Helms belongs to the Democratic Party, and so does not enjoy mentionable
support from the White House. Eighty per cent of the agency's human and
financial resources are controlled and its affairs conducted by the
Secretary of Defense. It has become known now by all that Laird and
Helms were constantly in dispute over diffeiret estimates and opinions
connected with the intelligence agency.
The new director, Schlesinger, has no former experience in the
field of intelligence except for his having shown administrative skill
when he headed the Atomic Energy Commission in the United States. James
Schlesinger is a man of greater determination and firmness than Helms.
He also excels him in following a conservative political policy. Informed
.sources sr that Schlesinger's dismissal of three top officials does
. not at all mean that he is resolved to do away with most of the agency's
old timers. These circles demonstrate their viewpoint by pointing out
that Schlesinger put in the place of one of the dismissed old timers
another old times, 53 years old, who entered the agency 23 years ago.
Other Branches Aid the CIA
[Here are listed five agencies connected with the field of American
intelligence, with a brief, general description given of each of the
following: the Atomic Energy Commission, the Federal Bureau of Investigation;
the National Security Agency; Bureau of Intelligence and Research; the
Defense Intelligence Agency.]
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Approved For Release 2001/06/09 : CIA-RDP84-00499R00100011001-3
THE EVENING STAR and DAILY NEWS
Washington, D. C., Monday, April 30, 1973
A-15
CHARLES BARTLETT
Sihanouk's War With CIA
With the enemy knocking on
the gates of Phnom Penh, Lon
Nol's grudging acceptance of
a conciliatory council has the
look of a reform that has.
come too late. ?
Lon Nol is taking help
where he can get it, and his
belated agreement to readmit
Sink Matak to the leadership
council is combined with some
strenuous overtures to the
Soviets. It is a crowning irony
of Southeast Asia's complex
diplomacy that a leader who
wears the brand of an Ameri-
can puppet should reach for a
lifeline from the Kremlin.
The Soviets have, it turns
out, been just as wrong as the
Americans in calling the turn
on Cambodia. It was probably
because they desired to ac-
commodate President Nixon
and lacked a clear view of the
Cambodian peasant mentali-
ty. So they left Prince Sihan-
ouk to the mercies of the
Chinese with confidence that
he would find no warmth in
Peking. But-Mao and Chou
En-lai shrewdly treated the
god-king like a prince while
they enabled him to become
an effective guerrilla leader.
So the actual hope now is
not that Lon Nol's new council
will manage to assert Its au-
thority over Cambodia. It is
more realistic to hope that the
council can become the in-
strument for a negotiated set-
Will rinItl n
government with some bal-
ance in its future outlook. But
even this may be wishful be-
cause Sihanouk has written
that he will never enter "any
coalition or other
compromise" with the Lon
Nol group.
Sihanouk supplies this and
other timely insights in a new
book called "My War with the
' CIA." While the prince writes
with paranoiac intensity
about the harassments he has
allegedly suffered from Amer-
ican intelligence, he writes
with the clarity of a brilliant
politician about the forces at
work in Cambodia and why
the Nixon doctrine has not
found this to be favorable ter-
rain.
An important fact illuminat-
ed by the book is the resilient
, nature of Sihanouk himself.
Originally enthroned by the
French, who mistook him for
a malleable lamb, he commit-
ted him.self to the tradition of
his namesake grandfather, a
fervent champion of Cambodi-
an independence. The passion
of Sihanouk's ambition to
keep his people free of foreign
yokes is attested to by the
major moves of his career.
This was why, after forcing
out the French, he gave up
the throne in 1955. Ile felt sti-
fled by the sycophancy of
court life and unable to lead
or stimulate the nation. He
eliminated the U.S. aid pro-
gram in 1963 because he be-
lieved it was corrupting the
people and impinging upon his
options. Ile broke with the
United States over a military
encroachment on his territory
and risked his standing with
tho North Viettinti-Wile to Ivo-
test their troops' use of his
sanctuary.
He has pursued independ-
ence with a defiant spirit be-
cause his outlook, like his
people's, has been shaped by
, 2,000 years of vulnerability.
He seemed in 1971 to have
hurt his prospects of regain-
ing power by relying on the
North Vietnamese army. But
he seems to have been vindi-
cated by Lon Nol's far greater
reliance on American bomb-
ers along with South Vietnam-
ese and Thai soldiers. "Lon
Nol has been," Sihanouk
writes, "our best recruiting
officer."
Sihanouk is not, by his own
testimony, making his way
back in order to serve as a
Communist puppet. Ile writes
of "neutrality with nuances"
as his objective in foreign pol-
icy. This apparently means he
will play the game as he did
before his overthrow, larding
his neutrality with manifesta-
tions of a clear preference for
his strong Communist neigh-
bors.
Ile wants to preside over a
Socialist, egalitarian society
which will not be Communist.
lie appears bent on recreat-
ing a social structure much
like the one he left in 1970. Ile
believes in private property
for the pheasants and nation-
alization for industry. Ile will
be wary of Japan's economic
penetartion because, as he
writes, "the only real guaran-
tee for maintaining non-align-
ment is to neutralize the
forces of internal reaction."
This was the weakness of
the faction on which the
Americans and Soviets bet. It
rnitftIntitilpil the forces of in-
ternal reaction. It was a poor
choice, and its blatant failure
makes it important to hope
.that the U.S. government,
despite Sihanouk's allega-
tions, had nothing to do with
the machinations which
brought it to power.
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Approved For ReWFIT" ISPY""9AUENCIES
ARE BEING SHAKEN UP
Drastic changes are aimed at
ending rivalries and improving
the usefulness of U. S. intelli-
gence. One result: Some inner
workings are being disclosed.
The supersecret U. S. intelligence ap-
paratus is being rocked from within on
a scale never before so visible to the
public.
What set off the tremor is a major
overhaul, now in progress, of the ma-
chinery that produces the worldwide
intelligence assessments on which crucial
national decisions are based.
Under James R. Schlesinger, the new
Director of the Central Intelligence
Agency and overseer, also, of the vast
U. S. information-gathering network?mil-
itary as well as civilian?significant
changes are being made. They have
these objectives:
? To shake up the whole system and
sharply improve its usefulness to the
President and his top advisers.
? To process vital intelligence more
effectively, at less cost.
Mr. Schlesinger cracked down on
CIA, his home base, first. Now he is
expected to focus on other parts of the
intelligence community?military and
civilian.
Payroll reductions. In the reorga-
nization process, wholesale firings have
occurred at the CIA?a cutback, sources
say, of perhaps more than 1,000 of the
agency's estimated 15,000 employes.
Some professionals assert that Mr.
Schlesinger is bent on rooting out an
"intellectually arrogant" clique that has
been riding high in the CIA hierarchy
for years.
Others counter that the chief purpose
of the housecleanings is to enable the
Nixon Administration to "politicize" the
intelligence mechanism to its own ideo-
logical shape?and use Mr. Schlesinger
to do it.
Both charges are vigorously denied
by responsible people on all sides. In-
stead, the charges are cited as examples
of the bitter bureaucratic infighting go-
ing on in Washington?and spreading
into the intelligence system.
On one front, heated feuding between
the CIA and the Pentagon's Defense In-
telligence Agency?DIA?is out in the
open.
78 14?"WrroilYN_ 1G7-
Pentagon intelligence specialists, trying
to regain control of assessing military
threats to the U. S,, are citing what they
characterize as examples of blunders and
bias by the CIA.
The military critics admit that their
own mistakes a decade and more ago
obliged the Government to turn to the
civilian CIA for the main assessments
on military threats. But now, the mili-
tary men contend that DIA has been
revamped, is more objective?and less of
a lobby designed to scare Congress into
voting higher defense budgets.
Against that background of turbu-
lence, Mr. Schlesinger is moving to
carry out the sweeping reorganization
of the U. S. intelligence community orig-
inally ordered by President Nixon a
year and a half ago?in November, 1971.
Knowledgeable sources say that Rich-
ard Helms, now Ambassador to Iran,
was replaced by Mr. Schlesinger as CIA
Director because he failed to carry out
the overhaul mandate to Mr. Nixon's
satisfaction.
A top man in the intelligence network
put it this way: "The President and his
national-security adviser, Henry Kis-
singer, just didn't think they wore getting
their money's worth."
The reorganization plan, in fact, is
Mr. Sehlesinger's own handiwork. He
drafted it while serving as Assistant
Director of the Office of Management
and Budget. Later, lie was named
Chairman of the Atomic Energy Com-
mission?the job from which he was
transferred to his present post as Amer-
ica's "superspy."
Like Mr. Helms before him, Mr.
Schlesinger is not only Director of the
CIA but also Director of Central Intel-
ligence?DCI. That makes him boss of
all American intelligence operations.
New faces. One thing that Mr.
Schlesinger has done is to put together
what he calls the intelligence communi-
ty staff, with offices on the top floor of
the CIA headquarters building in a
Virginia suburb of Washington.
Significantly, two military-intelligence
THE U.S. INTELLIGENCE NMI AND
WHAT IT DOES
James Schlesinger, Director of
Central Intelligence, presides
over the U.S. Intelligence
Board, which sets intelligence
requirements and priorities.
Represented on the board are?
Central Intelligence Agency, top-secret Government organization,
responsible only to the White House, collects and evaluates intelligence
information, runs clandestine missions abroad, conducts espionage and
counterespionage.
lease 2001/06/09 : CIA-RDP84-00499R001000110001-3
u. S. NEWS & WORLD REPORT, May 71, 1973
CIA Director James R. Schlesinger, who
oversees all U. S. intelligence, desig-
nated two military men among deputies.
experts have been assigned to that staff
as Mr. Schlesinger's deputies. One is
Maj. Gen, Lew Allen, of the Air Force,
who has been nominated for promotion
to lieutenant general. The other is Maj.
Gen. Daniel 0. Graham, of the Army,
a career intelligence officer.
General Graham, who has been dep-
uty director for estimates in the Penta-
gon's DIA, sounded a call in an article
he wrote recently for "Army" magazine
advocating reassertion of a dominant
role for the military in estimating security
threa ts. May 1 was set as the date of his
move to Mr. Schlesinger's staff.
As the shake-up of the intelligence
establishment continues, charges and
countercharges are giving Americans a
rare look at its inner workings and hot
rivalries. For example?
? Military men are alleging that "bi-
as" of top-level CIA evaluators colors
Final estimates sent on to the President
and his aides.
One case cited by a critic of the
CIA:
'An estimate entitled 'New Order
in Brazil' was prepared as a basis for
Maj. Gen. Lew Allen
Maj. Gen. Daniel Graham
policy decisions. Use of the term 'New
Order' in the title was like overprinting
a Nazi swastika on the cover. It paint-
ed the blackest possible picture of the
present Brazilian Government, making
Brazil look like an imminent threat to
the' U. S. If the President had acted on
that report, he would have cut all aid
to Brazil."
? The CIA is accused of failing to
use information it had in hand to alert
the White House to Russia's acute food
shortage last year. The point made is
that the Soviets were able to negotiate
a billion-dollar grain deal with the
U. S. on terms favorable to the Krem-
lin?and unfavorable to the American
housewife, who had to pay more for
bread.
The CIA answers this charge by con-
tending that the information was passed
along to the Department of Agriculture,
which, in the CIA view, failed to act
on it promptly enough.
? A military intelligence official says
that before the Soviet invasion of Czech-
oslovakia in 1968, the CIA director of
estimates offered a report prepared for
the President saying there would be no
invasion. An aide, disagreeing, used
various stratagems to avoid forwarding
the report. The delay prevented embar-
rassment for the CIA when the Russians
did invade, but, according to the
source, the aide who blocked
the erroneous estimate "won
no friends."
? In Vietnam, it is now
revealed, CIA and DIA were
often at odds. For instance,
they agreed that some Com-
munist arms were reaching
South Vietnam through the
Cambodian port of Sihanouk-
vile, but both were "wildly
wrong" on how much. But an
official, not in intelligence,
recalls that CIA was "much
further wrong" than DIA?al-
though each was on the low
side.
? Another charge by critics of the
CIA: After the Tet offensive of 1968,
CIA reported Communists had seized
vast portions of the countryside, because
contact was lost with most sources out-
side the cities. This assumption was dis-
proved by on-the-spot checks by DIA
teams in helicopters.
An illustration of conflict between
civilian and military analysts:
In a recent national estimate, the
CIA took the position that Japan would
never consider arming itself with nuclear
weapons. The DIA argued that the Jap-
anese were keeping abreast of nuclear
technology and would not hesitate to
"go nuclear" if Tokyo felt that was
necessary for survival.
When the document was brought to
Mr. Schlesinger, an insider says, the
CIA analysts emphasized that they had
put their views first, as the current
position, and the DIA estimates were
relegated to the back pages. Mr. Schles-
inger was said to have,"hit the roof" and
to have ordered that the military view
be given equal prominence.
? General Graham, in his writing in
"Army" magazine, admits serious DIA
shortcomings in the past. He charges
that Pentagon intelligence has damaged
its own status by inflating its estimates
of threats to the "worst case" possible?
(continued on next page)
0111
Defense Intelligence
Agency, coordinating
intelligence efforts
of Army, Navy and
Air Force, assesses
armed forces and
weapons of friend
.Irld foe.
OSA
National Security
Agency codes and
decodes U.S, messages,
breaks foreign codes,
monitors foreign
communications.
conducts electronic
surveillance.
State Department's
Bureau of intelligence
and Research makes
sure final intelligence
estimates take account
of political and
economic trends
abroad.
AEC
Atomic Energy
Commission detects
and monitors nuclear
tests by other
countries, gathers
information on
their nuclear
capabilities.
Federal Bureau
of investigation
conducts
counterespionage
within
U.S., combats
sabote,
In addiii@kr,Kftg&PridgfilifilififittOiiiiaie%calirfilDiafttl-MatitSkROielitetintica00*-9ther countries.
Copyright tr) 1973, U. S. News & World Report, Inc.
.11 ? ???
70
?Wide World Photo
Overhaul of U. S. intelligence network is creating ten-
sion at CIA's massive headquarters near Washington.
"SPY" SHAKE-UP
[continued from preceding page]
in order to get more money from Con-
gress. He claims that this tendency has
been largely eliminated.
? General Graham also charges that,
in the past, military intelligence has
been too prone to tailor its assessments
to the need "users" have for intelli-
gence that "supports the program."
Assessing blame. In some instances,
blame is being heaped upon both civil-
ian and military intelligence agencies.
One thing pointed out is that the entire
U. S. intelligence community?despite
warnings from some agents?refused to
believe that Soviet boss Nikita Khrush-
chev would dare to risk putting offen-
sive missiles in Cuba in 1962.
Khrushchev did just that, however,
and the "missile crisis" resulted.
Some of the military intelligence ex-
perts now insisting on a stronger voice
in the evaluation of raw data concede
that, in the past, the armed forces have
been supplied with exaggerated esti-
mates of the Soviet threat?such as the
"missile gap" of a decade ago that
turned out to be nonexistent.
It is pointed out, however, that the
DIA has had a thorough housecleaning
in recent years.
"Time to reassert." In his article
for "Army" magazine, General Graham
wrote:
?`. . . I think the time is ripe for the
military profession to reassert its tradi-
tional role in the function of describing
military threats to national security. Both
the military user and the military pro-
ducer of strategic intelligence have
come a long way since the 'missile gap'
days. DIA has hit its stride in the pro-
duction of respectable military esti-
mates."
Many CIA professionals in top and
middle ranks are unhappy about the
.1.WU 46u1Ig., y I LU LPG 11.9.11. 1 I y
anent typical of this view- aware of what all the others are doing.
point: 5. Cost experts are combing through
P84-0620991140b1W0444(101 4 operations to determine how to use
that those who seek to fewer men and spend less money.
present intelligence as it "To be continued." Some projects
is, rather than as the situa-
tion is seen by those sup-
porting specific policies,
are being plucked out."
Aides of Mr. Schlesinger
deny that he has any inten-
tion of "politicizing" the
agency. They point out
that at his confirmation
hearing before the Senate
Armed Services Commit-
tee he said he was deter-
mined to maintain the in-
dependence and integrity
of intelligence evaluations.
Within the Nixon Ad-
ministration, dissatisfaction with the CIA
has centered particularly in the Na-
tional Security Council staff, which is
under the direction of Mr. Kissinger.
The main complaint has been that
evaluations of raw intelligence often re-
flected the biases of top men.
To that, one CIA man retorts:
"We feel that we do a better job of
evaluating raw intelligence without bias
than the military does?or, for that mat-
ter, than people like Kissinger who are
defending a specific policy."
The argument is made that?particu-
larly since the days when the late Allen
Dulles was its Director?the CIA's "con-
trolling voice" in the intelligence com-
munity has sought intelligence estimates
unaffected by the policies of the Ad-
ministration in power, the Pentagon, the
so-called military-industrial complex, or
any other group.
Changes in the works. Whatever
the merits of the arguments now boil-
ing, drastic changes are being made by
Mr. Schlesinger.
They include:
1. To reduce costs, overlapping intel-
ligence agencies are to submit "bids" on
operations that are assigned by President
Nixon and the National Security Coun-
cil. The Intelligence Resources Advisory
Committee, set up under the 1971 re-
organization plan, is to consider the
competing "bids" and accept the least
expensive if the bidder can . convince
the Committee that his agency can do
the job.
2. Mr. Schlesinger is making it clear
that he will exercise fully his authority
over all of the intelligence services. In
the past, this has been a difficult prob-
lem for the Director of Central
Intelligence, because the Defense De-
partment gets most of the money and
most of the manpower.
3. As DCI, Mr. Schlesinger will de-
cide which of the U. S. intelligence agen-
cies?military and civilian?will carry out
operations assigned by the White House.
are being phased out as inefficient or
outmoded. One report indicated a sharp
curtailment in clandestine operations.
But an insider commented:
"They may not talk about these as
much as they (lid, but like it or not,
these activities are part of the way of
life in the world today, and they will
be continued."
One revision put into effect, by Mr.
Schlesinger has to do with preparation
of CIA reports requested by the Presi-
dent and other high officials.
Condensed intelligence. Previously,
such requests were answered with de-
tailed studies-20, 30, or even 50 pages
long. Now, the reports run no longer
than three double-spaced pages. A CIA
official explained:
"Instructions from Schlesinger are to
answer the questions asked?and no
more. No background. No historical dis-
cussion. just keep in mind that the
President or the Secretary of the Treas-
ury or whoever else asks the questions
is a busy man. He rarely has time to
read long reports. What he needs is
for use right now?today?in order to
make a decision."
The telephone number of the analyst
or working group responsible for the re-
port appears on the document, so if
more information is needed, it can be
obtained without delay.
In line with Mr. Nixon's efforts to re-
duce federal spending, the intelligence
agencies are under orders to reduce
costs.
Just how much is being spent to piece
together the information essential to na-
tional security is not a matter of public
knowledge.
A 6.2 billion cost? Senator William
Proxmire (Dom.), of Wisconsin, esti-
mated recently that the cost of gather-
ing military and civilian intelligence is
6.2 billion dollars a year. But Albert C.
Hall, Assistant Defense Secretary for
Intelligence, said that Mr. Proxmire's
figure is "just plain wrong."
Without hinting at the actual figures,
Mr. Hall said that the Pentagon's int&
ligence budget has been cut by about a
third in the last three years.
Other sources say that manpower in
the CIA and the other intelligence serv-
ices, including the National Security
Agency, now totals less than 125,000?
a reduction of more than 25,000 since
1971.
Thus, a money crunch and diminished
manpower are added problems at a time
of sharp change and open conflict for
the agencies which function as the "eyes
and ears" of the United States around
the world. [END]
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Approved For Release 20411;106/09 :ThA131714a0trtircAqaT011474;la
In /long Kong, an agent of the U.S.
Central Intelligence Agency slips into
? a railroad yard and checks the wear on
ball bearings of freight cars coming in
from China to try to spot unusual troop
movements. Meanwhile, another agent
? goes to the !long Kong central market
and buys a large order of calf's liver
from animals raised in China to run a
lab test for radioactive fallout.
In Eastern Europe, a CIA team tries
to obtain a sample of a Communist par-
ty chief's urine. Purpose: to determine
his state of health. The CIA did this suc-
? cessfully with Egypt's late King Farouk
but failed recently with Yugoslavia's
President Tito.
17HESE are only a few of myriad mis-
sions that the CIA has performed
around; the world. The agency is also
constantly accused of fantastic James
? Bondian exploits that' more often than
not it has nothing to do with. The fact
is that no nation can any longer:accept
Secretary of State Henry Samson's
bland dictum of 1929 that "gentlemen
do not read other people's mail." In a
nuclear-ringed globe, intelligence is
more vital than ever. Nor can a world .
power automatically limit itself to such
a passive role as mere information gath-
ering; trying to influence events may at
times be necessary. But it can no long-
er be done with the crudity and arro-
gance displayed in the Bay of Pigs in-
vasion of; 1961, or the attempt with the
International Telephone and Telegraph
Corp. to sow economic chaos in Chile
in 1970. To harness the CIA's excesses
and yet utilize its immense capabilities
for keeping the U.S. abreast of world de-
velopments; the ;Nixon Administration
has ordered the greatest reorganization
in the agency's 25-year history.
Cooperate. Reports TitviE's Diplo-
matic Editor Jerrold Schecter, who has
; been keeping a watch on the CIA: "For
the first time since its founding the CIA
is undergoing a thorough shakeup of
personnel and redirection of mission.
The two main targets of U.S. intelli-
gence activities continue to be the So-
viet Union and China. But a rapidly de-
veloping detente with those countries
E has created different demands on the in-
telligence establishment. Along with
traditional estimates of the missile and
; military capabilities of Communist
countries, the White House is insisting
on a new' 'emphasis on assessments of
their political and strategic intentions.
The entire intelligence estimating pro-
cess is being refined to include more
stress on such developments as Soviet
; and Chinese grain outputs and comput-
er advances."
To chart this new direction,' Pres-
ident Nixon has turned to a tweedy,
se 2001/06/09
irriMitANNIMOOP4VArcip 1-3
TIME, APRIL 30, 1973
Approved For Release. 20
Gmcth Cub
in February took over as director of the
CIA. Aides quote Schlesinger as saying
that "the entire intelligence community
can produce a better product with a low-
er level of resources." In short, the na-
tion's spy network should generate bet-
ter intelligence for less money.
Schlesinger has ordered the firing or
forced retirement of 600 of the CIA's
18,000 worldwide employees; 400 more
are expected to go by year's end. His
aim is to cut costs, eliminate marginal
performers, and change the leadership
of the agency. Among those who have
gone are several of the long-entrenched
top deputies of former cm Director
Richard Helms, who tended to favor the
"operational men," or spies in the field,.
over the cerebral analysts, who ponder
the intelligence and make policy rec-
ommendations. These two sides of the
agency, traditionally separated, have or-
ders to cooperate more.
Paramilitary operations are being
scaled down. In South Viet Nam, the
CIA's role in the "Phoenix"?or coun-
terterror?program has already been
phased out. The program used CIA
agents to advise the South Vietnamese
in the "neutralization," or killing, of
Viet Cong officials. Such covert activ-
ities arc under the CIA's deputy direc-
tor of operation-s, currently William
Colby, 53, a former ambassador who
was in charge of pacification in Viet
Nam from 1969 to mid-1971.
Often called the agency's "dirty
tricks department," Colby's section con-
trols field agents who are involved in
clandestine activities, including keeping
a watch on the KGB (Soviet intelligence)
and working with intelligence organi-
zations in Western countries. But Col-
by's group is now placing new empha-
sis on such activities as getting early
warnings of?and curbing?interna-
figePerktirdiPtifilM4.9004000 1
,
Ira ic. hroug intercepts o commu-
nications, the CIA has discovered who
ordered the killing of the U.S. and
Belgian diplomats in Khartoum two
months ago. It also knows the financial
sources of the Black Septernbrists, who
carried out those assassinations, as well
as the murders of Israeli athletes at the
Munich Olympics.
Rivalry. With the downgrading of
cloak-and-dagger operations,. one of
Schlesinger's tasks will be the strength-
ening of the "leadership for the lintel-
ligencel community as a whole," a rec-
ommendation that he himself urged on
the President in 1971, when he was an
assistant director of the Office of Man-
agement and Budget. Now, Schlesinger
not only heads the CIA but also has ul-
timate responsibility for the I entagon s
Defense Intelligence Agency, which
provides intelligence for the armed
forces, and the National Security Agen-
cy, which directs spy planes, satellites
and a vast communications-monitoring
apparatus that cracks Codes and gath-
ers data from other countries.
Schlesinger, as chairman of the In-
telligence Resources Advisory Commit-
tee, will be taking a hard look at the
combined $6.2 billion (some estimates
put it as high .as $8 billion) spent by the
three agencies. Nearly half of the mon-
ey goes for satellite reconnaissance and
spy planes; about $750 million is bud-
geted to the CIA.
Schlesinger also must watch out for
a smoldering rivalry between the CIA
and the DIA. The rivalry broke out in
the open recently in the form of an ar-
ticle in the small (circ. 75,000) month-
ly magazine Army, written by Major
General Daniel 0. Graham last Decem-
ber?before he was picked by Schle-
singer to be a member of his five-man
Intelligence Resources Advisory Com-
mittee. Graham's article contended that
the Pentagon should win back from the'
CIA. primary responsibility
for analyzing strategic mili-
tary intelligence. To the em-
barrassment of military lead-
ers, he conceded that in the
past the Pentagon's estimates
of Communist military po-
tential were vastly ora.rstat-
ed, and that the nation's de-
cision makers rightly regard-
ed those estimates as "self-
serving, budget-oriented and
generally inflated." But, he
wrote, the Pentagon has so
greatly reformed and .im-
?proved its analysis in recent
?years that there will be no
more "bad overestimates"
_like "bomber gaps," "missile
gaps," and "megaton gaps."
Aided by Graham, who
will be the primary link be-
CEiy DI) ,f to as la kclItoofftiqor Said he recently to an old
c esinger hopes to improve ciA tan : "The trouble with this place
relations with the Pentagon. is that it has been run like a gentleman's
Under the able Richard club?but I'm no gentleman."
51010?10
() C\
I If
011
Art
t?
CIA DIRECTOR JAMES R. SCHLESINGER
Inducing constructive tensions.
Helms, CIA analysts had remained aloof
from the military, and there were bit-
ter battles between the CIA and DIA dur-
ing the Viet Nam War over estimates
of enemy infiltration and intentions.
To increase accountability within the
agency, Schlesinger has told CIA's
analysts to sign all their intelligence
reports. He hopes that bylines on
the blue and white-covered CIA assess-
ments will sharpen analyses and make
the authors feel personally responsible
for their assessments.
Schlesinger seems just the man to
shake up the CIA. A seasoned scholar,
bureaucrat and Republican, he enjoys
the confidence of President Nixon. He
was graduated sumina cum laude from
Harvard ('50), later got his Ph.D. in eco-
nomics there, taught at the University
of Virginia, and was director of stra-
tegic studies at the Rand Corp. He
joined the old Bureau of the Budget in
1969, and two years later was named
chairman of the Atomic Energy Com-
mission. His prodding of utility exec-
utives to pay more attention to envi-
ronmental safeguards impressed the
President. When industry leaders
complained. Schlesinger told them:
"Gentlemen, I'm not here to protect
your triple-A bond ratings."
While maintaining traditional secre-
cy about clandestine operations, Schle-
singer is moving fast to lift the veil of
conspiracy that has shrouded the agen-
cy. In an unprecedented move last
month, he allowed a CIA agent, William
Broe,...the former chief of clandestine
operatiOns for the Western Hemisphere,
to testify before a Senate subcommittee
investigating the involvement of the CIA
and the International Telephone and
Telegraph Corp. in Chilean political
affairs.'
- As tough-minded as he is candid,
_Schlesinger leaves little doubt that he
is determined to reform and redefine the
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-
,? PridemAm4V3,1973 THE WASHINGTON POST' ? '
West German Denies
14 Was CIA Agent
Reuter
FRANKFURT, West Ger-
man, April l2?West German
,technician Trutz Ritter von
Xylander,. freed by the Chi-
nese authoiities yesterday at-
ter more than five years of de-
tention, denied on his return
here today ? Chinese charges
ithat he had worked for the ?
!U.S. Central Intelligence .
. ?
agency.
"I have never had any con-
'tact with the CIA, either bo-
lero my arrest or now after
my reloaso," he told On airport
'press conference after flying
here from Hong Kong.
Tr-r,F-7
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THE EVENING STAR and DAILY NEWS A.5 ?
Washington, D. C., Wodnitsckly, April II, !9.13
Pardoned. CIA, Sp
P.Ze eased by Chin
HS/HC- Miro
HONG KONG (liPl) ?
Trill?. Ritter Von Xylander,
41, a West German jailed
since ,1967 on a charge of
spying for the United States,
crossed the border into, Hong
Kong today. -
Von Xylander was convicted
Oct. 22, 1969, of spying for the
Central Intelligence Agency'
' and was sentenced to 10 years
in prison. He was .arrested
Nov. 17, 1967, while working
as an equipment inspector
and plant site clerk for the
turgi Co., which was erecting
a petrochemical plant in the
northwestern Chinese prov-
ince of Kansu.
The West German Embassy
in Peking announced Monday
that China had pardoned Von
Xylander and would release
him. He was the last West
German known to be held in
China,
Peking Radio reported
on the day of his conviction
that Wm Xylander was photo-
graphing restricted areas in
Lanchow, the provincial capi-
tal of Kansu, and collecting
important military, political
and economic information on
behalf of the United States.
He was recruited by U.S.
agents in West Germany be-
fore he went to China in Octo-
ber 1965, the report said.
Lanchow is known lobe one
of the key industrial support
bases fbr China's nuclear and
missile programs.
The German is scheduled to
return to Frankfurt in the
company of his brother, Horst
Von Xylander, who had come .
to Hong Kong to meet him.
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A.26
THE EVENING STAR and DAILY NEWS
Washington, D. C.," inesday, April 11, 1973
APPrOVIJ For Release..2001/06/09 : CIA-RDP84- 09R001000110001-3
finq n'e
7 By ORR KELLY
Star-News Staff Writer
:mcs R. Schlesinger, thei
ww director of Central Intel-
ligence, is giving the military
a stranger role in assessing
ifireats posed by other coun-
tries, 'according to the
pentagon's top civilian
intelli-
nce official.
.7 Albert C. Hall, assistant
defense secretary for intelli-
gence, acknowledged in a in-
terview yesterday that "some
of the civilians up the river"
lit the Central Intelligence
Agency) are quite concerned
by the new development.
? Ain Hall, who was brought
'into the Pentagon by Defense
Secretary Melvin R. Laird
two .years ago to strengtheni
civilian control over intelli-
gence, said he thinks what
Schlesinger is doing "is really
Clint? sound."
? 'SCHLESINGER, who drew
up a plan for revamping the
intelligence community when
he was at the Office of Man-
agement and Budget in 1971,
has placed two career sol-
diers on his personal staff,
"Maj. Gen. Lew Allen, a
West Pointer who holds a
doctor's degree in physics and
who has been active in Air
Force nuclear and space pro-
graft, became one of
?eblesinger's deputies "for
JAMES R. SCHLESINGER
the intelligence community"
on March 1. He was nominat-
ed yesterday for promotion to
lieutenant general. Maj. Gen.
Daniel G. Graham, a career
intelligence office who is now
deputy director for estimates
in the Defense Intelligence
Agency, is scheduled to be-
come a deputy to Schlesinger
May 1.
While Schlesinger is report-
edly embarking on a house
cleaning to cut about a 1,000
persons from the CIA payroll
of about 15,000, he has given
his stamp of approval ? at
least for the time being ? to
the military intelligence oper-
ation, Ilall said.
"I have told the DCI
(Schlesinger) what we are
doing, what our objectives-
are, and how we are going
about researching them in a
broad sense ?and he's en-
dorsed them," Hall said.
TIM; DIA, the key Pentagon
intelligence office, underWent
a house cleaning of its own '
beginning in 1970, when Lt.
Gen. Donald V. Bennett be-
came its director. The entire
defense intelligence communi-
ty has received a further
shaking up under Hall.
Over the years, there has
been a tendency to downgrade
the military estimate of ' the
threat from other countries ?
primarily the Soviet Union ?
and for the civilian analysis of
the CIA to be predominant,
Hall said.
"On the civilian side ? up
the river ? they were more
inclined to regard the Soviet
Union as a more peaceful ent-
ity than it actually is. Their
tendency is to regard what
they (the Soviets) do as a
reaction to us," Hall said.
The military picture tends
to make the Soviets look like
the fierce guys, and that
we've got to catch up, he said.
"In analysis of the Soviet
Union, one was too far on one
. are involved. He did say,
however, that an estimate by
Sen. William Proxmire, D-
Wis., that the nation's annual
intelligence bill is $6.2 billion
is just plan wrong. ,
PROXMIRE SAID yester-
(lay his figijfS were "in_the
roved For
ITS/LIC- 3-0
side, the other too far on the
other side. I don't want to
overstate this, because it was
not that bad a situation. But it
would be better if they both
moved toward the middle,"
Hall said.
VVIIILE the different inter-
pretations seemed to provide
a broad range of views, the
opposite was often the case,
, Hall said. Graham, in an arti-
cle of the current issue of
Army Magazine, said
"planners of all services
'coordinating' an intelligence
estimate are quite capable of
reducing it to lowest common
denominator, mush."
The goal now, Hall said, is
to recognize that "There real-
ly isn't one estimate ? that
there are ranges of possibili-
ties driven by certain circum-
stances.
"It is important to get the
ranges and the circumstances
laid out," he said.
Unfortunately, he added,
many of those who receive the
intelligence information
would rather have a specific
figure than a range of
choices.
HALL ALSO STRESSED,
throughout the interview, that
he is seriously concerned
about the nation's intelligence
budget. Over the last three
years, he said, the Pentagon's
intelligence budget has been
cut about a third.
"We don't have all the
things covered at all that we'd
like to have covered," he
said. "When resources are
limited, it is no easy way out
of that situation."
Hall. refused to say how
much Nixon spends on intelli-
gence or how many people
ballpark" and called on $100 million; Army Intelli-
Schlesinger to make the ? in- gence, 38,500 and $775 million; '
telligence budget public. Navy Intelligence, 10,000 and
He said his estimates of 8775 million; Air Force Intelli-
manpower and budget are: gence, 60,000 and $2.8 billion
CIA, 15,000 and $750 million; (including satellite launches
National Security Agency, and reconnaissance); State
20,000 and $1 billion; Defense Department intelligence, 335
Intelligence Agency, 5,016 and and $8 million.
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Approved For Release4D01/06/09 : CIA-RDP84-00499R001000,114001-3
U.S. Spying
Cost Put at
$6.2 Billion
Associated Press ,
Sen. William Proxmire (D-
Wis.) said yesterday, the U.S.
intelligence community em-
ploys about 148,000 persons'
and spends about $6.2, billion
each year.
Renewing his call for dras-
tic cuts in the cost of Ameri-
can spying and covert activi-
ties overseas, Proxmire urged
James Schlesinger, new Cen-
tral Intelligence Agency, Di-
rector, to make public the gov-
ernment's entire intelligence
budget, which has always been
secret.
Proxmire said he is not op-
posed to a first-rate American
? intelligence operation but
does believe that the intel-
ligence establishment has
swollen out of proportion to
national , defense needs and
that congressional controls
and restraints on it have
eroded.
He said his cost and man.
noWer @Militates Are Het baaad
on classified or , official
sources and noted that they
depict the CIA as smaller in
both personnel and budget
than at least three other U.S.
Intelligence groups.
Proxmire's estimates show
the CIA with a work force of
15,000 and an annual budget of
$750 million. These are his
? other estimates:
?
?
THE WASHINGTON ?Onreinottay.Ap.rini.1973
? ? ?
?
National Security Agency,
20,000 and $1 billion; Defense
Intelligence Agency, 5,016 and
$100 million; Army Intelli-
gence, 38,500 and $775 million;
Navy Intelligence, 10,000 and
$775 million; Air Force Intelli-
gence, 60,000 and $2,8 billion,
and State Department Intelli-
gence, 335 and $8 million.
Proxmire said his estimates
are "not without error," but
nevertheless are "in the ball-
park."
"These figures ' do not re-
flect, however, the coordina-
tion that is involved from one
organization to another,"
Proxmire said. "The Air
Force, for example, supplies
the launch boosters and satel-
lites for the highly successful
reconnaissance program ,and
this is one reason the budget
is so high."
Proxmire has said previ.?
otialy that aeuret ithamotta by
intelligence agencies overseas
are needlessly involving the
United States in the political
affairs of other countries at a
period when the need for the
missions has been greatly re-
duced by modern techniques
of electronic and aerial sur-
veillance. '
d For Release 2001/06/09 :,CIA-RDP84-00499R001000110001-3
4
Approved For Releas
IHS/1-1C- 44-0 I \
'
SEN. WILLIAM PROXMIRE
Proxmire
Asks Cut in
U.S. Spying
United Press International
Sen. William Proxmire, D-
Wis., has called for a drastic
reduction in secret U. S. intel-
ligence operations overseas,
estimating their cost at $6 bil-
lion a year and saying their
value is greatly exaggerated.
"Our foreign covert opera-
tions have brought little but
embarrassment abroad and
confusion at home," he said
?yesterday. "They should be
cut to the bone. In the day of
sophisticated electronic de-
vices, no longer is there a
sound justification for covert
operations to defend the U. S.
from surprise attack."
Proxmire, who is also a
leading congressional critic of
Defense Department spending
policies, alleged that the U. S.
intelligence operation had
switched gradually from col-
lecting information to becom-
ing involved in the affairs of
foreign countries, and ex-
pressed fear this could be a
possible prelude to similar
tactics in this country.
"In too many cases," he
said, "we are substituting
clandestine operations for
sound foreign policy. Further-
more, due to the 'spill-over'
effect, it could lead to covert
domestic operations."
He said that, for example,
the responsibilities of the Cen-
tral Intelligence Agency have
been expanded by "secret
interpretive directives"
whieh Congress never sees.
In a statement issued from
his office, Proxmire recom-
mended steps which he said
would permit trimming as
much as $1 billion from the
intelligence budget.
-00499R00100%100001-3
THE EVENING STAR and DAILY NEWS
Washington, D. C., Monday, April 9, 19 73
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'VI ,
THE WASHINGTON POST Saturday, April t9, 1973
The Washington Merry-Go-Round ?
E31
Bureaucracy Engulfs Wounded Knee
By Jack Anderson
The bureaucratic build-up
'outside Wounded Kneels a
testament to the government's
way 'of doing things.. No less
than 400 federal officials have
descended upon the small
South Dakota village to nego-
tiate, mediate, consult and oc-
casionally exchange gunfire
with the Indian occupiers.
Cost to the' takpayers: around
$2.7' million.
Yet at this writing, the Indi-
ans remain armed and angry,
Take the problem of road-
blocks, for example. The daily
crisis reports from Wounded
Knee, intended for Justice De-
partment eye's only, tell how
armed local residents threw
up their own vigilante road-
block. Assistant Attorney Gen-
eral J. Stanley Pottinger "met
with them at the roadblock
shortly after it was established
but failed to talk it down," de-
clares a crisis report.
Next clay, the vigilante
group refused to 'allow the
Community Relations Serv-
ice's peace-keeping team into
Woubtled Knee, While "no
CRS personnel were in
Wounded Knee" to restrain
the militants, a "most serious
incident" took place. Accord-
ing to a report, the incident
"involved the alleged looting
of a rancher's home and cattle
by WK (Wounded Knee) occu-
pants." Three days later seri-
ous shooting broke out, and
one militant Indian was crit-
ically injured.
Still, Pottinger took no ac-
tion against the unauthor12ed
roadblock. "Pottinger has indi-
cated to CRS and at staff
briefings,' states a report,
"that he' is inclined to arrest
the leaders of the roadblock,
but most other agencies advise
against it for purposes of pub-
lic relations or convenience."
? Explaining what is meant by
"convenience," the report tells
of "a planned .march on WK
by clergymen and others
(Easter) weekend. The govern-
ment would rather have the
marchers detained by a citi-
zens' roadblock than by an
FBI one."
The Easter march fizzled,
and Pottinger finally ordered
the roadblock removed. But
meanwhile, he was having
trouble with the government's
own roadblocks. He obtained
an order from Wshington to
put all federal roadblocks and
bunkers under the command
of U.S. marshals.
"Previously," notes a report,
"the marshals, the FBI and
the MA police each manned
their own units, and it was dif-
ficult to verify and control the
repeated incidents of federal
vehicles and troops (mostly
FBI and BIA police) moving
into the WK perimeter."
The CRS peace-keeping
team has now returned to
Wounded Knee. But the Indi-
ans and the federal officers
are still manning their armed
bunkers. As one federal offi-
i ?
cial put it, "We're now back to
zero again."
Military Martinet
Maj. Gen. Daniel Graham, a
short, ramrod-straight authori-
tarian, is moving from the De-
fense Intelligence Agency to
the Central Intelligence
Agency to take charge of stra-
tegic estimates.
He has already alarmed CIA
hands by writing in Army
Magazine that vital security
estimates should be made by
military analysts, although he
acknowledges that DIA esti-
mates have been slanted in
the past to please the Penta-
gon bosses and the CIA esti-
mates have been more accu-
rate.
The alarm hasn't been al,
layed any by reports reaching
CIA headquarters of his con-
duct as head of the Wakefield
(Va.) High School PTA.
He circulated a memo, for
example, urging that five
teachers be fired and eight
others be enlisted as inform-
ers. He wanted them to keep
an eye on suspicious teachers
and students. The Graham fac-
tion also brought pressure to
oust the school's able princi-
pal, who finally left voluntar-
ily,
In one stormy PTA meeting
after another, Graham has
fought student privileges in-
cluding the right to partici-
pate fully, in PTA activities.
So vehement is he at PTA
meetings that some neighbor-
hood government officials are
afraid to argue with him for
fear he'll retaliate against
them ? in their jobs. In re-
sponse to our inquiries, Gra-
ham sent word through his
secretary that he, wouldn't
speak with us.
Inside North' Korea?Vii-?
tors just back from North Ko-
rea remind us that Kim .11
Sung's Red regime is still one
of the most oppressive on
earth. They describe the towns
as drab, the social life as ste-
rile, the people as regimented
and the atmosphere as harsh.
Individually, the North Kore-
ans were friendly and curious.
But in the presence ? of others,
they became' stiff and strident.
Their private opinions sud-
denly ? conformed to the rigid
official line.- North and South
Korean delegations, mean- ?
while, are preparing for an-
other round of negotiations.
Sikkim Strife ? Hush-hush -
reports smuggled out of the
Himalayan kingdom of Sikkim
charge that India is financing
riots against the regime of
King Palden Thondup Nam-
gyal as part of a plot to take
full control of his land. The
dashing king became a special
favorite of Americans when he
married a pretty New Yorker,
hope Cooke. Lately, demon-
strations have shaken his mon-
archy, and Indian troops have
crossed the border "in the in-
terest of law and order." Insid-
ers close to the royal family
have gotten word to . us that,
even as the troops moved in,
Indian political officer K.S.
Bajpai began to pressure the
king to "hand over all power"
to India
OD 1973, United Feature Syndicate
1
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I HS/I1C- fro
HS/HC-
vpro
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?
JOURNAL,
1\9g 8 1973
M ? 66,673
? 209,501
Tight
em n Urged on Intelligence
By DOANE IIELICK
Congress and the executive
branch of the government
should exercise virogous con-
trol over the nation's in-
stelligence-gathering agencies,
according to a Brown Univer-
sity political scientist.
Lyman 13. Kirkpatrick, ? a
former high-ranking CIA of-
ficial who joined the Brown
faculty eight years ago, said
strong controls are needed
.especially in the field of do-
mestic intelligence.
"The less we have of do-
mestic intelligence the bet-
ter," he said.
Mr. Kirkpatrick, is the au-
thor of a new hook: ''The
Intelligence: Foreign Policy
and Domestic Activities,".
which is scheduled for publi-
caton in the fall. ,
It analyzes the nation's in-
telligence Ewan-this and its re-
-lationship to the .President,
Congress and the public.
Mr. Kirkpatrick believes both
the executive and legislative
branches of the government
have at their disposal adequate
means of .overseeing intelli-
gence operations.
"The- whole- point is that
they should exercise more ag-
gressive controls," he said.
Critical of the decision to
assign the Army a role in
gathering domestic in-
telligence during the height of
civil unrest stemming irons
the war in Southeast Asia,
Mr. Kirkpatrick maintains that
"the Army shouldn't be in-
volved in that kind of busi-
ness. Tint is the role of the
FBI."
The Brown professor served.
as a staff officer; assistant
director, inspector general
and executive director-comp-
troller of the CIAssduring his
two-decade career with the
agency. He emphasized than
espionage is only a small part
of the agency's work, and as-
sumes a secondary role to re-
search and the analysis of
Politica science profes-
sor Lyman B. Kirkpatrick.
SI y
Uy HUGH S MISER
newspapers, government
lications and computer
outs to to evaluate them ssan ?
an intelligence standp6int. ,
At Brown Mr. Kirps ri
teaches courses on Cold War
operatons, American miilto
affairs and problems of na-
tional strategy and policy.
The seminar on American
military afairs is new this
term and was organized with
the help of a $143,000 grant
from the Carthage Foundation
of Pittsburgh.
A portion of the seminars
will focus on'a case history_of
the Vietnam war, using the
Pentagon Papers as resource
material.
Mr. Kirkpatrick rates U.S.
intelligence in Vietnam as
generally good in the area of
strategic matters, but has
concluded that tactical Infos-
mation was less reliable.
"Good tactical intelligence
was difficult to come by since
the Viet Cong controlled so
much of the countryside," be
said.
Mr. Kirkpatrick said his
standard reply to criticism of
the CIA for activities such as
the Bay of Pigs invasion and
to charges that the agency
has too much say in foreign
policy is that "the CIA does
what it is told to do."
"As long as we live in a
world with intense competi-
tion and hostility we need a,
good intelligence system," he
said.
"But intelligence is, as a
word, relate. si to military at-
/fairs. My conviction is that in-
telligence work is closely re-
lated to peace," he added.
-Arr. Kirkpatrick said the
FBI is the only appropriate
agency to engage in domestic
. intelligence gathering activi-
ties and is so designated by
federal laws, When the Army
entered this field in 1968, its
intelligence collecting opera-
pparatus
tions snowballed to the point
that dossiers were being
created almost indiscrim-
inately, he said.
In the field of . foreign in-
telligence, Congress has the
options to exercise influence
and controls through appro-
priations, Mr. Kirkpatrick
said.
Lawmakers such as Sen. J.
William Fulbright, chairman
of the Senate foreign relations
committee, and Congressman'
George Mahan, chairman of
the House appropriations
committee, are Continually
placing CIA activities under
scrutiny.
He said be believes .the CIA
has a legitimate role in inves-
tigating foreign drug traffic,
adding that the agency has
been involved in that kind of
investigative activity for 25
years.
It was recently reported
that the agency would broad-
en its activities in this field
and also use its intelligence
gathering resources in an ef-
fort to curb acts of terrorism.
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?The Washington Illerry-Go.Ronnd
CIA-Inspire 1 Tibet Raids Wind own
By Jack Anderson -
gence agents were used to Par-
achute American supplies to
In ? mountanious Nepal, the Khampas' mountain hiv-
.
least bloody war is winding (macs, The bright orange sup-
America's least known and Ply parachutes were converted
down. The warring tribesmen into shirts by the Khampas
and the Central Intelligence
Agency, which recruited them,
are losing interest in the ad-
venture.
After the fleece-clad Red
Chinese legions crushed a re-
volt in Tibet in 1959, the fierc-
est of the Tibetan clans fled
on wiry ponies into the high
fastness of Nepal.
CIA 'agents slowly gained
the confidence of the moun-
tain fighters, known as Kham-
pas or "warriors," and began
organizin ging them against
the Chinese. In the cloud-cap-
ped regions of Mustang and
Dolpa, the Khampas were out-
fitted with American saddles,
small arms and other equip- on peasants instead of Chinese
mein. soldiers.
Then, - out of the craggy Thus has a faraway war
flared up and died down, vir-
tually unknown to the Ameri-
can people, whose dollars sup-
ported it and whose secret
agents encouraged it.
Washington Whirl
Campaign Finances?We re-
cently reported that most of
were invited to participate in the Nixon scandals, from ITT
a raid on Chinese army facili- to Watergate, were outgrowths
ties in Tibet. The Khanma , of the 1972 presidenti:d cam-
'leader claimed he learned his Ipaign and I P e corn ptive
English and was trained in
rguerrilla tactics in the United
:States. We suggested that the tax-
In past years, Indian intent- 'payers would be better off if
and quickly became a "Red
Badge of Courage" in Tibetan
refugee restaurants in Khat-
mandu.
But now the Tibetan refu-
gees, when they gather in the
restaurants for in uana
stew and cakes, are forlorn
The American aid is drying
up, and the Khampas have to
depend on the penurious In-
dian intelligence services for
supplies. This has so weak- cause it would give the debt-
cued them that the Nepal goy. ridden Democrats an even fi-
ernment, branding them nanciat break with the Repub-
"bandits," has been able to licans in the 1979 presidential
move them from the border election.
areas. Now when the tribes, "
men feel war-like, they prey
they earmarked a dollar of
their taxes for the political
party of their choice. They can
do this simply by filling out
the Presidential Election Cam-
paign Statement, Form 4875.
But -a spot check by IRS dis-
closed that only two of 29 em-
ployees, assigned to assist tax-
payers with their returns,
bothered to inform the taxpay-
ers of the campaign checkoff.
This would seem to confirm
Democratic National Chair-
man Robert Strauss' com-
plaint that IRS, under Repub-
lican rule, is de-emphasizing
the dollar contribution be-
highlands, they swooped down
into Chinese military encamp-
ments in Tibet, disrupting
communications and stealing
supplies. This distressed the
Nepalese authorities, who
never authorized the raids and
Ifeared Chinese retaliation.
- We spoke to sources who
method of financing politics
in this country. ,
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JAW.
NEWS
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E - 4'34,849
APR 1 0 1973 -
? By Keyes Beech
Daily News Foreign Service
Morale of the U.S. Central Intelligence Agency, once the
highest of any government agency operating in Southeast
Asia, has sunk to an all-time, low under the impact of a
drastic reorganization under the new director, James R.
Schlesinger. ?
Most CIA men in the field concede that an overhaul of the
agency was long overdue, not only to keep pace with chang-
ing times but to eliminate deadwood personnel. Nor have
they anything against Schlesinger, a budget-minded man-
avement expert who was President Nixon's choice to cut
down to size not only the CIA but other government in-
telligence services as well.
But their greatest fear is that in the process, and tinder an
administration that seems to insist on absolute loyalty to the
.President, the CIA will lose its most precious assets ? its
Integrity and independence of judgment regardless of who is
in power.
"I have no argument with efficiency and economy," said
one senior CIA official and oldtime cold warrior. "But. I
would prefer a little inefficiency and room for initiative
Instead of seeing the CIA as the best-run agency in the
government."
ACCORDING TO REPORTS REACHING Southeast Asian
_ .
capitals, more than 1,SW employes hae been lopped-off tie,
CIA payroll since Schlesinger took charge Feb. 2. One divt-
,sion received an 18 per cent across-the-board cut.
"For the most part it's the World War II types who are.
gettingthe axe ? men in their late 40s or 50s," said one CIA
man recently returned from the United States. "But some
younger men in their 30s are also losing their jobs.
William A. Colby, a one time OSS agent who parachuted
Into France in World War II, transferred to CIA when it was
born out of OSS and later became director of the 'pacifica-
tion program in South Vietnam with the rank of ambassador
until he returned to the CIA in a top job, was reported doing
all he can to ease the pain for some of the old Southeast Asia
hands.
Some senior CIA officials are returning to Washington
without knowing what their next job will be ? if they have
one. Some are slated for retirement, even though they don't
know it. Some CIA men are threatening to resign after more
than two decades of service. The choice may not be theirs.
ONE CIA VETERAN HAILED the dismissals. "It's about
time we cut down and got rid o: some of the World War II -
types," he said. He is a World War II "type" who escaped
the axe.
Among the first to be dismissed were such paramilitary
men as those who for more than a decade helped run the ?
clandestine war in Laos. Unlike career CIA agents, they
were under contracts subject to termination in 30 days.
They had job security because there was always another
war to go to. "Now," as one remarked, "we've run out of
wars."
Schlesinger's takeover capped a changing of the guard '
that began at least two years before. Attrition and the dis-
astrous Bay of Pigs affair took their toll of the World War II
derring-do gentlemen-adventurer ? spies and dirty tricks
specialists who once dominated the agency.
"I'm one of the new breed ? a technocrat," said one top
CIA man.
,
BUT IT WAS THE END of the. Cold War more than any-.
thing else that contributed to the decline of CIA influence in
foreign affairs. That and the fact that today the most vital
intelligence is gathered not by men but by computers and
high-flying satellites.
The CIA emerged from the Vietnam War looking better
than any other brand of government involved in the Indo-
china conflict. One reason was that CIA men tried to tell
it like it was, not like somebody back in Washington wanted.
This was amply proved by the Pentagon Papers.
?
Ho /IIC- 9,1f)
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3 APR 1973
ITT Head
Affirms
Fund Offer
By Laurence Stern
Washington Post Staff Writer
. ? Harold S. Geneen, chairman
of the International Telephone
and Telegraph Corp., acknowl-
edged yesterday that he twice
offered large sums of money
ro. the U.S. government in 1970
to block the election of Chi-
lean President Salvador- Al-
lende.
The ITT executive, reputed
to be the nation's highest paid
corporate . officer, gingerly
stepped around contradictions
in previous testimony by ITT
officials and other witnesses
which Sen. Frank Church (D-
Idaho) declared might be the
basis for perjury action.
? Geneen said he could not
recall making an offer of a
"substantial fund" .to a top
.Central Intelligence Agency
official, William V. Broe, in
July, 1970; to finance - an
agency effort to stop Allende:
- But he stipulated that he
would accept Broe's sworn
version of their conversation
during a late evening meeting
in Geneen's room at the Sher-
aton Carlton Hotel here.
He said the offer to Broe
might have been ill-advised,
prompted by his "shock" at
political developments in
Chile where he feared confis-
cation by the Allende govern-
ment of ITT holdings. The
CIA declined his offer, he
said, and the matter "died
right there."
But the offer surfaced ag,ain
in different form in Septem-
ber after Allende's popular
election, Geneen conceded un-
der questioning. It came in
the form of a proposal con-
veyed by ITT to national se-
curity adviser Henry A. Kis-,
singer and Richard M. Helms,
then head of the CIA, to do-
nate "up to a million dollars"
toward a plan to block Al.
Geneen also disclosed that
ITT had offered to contribute
to the CIA in the 1964 elec-
tion When Allende lost to
Christian Democrat Eduardo
Frei. The offer, he said, was
turned down, as was the 1970
proffer to the agency.
For three hours under hot
television lights Geneen spar-
red his Senate questioners.
At one point Church, chair-
man of the inquiry, exclaimed
that testimony on ITT's role
was getting "curiouser and
curiouser."
Geneen was flanked by two
lawyers and a bodyguard. Be-
hind him sat a row of ITT's
top corporate officers. His
testimony marked the closing
session of the inquiry by the
Senate Foreign Relations Sub-
committee on Multinational
Corporations into the giant
comnittnication conglomerate's
activities in the 1970 Chilean
election.
In earlier sessions ITT vice
president Edward Gerrity said
G-eneen's second offer of a
fund "up to seven figures"
was for some form of devel-
opment aid in housing or agri-
culture. He was never aware,
said Gerrity, of the purpose
disclosed by MeCone: to fi-
nance U.S. government efforts
to block Allende's .confirma-
tion by Chile's Congress.
But the ITT official . who
was supposed to convey the
offer of development aid to
the White House and State
Department said yesterday he
had never been instructed to
make such an offer. "I passed
on the message I received,"
said Jack Neal of ITT's Wash-
ington office.
Gerrity conceded he might
have failed to pass along that
ITT was ready to underwrite
a Si million contribution for
development aid to Chile.
Geneen himself took the
position that the million-dol-
lar offer was a "duel" offer:
It might have been allocated
by the goy ernmen t I owa rd
financing an anti-Allende coal-
ition in the Chilean Congress,
or it might have been usee for
Geneen responded: -"That
depends on what the second
plan was." i
" "I don't think I'd ever get.
aver the first plan," . Case
snapped back.
"As the record now stands,"
said Church, "the beneficent
plan, the constructive propo-
sal, was never communicated
to the government and died
somewhere as it was being
passed down to subordinates
af the company . . Why was
something so serious never
aimmunicated to the govern-
ment?"
Geneen could not explain
he communication lapse with-
in ITT.
In his prepared statement
Geneen said he used the mag-
nitude of "up to seven figures"
in order "to show a serious
intent and to gain serious at-
tention from the Govern-
ment."
In presenting ITT's role in
the Chilean affair, Geneen
said, "all that ITT did was to
present its views, concerns,
and ideas to various depart-
ments of the U.S. government.
This is not only its right, but.
also its obligation,"
!, At one point Church inter-1
Liected,' "If all this involved
Was petitioning the govern-?'
tnent, why did you seek obt
the CIA?" Geneen responded:
"Because I think they are
good suppliers of information
in this area."
The ITT chairman said he
did not realize in meetine. with
Broe, the CIA's chief of
clandestine services for Latin
America, what the distinction
was between the clandestine
n d intelligence services of
.CIA. The purpose for which
he requested the meeting,
Geneen said, was to get cur-
rent information on political
developments in Chile.
Normally intelligence brief-
ings by the CIA are provided
lby its intelligence wing, the
directorate of intelligence.
Thu directorate of plans, for
which Bron worked, is mainly
!responsible for covert opera
tio.w4 such as political or eco-
nomic sabotage.
lende's confirmation by the ? development aid. "It was in-
Chileantendedto he a very open of-
Congress.
fer," he said.
Genemes emissary this time. "If I were 1)r. Allendo," in-
was John A. McCone, Helms' terjected Sen. Clifford P. Case
former boss in the CIA, an (R-N.J.), "and a non-friend of-
ITT board member and also fered a plan to a group of my,
a CIA consultant. McCone enemies to enleat Case?or, if
first disclosed the mission in Case should win, to -make him
earlier testiApprOVeldeR5PREWelaset200-11061.109 i CiArtFIPP8
ate investigators. regard that as provocative."
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f o
By JEFFREY ANTEVIL
Washington, April 2 (NEWS Bureau).? International Telephone & Telegraph
Corp. President Harold Geneen said today that he was in a state of "shock"- at the
prospect of his firm's investment in Chile "going down the. drain" and that is why
he offered company meney if the Central Intelligence Agency would try to block the
election of Marxist Salvador
Geneen told a Senate Foreign
Relations subcommittee that the
offer was dropped after ? CIA
spymaster William V. Broe re-
jected it as a violation of U.S.
policy. ITT took no steps to keep
Allende from. taking power in
1970, Geneen added. "If I had
given it more serious - considera-
tion," he said of the money of-
fer, "I might have rejected it
-myself."
But Geneen defended his firm's
conduct against charges that it
conspired with the CIA to in-
terfere improperly in the Chilean
election. "All that ITT did was
to present its views, concerns
and ideas to various departments
,of the U.S. government," he said,
calling this the firm's "constitu-
tional right" in light of its fears
that Allende would nationalize
the ITT-controlled Chile Tele-
phone Co.
"If all that was involved was
petitioning your government,"
asked subcommittee chairman
Frank Church (D-Idaho), "why
did you seek out the CIA?"
Church noted that Broe, who met
with Geneen several weeks be-
fore the Chilean election, was in
charge of . CIA clandstine opera--
tions for Latin America.
Geneen also testified, in the -
final day of hearings on the ITT-
Chile affair, that a later ITT
offer tithe government of Alp to
$1 mi%on was intended for
socially constructive projects" in
Chile. He said that he hoped the
U.S. would come up with a plan
to offer Allende technical aid for
some other quid pro quo in re-
turn for fair compensation for
expropriated American business
Interests.
ITT is claiming $97 million
from the federally subsidized
0 v er se a s Private Investment
Corp. as a result of Allende's
ES/HC- 4ro
Allende as president.
takeover of the phone company
in 1971. ?
Church, Sen. Stuart Syming-
ton (D-Mo.) and other subcom-
mittee members criticized the
government Insurance plan. Call-
ing ITT's earnings of $450 mil-
lion last year "a pretty good
profit," Symington said, "I don't
see why the taxpayer has to put
up this kind of money if in one
.'case things go wrong."
Symington and Sen. J. William
Fulbright (D-Ark.) asked Geneen
how .much ITT paid in federal,
income taxes on its profit.
Geneen called an estimate .of
$2 million 'too low" but said he
didn't recal the correct .figure
and ? would have to suply- it to
the subcommittee latter.
Syminton charged that big
multinational firms like ITT
posed a threat to the sovereignty
of small countries and were a
major factor in increasing anti-
Americanism abroad._ 7 .
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3 APR 1973
Church to Seek
CIA Donor an
By JERMIAH O'LEARY
Star-News Staff Writer
Chairman Frank Church, D-
Idaho, of the Senate multina-
tional corporations subcom-
mittee plans to introduce leg;
islation that would make it a
federal crime for a business
organization to contribute
money to finance operations
of the Central Intelligence
Agency.
- Church announced this in-
tent at the close yesterday of
two weeks of hearings into the
machinations pf ITT Corp.
with CIA and other govern-
ment agencies in the internal
affairs of Chile. The hearings
produced testimony that ITT
and CIA ? approached each
other at different times in the
Chilean election period of 1970
? with suggestions for affecting
the outcome of the election
and the Chilean economy.
? . But Church indicated that
the subcommittee would not
pursue his threat to Send the
transcript ? of the hearings to
the Justice Department on
suspicion of perjury. Church
announced last week that .he,
believed "someone is lying"
when testimony of ITT execu-
tives appeared to conflict with
that of U.S. government wit-
nesses and other ITT officials.
Church said the 'inconsisten-
cies now seem to be due to
lapses of -time Or memory, or
a failure to communicate
.among those involved in the
sensational ITT documents on
? "I feel the wider the dis-
tance between big business
and the CIA the better for all
concerned-," Church declared.
"Legislation to accomplish
this may be one of the better
outgrowths of these hearings.
We cannot have this inces-
tuous relationship between
the CIA and U.S. companies
operating abroad."
Harold S. Geneen, ITT
board chairman, occupied the
witness chair for most of yes-
terday as the subcommittee
wound up the hearings.
Gelleell'S testimony was that
there were two distinct plias-
roved (Filo. Rti1ealsiek2OMOS839 :
in MO; One in the summer
when Marxist Salvador Al-
lende was campaigning on a
platform of expropriation that
ITT believed would cost the
corporation its $153 million
investment; the other during
the autumn when Allende
looked to be a sure winner
requiring only confirmation
by the Chilean Congress. .
Geneen accepted testimony
of CIA agent William V. Broe
that Geneen had offered a
substantial sum for any gov-
ernment plan that would
block Allende, although ,he
said he did not recall doing it.
But Geneen said that money
offer "died" when Broe re-
jected the offer in July 1970.
"The next offer was entire-
ly separate and had a dual
purpose," Geneen testified.
"The offer of $1 million was
openly presented to two de-
partments of government
(The National Security Coun-
cil and the State Department)
. It was to make Allende more
receptive to us and other
companies if he was elected ?
or to help the Chileans arrive
at a democratic coalition solu-
tion. The $1 million figure was
only a measurement of our
willingness to join any gov-
ernment program."
Sen. Clifford Case, It-N.J.,
said, "If I heard someone was
offering $1 million to defeat
rue or make me vote better,
I'd take that as a provoca-
tion."
"That depends on the sec-
ond part of the plan," Geneen
said.
"I don't think I'd get over
the first plan," Case replied.
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:-LJF7 'U.S.
New roles for CI
WASHINGTON,
Monday (AAP). ? The
'Central Intelligence
Agency apparently is
planning to curtail some
of its old activities, not-
ably clandestine military
operations, and under-
take some new ones,
such as action against
political terrorism and
the international drug
traffic, the New York
Times reported.
Since Mr James R.
Schlesinger took over as
director on February 2
more than 1,000 em-
? ployees of the CIA have
received dismissal notices.
? Mr Schlesinger also has
authority from President
Nixon to reduce man-
power as well in the mili-
tary intelligence services.
During the past two
rat's, personnel in the
Intelligence establishment
as a. whole has been re-
duced by about 20%
according to reliable esti-
mates. ,
In 1971 there were
more than 150,000 people
in the military and diplo-
matic intelligence services
and the CIA. There are
. now fewer than' 125,000
according to the estimates,
and perhaps no more than
115,000.
, The man mainly respon-
sible for drafting the Pre-
sident's memorandum on
reducing duplication of
functions and improving
efficiency was Mr Schle-
singer and he has now
been given the authority
to put it into effect.
Apparently Mr Schle-
singer is expected to make
the Federal bureaucracy
more responsive to the
Administration.
This objective, has led
to charges from some old
hands at the CIA that the
.agency has been "poli-
ticised" by the Nixon
Ad in inistration.
Mr Schlesinger met this
charge, when his CIA
appointment was up for
confirmation in the Senate,
by assuring the Senate
armed services committee
that he believed absolutely
in maintaining the integ-
rity and independence of
Intelligence estimates.
People who know Pre-
sident Nixon's attitude say
he wants his intelligence
information straight even
when it is unpalatable.
Ther
iNgil3rfaVed FtliraR
tendency to cut back on
CIA paramilitary opera-
tion; such as the abortive
Bay of Pigs invasion of
Cuba in 1961 and the
clandestine war still being
waged in Laos, operations
that have ? sometimes
brought the agency as
much censure as praise.
Operations on a smaller
scale, sometimes called
''dirty tricks", reflect the
atmosphere of the 1950s,
the cold war, period, and
seem to? be regarded now
as obsolescent.
Also with the reduction
of', international tensions
r
eletse 2001/&/09 :
HS/HC- Irlap
and suspicions, which Is
the aim of President Nix-
on's dealings with the
Soviet Union and China,
? the intelligence community
may not need to pay so
much attention to the mili-
tary capabilities of the
major powers.
However, there may be
new tasks for the intelli-
gence community, in an
era of negotiation, such as
helping to verify nuclear
disarmament treaties.
,?? Other new problems for
the intelligence agencies
include the narcotics traf-
fic and political terrorism.
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11111,0.11111 H
'OREIGN
BROADCAST
INFORMATION
SERVICE1
111111111111111111111
SPEC
AL TRANSLAT
ON
GDR WEEELY COMMENTS ON NEW CIA DIRECTOR
/?Article by Dr Julius Mader; East Berlin, Volksarmee, German,'
No 11, March 1973, p 6 _7
.4 April 1973
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GDR WEEKLY COTENTS ON NEW CTA 1)IR2OT0R
/?Article by Dr Julius Mader;
No 11, March 1973, p 6 _7
As of December the 220,000 U.S. snoops, spies, and
saboteurs have a new boss -- 44- year?old Dr James Rodney
Schlesinger. President Nixon had several reasons for appoin-
ting this man at precisely this time to the very influential
position of CIA director: Schlesinger and Nixon both belong
to the reactionary Republican Party.
Wall Street Agent
As a former professor, Schlesinger. is a. member of'uile
East Berlin llolksarmee, German,
exclusive American 4-'conomic Society and for many years has
maintained close contacts with the millionames of the
military-industrial complex through the American Financial
Society. Schlesinger is a prominent wall Street agent,
whom Nixon in 1969 appointed deputy director of the Office
of the Budget, the state monopoly financial control center
Ltitj
in Washington. aine-e 1971 Schlesinger president4of the
primarily militarily-programed Atomic Energy Commission.
Santa Nonica Planner of Nassacres
Schlesinger is not inexperienced in intelligence
work. After 1963 he served for about 6 years as a staff
member, i.e.) "director for strategic studies " of the Rand
Corporation in Santa Monica, Cclifernia. The Rand jorporation
serves as a "think tank" for a--,ressive air force irojecLd.
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Here Schlesinger was involved in the completion of studies
such as "The Increased Efriciency of Area .pombing" and
"The Escalation of the. Use of Atomic Weapons." It is not
surprising that Nixon apc(inted Schlesinger CIA director
on the very same day that he ordered a ma,-,sive bombing attack
on the DIN,
Specialist in Subversion
With the appointment of this unscrupulous person Nixon
has undoubtedly fortified his position regarding a presidential
dictatorship. With the help of the CIA, whose sources will
of course be kept secret and uncontrolled, Nixon plans to
implement the global strategy of U.S. imperialism. Schlesinger
is to assist him in various ways. As a strategist of the
U.S. Air Force, Schlesinger represents the reactionary
military clique in the Pentagon, which is constantly brandishing
its sword and playing world policeman. As a militant anti- .
communist, Schlesinger was charged with the task of strengthen-
ing NATO. He has also been toll to direct the antisocialist
activities of NPTO intelligence services, which were expanded
in 1972 with no less than 20 billion man's, and to spy on
all NATO countries to assess their reliability.
As a former economics professor and budget 'expertl
Schlesinger is to lead his CTA in the merciless economic war
declared by the United States against all c:mpetotors and
support the economic expansion of the capitalist world market.
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As a successful manager of the U.S. financial oligarchy,
Schlesinger is to insure the increased cooperation of all
U.S. and military intelligence apparatuses under his
control in antisocialist and antidemocratic subversion.
His army of agents still is und,r ord3rs to conduct world-
wide ideological diversion, war-inducing espionage, and
dangerous sabotage. His agents
coups, and thwart U.S. domestic
CIA assault troops are prepared
are to create unrest, stb.6e
popular opposition. The
at any hour of the day or
night severely to disrupt political detenefor the benefit
of U.S. profiteers.
At Many Controls
With this general directive and Army Intelligence -2'e-rytest}
-*gooey* General "alters as deputy director, J.R. Schlesinger
has begun his international disruptive activities. Now he
is Nixon's "Superman" in mall- positions of control (see sketch)
of U.S. state monopoly capitalism: in the Aational Security
Council, as chief of heads of all U.S. intelligence agencies,
and manager of the intelligence service budget, which in the
United Statis amounts to 8 billion dollars annually including
')
espionage activities in outer space. However.4 the real
international balance of power will sec to it that Nixon's
new "man with a dag,7er under his cloakIt does not leave the
ranks of the losers.
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Approved For Releasika001/06/09 : CIA-RDP84-00499R00100?010001-3
Committee of the
Chiefs of
Intelligence
Services
Chairman:
Schlesinger'
National Security Council
Member:
Schlesinger
AT 1 ?..!It ES's
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Committee for
Intelligence
Service Finances
Director:
Schlesinger
HS/ININftti4 di
N.= YON. TIES
Approved For ReleasV,001/06/09% CIA-RDP84-00499R0010042.10001-3
1 APR 19"/3
story behind today's
113miliries...ond tomorrow's.
THE CM RIM
ITS AWES
CE,ITE01.
TM MTH STEITES
TiE ITIO3LIJ
Dy L L PoIcler Pranty,
LLS rForce, H3tirel
Six weeks before publication, Jack Anderson broke the news on how the CIA
tried to get its hands on this book. A revealing book about the "data coordina-
tion" agency's key people who unseat governments, "hit and run" in communist
areas, do government dirty work, and are truly untouchable. Written by a former
liaison officer between the CIA and the Pentagon. A terrifying book? Yes. A nec-
essary book? Absolutely.
"One of the most important books ever written on the CIA. Fletcher Prouty deftly
reveals how the cults of secretism and James Bondism are undermining Ameri-
can democracy." ?DEREK SHEARER, contributing editor, Ramparts
"Should blow the roof off the CIA's headquarters building. It reveals more of the
CIA's history, its clandestine operations and adroit cover-up tactics than any
previously published book on the subject,
"The Secret Team is a book every thoughtful American interested in public affairs
should read, mark, learn and inwardly digest."
?JOHN BARKHAM, Saturday Review Syndicate
"A blockbuster.. ,his work might be termed a confession."
?DAVID G. COPELAND, Houston Chronicle'
"Not bound by a secrecy oath, he can give us an insider's view of the agency..."
- Publishers Weekly
$8,95 At your bookseller or by mail:
n 1PRENTICE-HALL
Englewood Ciitfs, N.J. 07(532
For Release 2001/06/09: CIA-RDP84L00499R001000110001-3
. _ .
RADIO-TV MONITORING SERVICE, INC.
3408 WISCONSIN AVENUE. N. W. -:- WASHINGTON. O. C.
20018 -:- 244-8602
PROGRAM:
CBS MORNING NEWS
DATE:
APRIL 2, 1973
STATION OR NETWORK:
CBS TELEVISION
TIME:
7:00 AM, EST
COLONEL FLETCHER PROUTY INTERVIEWED
JOHN HART: Before he retired, Air Force Col. Fletcher
Prouty spent a lot of his military career as what is called the
focal point officer between the Department of Defense and the
Central Intelligence Agency. He's written a book which is highly
critical of what he calls The Secret Team, which by the way is
the title of the book. Since there are frequent references in
the book to information in the Pentagon Papers, CBS News corres-
pendent Fred Graham, who's been covering the Daniel Ellsberg
trial, has joined me for the interview.
Col. Prouty, I'd like to ask you first, what is the
secret team?
COL. FLETCHER PROUTY: You know, there are quite a few
people who write about the CIA, and Mr. Dulles has written about'
CIA; Lyman Kirkpatrick has written about CIA. The secret team
really is the CIA and other parts of the government. The secret
team includes, for instance, the participation of the Defense
Department, of the White House, offices such as today we have
under Dr. Kissinger. I think it's important to point out that
in the operational aspects of CIA 'work, the participation of a
major part of the government, not just CIA is an important
consideration.
HART: Well, the secret team's part in such things as
the assaSsination of Ngo Dinh Diehm, that sort of thing, the ITT-
CIA involvement--alleged involvement?in the election in Chile
are pretty well documented. Can you tell us anything about what
you think may be going on right now?
PROUTY: You mean current operations?
HART: That's right, yes.
PROUTY:. Actually, most of the things that I knew in
current operations ended with my retirement about ten years ago.
IIS/HC- yr/1
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2
Obviously, I've kept in touch with some of the people that are
in this business, but some of that might be in the area of con-
jecture. I think one of the most important parts is the role of
Jim McCord and Howard Hunt in the Watergate case--CIA people,
career men, McCord in his area, FBI man--through my friendship
with a lawyer, Bernard Fensterwald, we get Mr. McCord moving into
a different area in the Watergate thing. This is, you might say,
a civilian application of a CIA or secret team type operation.
I think it's an example, currently--not of course directed by CIA
at this present time, but it's an example of the kind of thing
that's done by people under the cloak of secrecy, under security
wraps, and in a way that the American people have no way in the
world to really know what's going on.
FRED GRAHAM: Colonel, could I ask you to elaborate
just a minute about--there's been some conjecture in the press
about Bernard Fensterwald's role. He is the new lawyer for James
McCord, and it's been pointed out that he was--he is a lifelong
and at one time very active Democrat, and perhaps one of his
motives is to bring out into the open more about the Watergate
and the White House's alleged involvement in it. You said you
were partially responsible for Mr. Fensterwald being involved
here. Can you elaborate as to whether or not that might be true?
PROUTY: Well, I've known him for quite a long time.
We've discussed this Watergate affair--
HART: You mean Mr. Fensterwald?
PRQUTY: Mr. Fensterwald, and it just happens that in
my book, I mention an operation in which Jim McCord did quite a
bit of work with me and with the Defense Department. As a
result, I had the feeling all along that McCord was just not
somebody's little wiretapper or debugging man. He's a pro, he's
a master at certain things. Allen Dulles introduced him to me..
I have a pretty high regard for his capability. It's much
greater, I would say, than the general concept. So I talked to
Fensterwald about this, and I believe that the motivation on the
part of Bud Fensterwald is purely professional and that he sees
that there's much more to be done in the case. I think that's
why McCord is working with him now as someone who's willing to
get into this case and get to the bottom of things.
HART: You seem to know James McCord fairly well.
PROUTY: I did at one time. As in the--in one chapter
in the book, we write about an airplane that belonged to Mr.
Dulles himself, it was his private plane. It was shot down over
Russia and a nine-man crew of CIA-Air Force people were captured.
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3
Mr. Dulles called me to his home that evening and then
after a conference with Dick (Vissal?) and others, introduced me
to McCord, and said this man is the best man that we have, he's
an FBI man, trained in their ways, and trained with the CIA both,
he's an expert. So, yes, I've known him since 1959.
GRAHAM: Colonel, the incident of the plane being shot
down--was that the plane that Jack Downey was on?
PROUTY: No, Downy was shot down as part of the Korean
War. The one I'm talking about was shot down near Baku.
GRAHAM: Well, may I ask you then about Jack Downey's?
Of course, Mr. Downey came out from a Chinese prison earlier
this month--last month--and he said at that time, without any
apparent qualms, he said, I told the Chinese all I knew. Now, how
much did that compromise the CIA's activities, to have a CIA
operative tell the Chinese all he knew?
PROUTY: In the context of what Downey knew during the
Korean War and as a young man just out of jail, operating with
drop teams over China, I would say that what he knew was good for
maybe a week or two weeks in a security sense, but what he knew
in terms of the real CIA relationships with the government I think
weren't going to hurt things very much. I don't think Downey did
anything to hurt the government.
GRAHAM: So you don't think Downey did anything repre-
hensible in telling the Chinese all he knew?
PROUTY: No, one thing that those people in deep security
learn is that there are other people involved, other Chinese, let's
say, or maybe Koreans, or Americans close into these lines. Now,
we try to protect them, of course, try to protect them for par-
ticipating in this kind of activity. In that sense you have to
guard knowledge.
GRAHAM: Let me change the subject. In your book an
important point--an allegation that you made, is that the CIA
engineered the disclosure of the Pentagon Papers through Daniel
Ellsberg, in order to throw favorable light on the CIA's intel-
ligence efforts, because the Pentagon Papers do point out that
the CIA was quite often right in its warnings that we were being
drawn into a quagmire, but Colonel, I was flabbergasted to see
your allegation there, in two points, straight out, that Daniel
Ellsberg was a CIA agent. What's your source for that statement?
PROUTY: Well, you know, Dan Ellsberg called me the
other day, more or less reminding me that he had never worked
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4
for CIA. A lot of people who work in the peripheral areas--
that's really why I talk in terms of a secret team, are not
necessarily paid by the CIA, you might say, or even sometimes
don't realize that they are working in support of CIA activi-
ties. I wouldn't say either of these applied, but I do know
that Ellsberg worked with Lansdale in Viet Nam; I worked with
Lansdale for many, many years. I don't think Lansdale really,
other than being an Air Force man, ever did much work that
wasn't involved with CIA. He was one of their most --
HART: You're talking about retired Major General
Edward Lansdale.
PROUTY: --Lansdale, right, and I think the affiliation
is pretty strong, but the key thing about--going back to your
earlier point--the key thing about these papers, the thing that
should interest the American people, because they seem to be put
forth as a document of the history of Viet Nam, which they are
not--these papers are 3,000 pages of narrative, 4,000 documents
that they have been culled out. They're not the complete his-
tory of even the activities that they portray. Somebody got in
there in took out quite a few of those. I used to have
file cabinet after file cabinet of it in the JCS, of CIA papers;
it was my business to take care of those papers. A lot of them
that I knew aren't in these Pentagon Papers.
GRAHAM: Well, Colonel, just for the record, though, I
called Daniel Ellsberg on the telephone yesterday out in Cali-
fornia, and he flatly denies ever having been a CIA agent. Nowy
you say in your book flatly he was. Now, which is true?
PROUTY: I'd have to talk with him and find out how
much he knows about really what he was doing..
GRAHAM: He told me that he denied to you that he
was a CIA man and you accepted that.
PROUTY: Yes, he told me that--well, he told me that;
I didn't answer him. He said that he wasn't a CIA agent, and I
think that's pretty simple, itself. Whether he's a CIA employee
or whether he's working as a member of the secret team, which is
a very close thing--
HART: Well, secret team can cover almost anything, by
your description.
PROUTY: Ah yes?anything in the area of the CIA opera-
tional activities, activities that develop from secret intelli-
gence, and are generally in support of clandestine areas, whether
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5
clandestine in operational matters, or clandestine in deep intelli-
gence.
HART: Colonel Prouty, it was never clear to me what
intelligence agency you were working for.
PROUTY: I was a member of the United States 'Air Force,
working for many years in the Office of Secretary of Defense, or
in the Office of the Joint Chiefs of Staff.
HART: Well the question arose in my mind, as T read your
book, which certainly casts some aspersions upon the CIA, many of
them, as to what rival agency, whether it was an intelligence agency,
or perhaps a military agency, would benefit from this characteriza-
tion of the CIA, which comes out very clean as you point out in the
Pentagon Papers. Is this a kind of a defense answer?
PROUTY: No, that's a good way to put it. I think, per-
haps, the best answer is something I read in the news letter--
HART: No, no--excuse me--I mean,
by the Department of Defense?
is your book an answer
PROUTY: .1 think to clarify this, John, the story is that
the CIA likes to cover itself as an intelligence organization, and
the CIA works very hard to present on one hand that it is an intelli-
gence operation, whereas, 80 or 90 per cent of its activities are
operational. The Pentagon Papers show that. They talk almost '
nothing about their operations. They usually put them in terms of
military operations. They talk primarily of the CIA's intelligence,
and at the same time, Mr. Dulles would be delivering an NIL, put
out by Sherman Cantor--
HART: And that's no intelligence.
PROUTY: Yes. And then he would, at the same time, in
the same period of time, be establishing an operation which was
almost 100 per cent counter to the NIL, or completely different
from that NIL. The Federation of American Scientists, for example,
last month, published--
HART: Very quickly, Colonel, we're running out of time.
PROUTY: They say that the CIA's best cover is its repu-
tation as an intelligence agency.
HART: Colonel, I have to interrupt you. We've enjoyed
having you, and we'd like to go on, but we've just run out of time.
Colonel Fletcher Prouty, thank you very much.
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RA Chl6r?14 Fitk&feetp,e2MORt.CIA-RDP84-00499R00 I cigg,4 1 0001 -3
4435 WISCONSIN AVE. N.W., WASHINGTON, O. C. 20016, 244-3540
FOR PUBLIC AFFAIRS STAFF
PROGRAM CBS Morning News
ColkTE April 2, 1973
7:00 A.M.
STATION UTOP TV
CBS Network
CITY
AN INTERVIEW WITH COLONEL FLETCHER PROUTY
Washington, D.C.
JOHN HART: Before he retired, Air Force Colonel Fletcher Prouty
spent a lot of his military career as what is called the "Focal Point
Officer" between the Department of Defense and the Central intelligence
Agency.
He's written a book which is highly critical of what he calls
"The Secret Team" which, by the way, is the title of the book. Since
there are frequent references in the book to information in the Pentagon
Papers, CBS News correspondent Fred Graham, who's been covering the Daniel
Ellsberg trial, has joined me for the interview.
Colonel Prouty, I'd like to ask you first what is the secret
team?
COLONEL FLETCHER PROUTY: Well, you know, there are quite a
few people who write about the CIA. Mr. Dulles has written about the
CIA. Lyman Kirkpatrick has written about the CIA.
The secret team really is the CIA and other parts of the government.
The secret team includes the -- for instance, the participation of the
Defense Department, of the White House -- of offices such as today we
have under Dr. Kissinger. I think it's important to point out that in
the operational aspects of CIA work the participation of a major part
of the government, not just the CIA, is an important consideration.
HART: Well, the secret team's part in such things as the assassi-
nation of [name unintelligible] Jim, that sort of thing, the ITT and the
CIA involvement -- alleged involvement -- in the elections of Chile are
pretty well documented. Can you tell us anything about what you think
may be going on right now?
COLONEL PROUTY: You mean current operations?
HART: That's right. Yes.
COLONEL PROUTY: Well act -- actually most of the things that
I knew in current operations ended with my retirement about 10 years ago.
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2
Obviously I've kept in touch with some of the people that are in this
business, but some of that might be in the area of conjecture.
I think one of the most important parts is the role of Jim
McCord and Howard Hunt in the Watergate case -- CIA people, career men.
McCord in his area as an FBI man. Through my friendship with a lawyer,
Bernard FensterWaql, we got Mr. McCord moving into a different area in
the Watergate thing. This is, you might say, a civilian application of
a CI -- CIA or secret team type operation. I think it's an example, currently,
not of course directed by CIA at this present time, but it's an example
of the kind of thing that's done by people under a cloak of secrecy, under
security wraps, and in -- in a way that the American people have no way
in the world to -- to really know what's going on.
FRED GRAHAM: Colonel, could I ask you to elaborate just a
minute about the -- there's been some conjecture in the press about Bernard
Fensterwahl's role. He is the new lawyer for James McCord, and it has
been pointed out that he was -- he is a lifelong and one time very active
Democrat, and perhaps one of his motives is to bring. out into the open
more about the Watergate and the White House's alleged involvement in
it.
You said you were partly responsible for Mr. Fensterwahl being
involved here. Can you elaborate as to whether or not that might be true?
COLONEL PROUTY: Well I've known him for quite a long time.
We've discussed this Watergate affair...
i
GRAHAM: You've known Mr. Fensterwawnhl?
COLONEL PROUTY: Mr. Fensterwahl. And it just happens that
in my book I mention an operation in which Jim McCord did quite a bit
of work with me and with the Defense Department. As a result, I had the
feeling all along that McCord is not just somebody's little wiretapper,
debugging man, but he's a pro. He's a master at 'certain things.
Allen Dulles introduced him to me. I have a pretty high regard
for his capability. It's much greater, I would say, than the general
concept. So I talked to Fensterwahl about this, and I believe that the
motivation on the part of Bud Fensterwahl is purely professional and he
sees that there's much more to be done in the case. I think that's why
McCord is working with him now as someone who's willing to get into this
case and get to the bottom of things.
HART: You seem to know James McCord fairly well.
COLONEL PROUTY: I did at one time, as in the -- in one chapter
in the book we write about an airplane that belonged to Mr. Dulles himself.
It was his private plane. It was shot down over Russia, and a nine-man
crew of CIA air force people were captured.
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3
Mr. Dulles called me to his home that evening and then after
a conference with Dick Bissell and others introduced me to McCord and
said this man is the best man we have. He's an FBI man trained in their
ways and trained with the CIA booth. He's an expert.
[Laughter]
So, yes, I've known him since 1959.
GRAHAM: Colonel, the incident of the plane being shot down,
was that the plane that Jack Downey was on?
COLONEL PROUTY: No. Downey was shot down in -- as a part
of the Korean war. The one I'm talking about was shore -- was shot down
near Barcoo (?).
GRAHAM: May I ask you, then, about Jack Downey?
COLONEL PROUTY: Of course..
.GRAHAM: Mr. Downey came from Chinese prison earlier this month
last month -- and he said at that time, without any apparent qualms, he
said "I told the Chinese all I knew." Now, how much did that compromise
the CIA's activities to have a CIA operative tell the Chinese all he knew?
COLONEL PROUTY: In the context of what Downey knew during
the Korean War and as a young man just out of Yale operating with drop
teams over China, I would say that what he knew was good for maybe a week
or two weeks in a security sense, but what he knew in terms of the real
CIA relationships with the government I think weren't going to help things
very much. I don't think Downey did anything that could hurt the government.
GRAHAM: So you don't think Downey did anything reprehensible
in telling the Chinese all he knew?
COLONEL PROUTY: Well one thing that these people in deep security
learn is that there are other people involved, other Chinese let's say,
or Americans close in to the lines. Now we try to protect them, of course.
We try to protect them for participating in this kind of activity. In
that sense you have to guard your knowledge.
GRAHAM: Now if I may change the subject, in your book an important
point -- allegation -- you make is that the CIA engineered the disclosure
of the Pentagon Papers through Daniel Ellsberg in order to throw a favorable
light on the CIA's intelligence efforts, because the Pentagon Papers do
point out that the CIA was quite out in the right in its warnings that
we were being ground [words unintelligible].
But, Colonel,- I was flabbergasted to see your -- your allegation
there in two points straight out that Daniel Ellsberg was a CIA agent.
What's your source for that statement?
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4
COLONEL PROUTY: Well, you know, Dan Ellsberg called me the
other day to more or less remind me that he had never worked for CIA.
A lot of people who work in the peripheral areas, and that's
really why I talk in terms of the secret team, are not necessarily paid
by the CIA, you might say, or even some times don't realize that they're
working in support of CIA activities. I wouldn't say either of these
applied, but I do know that Ellsberg worked with Lansdale in Vietnam.
I worked for Lansdale for many, many years. I don't think Lansdale really,
other than being an Air Force man, ever did much work that wasn't involved
with CIA. He's one of their most interest....
HART: You're talking about retired Brigadier Gen -- Major
General Edward Lansdale?
COLONEL PROUTY: Lansdale. Right.
And I think the affiliation is pretty strong. But the key
thing about -- going back to your earlier point -- the key thing about
these papers, the thing that should interest the American people because
they seem to be put forth as a document of the history of Vietnam which
they are not. These papers are 3,000 pages of narrative, 4,000 documents,
but they have been culled out. They're not the complete history of even
the activities that they portray. Somebody got in there and took out
quite a few of those.
I used to have files -- file cabinet after file cabinet --
in the JCS of CIA papers. It was my business to take care of those papers.
A lot of them that I knew aren't in these Pentagon Papers.
GRAHAM: Colonel, just for the record though, I called Daniel
Ellsberg on the telephone yesterday out in California and he flatly denies
ever having been a CIA agent. Now you say in your book, flatly, he was.
Which is true?
COLONEL PROUTY: I'd have to talk with him and find out how
much he knows about really what he was doing.
GRAHAM: He told me that he denied to you that he was a CIA
man and you accepted that.
COLONEL PROUTY: Yes, he told me that. Well, he told me that.
I didn't answer him. He said that he wasn't a CIA agent, and I think
that's pretty simple to solve.
Whether he's a CIA employee or whether he's working as a member
of the secret team, which is a very close thing.
HART: The secret team can cover almost anything by your description.
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5
COLONEL PROUTY: Yes. Anything in the area of the CIA operational
activities -- activities that develop from secret intelliaence and are
generally in support of clandestine areas whether clandestine in the operational
matters or clandestine in deep intelligence.
HART: Colonel Prouty, it was never clear to me what intelligence
agency you were working for.
COLONEL PROUTY: I was a member of the United States Air Force
working for many years in the office of the Secretary of Defense or in
the office of the Joint Chiefs of Staff.
HART: Well the question rose in my mind as I read your book,
which certainly cast some dispersions upon the CIA, many of them, is what
rival agency, whether it was an intelligence agency or perhaps a military
agency, would benefit from this -- from this characterization of the CIA
which comes out very clean, as you point out in the Pentagon Papers.
Is this a kind of defense answer?
COLONEL PROUTY: [Laughs] That's a good way to put it. I
think that perhaps the best answer is something I read in the newletter
of
HART: No, I mean. Excuse me, but I mean is your book an answer
by the Department of Defense?
COLONEL PROUTY: I think to clarify this, John, that the story
is that the CIA likes to cover itself as an intelligence organization,
and the CIA works very hard to present on one hand that it is an intelligence
operation whereas 80 or 90 percent of its activities are operational.
? The Pentagon Papers show that they talk almost nothing about
their operations. They usually put them in terms of military operations.
They talk primarily of the CIA's intelligence. And at the same time Mr.
Dulles would be delivering an N.I.E. put out by Sherman Canter's....
HART: National Intelligence Estimate?
COLONEL PROUTY: Yes.
Then he would at the same time, in the same period of time,
be establishing an operation which was almost a hundred percent counter
to the N.I.E. or completely different from that N.I.E.
The Federation of American Scientists, for example, last month
published a...
HART: Very quickly, Colonel, we're running out of time.
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6
COLONEL PROUTY: ...and they say that the CIA's best cover
is its -- is its reputation as an intelligence agency. .
HART: Colonel, I'll have to interrupt you. We've enjoyed
having you and would like to go on, but we've just run out of time.
Colonel Feltcher Prouty. Thank you very much, Fred Graham.
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Hs APPitlfd
THE EVENING STAR and DAILY NEWS
VVashIngton, D. C., Friday, April 4.1973
CIA RETIREMENTS ?
The Central Intelligence
Agency, whose basic retire-
ment law includes a numeri-
cal ceiling on the number of
employes who retire, has
,asked the House Armed Serv-
ices Committee to boost the
ceiling from 800 to 2,100 for
? the period, 1969-74.
? It says it has a large num-
ber of employes Who want to
retirebut can't because of the
limitation.
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Shift Sought
OF CIA Role
To Pentagon
By Michael Getler ?
wilutilogton ['oat Stilt( Wri
One of the military's top-
ranking intelligence officers
has called for a reassertion of
the military's dominant role
over civilians in the critical
business of estimating na-
tional security threats to the
United States.
The case for giving this re-
sponsibility to the Pentagon
?rather than the Central In-
telligence Agency (CIA) ? and
other civilian-dominated intel-
ligence agencies?is laid out
in a highly unusual article ap-
pearing in the April issue of
Army magazine.
The article is by Army Maj. I
Gen. Daniel 0. Graham, cur-
rently deputy director for esti-
!pates in the Pentagon's De-
fense Intelligence Agency
(DIA).
Graham is scheduled to
move over to the CIA on May
1 to join the staff of its new
director, James R. Schle-
singer. ?
Thus, the appearance of
Graham's article in public ,
could indicate that at least
part of his new job at the CIA
will be to help bring about the
return of a major portion of
the highly important intelli-
gence estimating job to the
Pentagon. The estimates of
military threats are a major
factor in planning the Penta- '
will's annual budget and in the
course of U.S. foreig policy.
While Graham's article re-
flects his. personal judgment,
U.S. defense officials say the
appearance of the article at
this time "was not acciden-
tial," implying that it had an
official okay.
Graham's pending transfer
to the CIA has prompted con-
cern among some civilian in-
telligence officials. They fear
that the critical annual Intelligence estimates ? on such
things as Soviet missile devel-,
See ARMY, Al, Col. 1 ?
AZIStoir.
ved Fork
Trarlisler of CIA Role Sought
'
ARMY, From At case estimates can be used to an enemy that exist only on
squelch military programs paper.
?
?merits, for example, might just as quickly as to support
take technique :on an ,even harder line. them." In other words, he ar-Graham also criticizes the :-
of assessing only f'
Graham argues, however, goes, overestimating the So- Soviet capabilities rather than ,; ?
that the job of judging and de- viet Union's missile capahili- Intentions as well.
scribing the various military ties can prematurely kill off
threatsProjects by leading bffi- "since World War II the Sovi-
the United States U. S. "For example," he says,
might face properly belongs to flak to discount the estimates
ets haye never, to our know!-
the military. And, he states, it entirely. edge, deployed forces,or
was the military's own fault? , The inflated intelligence es- fielded hardware as ;as as -
through "a series of had over- timates ? also raise problems their total capability permit-
estimates later dubbed the for the strategic arms limlta- ted. To. estimate that they
bomber gap, missile gap and tions talks where, ha says, would do so with regard to
megaton. gap"--that military "the very_ real' possibility" ex- some weapon system in the
credibility was shaken and the ists of trading off actual U. S. future would make ,little
principal ;lob of figuring out capabilities against those of sense."
what the Russians and others
were up to gradually was won ?(' ?
over by the CIA ? and other
agencies.
Rutin the past three years,
he says, the new Defense In-
telligence Agency has "come a
long way since the missile
gap.".
He argues that the quality
of military analysis has now
improved considerably and
that most, though not all, of
the military men who use in-
telligence have learned not to
bend it for their own self-in-
terest: or force intelligence an-
alysts to do that.
"To sum up," he writes, "I ,
think that the time is ripe for
the military profession to reas-
sert its. traditional role in the .
function of describing military':
threats to national security." '
In a key statement that may '
foreshadow some reduction in
the CIA's estimating role in
favor of ? the Pentagon, Gra-
ham writes:
"While there will always he
a legitimate reason for inde-
penderit? judgments from out-
side the Department of De-
fense'. on. issues of critical im-
portance to not decision-
makers, there Is no longer a
need,. in my judgment, to du-
plicate the Defense Intelli- 4.
genm Agency's efforts in
other agencies."
Throughout the article, the
two-star general is sharply
critical of the military's past
history of Usually describing
the threat to U.S. security in
the worst or scariest' terms.
Not only did it produce scepti-
cism in government., forcing
officials to turn to other intel-
ligence agencies, but it actu-
ally htirt the military in other
ways,,he writes.
90it?IftjklitV46.tteNt
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9
Victoi Zorza
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Putting the Military- in Charge of' Intelligence
to "coordinate" an estimate produced
by military intelligence are quite capa-
ble, he says, of reducing it "to the low-
est common denominator mush," and
to "inoffensive pap."
The purpose of this remarkabla con-
fession which Graham makes on behalf
of his colleagues, if not on his own?
for he implies that his own estimates
were always right?is not far to seek.
He says that by "abusing the intelli-
gence process" the military profession-
als have "produced the best arguments
for taking the responsility for threat
description out of military hands," and
have caused the decision-makers to
turn elsewhere for "objective" assess-
ments.
It is this distrust of the DIA, which
has caused successive Presidents to
turn to the CIA, that Graham has' set
out to cure. The burden of his argu-
ment is that the military can and will
now make the right decisions?al-
though he does not make it clear why
it should be trusted to mend its ways.
The decisions about the . defense
budget, and about the nature of U.S.
forces and weapons development, were
always supposed to be made in re-
sponse to intelligence estimates of the
Soviet "threat." But more often than
not they resulted from a mix of budget-
An article by the Pentagon general
newly appointed to curb the Central
Intelligence Agency throws a strong
light at the murky fog which envelops
the CIA.
The article by Maj. Gen. Daniel Gra-
ham, which appears in the current is-
sues of the Army magazine, strongly
urges the transfer of some of the CIA's
most important functions to the DIA,
the Pentagon's Defense Intelligence
Agency. The fact that Graham has
been appointed chairman of the inter-
agency committee which will ride herd
on both the CIA and DIA suggests that
the case he presented in his article has
been accepted by the White House.
What is at issue is not simply a bu-
reaucratic conflict between intelli-
gence agencies or men ambitious for
promotion, nor even a squabble about
who is to control the $5 billion spent
annually by the "intelligence commu-
nity," although all these elements are
present in the dispute. The real issue
behind the struggle over the reorgani-
zation of the CIA concerns the whole
direction of U.S. defense policy and,
therefore, foreign policy.
On the face of it, Graham provides
what looks like the first insider's ac-
of the perversion of the intelli-
gence process by the military in pur-
' ? ?
suit of bigger defense appropriations.
He admits that military intelligence
has often supplied the exaggerated es-
timates of the Soviet threat demanded
by the defense chiefs?"the bigger the
better." And when military intelligence
failed to "maximize enemy threats" as
instructed, it wai denounced by the
brasshats for "wishful thinking."
"More often than not," he says,
"military intelligence people came to
"It is this distrust of the
DIA, which has caused
successive Presidents
to turn to the CIA,
that Graham has set out ?
to cure."
heel under such criticism and stumped
hard for the worst-case view." Al-
though he believes that this attitude is
waning now, "there are Still some old
hands" in military intelligence who are
so used to yielding to their Pentagon
superiors "that they automatically
produce threat estimates designed to
please, or at least certain not to of,
fend." Military planners who profess
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ary restraints, intelligence estimates,
pressures by the military-industrial
complex pork-barrel interests and
many others.
Now a basic change, which is as yet
barely perceptible, is taking place un-
der the surface. The U.S.-Soviet agree-
ments on the limitation of strategic
arms, and Mr. Nixon's grand design for
a "generation of peace," have brought
entirely new factors into military pol-
icy. The major weapons programs such
as the B-1 bomber and the Trident sub-
marine-missile systems which are now
pending are V far more costly than any
in the past. 'U.S. decisions on V them
will depend to a considerable extent on
Mr. Nixon's estimate of the effect they
have on the strategic balance, and on
arms reduction bargaining. ? ?
Therefore, if the Pentagon is to have
a real influence on the making of de-
fense policy, it must wrest control of
the intelligence estimates back from
the CIA. Even if Graham's apPoint-
ment means that his argument about
the control of intelligence has been
accepted by the White House, the
struggle is by no means over.
The issues involved in this conflict,
which will have a major bearing on
strategic arms limitation and disarma-
ment, are so momentous that the next
battle will be joined almost before the
last is over.
43 1973. Victor Zorn
HS/I-IC- ferai
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a?
and
Theegiews
CROSBY N. BOYD, Chairman of the Board
JOHN H. KAUFFMANN, President NEWBOLD?NOYES, Editor
A-4 *
SATURDAY, April 7, 1973
MILTON WORST
Lk unch, Etren 'for ii'fie CIIA
It apparently is true that,
under the U.S. Code, it is not
illegal for a group of corporate
executives to sit in a Washing-
ton office and conspire, or so-
licit federal officials to join a
conspiracy, to overthrow the
government of Chile.
But the United States has a
legal commitment under the
Charter of the Organization of
American States not to inter-
fere in the internal affairs of
Latin American countries?
' and it is clear that the CIA,
' fired up by In', was trying to
do exactly that to keep Salva-
dor Allende out of the Chilean
presidency.
It might be said, of course,
that in the end no substantive
action was taken. But the tes-
timony given to Sen. Frank
Church's Foreign Relations
subcommittee by CIA and ITT
officials.make.s. clear that the
reason nothing was done was
that no one could devise a plan
that they agreed was likely to
work.
Clearly, the United States,
did not desist from interfer-
ence in the Chilean election as
a matter of policy. In fact, the
policy was quite the contrary.
What was lacking, as it turned
out, was a feasible means.
Having become rather cyni-
cal folks, we Americans might
say to ourselves that this was
just another ? ho-ho of
those lovable CIA capers, the
kind The New Yorker prints
funny cartoons about, the kind
that got us the Watergate
But William Broe, the CIA
operative who was at the cen-
ter of this Katzenjammer epi-
sode, testified that he was act-
ing on the authority of the CIA
director, Richard Helms. And
helms has told the subcommit-
tee privately that he never
acted on policy matters with-
out clear White House instruc-
tions.
So what we are talking
about here are plans drawn up
with the knowledge and con-
sent of the National Security
Council, at the least. And
though we have no direct in-
formation, it would be naive to
think that the President didn't
approve, too.
? What makes this story more
unsavory than it might be if all
we were proposing was to save
the Chileans from commu-
nism, which we once thought
had a certain idealism to it,
are the recurring themes of
money' and cronyism.
The man who got this proj-
ect energized is John Mc
Cone, paragon of the Anion-
can establishment and former
head of CIA, who went to Hen-
ry Kissinger and to Helms.
McCone still is carried as a
consultant to the CIA.
Did he make his recommen-
dation out of patriotism?
I'Vlaybe, but it is hard to be-
lieve he was not influenced by
his membership on the ITT
board and his considerable
holdings of ITT stock. In fact,
he seems also to control large
holdings inAnaconda Copper
Who could possibly suspect
the motives of such a distin-
guished establishmentarian?
But, let it be said, that if it
were anyone else, the ugly
words "conflict of interest" ?
ethical if not legal ? would
certainly be spoken.
Indeed, what is so stunning
here is that ITT offered the
CIA a substantial sum of mon-
ey ? much as it offered the
Republican party a huge dona-
tion when it had an antitrust
prosecution pending at the
Justice Department ? to in-
tercede to protect its property
in Chile.
Does the AFL-CIO give
money to the Labor Depart-
ment to influence trade union
regulations? Do the pharma-
ceutical manufacturers subsi-
dize the FDA to get favorable
decisions on drugs?
It seems to me that the fit-
ting response of any self-re-
specting public official, when
a corporation executive walks
into his office waving $1 mil-
lion to pay for the overthrow of
the government of a friendly
country, would be, "Sir, get
the hell out of here and don't
come back."
If he answers by scheduling
a meetng to discuss it further,
then, Whatever the outcome,
he's playing the dirty game.
And it's just this game that
has made every small country
in the world suspicious of us,
Certainly, the newest revela-
tions will, justifiably, intensify
everywhere distrust of what
we stand for
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Approved For Rele
IHS/HCAprevi
'
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EDUARDO FREI
... elected Chile chief
SALVADOR ALLENDE
... defeated as Socialist
7 7
01
U.S. Helped Beat
Allende in 1964
By Laurence Stern
Washington Poet Staff Writer
Major intervention by the Central Intelligence
Agency and the State Department helped to defeat
Socialist Salvador Allende in the 1964 election for
president of Chile, according to knowledgeable offi-
cial sources.
American corporate and governmental involvement
against Allende's successful candidacy in 1970 has
been the controversial focus of a Senate Foreign Re-
lations subcommittee investigation into the activities
of U.S. multinational companies abroad.
, But the previously undisclosed scale of American
support for Christian Demociat Eduardo Frei against
Allende six years earlier makes the events of 1970
seem "like a tea party," according to one former
intelligence official deeply involved in the 1964 effort.
Up to $20 million in U.S. funds reportedly were in-
volved, and as many as 100 U.S. personnel. ,
The story of the American campaign, early in the
Johnson administration, to prevent the first Marxist
government from corning to power by constitutional
means in the Western lIethisphere was pieced to-
gether from the accounts of officials who participated
in the actions and policies of that period.
Cold war theology lingered, and the shock of Fidel
Castro's seizure of power in Cuba was still reverberat-
ing in Washington. "No more .Fidels" was the guide-
See CIA, Al2, Col. I
-3
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!.
?:?
Al2
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Friday, A pril 6,1973 THE WASHINGTON POST
. . . R
U.S. Helped
eat Allende
CIA, From Al
post of American foreign
policy in Latin America un-
der the Alliance for Prog-
ress. Washington's romantic
zest for political engage-
ment in tile Third World
had not yet been dimmed
by the inconclusive agonies
of the Vietnamese war.
"U.S. government inter-
vention in Chile in 1964 was
blatant and almost obscene,"
said one strategically placed
intelligence officer at the
time. "We were shipping
people off right a iid left,
mainly State Department
but also CIA with all sorts
of covers."
One of the key figures in
the 1964 intervention was
Cord Meyer Jr., the redoubt-
able Cold War liberal. He
directed the CIA's covert
programs to neutralize Com-
munist influence in import-
ant opinion-molding sectors
such as trade unions, farmer
and peasant organizations,
student activists and com-
munication media.
At least one conduit for
CIA money, the Interna-
tional Development Founda-
tion, was employed in the
1964 campaign to subsidize
Chilean . peasant organiza-
tions, according to a former
official who was responsible
for 'monitoring assistance to
Chile from the Agency for
International Development.
One former member of
the IDF board, who quit
when he discovered it was
financed by the CIA, said:
"Some of us had suspected
for a long time that the
foundation was subsidized
by the agency. Then it fi-
nally surfaced, and it was
impossible to continue serv-
ing on it. Nonetheless, what
they were doing was conso-
nant with President Kenne-
dy's policiespibiSiterialithirtsr Reie
?political development..
The foundation is still in
existence, although its CIA
funding was terminated. It
now is financed by AID ap-
propriations.
Covert financing was ar-
ranged for a newspaper
friendly to the political in-
terests of Christian Demo-
crat Frei. "The layout was
magnificent. The photo-
graphs were superb. It was
a Madison Avenue product
far above the standards of
Chilean publications," re-
calledanother State Depart-
ment veteran of the cam-
paign.
One former high-ranking
diplomat said CIA opera-
tions at the time were by-
passing the ambassador's of-
fice, despite the 1962 Ken-
nedy letter issued by the
late President after the Bay
of Pigs debacle in Cuba. The
letter designated ambassa-
dors as the primary author-
ity for all U.S. operations
within their countries.
"I remember discovering
one operation within my last
week of service in Chile that
I didn't know about. The
boys in the back room told
me it was 'deep cover' and I
told them: 'You guys were
supposed to tell me
everything,' " the former
diplomat reminisced.
As the 1964 election cam-
paign unfolded in Chile, the
American intelligence and
diplomatic establishments
were divided from within
over whether to support
Frei or a more conservative
candidate, Sen. Julio Duran.
CIA's traditional line or-
ganization, centered in the
Western Hemisphere divi-
sion and working through
the traditional station chief
structure, favored Duran in-
itially. So did then Ambassa-
dor. Charles Cole and the
bulk of top State Depart-
ment opinion. The remain-
I
I 61
6
?
hand, leaned toward Frei and 1
the "democratic left" coali-
tion he represented. So, re. I
portally, did the CIA's Cord '
Meyer.
"For a while, we were at
war among ourselves on the
question of who to supports"
recalled a participant in
those events.
Duran dropped from con-
sideration when he lost an
important by-election to the
Communists, and gradually
the entire thrust of Ameri-
can support went to Frei.
"The State Department
maintained a facade of neu-
trality and proclaimed it
from time to time," accord-
ing to one source who
plaYed an important Wash-
ington role in inter-Ameri-
can policy at the time of the
election.
"Individual officers ? an
economic counselor or a
political counselor ? would
look for opportunities. And
'where it was a question of
passing money, forming a
newspaper or community de-
velopment program, the op-
erational people would do
the work.
"AID found itself sud- .
denly overstaffed, looking
around for peasant groups
or projects for slum dwell-
ers," he recalled. "Once you
established a policy of build-
ing support among peasant
groups, government workers
and trade unions, the strate-
' ? gies fell into place."
? A former U.S. ambassador
' to Chile has privately esti-
mated that the far-flung
? covert program in Frei's be-
half cost about $20 million.
In contrast, the figure that
emerged hi Senate hearings
as the amount ITT was will-
ing to spend in 1970 to de-
feat Allende was $1 million,
The number of "special
personnel" dispatched at
various stages of the cam-
paign to Chile from Wash-
ington and other posts was
calculated by one key Latin
American policy maker at
the time as being in the
range of 100.
, AID funds alone were sub-
. stantially increased for the
year of the crucial election.
The first program loan in
Latin America, a $40 million
general economic develop-
" ment 'grant, was approved to
4,.1it/gata P84 -Mt 6a16 III
6
"we ain not want to have
a condition of vast unem-
ployment as Chile was going
into' the election," recalled
the former AID official.
In addition to U.S. govern-
ment ?asistance, Christian-
Democratic Party money was
being funneled into Chile
In Frel's behalf by the Ger-
man and Italian Christian
Democratic parties.
A in on g the important
channels were the German
Bishops Fund and the Aden-
auer Foundation, ivhich were
managed by a Belgian Jesuit
priest, Roger Vekemans, who
has long been a controversial
figure in Chile and other
Latin American countries.
Knowledgeable Americans
believe that the European
funds had no connection
with the CIA programs. But
Vekemans was a natural tar-
get of criticism by Frei's
opponents in the super-
heated atmosphere of the
time.
A
'GitilTD70
LE [IN CHILE
? disruption" in Chile to try to influence
R00100QUOtlirle*
r. Broe said that, at a meeting with
ITT vice president Edward Gerrity in
New York, he explored "the feasibility
of possible actions by the companies to
apply some economic pressure on Chile."
Such suggested action, Mr. Brea
agreed at the Senate hearings, included
withdrawal of technical help and delays
in granting credit and in shipping parts.
Regarding the CIA's attitude toward
such steps, Mr. Broe testified:
"These were ideas . . . passed up to
me by people who work for me. I went
upstairs, I talked to the people upstairs,
and I was sent out to check out if they
made any sense at all."
But Mr. Broe said he got the idea that
Mr. Gerrity "did not think it would
work" and no action was taken.
Charles Meyer, former Assistant Sec-
retary of State for Inter-American Af-
fairs, told the Senators that the CIA was
only exploring options in talks with ITT,
and that over-all U. S. policy of nonin-
tervention in Chile's affairs was main-
tained throughout.
Wider investigation. What did all
this add up to? The Senate's look at ITT
is only part of a broader investigation
into the activities of multinational corpo-
rations, expected to last several years.
But testimony at the hearings could
focus the subcommittee's attention more
strongly on the part such corporations
might play in trying to sway foreign
governments and U. S. foreign policy.
ITT is one of the largest that will
come under Senate scrutiny. With sales
of 8.6 billion dollars in 1972, it was the
ninth biggest industrial company in the
U. S. Its operations in 80 countries em-
ploy 428,000 persons.
ITT subsidiaries in the U. S. bear such
well-known names as Wonder bread,
Morton frozen foods, Sheraton hotels,
Scotts lawn products, the Hartford Fire
Insurance Company.
Claim for losses. With the first pub-
lished reports of ITT activity in the
Chilean election, the Allende Govern-
ment broke off talks about compensating
ITT for the nationalized telephone com-
pany. ITT has filed a claim for 92 mil-
lion dollars with the Overseas P-Ivate
Investment Corporation, a federal agency
that insures investors abroad agairst sev-
eral forms of damage, including exp:,,-
priation. The claim of ITT is under co!).?
sideration by the OPIC.
Further testimony by ITT Chairman
Geneen was scheduled for arly
Still to come was a review by sub-
committee to determine if legal ;Aetn
should be taken against any wit%esses.
Said Senator Church, atter wo wc, 3
of hearings:
"It's obvious somebody is lyClg.'r
Now COMING OUT of a congressional
hearing are new disclosures on a
2%-year-old story of international mystery
concerning this question:
Did a big multinational corpora-
tion, based in the U. S., attempt
through the Central Intelligence
Agency to block the election in
1970 of Marxist Salvador Allende
as President of Chile?
The corporation is one of the world's
largest?International Telephone & Tele-
graph, with connections extending into
80 countries.
The CIA's role was detailed in testi-
mony, before a special Senate Foreign
Relations subcommittee, that offered
rare public glimpses into the agency's
undercover operations.
Fear of nationalization. ITT's big
stake in Chile is a telephone company,
known as Chiltelco, which reportedly
represents an investment of more than
150 million dollars. The company, as
ITT had feared, has been nationalized
by the Allende Government.
Main witnesses before th'e subcommit-
tee, headed by Senator Frank Church
(Dem.), of Idaho, have been a number
of the huge corporation's officials?and
William V. Broe, a CIA agent who said
he was in charge of "clandestine services"
for the agency in the Western Hemi-
sphere in 1970.
Their testimony largely related to
events beginning about midsummer of
1970, when Mr. Allende's chances of
winning the Chilean Presidency were
being assessed. In the September 4 vot-
ing, he gained a plurality. On October
24, the Chilean Congress named him the
country's chief executive.
Election fund. The testimony was
often conflicting. ITT officials acknowl-
edged that the corporation had been will-
ing to put up a large sum of money to be
sent to Chile. But they differed on its
intended use.
John A. McCone, an ITT director and
a former Director of the CIA, said 1 mil-
lion dollars was offered "for the purpose
of bringing about a coalition against
Allende."
Another witness said the money was
meant for a housing program. A third
testified it would have gone for "any
program the U. S. might formulate."
Funds refused. The CIA's Broe said
he was selected by Richard Helms, then
CIA Director, as contact man with ITT.
Regarding a meeting with Harold S.
66
?UPI Photo
ITT's Geneen. Witnesses said he
tried to influence vote in Chile.
Geneen, ITT board chairman, Mr. Broe
testified:
"I told him we could not absorb the
funds ? and serve as a funding channel. I
also told him that the United States Gov-
ernment was not supporting any candi-
date in the Chilean election."
The CIA came up with this sugges-
tion, however, in the period preceding
the final selection of Mr. Allende: that
U. S.-owned firms work for "economic
?Wide World Photo
CIA's Broe. He told about sugges-
tions to disrupt Chilean economy.
Release 2001/06/09 : CIA-RDP84-00499R001000110003 -3 NEWS
& WORLD !'ORT. 119rP 9, ?973
LE1UFCF1 TOJUVK
Approvadii6orRele -mia-2n01/06/09 : ClhooDP84-00499R00100111A0001-3
CIA VOnorBan
By JERMIAII O'LEARY
Star-News Staff Writer
Chairman Frank Church, D-
Idaho, of the Senate multina-
tional corporations subcom-
mittee plans to introduce leg-
islation that would make it a
federal crime for a business
organization to contribute
money to finance operations
of the Central Intelligence
Agency.
Church announced this in-
tent at the close yesterday of
two weeks of hearings into the
machinations of ITT Corp.
,with CIA and other gevern-
ment agencies in the internal
affairs of Chile. The hearings
produced testimony that ITT
and CIA approached each
other at different times in the
Chilean election period of 1970
with suggestions for affecting
the outcome of the election
and the Chilean economy.
But Church indicated that
the subcommittee would not
pursue his threat to send the
?
transcript of the hearings to
the Justice Department on
suspicion of perjury. Church
announced last week that he
believed "someone is lying"
when testimony of ITT execu-
tives appeared to conflict with
that of U.S. government wit-
nesses and other ITT officials.
Church said the inconsisten-
cies now seem to be due to
lapses of time or memory, or
a failure to communicate
among those involved in the
sensational ITT documents on
Chile.
HS/HC- kr?
pproved For Release 2001/
"I feel the wider the dis-
tance between big business
and the CIA the better for all
concerned," Church declared.
"Legislation to accomplish
this may be one of the better,
outgrowths of these hearings.
? We cannot have this inces-
tuous relationship between
the CIA and U.S. companies
operating abroad."
Ilarold S. Geneen, ITT
board chairman, occupied the
witness chair for most of yes-
terday as the subcommittee
wound up the hearings.
Geneen's testimony was that
there were two distinct phas-
es to ITT's thinking on Chile
in 1970: One in the summer
when Marxist Salvador Al-
lende was campaigning on a
platform of expropriation that
ITT believed would cost the
corporation its $153 million
investment; the other during
the autumn when Allende
looked to be a sure winner
requiring only confirmation ;
by the Chilean Congress. -
Geneen accepted testimony
of CIA agent William V. Broe
that Geneen had offered a
substantial sum for any gov-
ernment plan that would
block Allende, Although he
said he did not recall doing it.
But Geneen said that money
offer "died" when Broe re-
jected the offer in July 1970.
"The next offer was entire-
ly separate and had a dual
purpose," Geneen testified.
"The offer of $1 million was
openly presented to two de-
partments of government
(The National Security Coun-
cil and the State Department)
. It was to make Allende more
receptive to us and other
companies if he was elected
or to help the Chileans arrive
at a democratic cdalition
solu-
tion. The $1 million figure was
only a measurement of our
willingness to join any gov-
ernment program."
Sen. Clifford Case, R-N.J.,
said, "If I heard someone was
offering $1 million to defeat
me or make me vote better,
I'd, take that as a provoca-
tion."
? "That depends on the sec-
ond part of the plan," Geneen
said.
"I don't think I'd get over
610/ie fietiORCIRIA*-0049t1R001000116001-3
THE EVENING STAR and DAILY NEWS
Washington, D. C., Tuesday, April 3, 1973
ne vvorse rungs %veil Tile beller
nized, according to die testimony, at
least two meetings with representatives
pAckgmpeprr BiaesnkasofAzmaconda, Ken-
ii\elyuen4?livAYRVONOSiwtfiPlAbcgrfcakt R-ItitO?tlettoaaia
flies like United Fruit and Jersey Stan- week ago, unraveled flie following chro-
dard often intervened in the internal nology of collaboration.
politics of South American countries.
Sometimes, to help promote their for-
eign interests, the companies could
count on the diplomatic and military le-
verage of the U.S. Government. Those
days are long past. But executives of the
International Telephone and Telegraph
Corp., the largest U.S. conglomerate,
apparently yearn to carry on in the not-
so-grand old tradition. The testimony in
two weeks of hearings by the Senate
Subcommittee on Multinational Corpo-
rations, which showed how ITT and the
Central Intelligence Agency conferred
on ways to block the election of Marxist
Salvador Allende in Chile 2'A years ago,
provided enough juicy material to keep
any Yankee-go-home propagandist
busy for years.
Realizing that the company was
JULY 16, 1970. Broe met with ITT
Chairman Harold Geneen in Washing-
ton. The meeting had been proposed to
Richard Helms, then the CIA chief, by
John McCone, an ITT director and for-
mer head of the CIA. Broe said that Ge-
neen told him that ITT was willing to
put up a "substantial fund" to support a
conservative candidate for President in
the elections in Chile to be held Sept. 4.
According to Broe, at that time the CIA
declined the proposal because the U.S.
was not supporting a candidate in the
Chilean election.
SEPT. 4. Allende won a 36% plurality
but still had to face a run-off vote in the
Chilean Congress Oct. 24.
SEPT. 9-10. Geneen told McCone at an
ITT board meeting that he was willing
to put up $1,000,000 for the U.S. Gov-
THE SERVICE DIVISION
about to have its $150 million invest- eminent to use in Chile. A few days
ment in Chile's telephone system na- later, McCone made offers to both Hen-
tionalized, ITT executives worked over- ry Kissinger and Helms of "up to
time to devise ways of stopping Allende $1,000,000 to support any Government
and tried to donate, through CIA opera- plan for the purpose of bringing about a
tives, large amounts of money for an coalition of the opposition to Allende."
anti-Allende coalition. The company McCone did not receive an answer.
management even considered the old SEPT. 29. Broe then made what
insurgent Communist Party strategy amounted to a counterproposal to ITT
against troubled capitalist states: fo- Senior Vice President Edward Gerrity
ment economic chaos on the principle Jr. Broe said that he discussed with
that the worse things get, the better. Gerrity "the feasibility of possible ac-
Though ITT and CIA officials deny that tions by U.S. companies designed to cre-
any of these plans were ever carried out, ate or accelerate economic instability in
such schemes ran against the stated U.S. Chile." Broe mentioned such measures
policy of non-intervention in Chile and, as the cancellation of credit lines to
in light of the CIA's involvement, raise Chile by American banks, a slowdown
doubts as to how firm the policy was. in delivery of machinery spare parts, ac-
In an unprecedented move, the sub- tion to force savings and loan institu-
committee heard and released the tions to close down, and the withdrawal
closed-session testimony of the CIA's of technical assistance. Broe gave Ger-
chief of clandestine operations in the rity a list of American companies that
Western Hemisphere, William Broe. (It might help in such a plan, "providing
was the first time that a CIA agent has the economic course was feasible." Ger-
Inc. and Ralston Purina. Thecoritchae.rPcom-
panies were not willing to go along with
such adventurism.
OCT. 24. Allende was elected by the
Chilean Congress. Later he nationalized
many U.S. companies, including M"s
Chilean telephone subsidiary.
During the hearings, several wit-
nesses gave conflicting versions of the
purpose of the million-dollar offer. Con-
trary to McCone's testimony that the
money was to be used for an anti-Allen-
de coalition, Gerrity maintained that it
was for constructive programs, such as
housing and social development, "to
make Allende happy about the Ameri-
can presence." Later, Charles A. Meyer,
then Assistant Secretary of State for In-
ter-American Affairs, repeatedly em-
phasized that the U.S. policy towardi
Chile during this period was one of strict
non-intervention--a statement that
seemed to conflict with Broe's testimony
about CIA suggestions to create econom-
ic disturbances in Chile.
"It is obvious," said Subcommittee
Chairman Frank Church, "that some-
body is lying." Members of the subcom-
mittee will review the transcripts of the
testimony to decide whether to send
them to the Justice Department for pos-
sible charges of perjury.
For either private companies or the
U.S. Government to intervene in a free
election is, as Church said, "very im-
proper." Beyond the question of propri-
ety, the troubling aspect of the ITT af-
fair is that it will fan suspicions in
foreign countries that multinational
corporations commonly use their finan-
cial powers to influence foreign political
affairs directly. To date, there is little
public evidence that other companies
have in recent years tried to meddle as
ITT sought to do.
Senator Charles Percy noted during
the hearings that corporations have an
obligation to protect their assets and the
interests of their shareholders. But, he
said, such protection must not improp-
erly involve the corporation in the inter-
nal affairs of the host country or contra-
dict U.S. foreign policy. In Chile, most
of the U.S. corporations?except ITT
?have followed that standard, even at
a loss. Ford, for instance, simply pulled
out of Chile, wrote off a $16 million loss
and settled for a $900,000 payment
from the federally financed Overseas
Private Investment Corp. (cow), which
insures multinational corporations
against expropriation. ITT now stands
to lose whatever compensation Allende
had promised to pay; and unless the
company can disprove the mounting ev-
idence that its loss resulted from its at-
tempt to interfere in Chilean politics, it
may also lose its $92.5 million claim
with the ?Pic. To knock down that ev-
idence will be Harold Geneen's task in
testi ficAtifiroVedoFtits1401*heSel21:101 /08109i4 bpAIRDputroo2f1Yerayotioto11tirtthis week'
18 1 HS/I-IC-VD
TIME, APRIL 9. 1973
Worsporma......arawort.
2 APR 1973
? PEOPLE OF THE WEEKA
Approved For Reledg* 2001/06/09 : CIA-RDP84-00499R00144011L0601-3.
? SH KO G UP THE CIA
"NIX UREAUC ACY T
ATEST GOVERNMENT operation to feel
L. the effects of a shake-up in its estab-
lished bureaucracy is the supersecret
Central Intelligence Agency.
The man behind what promises to be a
sweeping reorganization is the CIA's
new Director, James H. Schlesinger, who
has had this tag pinned on him inside
Government circles: "President Nixon's
bureaucracy tamer."
"Tough guy." Mr. Schlesinger came
to the CIA post from the Chairmanship
of the Atomic Energy Commission, where
he was also looked on as ...tough guy."
Says one Government source:
? "At the AEC he turned things upside
down at first. Everyone there was up
tight. But, in the end, his overhaul
improved morale at AEC tremendously.
"Now he has started out the same way
at CIA?and it looks as if he will get
the same results."
As with most activities of the CIA,
the Schlesinger-ordered shake-up of per-
sonnel is being conducted pretty much
under wraps.
No one in authority is saying?if any-
one really knows?bow many of the esti-
mated 15,000 on the payroll will be
squeezed out before it is all Over.
Estimates of a 10 per cent cut have
been reported. Knowledgeable sources
say that is too high?but it is acknowl-
edged that the reduction now under way
is the biggest ever at the CIA, which has
had others in the past.
Improvements ahead. The overhaul
is across the board?young and old, peo-
ple from all areas of the agency.
Every personnel folder is being read.
The four main directorates in the agency
?administration, plans, science and in-
telligence?are each handling the me-
chanics of review ill their divisions.
Some tasks are being eliminated as
outmoded, no longer needed in the
changing intelligence ?vorld ()I' today.
But, at the same time, the word is out
at CIA that the shake-up is designed to
improve American in gathering
?not scuttle it. A slogan that began to
be heard with Mr. Schlesinger's Jake-
Over was: "Intelligence is Our first Nue
of defense."
After the initial shock of the reduc-.
lions, some CIA officials began to take
second looks?and decided that what they
saw was laAt;
HS/HC-9,r0
ever said the agency would be strength-
ened by getting rid of fat and deadwood
?and didn't mind as long as it didn't
include him?was right."
The critics' view. Not everyone, of
course, felt that way. Fears were ex-
pressed that the cuts will result in reduc-
ing the effectiveness of the CIA, and
that intelligence work as a career will
be less of an attraction.
Said one such critic:
"Whoeyq succeeds Schlesinger will
have the- job of building the organi-
zation back up to be able to do its job."
While some outsiders
have been named to high
posts?notably Generals
Daniel Graham of the
Army and Lew Allen of
the Air Force?high-rank-
ing intelligence profession-
als are still ill top spots,
and a number are being.
promoted.
For example, the vet-
eran William E. Colby,
who had been high in the
hierarchy as executive di-
rector, has been moved up
to deputy director for
plans.
A hard worker, Mr.
Schlesinger, 44, was named
to the CIA post by Mr.
Nixon in December, re-
placing It ichard lidl ins,
who was appointed Ambas-
sador to Iran.
The new Director is described as a
hard worker, usually on the job from
7 a.m. to 7 p.m. But, an official says,
he does not demand that kind of day
from those Nvlio work for him. Instead,
this source explains:
"He makes it clear that vhat he wants
is results, not time-clock punchers. As
long as the work is done in time, he
doesn't bother too much about the hours
spent on it."
Mr. Schlesinger was a SUSUMU CUM
laud(' graduate of Harvard, and got his
Ph.D. degree there in 1956.
After a year of travel in Europe and
parts of Africa and Asia, lie went to
the University of Virginia to teach eco-
nomics for eight years.
Publication of a hook, "The Political
EP"
him an offer of a job from the Rand
Corporation, where he eventually became
director of strategic studies. .
Mr.?Schlesinger's first post in the Nix-
on Administration, beginning in 1969,
was assistant director of the Office of
Management and Budget. In 1971 he
rest; to the Chairmanship of the AEC.
Changing atomic policy. Mr. Schles-
inger ordered a drastic reorganization of
the AEC, resulting in a cutback of its
high-level staff. But that wasn't his only
impact on the agency.
One new job he created was that of
?USN&WR Photo
Mr. Schlesinger, as new chief, is presiding over CIA
reorganization and biggest-ever cuts in .its payroll.
assistant general manager for environ-
mental and safety affairs. And he is
credited w?ith making the AEC more con-
scious of the interests of consovationists
in its planning for new uses of atomic
energy.
"Very fast study." Mr. Schlesinger
came to the CIA without background in
pU re intelligence \Mil:, 'although he has
had much experience in the wide field
of world strategy.
One official describes him this ?vay:
"lie is a very fast study who does his
110111CWOrk."
One hit Of 110111('WOrk many associates
believe lie learned long ago: How to trans-
form a bureaucracy into a well-tuned
machine. That apparently was the job
President Nixon felt was needed at the
le?ala '2 00 Vida* :(6M41508Viiiji.49kitAbh qbb
_oi ._01-3
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sof
fie VOA le 71 S
n Oen ? 2 parft 10 3
.1.A. Apparently Plans
Cut in Some Covert Roles
By CLIFTON DANIEL
Speolat to The New leek Times
WASHINGTON, April 1?
Under its new director the
Central Intelligence Agency is
apparently planning to curtail
some of its old activities, no-
tably clandeStine Military oper-
ations, and undertake some new
ones. These Include ? action
against political terrorism and
the ? international drug traffic.
Since .James R. .Schlesinger
took over as director on Feb. 2
more than 1,000 employes of
the C.I.A. have received dis-
missal notices. Mr. Schlesinger
also has authority from Presi-
dent Nixon to apply what one
official calls "a great deal of
persuasive influence" to reduce
manpower as well in the
Intelligence services. These
are the Defense Intelligence
Agency and the National Secu-
rity Agency, which Mr. Schle-
singer oversees but does not
operate.
In the last two years ,the in-
telligence establishment as a
whole has been reduced by'
something like 25 per cent, ac-
cording to reliable estimates.
In . 1971 there were, more
than 150,000 people In the mili-
tary and diplomatic intelligence
services and the C.I.A. There
are now fewer than 125,000, ac-
cording to the estimates?per-
haps no more. than , 115,000.
Since November, 1971, the vari-
ous agencies have been under
orders in a memorandum from
the President to reduce dupli-
cation of facilities and func-
tions and make more economi-
cal use of their resources, es-
pecially in -collecting informa-
tion,
Intelligence information these
days is gathered more by ma-
chines than by men?by satel-
lites and computers rather than
by spies meeting informers in
bars and alleys.
Each intelligence agency
seems to want its own machines
and some systems have report-
edly been made deliberately in-
compdtible so that each agen-
cy keeps its own.
For that reason and others
it is said here that President
Nixon's 1971 memorandum has
as yet had ,no ,measurable ef-
fect on the operations of the
Continued on Page. 1, Column 1
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Approved For Release 2e2)/06/09 : CIA-RDP84-00499R001000110001-3
C.I.A. MAY CURB
SOME ACTIVITIES
Continued From Page I, Col. 7
intelligence community.
The man principally respon-
sible for drafting the Presi-
dent's memorandum was Mr.
Schlesinger and he has now
been given the authority to
put it into effect. He got the
job because as assistant direc-
tor of the Office of Manage-
ment and Budget and later as
chairman of the Atomic Ener-
gy Commission he earned a
reputation for efficiency and
effectiveness.
Apparently Mr. Schlesinger
G expected to do in the Intel-
litence community what other
recent Presidential appointees
have been instructed to do in
more open departments?that
is, to make the Federal bu-
reaucracy more responsive to
the Administration,
This objective has led to
charges from some old hands
at the C.I.A. that the agency
is being "politicized" by the
Nixon Administration. Mr.
Schlesinger met this charge,
when his C.I.A. appointment
was up for confirmation in the
Senate, by assuring the Senate
Armed Services Committee that
he believed absolutely in main-
taining the integrity and inde-
pendence of intelligence esti-
mates.
People who know President
Nixon 't; attitude say he wants
ihis intelligence information
straight even when it is un-
palatable. However, the White
House does want to see less
money spent on intelligence,
and a better intelligence prod-
uct provided.
By a better product the
White House apparently means
among other things a product
that answers the questions that
? senior policy makers are inter-
ested in and gives the answers
In brief and readable form.
"You can't drop a 90-page
C.I.A. analysis on a high offi-
cial's desk and say 'You've got
to read this,'" one such official
aid recently.
That Discouraging Thud
- "The thud it makes when
It fails on your desk is enough
to discourage you from open-
ing it," another said.
" Apparently C.I.A. memoran-
dums under the Schlesinger re-
gime will number more like
three pages than 90 and will
have a telephone number to
call if the recipient wants fur-
ther information.? '
While seeking greater econ-
omy and efficiency the intelli-
gence community is reassess-
ing its tasks.
There appears to be a ten-
dency to cut back on C.I.A.
paramilitary operations ? op-
erations such as the abortive
Bay of Pigs invasion of Cuba
in 1961 and the clandestine
war still being waged in Laos,
operations that have some-
times brought the agency as
much censure as praise.
In his second Inaugural Ad-
dress, President Nixon said,
"The time has passed when
America will make every oth-
er nation's conflict our own,
or make every other nation's
future our responsibility, or
presume to tell the people of
other nations how to manage
their own affairs."
That statement seemed to
Imply less intervention in oth-
er people's affairs, whether by
intelligence agencies or other-
wise.
In any event, operations such
as the one in Laos, where the
C.I.A. has long given support
- and leadership to the anti-
Communist military forces, are
on such a scale that they can-
not be conducted secretly, and
thus may not be thought Suit-
able for an undercover agency.
'Dirty Tricks' Wane
Operations on a smaller
scale?sometimes called "dirty
tricks"?reflect the atmosphere
of the nineteen-fifties, the cold
war period, and seem to he
regarded now as obsolescent.
Also with the reduction of
international tensions and sus-
picions, which is the aim of
President Nixon's dealings with
the Soviet Union .and China,
the intelligence community may
not need to pay so much atten-
tion to the military abilities
of the major powers.
However, there may be new
tasks for the intelligence com-
munity in an era of negotia-
tion.
For example, the protocol to
the Soviet-American agreement
on the limitation of strategic
offensive weapons provides in
Article 12 that "for the pur-
pose of providing assurance of
compliance with provisions of
this treaty, each party shall
use national technical means
of verification."
In plain language, that means
that the Soviet Union and the
United States may each use its
own photographic satellites and
other intelligence-collectint de-
vices to see whether the other
side is abiding by the treaty.
This is the '"open skies" policy
proposed by President Dwight
D. Eisehnower at the Geneva
summit conference in 1955 and
rejected at that time by the
Russians.
There are also other new
problems to attract the inter-
est of the intelligence agencies.
One is the narcotics traffic.
Intelligence is a major ingredi-
ent in controlling it.
Another is_ political terror-
ism, a form of warfare that
cannot be dealt with by ordi-
nary diplomatic means or con
ventional military forces.
The interest of the C.I.A.
in these problems does not
mean that the agency will no
longer have an arm that can
perform paramilitary functions.
It also does not mean that
the C.I.A.?to use a term hear
here?will not "invest" funds
in the affairs of third coun-
tries on occasion.
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Approved For Releasts12001/06/09 : CIA-RDP84-00499R001004,1010001L3
3
Sunday, A pail; 1973
. .
THE WASHINGTON POST .*
TT and CIA on C
By Laurence Stern
Wanhington Poet Stet Writer
'The most lurid of Marxist
1) p a ganda parables against
e excesses of U.S. invert.
sm couldn't have been
lotted with more heavy-
Aided caricature than the
-2 saga in Chile, as it has
afolded the past two weeks
a Senate hearing room.
'There was the giant
-nerican corporation con-
-Ong with the Central In-
lligence Agency to subvert
clandestine economic war-
re an elected left-wing
evernment in Latin Amer-
a.
'There, also, was a senior
gure of the American in-
:strial elite, John A. Mc-
3ne, serving as go-between
^ the CIA he once headed
ed International Telephone
id Telegraph on whose
ard he sits.
There was, furthermore,
spectacle of ITT execu-
Ives lobbying officials of
ie National Security Conn-
1, the top-secret policy arm
7 the White House through
lich the President directs
merican - foreign opera-
ns.
The case has propelled
ito the limelight as CIA's
lerational contact eman
ith ITT a government' off'-
:
minc- 9(et
cial with the most tantaliz-
ing job title in town, Wil-
liam V. Broe, chief of clan-
destine services, Western
Hemisphere, of the CIA's
Directorate of Plans. \
The centerpiece of this in-
triguing jigsaw has been
ITT itself, whose motto?
"serving people and nations
everywhere"?well describes
its multinational and con-
glomerate scale of opera-
tions. ITT,, the nation's
eighth largest industrial tor- ?
poration, functions as a
global subgovernment
more than 70 countries. It
reported $8.5 billion in sales
and revenues during 1972.
Starting with the modest
base of the Virgin Islands
telephone company at the
beginning of the 1920s, ITT
rapidly branched out around
the world under the dy-
namic management of a
Danish enterpreneur, Sosth-
,enes Behn, who became a
naturalized American citi-
zen when the United States
bought the Virgin Islands
from Denmark in 1917.
Corporate Involvement
By .World War II, accord-
ing to Justice Department
records, a German subsidi-
ary of ITT was an owner of
the company that produced
Sem
,JOHN, McCONE
. . . interested in Chile
the Luftwaffe's Focke-Wulff
fighter while an American
subsidiary was building the
"Huff-Duff" U-boat detector
for the U. S. Navy. A f t er the
war ITT collected several
million dollars in damages
from the U.S. Foreign
Claims Settlentent Commis-
sion for allied bombing dam-
age to the Focke-Wulff
plants, according to govern?
-
ment records.
And so ITT's problems in
Chile came against a back-
WILLIAM V. BROE
, . . . pushed into limelight
ground of broad corporate
involvement in international
relations.
Two weeks of public hear-
ings by the Senate Foreign
Relations Subcommittee on
Multinational Corporations
have provided a rare
glimpse of the interrelation-
ship between corporate in-
terests and public policy in
the conduct of U.S. foreign
relations.
But it is by no means a
picture of clear-cut collu-
roved-For Release 2901/06409.:CIA-RDP84-00499R0,0109.0'W091.3
lance
07-,f,MT.1477., f,V3,1
4-1 L
HAROLD S. GENE
. . . painted into cor
don. In fact, there was
evidence of disarray v
the administration t(
the assumption of pow
September, 1970, of th(
elected Marxist goverr
In the Western Hemisr
as the administratio
Chilean President Sal
Allende was called.
The professed positi
the Nixon administrati
ward Allende's electio
one of strict neutrality
was reiterated durin
p.
, Assistant Secretary of State tions that might be carried istration can only De a suo-.,J
for Inter-American Affairs out without the public sane- ject of speculation. The Sen-,?
, Charles Meyer _and. foz. _,_? tion of the administration. ate subce nittee does not,
,
AppmpachvoroR-vmaminvolicwin? piihRtc04-qp.49943zoo too9,2,1001m assibil-,'
k
ward Korry. , strument because of the pre-
ity that i can compel the
Yet CIA operative Broe vious approaches of McCone
testimony of Kissinger, the
testified under oath that his and ITT Chairman Harold man who has all the an?,
"operational" contacts with S. Geneen, prior to Al- swers.
ITT, which included agency- lende's popular election: But Kissinger, 12 days af.,,,
' drafted and approved plans ter. Allende's popular eleow
for sabotage of the Chilean ITT, as Broe testified, tion, is on record as having ?'.,
? was the only company that
economy, were carried out " expressed serious concern'.
with the complete approval contacted the agency and 'over the impact of a Chilean +
expressed an interest in the
of his superiors. Marxist government on stir..
current situation in Chile."
Explore Options rounding countries.
His superior at the time
? was CIA Director Richard
- M. Helms, who reports to
the National Security Coun-
cil which in turn reports di-
rectly to the President
? through national security
? adviser Henry A. Kissinger.
It is inconceivable to
those familiar with.' the ,
tightly managed White
House national security sYs-
tern that such a mission as
Broe conducted with ITT of-
ficials in late September,
1970?before the Chilean
congress met to ratify Al-
lende's popular election?
was without full NSC ap-
proval.
How did this square with
the policy of neutrality to
which both Korry and
Meyer attested? Meyer sug-
gested that there was no in-
consistency. The govern-.
ment maintained the right,
he said, to explore options.
Subcommittee members
reacted with skeptical grum-
bles. Had ITT decided to
carry out Broe's suggestions,
Chairman Frank Church (D-
Idaho) pointed out, the
"option" would have become
an operational policy. ITT,
as it turned out, felt the
? plan was unworkable. As
formulated by Broe and the
agency, it would have been
up to ITT to execute on its
own.
The gist of the plan was
for a group of American
. companies, under ITT prod-
ding, to use their financial
clout to accelerate?as Broe
testified?"the deteriorating
, economic situation" in
' Chile. The objective was to
turn wavering Christian
Democratic congressmen
away. from Allende in final
balloting,
In his conversations with
ITT Vice President Edward
Gerrity, Broe told the sub-
committee, "it was under-
stood that he was going to
be doing it and CIA was not
involved. It was ITT which
was looking into the thing."
That testimony was cru-
cial, for it may have illumi-
nated the National Security
Council decision in early
September, 1970, for dealing
The administration may In the case of ITT, the re
well have reacted with some cord suggests that Geneen, i
trauma to Allende's popular McCone and other corporat&,
election victory since, ac- executives had an access to'
':
cording to the testimony, top administration officials
CIA polls have inaccurately that has created at least a4'
predicted the election of his strong isemblance of influ-,J
opponent, Jorge Alessandri, ence over policy,
candidate of the conserva- /
tive National Party. At the time it was pushing
The CIA's rejection of for intervention in Chile,
ITT was campaigning ac-
viously July for intervention
Geneen's overtures the Tore-
tively in Washington against
in Chile could have resulted a pending antitrust action,),
from the agency's misread-
calling for it to divest itself.
_
ing of Allende's election of the $2 billion Hartford In-
prospects. By its own testi-
surance Co.
mony, Geneen's proffer of ITT officials were, ins-:
? "a substantial fund" to? fi- some cases, dealing with the:4
nance an anti-Allende plan same administration men on '
was unattractive to the CIA. the two separate matters. As-
What the testimonial pat. it turned out, ITT won its''
tern suggests is that as po- fight on the Hartford case'
litical events crystallized in when antitrust chief Rich-C.
Chile, the CIA and ITT ard McLaren, now a federal
were pursuing increasingly judge, reversed himself and'.
congruent goals: further roil- withdrew opposition to thei,
lag Chile's already dis- merger. .
,
-.,.
rupted economy, trying to Things may not end up sq
promote the prospects of Al- happily for ITT in the Chi-1'
essandri in the congres- lean affair. Its claim Upont.
sional election run off, ulti- the Overseas Private Invest:Z :
mately seeking to block Al- ment Corp. (OPIC), a goy.'
lende's accession as presi- ernment agency, for . $92.5 .
dent. million in confiscation 1
losses is now in doubt.
??
Kissinger Concern .,..
ITT was pursuing its own Geneen's position in the, .
corporate welfare in view of company has not been to-
Allende's pre-election vOws tally enhanced by the reve- .
to nationalize basic indus- lations on Capitol Hill or"
tries, as well as the ITT- the past few weeks.
owned Chilean telephone ITT's chairman is due to.-
company. The CIA was pur- testify on his dealings with,,
suing a softly stated man- the administration and CIA,,
date of the NSC to see what over the Chilean affair. 1Iis?
It could do to stave off the position, as a result of the.,
specter of a new Marxist ad- testimony of McCone, Broe
ministration in the politi. and ITT executives, is some-,,
cally -volatile southern hemi- what analogous to that of ai,
sphere. man standing M a corner
Just how high the man- -surrounded by wet paint.
1 1.,...
Appithvectrearifteldasd400,11,0?109 CIA-RDP84-00499R0b1000110001-3
election in the Chilean con- '
gress the following month
as the hemisphere's first
or.
" 1
Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3
TAB
Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3
Approved mhr
Panel
By OSWALD JOHNSTON
Star-News Staff Writer
James R. Schlesinger, , the
. new director of Central Intelli-
gence, goes before a Congres-
s?
sional committee today in his
first formal legislative appear-
ance since reports began to
? circulate) of a major shakeup
at the CIA.
.' ? Schlesinger's testimony be-
' ? fore the House Armed Serv-
ices watchdog subcommittee
on the Central Intelligence
Agency will, as usual,, be se-
` c r e t. But congressional
sources are not hiding their
? expectations that questioning
? will focus on two reported as-
pects of an ongoing purge of
CIA ranks:
? That the White Howe has
. ordered a concerted ideologi-
cal attack on the supposedly
liberal bias of the CIA's small
but elite Office of National'Es-
timates, which is nominally
responsible for producing the
worldwide intelligence assess-
ments upon which President
Nixon, Henry A..Kissinger and
the 'National Security Council
base policy decisions.
? That Schlesinger is simulta-
neously implementing a White
House directive first handed
down 16 months ago to stream-
line both budget and manpow-
er resources in the nation's
unwielding $5 billion-a-year in-
telligence operation.
Ostensibly, the question be-
fore the subcommittee chair-
man, Lucien N. Nedzi,
D-IVfich., is whether Congress
should raise from 800 to 2,100
the legal ceiling on the num-
ber of CIA employes who may,
claim retirement benefits and
? leave office after ' 20 years '
service.
But Nedzi left no doubt that
Schlesinger will alsobe
quizzed on the scope and mo-
tive of the intelligence agency
purge. "Undoubtedly, ques-
tions will be asked about how
many men are leaving ? and
why," Nedzi said in an inter-
view yesterday.
Speculations aside, it is still
not clear how far Schlesinger's
? new broom will sweep, and to
what end.
Varying %ports have the
15,000-man agency facing a
cutback of from 1,500 to 1,800
e.mployes. One report, which
C
?45thiesinger
CIA officials sought to mini-
mize, said the agency eventu-
ally would be cleared of as
many as 3,000 underachievers
in annual installments of. 1,000.
At the same time, some
agency veterans close to
outgoing Director Richard M.
Helms, whose own departure a
few m,onths short of retire-
ment age gave rise to specula-
tion the White House was dis-
enchanted with his perform-
ance, were reportedly asked to
leave on only a few hours no-
tice.
Sources close to the intelli-
gence community are appalled
by what one former CIA'offi-
cial termed the "peculiar bru-
tality" ofSchlesisnger's
house-cleaning, and apprehen-
sive over what it may mean.,
But they are far from certain.'
One view, expressed by a
source of long eperience in the
intelligence community, sees a
conscious effort to punish the
CIA's intelligence assessors by
? cutting back their influencence
, and enhancing that of the Pen-
tagon's rival Defense Intelli-
gence Agency.
In this view, the CIA purge
JAMES R. SCHLESINGER
now in progress was foresha-
dowed by the administration's
bureaucratic assault earlier
this year on the Arms Control
and Disarmament Agency,
which in quick sucession lost
one-third of its budget, 12 staff
positions, most of its frontline
veteran officials and much of
its influence in the new rounds
ntroversial CI Shakeup
? of strategic arms limitation
talks with the Russians.
It is pointed out that the CIA
estimators for years now have
backed the longstanding disar?
mament argument that on-site
inspection of Soviet missile fa-
cilities is not necessary to en-
sure that the Russians are liv-
? ing up to a disarmament'
! agreement.
At the other extreme, one
former CIA official dismissed
the .whole Schlesinger exercise
as "a phony operation." So
? far, this source argued, there
Is no evidence that any really
Important changes are being
made.
. One indication this ma ir be
so is the fact that the newly
appointed deputy director of
? i
plans?the man n charge of
the CIA's worldwide clandes-
tine "department of dirty .
tricks" operations?is William
E. . Colby, the former bead of
the American Pacification
? Program in South Vietnam.
Despite the CIA's good repu-
tation from the Pentagon Pa- .
pers as a gloomy but accurate
forecaster of events in Indo-
rchinar it was Colby's side of
the agency's operations that in
large part engineered the orig-
inal U.S. involvement in Laos
and South Vietnam during the
early 1960's.
More generally, however, ?
speculation is focused on the
CIA's Intelligence evaluation
function, rather than on the
? Operations side.
In the main, informed
sources are resisting the
suggestion that the White
House would deliberately at-
tack the agency's intelligence
estimators simply because the
reports they have produced
were unwelcome:
"This is our last h ? ? ? ," one
source said. "A b? ? y inde-
pendent enough to say a policy
,is no good if that is what it
believes."
At the same time, many in-
telligence experts concede that
the Office of National Esti-
? mates is "old and tired," and
out of touch with the needs of ,
? Kissinger and his National Se-
=ray Council specialists.
These close observers of the
Intelligence scene note that the
Office of National Estimates
consists of at most 30 senior
officials in the agency. It re-
? mains an elite corps, so far
untouched by the purge, and
there are no Immediate signs
that its chairman, John Hu-
izenga, is being asked to retire
prematurely.'
? In the 'main, they see the
shakeup as motivated more by
? efficiency than by ideology.
Helms, the former CIA
director, received a mandate
to streamline the intelligence
community in November 1971,
when Nixon announced a re-
organization plan of which
Schlesinger, then in the Budg-
et Bureau, was the main au-
thor.
On the surface, the plan
gave Helms sweeping authori-
ty over the whole intelligence
community. But during his re-
maining year as director,
Helms did virtually nothing on
this missoin, and his inaction
, is viewed as a key reason for
his premature departure.
There are some signs Helms
quietly resented this turn of
events and felt he was never
? given the White House back-
ing he believed would be nec-
essary to tarry out the re- ?
sponsibility he was given.
It is an open secret that
some 85 Percent of the esti-
mated $4.5 billion to $5 billion
intelligence budget each year'
is under the direct control of
the Pentagon. But Helms, it is'
pointed out by former inti-
mates, was never given au-
thority to go up against the
Defense secretary.
Nevertheless, these sources
scoff at speculation that the
recent CIA recruitment of two
highly regarded Pentagon in-
telligence analysts ? Maj.
Gen. Daniel 0. Graham of the
Army and Maj. Gen. Lew Al- -
len of the Air Force is a
means of putting ideological
pressure on the Office of Na-
tional Estimates.
Graham and Allen, it is
pointed out, have been named
'to purely managerial positions
on an inter-agency Intelligence
Resourpe Advisory Commit-
tee, a 'board set up in the
Schlesinger-Nixon intelligende
reorganization 'of ? 1971, but
Which rarely functioned. '
pproovr For Release..20.01/azinti
THE EYENTIILY "YVAIV i litigEiP84.-WO499R00100114 'wed -3
? ? Washington, D. C., Friday, March 30, 1513
Approved For Releasto.2001/06/09 : CIA-RDP84-00499R001004,410001-3
ved For Rel
THE EVENING STAR and DAILY NEWS 6-3
Washington, D. C., Friday, March 30, 1973
CIA Sent 'Ideas'
ige to ITT
? By JEREMIAH O'LEARY
Star-News Staff Writer
The Central Intelligence
Agency has admitted, through
the testimony of one of its
agents to Senate investiga-
tors, that it generated and
passed to ITT a series of ideas
for disrupting the economy of
Chile during the crucial Chil-
ean election period in 1970.
William V. Broe, former
chief of CIA clandestine ser-
vices in the Western Hemis-
phere, told the Senate sub-
committee on multinational
corporations in testimony re-
leased yesterday:
"They were ideas staffed,
they were passed up to me by
? people who work.- for me. I
went upstairs (to his CIA su-
periors) and I was sent out
to check if they made any
sense at all."
Previous testimony by Broe
revealed that he took the eco-
nomic disruption ideas and a
list of American firms in Chile
to New York on Sept. 29, 1970
and presented them to ITT
Senior Vice President Edward
Gerrity. The purpose of do-
ing this, Broe said, was to
determine whether the ideas
were feasible.
But Broe told the subcom-
mittee headed by Sen. Frank
Church, D-Idaho, that Gerrity
was negative toward the pro-
sals and said the ideas
make aneivis
committee released the sec-
ond phase of Broe's testimony
yesterday, it was unclear who
had generated the plans and
whether the New York meet-
ing was a serious discussion
of action that might be taken.
Included in the plans Broe
suggested to the ITT executive
were: that banks should delay
or not renew credits; that
companies drag their feet on
spending, making deliveries
or shipping spare parts; that
preSsure be created on sav-
ings and loan institutions so
they would, have to close and
that all technical assistance
be withdrawn from Chile.
Brae also testified about
other meetings with ITT ex-
ecutives, including one ITT
President Harold S. Geneen in
Washington on July 16, 1970,
at which he said Geneen of-
fered a substantial but un-
specified fund to support any
U.S. government plan to de-
feat Marxist presidential can-
didate Salvador Alien d e.
Broe's testimony was that
Geneen said this money was
, to be used to back the cam-
paign of conservative candi-
date Jorge Alessandri. Broe
testified that he rejected the
offer, just as Gerrity did not
follow through with later CIA
proposals when Allende fin-
ished first in the popular
election and was on the verge
of a runoff victory, in the Chi-
4180443011004000119001-3
1
Approved For Releasci.2001/06/09 : CIA-RDP84-00499R0010W10001-3
NV:# YORK, N.Y.'
VIS MAR 2 1 1973
E
- 2,129,909
By JEFFREY ANTEVIL
Washington, March 20 (NEWS Bureau)?A vice president of Inter-
national Telephone & Telegraph Corp. testified today that company presi-
dent Harold S. Geneen met with a top government spy and got Central In-
telligence Agency approval for measures aimed at trying to keep Marxist
Salvador Allende from becoming president of Chile in 1970.
The ITT official, William R. Merriam, who headed the
firm's Washington office, told skeptical senators on a
Foreign Relations subcommittee that ITT had committed
no "improper actions" and did not actually work with the
CIA to keep Allende out of power.
Merriam said, however, that
Ceneen met shortly before the
Chilean election with William V.
Broe, the CIA's chief of Clandes-
tine genius tor tne Western
Hemisphere, to discuss ITT's
fears that Allende would national-
ize its Chile Telephone Company
if he became president. ITT later
got Broe's approval of a list, sub-
mitted by two ITT officials in
Latin America, of recommended
steps to keep Allende from taking
power, Merriam said.
Met With-.Nixon Men.
. He also confirmed, that he,
Cencen .and other ITT officials
held a series of meetings in 1970
with top administration leaders,
including Attorney General John
Mitchell, Treasury Secretary John
B. Connally and White House
aides, John Ehrliehman, Peter
Peterson and Charles Colson. -
Presidential Press Secretary
Ronald Ziegler refused to com-
ment in detail on Merriam's
statements, telling reporters
only that ''it is the President's
view that there were no impro-
prieties" by members of his
staff.
Merriam was the first witness
as the subcommittee, headed by
Si ii. Frank Chu rch Didaho),
opened hearings on the infirm- I for?" Church demanded.
of huge multinational c9;-.,,1 "You can read wha
Cut-..ate Fare
Nixed by CADt
Washington, March 20 (UPI)
want
plied.
Merriam said he also sent
Henry Kissinger, President
Nixon's foreign policy adviser, a
letter urging a cutoff in U.S.
aid to Chile if Allende were elect-
ed. The Nixon administration
subsequently took a number of
actions against the Chilean leader
on the economic and diplomatic
fronts.
into them," Merriam re- .
?In a move to prevent a trai.is ?
Atlantic air fare war, the Civil
Aeronautics Board suspended
today low-eo,tt fares proposed
by seven small foreign airlines.
TM fares were to take effect
April I, but the CAB said the
re?,C11L!C yield from the fares
would lp too low as compared
to fares filed by the two major
transatlantic airlines ? Trans-
World and Pan American.
In today's action, tm CAB
rejected fare proliosals filed by
Ale Afrique, Fiunaire,
Czechoslovakia Airlines, Aer
Linte, Iberia, and Transportes
Aercos Portugese.
porations on U.S. foreign poli-
cies and the world economy.
Merriam said the recommend a-
times in the memo submitted to
Broe were not official ITT polieyi
and that he had no idea wha
the Cl agent's approval signified
"Incredible," sputtered Sei
Edmund S. Muskie (D-Maine).
"If these recommendation4
were not intended to obstruer'
Mr. Allende, what were the,
HS/HC- 90:k
ved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3
r,f`rM
Approved For Releaa001/06/09 ? cIA-RDP8440499R0010W10001-3
MAR 1973
CIA
400,000 Ch e
By Laurence Stern
Washington Post Staff Writer -
Senate investigators sought to elab-
orate yesterday on a report that the
Central Intelligence Agency was au-
thorized to spend $400,000 for covert
propaganda action against Marxist,
presidential candidate Salvador Al-
lende in Chile during the summer of
1970.
The existence of the fund was first
broached by Jerome Levinson, counsel
to the Senate Foreign Relations Sub- -
committee on Multinational Corpora-
tions,- during the questioning of former
Ambassador to Chile Edward Korry.
Korry confirmed that he knew a sen-
ior interdepartmental intelligence'
group of the National Security Council
met to discuss the CIA's strategy to-
ward Allende in late May or. early June
of 1970.
But he referred the subcommittee
to CIA Director James R. Schlesinger
on the question of whether the NSC
policy group allocated $400,000 for co-
vert propaganda activities against
Allende.
The National Security Council com-
mittee to which Levinson referred is
the government's senior policy forum
for covert intelligence operations, and
functions under the direction cf Na-
tional Security Adviser Henry Kis-
singer.
"Anything to do with activities of
.the CIA, I am not going to reply to,"
Korry told Levinson. "It is the obliga-
tion of the CIA director to advise you."
Last week former CIA Director John
A. McCone told the subcommittee he
had been advised by Richard M. Helms,
the agency's director in 1070, that "a
minimal effort" bad been authorized in
the Allende election "within the flexi-
bility" of the CIA's budget.
McCone said Helms also told him
the senior interdepartmental commit-
tee, known as the Forty Committee,
had considered the matter and decided
that nothing of a major nature should
be clone to block Allende's election.
The subcommittee is examining whe-
ther the International Telephone and
Telegraph Corp. exercised improper
influence in the Chilean presidential
election to stave off nationalization of
its Chilean telephone company sub-
sidiary, and whether U.S. government.
agencies worked in collusion with ITT
in an attempt to prevent Allende from
assuming the presidency,
Korry, in an afternoon of testimonial
sparring, declined to tell the subcom-
mittee what instructions he had re-
ceived from the State Department in
the crucial period between Allende's
popular election on Sept. 4, 1970, and
his installation by the Chilean Con-
gress the following Oct. 24.
"I have Aloft iviTor,R6,44.
-mid Reported
tween an embassy and its government," ,
the former ambassador told the sub-
committee.
The question of Washington's in- r
structions to Korry came in the eon-
text of an ITT document in
the subcommittee's possessien
-1-a copy of a cable from two
executives of the firm on Sept.
17, 1970, from Santiago to
ITT's New York headquarters.
: The message said: "Late
Tuesday night (Sept. 15) Am-
bassador Edward Korry finally
received a message from the
State Department giving him
the green light to move in the
name of President Nixon. The
message gave him maximum
authority to do all possible ?
short of a Dominican Republic-
type action?to keep Allende
from taking power."
Korry said the ITT cable
was "erroneous" and that he
had not received instructions
to .do all he could .to stop
Allende. But he persisted in
refusing to tell his questioners
what his instructions were.
'The former ambassador, who
served in Santiago from 1967
to 1971, acknowledged that he
did personally favor a strategy
to block Allende's election by
Congress. This strategy, the
tAlessandri Formula," was de-
signed to pave the way for
election of former Christian
Democratic President Eduardo
'Fret.
Korry said he discussed the
Alessandri Formula with rep-
resentatives of American busi-
ness in Chile Who were con-
cerned about expropriation
under Allende. "But there was
no concerted effort on their
part to sell me or on my part
to sell them," he testified.
There was strong American
corporate support for the plan
until it became clear that it
did not have enough support
in the Chilean Congress.
; The subcommittee announc-
ed that it will release the t esti-
Mony of the CIA's former chief
for Western Hemisphere clan-
destine operations, William V.
Broe today after it has been
001 /04grisiVAti.14R6iSgav-0614gog
is morally .ong o give you ie
tails of privileged communication be- -
Broe testified for nearly 45
minutes during a closed ses-
von yesterday morning on his
dealings with ITT hoard chair-
man Harold S. Geneen and
pther officials of the company
In the Chilean affair. Geneen
will be asked .o give his ver-
sion of those dealings when
he testifies on Thursday.
F,ro
0100011 172____
Approved For Releaska/301/06/0Pb10-41D13i4V0499R00100010001-3
2 VAR 1973
,Ex-Erivoy Says the C.I.A.
Ordered Polls an Allende
By EILEEN SHANAHAN
Special to The Ne,r York Times
:?. WASHINGTON, March 27? with about 40 per cent of the,
"The Central Intelligence vote.
Agency commissioned polls to Mr. Korry said that he had
determine the probable out- challenged the validity of the
polls because they were based
'come of the presidential elec-
on 1960 census statistics and
? tion in Chile in 1970, Edward he had felt that more up-to-date
M. Korry, former United States information would show less
Ambassador to Chile, said to- support for Dr. Allende.
day. The Chilean won 36 per cent
'
But Mr. Korry would not of the popular vote and was
?later elected by the Chilean
Say, under questioning from a
Congress under a regular pro-
:'special Senate subcommittee, cedure for deciding an election
? whether he also had known a in which no candidate received
.:reported decision by the agencyi a majority of the votes.
:to set aside $400.000 for prop- The decision to allocate
? aganda activities in Chile $400,000 for anti-Allende prop.
'aimed at influencing the out- aganda was made, according to
come of that election. Mr. Levinson, not just by the
The winner was Dr. Salvador Central Intelligency Agency but
,Allende Gossens, whom Mr.
also by the high-level inter-
'Korry said he had wanted de- agency Government committee
t
!feated because he relieved that that oversees the agency's pol-
Dr. Allende would carry out icy.
the Marxist platform o hich -Mr. Levinson indicated that
'n w
the money had been earmarked
:be ran and would nationalize
American-owned businesses in for use in Chile in late June or
;-
Chile. early July 1970; the popular
?-
Question Raised by Lawyer election was held Sept. 4, 1970.
Mr. Korry took the position
'. The question about a $400,- that he could not answer ques-
000 propanga fund was ra'sed, tions on the reported fund and
? by Jerome I. Levenson, chief on other matters he was asked
counsel to the subcommittee on about today.
multinational corporations of
the Senate Foreign Relations Declines to Answer
'Committee. On matters involving the
- Mr. Levinson did not name C.I.A., he said that the law pro-
his source for the assertion that vided that only the agency's
$400,000 had been made avail- director could disclose anything
? able to influence the election. concerning its activities.
Earlier in the day, however, On questions about instruc-
the subtommittee had que.s- tions he had received from the
'tioned, in a closed session, the State Department, he said that .
former director of the Central if he answered he would be via-
:Intelligence Agency's clandes- lating promises of confidential-
tine activities in Latin America,,ity he had made when sworn as
'William V. Broe. Ambassador.
Mr. Broe's testimony is to be
:made public as soon as top
r agency officials have reviewed
'it for previously -unpublished
'information that might dis-
close United States intelligence
sources or methods.
. Results of Polls
- According to the Korry testi-
mony, the polls that the C.I.A.
commissioned showed that Dr.
Allende would win the election,
which was a three-way race,?
1 HS/HC- 14r? p[
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Approved For Releas64001/067C167-CIA:ftbP844)0499R001004,1010001-3
2 9 MAR 1973
parts, creating pressure on
savings and loan institutions
to close their doors, and with-
drawing technical assistance.
CIA Aide
LMiltes
ir"77 on Fluid Oiler
By Laurence Stern
Washington Poat Staff Writer
A high-ranking Central In-1 Tided by the CIA ? to sup-
telligence Agency official has port the candidacy of Jorge
told Senate investigators that Alessandri, of the right-wing
he was offered--and declined National Party, against Al-
---"a substantial fund" by ITT I lende.
board chairman Harold S. In declining the offer, Broe
Geneen to block the election said, he told Geneen "we could
of Chilean President Salvador I not absorb the funds and
Allende in 1970. serve as a funding channel., I
In sworntestimony. released I also told him that the United
yesterday, William V. Brood States Government was not
former CIA chief of elandes-1 supporting any candidate in
tine operations in the Western' the Chilean election."
Hemisphere, also acknowl-
me CIA official asserted
edged that he discussed steps that Geneen at no time sug-
with In' officials to acceler- gested that the money would
ate economic instability in be contributed for housing or
Chile at a crucial political pe- agricultural assistance. ITT's
vice president for corporate
nod for Allende. relations, Edward Gerrity, tes-
Broe's testimony, given to tified last week that Geneen
an investigating subcommittee intended the money to be used
Tuesday under an unprece- for such purposes and not to
dented arrangement, contra-
infltience the course of the .
election.
dieted earlier assertions under
Under questioning by For-
oath by an ITT vice president eign Relations Committee
that Geneen had made the Chairman J. W. Fulbright (D-
money offer to finance hous- Ark.), I3roe said ITT, not the
leg and technical agricultural CIA, took the initiative in at-
assistance in Chile. tempting to intervene in the
Geneen is due to testify on Chilean election for its "own
.his financial offea to Broe on corporate purposes."
Monday. Until then, Sen. It was not American policy,
Frank Church (D-Idaho) said. Broe said, to influence the
yesterday, the investigators Chilean elections in 1970.
would not "pass judgment" on
the possibility of perjury ac-
tion in the ITT investigation.
Church is chairman of the
Senate Foreign Relations Sub-
committee on Multinational
Corporations, which is con-
ducting, the inquiry. The panel
questioned Broe in closed ses-
sion '.1'nesday morning and
submitted the transcript to
the CIA for review. Church
said it was uniwecedented for
an operating agent of the
agency to give sworn testi-
mony to a congressional inves-
tigating committee.
Broe testified that he went
to the meeting with Geneen at
the Sheraton Carlton Hotel. on
I he night of july 16, 1970, un-
der instructions from then
(71,i. director Richard M.
Halms, who was recently re-
placed by President Nixon and
appoint ed Ambassador , to
Iran -
The CIA witness said Ge-
neen told him that ITT and
other American companies
raised a political fund to influ-
ence the outcome of the 1964
Chilean .election, when Chris-
tian Democrat Eduardo Frei
came to power, but that John
McCone, then the director, did
not accept the money.
Brae's testimony indicated.
that the agency took a more
cooperative attitude with ITT
in subsequent meetings, fol-
lowing Allende's narrow popu-
lar plurality on Sept. 4, 1970,
but before he was installed by
a vote of the Chilean Congress
'the following month.
The CIA's endorsement of
this economic pressure, said
Broe, was designed to discour-
age Christian Democratic con-
gressmen from supporting Al-
lende, a Marxist-Socialist, in
the crucial congressional bal-
loting on the presidency.
"There was a thesis," said
Broe, "that additional deterio-
ration in the economic situa-
tion could influence a large
number of Christian Demo-
cratic Congressmen who were
planning to vote for Allende."
He told the subcommittee
that ITT executives were neg-
ative toward the plan because
they 'felt it was unworkable.
The maneuver, described in
Chile as the "Alessandri For-
mula," was looked ? upan fa-
vorably by then U.S. Ambas-
sador Edward Korry and ITT,
as well as by Allende's Chilean
opposition, as a means of re-
storing Frei to the presidency
by setting the stage for a .new
election.
It never came to pass.
Church said yesterday he
thought it was "very im-
proper" for any American cor-
poration to offer a large sum
of money to support a CIA in-
tervention in an election. Ile
said it was also. "improper pol-
icy" for the U.S. government
to enlist private corporations
in the same objective.
In a meeting with newsmen,
the Idaho Democrat said he
could not clarify the apparent
contradiction between Broe's
declaration to Geneen that the
CIA was not supporting a can-
didate in the elction and
'Pine's subsequent endorse-
ment of economic pressures
designed to prevent Allende
from taking office. Broe's tes-
timony, he said, "would have
to speak for itself."
Sen, Clifford P. Case (R-
N.J.) also observed that "the'
record to me is not cleats"!
One possibility under con-
sideration is that the policy of
the U.S. government under-
went change between Broe's
first contact with Geneen and
his subsequent meeting with
Gerrity.
McCone testified last week
Again at the direction of that Helms had told him in
Helms, Broe said, he met with, the early summer or 1970 that
Gerrity on Sept. 29 to ex r
ploe, a National Security Council
with the ITT executive -how- i nterdepartmental group goy-
the deteriorating economic sit- exiling CIA covert operations
uation (in Chile) could be ac- had decided to take no action
At the meeting, Broe testi- celerated ? .." to thwart Allende's accession
lien, sretlerAl Broe confirmed that he cLiss to power.
1 i. AriONAifFrtitterddi 2001?000q1.t14410P84t0049.9140010,001,101)01-3
1 c
stantia- '-u ' ? ' c w 1 measures as et ' a li'n, a i
ever,
be con I r oil e d and (ban-
McCone,. an In board
credits and deliveries of spare
member and CIA consultant,
approached national security
adviser Henry Kissinger and
Helms to convey Geneen's of-
fer of aid to finance a U.S.
government plan to block Al-
lende,
On Sept. 16 Kissinger deliv-
ered a not-for-attribution press
imckgrounder in Chicago in
which he said, "I don't think
we should delude ourseves
that an Allende takeover in
Chile would not present mas-
sive problems for the United
States and democratic forces
and pro-U.S. forces in Latin
'America and indeed to' the
whole Western Hemisphere
. . . So we are taking a close
look at the situation. It is not
one in which our capacity for
influence is very great at this
particular mornent . . ."
An intensive lobbying pro-
gram was conducted during
mid-September by ITT offi-
cials with top administration
officials for some form of in-
tervention in Chile. Geneen's
offer of financial aid for a
CIA operation was rejected.
But on Sept. 29 Broe, acting
with the full consent of his su-
periors, endorsed an economic
program to frustrate Allende's
candidacy in the Chilean Con-
gress.
Broe testified that he also
met with ITT's former - Wash-
ington office director Williarn
Merriam on Sept. 22, a week
prior to the Gerrity meeting,
and gave his assent to ITT
proposals for covert; support
to anti-Allende newspapers as
well as the hiring of radio and
television "propagandists"
favoring other candidates.
"Mr. Merriam, without any
discussion of those (proposals),
said, 'What do you think of
the proposals', and I said I
think they are all right," Broe
testified. "Then there was no
discussion."
The anti-Allende press and
television campaign was pro-
posed by two ITT field opera-
tives, Hal Hendrix and Robert
Berrellez from Santiago. ITT
officials testified that they
never put the plan into opera-
tion.
The purpose of Church's in-
quiry is to determine whether
ITT brought improper influ-
ence in Chile to affect the out-
come of the 1970 election and
the extent to which it had the
active cooperation of the CIA.
Err and a number of other
companies contended that
their fears of an Allende ad-
ministration were prompted,
by campaign pledges of the
Approved For Release/2001/06/09 : CIA-RDP84-00499R0010^0001-3
Socialist candidate to national-
ize basic industries, such as
ITrs telephone subsidiary as
well as American owned cop-
per and bank holddings.
Allende's government con-
tended that it was negotiating
in good faith to compensate
ITT for the telephone com-
pany until March 21, 1972,
when columnist Jack Ander-
son published internal ITT
documents suggesting that the
corporation had actively en-
gaged in plans to block the
election of Allende.
On the day the Anderson
papers were published, the
Chilean Ambassador to the
United States, Orlando Lete-
lier, had just returned from
Santiago with a counter-offer
to ITT, according to Chilean
government sources. After
publication of the documents,
Chile broke off its contacts
with ITT.
At yesterday's hearing the
Assistant Treasury Secretary
for International Affairs, John
M. Hennessy, said the Nixon
administration cautioned in-
ternational lending organiza-
tions against extending new
lines of credit to an Allende
government because of its
shaky financial condition,
He acknowledged, however,
that the administration ha d
authorized a $10 million loan
to the Chilean military last
year:
"That seems to me from an
economic point of view en-
tirely inconsistent," observed
Case.
Replied Hennessy: "I would
have to admit there is some
inconsistency."
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2 9 nt,R 1373
C.I.A. Aide Says He Gave!
Anti-.Allende Plan to 1.7' .T.
By E-LEEN SHANAHAN ? d
.Spocat to T11,, New York Times
WASHINGTON, March 28?An official of the Central'
Intelligence Agency-_ has testified that in 1970 he proposed
to the International Telephone Ind Telegraph Corporation a
series of steps that it and
other American companies
might take to create enough
economic instability in Chile
to prevent the election of Dr.1
Salvador Allende Gossens as I
President.
The testimony came from I
William V. Brae, who was in
charge of the Central Intelli-
gence Agency's clandestine op-
erations in Lcit'n America in
1970. Mr. Broe, still a C.I.A.
official, said that be had acted
with the full knowledge of the
man who at the time headed
the agency, Richard Helms.
'Substantial Fund' Offered
Mr. Broe testified yesterday
before a closed session of the
subcommittee on multinational
corporations of the Senate
Foreign Relations Committee.
Twenty-six pages of transcript
were made public today. The
subcommittee and the Central
Intelligence Agency are still
discussing the release of 18
more pages, but tile subcom-
mittee chairman, Senator Frank
Church, Democrat of Idaho,
said that he thought that the
remaining pages were of rela-
tively little importance.
Mr. Broe also said that
Harold S. Geneen, chairman of
the board of I.T.T., had initiated
the first contacts between his
company and the Central Intel-
ligence Agency in the summer
of 1970.
At that time, according to
Mr. Broe, Mr. Geneen offered
the C.I.A. "a substantial fund"
to support the election of Jorge
Alessandri Rodriguez, one of
two relatively conservative can-
-Mates running against Dr. Al-
cede, a Marxist who was the
candidate of a Socialist-Com-
munist coalition.
Mr. Broe said that he had
turned down Mr. Gcneen's of-
fer, as I.T.T. officials testified
earlied had been the case.
Mr. Broe also said that he
told Mr. Geneen that the C.I.A.
could notA _"serve as ja funding
channel" ifirfPIRY.PaaFHPraft
"the United States Government
was not supporting any candid
date in the Chilean election."
A Different Position Later I
About three and a half
months later, however, Mr. Broe,
took a different position with
his proposal to the company
that steps be taken to create
such adverse economic condi-
tions in Chile that Dr. Allende
might be defeated.
What took place between the
Geneen-Broe conversation in
July and Mr. Broe's conversa-
tion with Edward J. Gerrity,
senior vice president of I.T.T.,
was not made completely clear
by the transcript.
A major charge was that the
first phase of the Chilean elec-
tion had occurred by the time
of the meeting with Mr. Ger-
rity, Dr. Allende in the popular
vote on Sept. 4, 1973, had won
a plurality but not a majority
of the popular vote and the
final decision lay with the
Chilean Congress?which elect-
ed Dr. Allende President on
Oct. 24.
The transcript of the testi-
mony line does not show
whether it was the increasing
likelihood that Dr. Allende
would be elected that had
changed the apparent position
of the C.I.A. or whether other
forces had been at work. Inter-
national Telephone and Tele-
graph Corporation officials had,
in the meantime, been talking
to the State Department and
President Nixon's adviser on
national security, Henry A. Kis-
singer. Properties belonging to
I.T.T. were seized after Dr.
Allende took office in Novem-
er, 1970.
'Thesis' About Economy
Mr. that when he
saw Mr. Geneen, about a month
before the Chilean Congress
date "There was a thesis that
additional deterioration in the our coverage of the military C.I.A. operations.
economic situation could inlfu. gave no indication they would In releasing the transcript,
ence a number of Christian- ;take action.
Senator Church said that he
Democratic Congressmen woo .
Other Matters Contradicted thought it improper for either
were planning to vote for
private companies or the United
Allende" not to do so. Other matters, either con- States Government to inter-
The following exchange then tamed in 1.T.T. documents or ?vene in a free election?which
took place in the hearing here: testified to earlier by I.T.T. of- the election of Dr. Allende
Senator Church: Did you dis- ficials, were also contradicted was, by all accounts. He com-
cuss with Mr. Gerrity the least- by Mr. Broe and other wit-
ing nesses today. . mented that at the same time
bility of banks not renew the ideas for intervention in
credits or delaying in doing so? Chief among these was the Chile were being discussed, the
Mr. Broe: Yes, sir. assertion that Cent ray Intelli- United States was fighting a
Senator Church: Did you disr gence Agency officials had di- war in Vietnam, the stated
100013urpose of, which was to as-
sure free elections there.
Broe
said
[in Chile] and in making de-
liveries and in shipping spare
parts?
Mr. Brae: Yes, I did.
Senator Church: Did you dis-
cuss with Mr. Gerrity the feasi-
bility of creating pressure on
savings and loan institutions in
!Chile so that they would have
1:.o shut their doors, thereby
'creating stronger pressure?
Mr. Broe: Yes.
Senator Church: Did you dis-
cuss with Mr. Gerrity the feasi-
bility of withdrawing all tech-
nical help and not promising
any technical assistance in the
future?
Mr. Broe: Yes, sir.
rectly approached officials of
United States banks, suggesting
that they cut off credit to
Chilean businesses and citizens,
Mr. Broe said that "the only
company that I had anything
to do with in regard to Chile
was I.T.T."
Officials of the First National
City Bank, the Chase Manhat-
tan Bank and Manufacturers
Hanover Trust, all in New York
City, all denied discussing any
cutoff of credit with either
C.I.A. or I.T.T. personnel.
All said, however, that they
had been approached by Chil-
ean politicians for financial
help in the presidential cam-
Suggestions Were Rejected paign.
According to internal I.T.T. Mr. Broe's testimony left
u
memorandums that were read unanswered the question of
whether anyone in a higher
position than Mr. Helms, the
Director of Central Intelligence
at the time, had known of Mr.
Broe's proposals to Mr. Gerrity
that the International Tele-
phone and Telegraph Corpora-
tion and other American com-
panies in Chile attempt to cre-
ate economic instability there.
He was not asked the ques-
tion and subcommittee sources
said that the reason was that
the subcommittee had agreed
in advance to limit its ques-
tions to the subject of Mr.
Broe's contacts with I.T.T. of-
ficials.
Since rgeulations covering
the operations of the Central
Intelligence Agency are not
made public, it is not clear
whether even Mr. Broe's ap-
proach to Mr. Gerrity should
have been cleared by the so-
called 40 Committee, an inter-
agency body with members
from the State and Defense
into the subcommittee's record
last week, Mr. Genee rejected
Mr. Broe's suggestions because
he felt they would not work,
Mr. Broe also testified, in
contradiction to the contents of
other I.T.T. documents, that the
purpose of attempting to create
instability was not to encour-
age a take-over by the Chilean
military.
Nor, he said, had the C.I.A.
made any approaches to the
Chilean military, contrary to
what appeared to have been re-
ported in a memorandum from,
William R. Merriam, the head
of I.T.T.'s Washington office.
The questions and answers
on this point were as follows:
Senator Church: Did you ad-
vise Mr. Merriam that ap-
proaches continue to be made
to select members of the armed
forces in an attempt to have
them lead some sort of uprising?
Mr. Broe: No. On a number
of occasions Mr. Merriam ques-
tioned me regarding possible Departments, 'the C.I.A. and
action by the military, as this the National Security Council.
Was a subject everyone was in- The committee is supposed to
terested in. I advised him that approve, in advance, certain
ease 20011Y08/09-ilm3IAJIR 8
bility of companies craggRif
their feet in spending money
Jimelik13?
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2 MAR :973
Were also open to Mr. McCone,
board chairman Harold S. Geneen and
lesser company officials.
To Senator Charles H. Percy, Re-
publican of Illinois, a member of the
subcommittee and a former corpora-
, tion executive, this seemed only right.
The Government, he suggested at the
hearings, ought to listen to the prob-
lems and proposals of big American-
owned companies. Mr. Percy earried
, that line of reasoning even further:
Perhaps it is also right that the Gov-
ernment and companies like I.T.T.
swap intelligence. Reports on political
developments from I.T.T. personnel in
Chile were apparently valuable to the
C.I.A.; the agency regularly sent a
messenger to the company's Washing-
ton offices to pick up the reports as
soon as they arrived.
Others who took a more critical
view of last week's disclosures, how-
ever, emphasized that the relationship
between I.T.T. and the Government
seems to have gone beyond consulta-
tion and exchange of information.
Testimony disclosed, for instance,
that in 1970 the company offered,
both to the C.I.A. 'and to Mr. Kissinger,
a kitty of $1-million?possibly more,
if necessary?to help finance any plan
the Government devised that would be
aimed at preventing Mr. Allende's elec-
tion.
There are discrepancies in the testi-
mony as to how the money was to
be used. Mr. McCone, while admitting
that the objective was to help finance
"any Government program for the
purpose of bringing about a coalition
in opposition to Allende," insisted that
nothing "covert's was intended. Other
evidence, however, hinted at darker
plans, including a proposal for stirring
up enough violence in Chile to justify
a takeover by the Chilean military.
Mr. McCone and the other I.T.T.
officials who testified last week had
? one broad defense: Nothing actually
happened; the Government never de-
vised any plan for using Mr. Geneen's
proffered $1-million and all the other
schemes hatched by lower-level I.T.T.
I.T.T. & C.I:A.
A Little
Plot for
Chile?
? WASHINGTON?When Salvador Al-
lende Gossens was elected President
of Chile in 1970 on a Marxist program,
the Nixon Administration appeared to
accept the need for calm if hard-
headed adjustment to a regrettable
?deVelopment. It was not long, how-
ever, before charges began to fly in
Santiago of behind-the-scenes American
pressure to undermine the Allende
regime. A question arose: Was the
power of the United States Govern-
ment and United States corporations
being wielded covertly in a modern
version of the old policies of "dollar
diplomacy" and the "big stick"?
fight on that question is now being
thrown in hearings before a special
subcommittee of the Senate. Foreign
Relations Committee that opened last
week. Already, as a result of testimony
thus far, certain things seem clear:
The United States Ambassador to
Chile wanted intervention; so did at
least one high-ranking official of the
Central Intelligence Agency; and both
consulted on that option with the
? International Telephone and Telegraph
Corporation (I.T.T.).
The subcommittee, headed by Sen-
ator Frank Church, Democrat of Idaho,
would like to find out if United States
policy toward Chile was influenced
Improperly in 1970 and 1971 by pres-
sure on the part of I.T.T., which owned
a majority interest in Chile's telephone
company and had other business in-
terests in the country.
I.T.T. is one of the 10 largest Amer-
lean corporations. It operates in scores
' of countries around the globe?a "mul-
tinational company," in today's lex-
icon. The Senate Foreign Relations
Committee is concerned about the ac-
tivities of all the "multinationals," and
its hearings on I.T.T. represent only
the first phase of a study of these
companies and their possible influence
on governmental policy, a study that
will stretch over several years.
The testimony thus far shows that
one I.T.T. director, John A. McCone,
a former head of the C.I.A. and still a
consultant to that agency, was able to
get an appointment with his successor,
Richard Helms, to discuss I.T.T.'s fears
that the Allende Government would
expropriate its Chilean properties with-
out adequate compe_nsation. Other
governmeRffreatemileflensey2001/0
Kissinger's door at the White House--e
or C.I.A. Officials were rejected at the
top. But documents placed in the hear-
ing record seemed to indicate that cer.
taM overt actions were, in fact, taken
without recorded top-level approval.
For example, according to one docu-
ment, William R. Merriam, head of
I.T.T.'s Washington office, wrote a
memo to Mr. McCone three weeks be-
fore Mr. Allende's final election saying
that William Broe, head of the C.I.A.'s
clandestine activities in Latin America,
had told him that "approaches continue
to be made to select members of .the
[Chilean] armed forces in an attempt
to have them lead some sort of up-
rising?no success to date." The same
Mr. Broe, who was I.T.T.'s regular con-
tact with the C.I.A., was quoted as
reporting later on the C.I.A.'s attempts
to get United States banks to suspend
lending operations in Chile, thus creat-
ing economic problems that could bring
down the Allende Government.
?EILEEN SHANAHAN
4-00499R001000110001-3
WASHINGTON STAR
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?
nv
F r
e.e
en te
By JEREMIAII O'LEARY
Star-News Staff Writer
? The Senate subcommittee on
multinational corporations will
decide tomorrow how to obtain
testimony on its Chilean hives-
tigation from Secretary of
State William P. Rogers, a
Central Intelligence Agency
official and other witnesses
who might invoke "executive
privilege."
The subcommittee staff
wants to hear from Rogers, an
aide said, because it has ITT
documents tellincit' about a
meeting held in Rogers' office
In October 1971, at which the
secretary reportedly suggest-
ed to representatives of Amer-
ican companies that they
. might organize a boycott of
spare parts shipments to
Chile.
Rogers also informed the
representatives of ITT and
other big U.S. firms, accord-
ing to the documents, that the
Nixon administration is a
"business administration" and
would try.. to help American
busineds with its problem.
That problem, in 1971, was a
wave of seizures of U.S. prop-
ertles by the administration of
Marxist President Salvador
Allende,
? Rogers Won't Attend
Rogers is not expected to
respond to the invitation of the
subcommittee, headed by
Chairman Frank Church,
D-Idaho. The State Depart-
ment has indicated that a Lat-
in American specialist would
be sent to testify in Rogers'
place.
The subcommittee said it
would be premature to say
now whether it will seek sub-
poenas to challenge the gov-
ernment on the executive priv-
ilege issue.
The subcommittee also
wants to hear testimony from
Ambassador to Costa Rica Vi-
ron P. Vaky, former National
Security Council aide Arnold
Naehmanoff and William V.
.Broe, former chief of the
CIA's Latin American divi-
sion. So far, the subcommittee
has contented itself with "in-
viting" these individuals to
testify.
Vaky was Latin adviser to
Dr. Henry A.MilitccAlmrillgr Re
the Clulean drriYeYiddi o`ti NOWS
which the investigation focus-
es; and Nachmance, no longer
in government, was his sue- -
cessor. Neither has responded
yet to the subcommittee invi-
tation
Broe's testimony is in a dif-
ferent category because of a
federal law cloaking the CIA
with secrecy. Broe and his for-
mer boss, Ambassador Rich-,
ard Helms, already have
talked to the subcommittee in
executive session.
It is understood that the CIA
would like to get 13roe's ver-
sion of the agency's role in the
Chilean affair on the record in
some form, but does not wish
to set a precedent for the pub-
lic appearance of one of its
officials.
Informed sources say Broe's
testimony would confirm that
there were discussions be-
tween him and officials of ITT
about the situation in Chile,
but would deny that the CIA
was running any operation to
stop Allende's election or to
induce economic chaos in the
Marxist dominated regime.
Some officials were reported
considering a plan by which
the subcommittee could read
into the record a question and
answer transcript of testimony
from Broe without the CIA of-
ficial actually appearing at
public hearings.
These questions, it was said,
would cover the discrepancy
in testimony heard so far from
ITT officials about whether it
was ITT or the CIA which was
making proposals to bar Al-
lende's election or to prevent
his nationalization of ITT
property in Chile.
There also has been a dis-
crepancy in testimony from
former CIA chief John Mc-
Cane and yrr senior vice pres-
ident Edward Gerrity about
ses ro lem
a el n Chile
the purposes ITT had in mind
for a fund of $1 million it of-
fered to the CIA for use in
Chile.
McCone testified he set up a
meeting, as an ITT director,
between Broe and ITT presi-
dent Harold S. Geneen to dis-
cuss ' means of stopping Al-
lende from taking power. But
Gerrity said the purpose of the
fund was to spend it on hous-
ing and agricultural projects
as a means of softening Al-
lende's attitude toward the
U.S. corporation.
Geneen is scheduled to testi-
fy this week, along with for-
mer Ambassador to Chile Ed-
ward Korry and officials of
other companies functioning in
Chile.
: CIA-RDP84-00499R001000110001-3
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2 MAR 1973
EChi llILigemi tia
sry
TI
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LI
by AT
0
revecn Sc aarfing
Daily World Combined Services
Harold Geneen. president of International, Telephone & Telegraph Corp.. met in
July. 1970. in a Washington hotel with the U.S. government's chief agent for Latin
American subversion and espionage. at a time when ITT was said to be trying to
block the election of Salvador Allende as President of Chile. a Senate subcommittee
was told yesterday.
This testimony was given by
William Merriam, ITT vice-pres-
ident. shortly after a House
subcommittee made public docu-
ments implicating Vice-Presi-
dent Spiro T. Agnew and five
other top Nixon administration
officials in pressuring the Jus-
tice Department to settle its
anti-trust suits against ITT.
Merriam also said in his testi-
mony that Geneen might have
discussed ITT's attempts to de-
rail Allende in a series of Aug-
ust, 1970. meetings with high Nix-
on administration officials, in-
cluding former Attorney-General
John Mitchell.
Meeting described
According to Merriam, on July
26. 1970. Geneen met in the Sher-
eton Carlton Hotel in Washing-
ton with William V. Broe. chief
of Clandestine Services, West-
ern Hemisphere, Directorate of
Plans,? of the U.S. Central Intel-
ligence Agency.
Merriam said he did not know
who arranged the meeting, but
when he escorted Geneen to the
hotel, Geneen introduced him to
Broe and told him Broe was
HS/IIC-f4fp
"the head of the Latin American
division" of the CIA. Merriam
said he left Geneen and Broe
and waited in the hotel lobby;
Geneen returned 25 minutes lat-
er and ordered him to -keep in
touch" with Broe.
Before yesterday's session,
Sen. Frank Church (D-Idaho,
chairman of the Senate subcom-
mittee, said it would "seek to
ascertain whether ITT and the
CIA cooperated in an effort to
prevent Allende from being
elected President of Chile in
1970."
Subcommittee sources said yes-
terday that they had "sheafs"
of documents on ITT-CIA col-
laboration to foment civil strife
and insurrection against Allende,
who was elected in September,
1970.
More revelations due
More revelations are expected
next week when John J. McCone
is scheduled to testify. McCone,
former director of the CIA, is
now a director of ITT.
Subcommittee sources also said
that in addition to the ITT-CIA
eonspiracy against Chit(, the
subcommittee will take up the
Justice Department's sudden 1971
decision to drop anti-trust suits
against ITT, 10 days after ITT's
Sheraton Hotels division offered
$400,000 to help finance the Re-
publican Party national conven-
tion. The probe will also try to
find out whether this may have
influenced the Nixon administra-
tion and the CIA in any action
against Chile.
A House subcommittee Monday
released data prepared by the
Securities and Exchange Com-
mission (SEC) which implicates,
in the ITT-Justice Department
"settlement" of the anti-trust
actions, not only Agnew and
Mitchell but also former Com-
merce Secretary Maurice Stans,
former Treasury Secretary -John
Connally, Nixon aide John Ehr-
Hellman, special Nixon aide Pe-
ter Peterson, a former Commerce
Secretary, and Charles Colson,
former special legal counsel to
Nixon.
Allende and the Popular Unity
government in Chile have repeat-
edly charged ITT and the CIA
with organized subversion.
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Approved For ReleaseV)01/06/09D2A444?60)300499R0010004.116001-3
4 n qmr-gi to? if? , r 44, n
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U LI Li ? lir dig YOQJ ty' U IrtilOikr?51
19 g.'?r aNOTTIC33
Daily World Combined Services
?
The Senate Foreign Relations subcommittee continued
on efforts by the International Telephone Sz Telegraph Corp.
Agency to block the election of President Salvador Allende in
Jack D. Neal, the director of victory and have been trying un-
international relations for ITT, successfully to get other Amer--
told the Subcommittee on Multi- can companies aroused over the
national Corporations on Tuesday fate of their investments, and join
that an offer "in sums up to seven us in pre-election efforts."
figures" was made to the office of Neal's memo added he had
Henry A. Kissinger. Neal, a State contacted then Attorney General
Department official for 35 years John N. Mitchell about the matter
before joining ITT eight year during a reception at the Korean
ago, was vague about what ITT Embassy.
hoped to get in return. In another memo, dated Sept.
"We were interested in fair 30, 1970, Neal stated:
compensation for our property," ? "Why should the U.S. be so
Neal said when questioned by pious and sanctimonious in Sept.
Sen. Frank Church (D-Idaho) and October of 1970, when over the
subcommittee chairman. past few years it has been pouring
Memo about Chile the taxpayers' money into Chile,
Neal's testimony centered admittedly to defeat Marxism?
around a memo he had written Why can't the fight be continued
Sept. 14, 1970, to W.R. Merriam, now that the battle is in the home-
ITT vice-president. stretch, and the enemy is more
In the memo, Neal had said he clearly indentifiable?"
"telephoned Kissinger's office The Neal memos confirmed
and talked with 'Pete' Vaky, who other documents turned over to
is the State Department's Latin the Senate subcommittee by the
American adviser to Kissinger." Securities and Exchange Corn-
After saying he informed Vaky
"we have heard rumors of moves
by the Chilean military," Neal
said, "Mr. Vaky said there has
been lots of thinking about the
Chile situation and that it is a real
tough one for the U.S.
A sum of 'seven figures'
"1 told Mr. Vaky to tell Mr.
Kissinger Harold Geneen (ITT
president) is willing to come to
Washington to discuss ITT's in-
terest and that we are prepared to
assist financially in sums up to
seven figures," the memo con-
tinued.
"I said Mr. Geneen's concern is
not one of 'after the barn door
has been locked', but that all
along we have feared the Allende
yesterday to hear testimony
and the Central Intelligence
Chile in 1970.
mission, which show that ITT. the
CIA and the Nixon administra-
tion's top officials were working
_together against Allende.
Covered by insurance
Of interest is the fact that all of
ITT's holdings in Chile were cov-
ered by Federal government in-
surance, which may mean The
U.S. taxpayer will have to shell
out up to $100 million to compen-
sate ITT for its nationalized
property in Chile if ITT can es-
tablish that it did nothing to
"provoke" nationalization.
John J. McCone. who directed
the CIA from 1961 to 1965. testify-
ing yesterday, admitted he -talked
in 1970 about Chile with Richard
Helms. the CIA director at that
time, but he asserted that Helms
told him the U.S. would do noth-
ing to prevent Allende's election.
McCone now is a director of
ITT but he said he was still a
"consultant" with the CIA so that
he is still under the same govern-
ment regulations forbidding dis-
closure as to any other CIA agent.
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Approved For Release 200446/09 : CIA-RDP84-00499R00100011084610-3
HS/HC- 9(0 I
Approved For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3
DAILY WORLD
1 r3 MAR 1973
WHY HONOR CIA SPY?
It is now openly admitted that John T. Downey
was a CIA spy when he was shot down over China in
1952,. although at that time the CIA and the Admin-
istration emphatically denied it. In fact, the issue
,made a big stir at the time, with the Administra-
tion slandering anyone who refused to accept its lies.
Downey has now been freed and has returned to
the U.S. A spokesman for the CIA said Downey
"has been well taken care of" ? meaning financial-
W. The New York Times estimates he is "?fairly
wealthy."
A man who goes to jail for stealing a loaf of bread
in the United States because he is hungry comes out
of jail not only as poor as before but branded.
CIA spying is a criminal act. Why should it be
? rewarded?.
? ? Newark. N.J...
40,0\ ,?????,?,?,?. 00000000000 ? ? ?
WASHINGTON POST
Approved For Release 2001106/09 : CIA-FfpNlyy001000110o443
1, ?
CIA's Cor Meyer
Going tt London
Manchester Guardian ?
The Central Intelligence ing story. He was one of the
Agency's new station chief in
London is Cord Meyer, hither-
to the agency's assistant de-
puty director of plans in Wash-
ington. ?
The planning department of
the CIA is responsible for
espionage and clandestine op-
erations. Detractors of the
CIA call it the "Department
of Dirty Tricks."
, Meyer was in line for pro-
motion to be deputy director
of plans?"DDP," the nearest
CIA equivalent' of ? James
Bond's "M."
Instead, according to CIA
watchers here, he Is being pro
meted to the U.S. embassy in
London. They regard this as a
"kick upstairs."
. In 1967, it was revealed that
Meyer was in charge of cov-
ertly funding Encounter mag-
azine and other organizations.
Last summer, he became the
object of further notoriety
when he asked the New York
publisher Harper and Row to
show the CIA proofs of a book
since published, called "The
Politics of Heroin in South-
east Asia." The book linked
the CIA with the drug traffic
in that area.
Meyer later denied that it
had been his intention to sup-
press the book.
Few details are known
about the nature or extent of
CIA operatiens in England.
Sources here say that there is
a large base for covert action
in premises within alew min-
utes walk from the U.S. em-
bassy in Grosvenor Square.
This is the ? headquarters for
covert action in western and
eastern Europe and the Medi-
terranean. It was moved
from Paris to London at the
time of Gen. Charles De
Gaulle's quarrel with NATO
and the United States.
The CIA works closely with
British intelligence and claims
not to engage in clandestine
activities in Britain.
Meyer's career is a fascinat-
For Release 2001/06/09 : CIA-RDP84-00499R001000110001-3
most brilliant men a his year
at Yale University in the early
1940's. He lost an eye in a Ma-
rine landing in the Pacific war
and wrote a short story about
the experience called "Waves
of Darkness." After the war,
he became a passionate advo-
cate of world government and
wrote a book on this subject.
He was a hero to the student
generation of the late 1940's.
He joined the CIA in 1953 at
the urging of Alan Dulles. At
that time, the Agency was a
respectable haven for liberal
intellectuals. During, the Mc-
Carthy era he was investi-
gated for alleged Communist
associations but was cleared.
In Fact, he had never been a
Communist sympathizer. He
soon became as ardent for the
Cold War as he had been for
the United World Federalist
movement.
Meyer's assignment to Lon-
don is seen by CIA watchers
as a part of the purge which
the agency is experiencing un-
der its new director, James
Schlesinger. Reports in Wash-
ington this week say that the
CIA's 18,000 personnel is to
be cut by 10' percent by June
30. Schlesinger, a business-
man with no intelligence back-
ground, is said to be making
a through-going reappraisal of
the CIA's 'function's and op-