I.T.T. AND CHILE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000600100006-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 15
• Document Creation Date: December 20, 2016
• Document Release Date: July 25, 2006
• Sequence Number: 6
• Publication Date: March 29, 1973
• Content Type: NSPR

Approved For Release 2006/07/2iACIA-RDP91-0901 R000600100006-8
CHICAGO, ILL.
TRIBUNE-
767,793
S - 1,016,275
t'lliri u 9 1 1
I. T. T. and Chile
Officials of International Telephone
and Telegraph Corp., a large conglom-
erate, have stated in testimony before
a Senate subcommittee that the corpora-
tion proposed thru the Central Intel-
ligence Agency that $1 million of its
funds be used to head off the ascension
of Marxist Salvador Allende as presi-
dent of Chile in 1970.
The corporation had assets of $165
million in the country, consisting main-
ly.-of a:.70 per cent ownership in the
Chilean telephone system. One of its
vice presidents, William R.- Merriam,
said that I. T. T. feared that an Allende
regime would . "steal" its properties.
The fear was warranted. President Al-
lende subsequently nationalized I. T. T.
holdings and the properties of American
copper companies ..without compensation.
John A. McCone, former director of
the C. 1. A., now a director of I. T. T.,
discussed with CIA officials a plan to
unite the two o,j11j.,d Btiun parties against
Allende's assumption of power. The
C. I. A. failed to act and Mr. McCone
said that. Dr. henry hi:,singer, Presi-
dential adviser on foreign relations,
whom he also approached, did not re-
ply to his proposals.
1. T. T. has been a favorite whipping
boy for Senate Democratic "liberals"
ever since the Justice Del arttnent, be-
fore last years Presidential election,
settled an antitrust. action against the
corporation. 1. T. T. at the time propos-
ed making a substantial contribution to
the Republican National Convention
when it was originally scheduled for
San Diego, where the corporation owned -
a hotel.
An I. T. T. Washington lobbyist, Dita
Beard, in a memorandum which came
into possession of the Senate, made
sweeping claims about her agency in
reaching the settlement which put her
employer in a questionable light and
sought to imply that the Nixon admin-
istration had been bought off.
If it were not for this checkered back-
ground, the Senate critics would have
had less reason to indulge in the present
field day over the attempted interven-
tion in Chile. After all, it has tradition-
ally, been regarded as a responsibility
of the federal government to protect
American lives and property abroad. In
the past, stern measures have been tak-
en to carry out that responsibility.
Businessmen therefore have a proper
right to make approaches to the gov-
carnment in defense of their interests.
We wouldn't say 1. T. T. has taken the
most intelligent approach in asserting
this right: but it is only fair to re-
member that, I. T. T, and the govern-_k
moot might not have been led to invite
the present suspicion of secret conspi-
racy if earlier governments had not
conditioned the world to think that.
American business interests can be,
1:ichod around with impunity. And the
same people who encouraged this atti-
tude in the past are in general the ones
who now think they can tar 1. T. T. and
the administration and coal;c political
hay all at the same time.
MORI/CDF Pages 1, 2, 4, 5, and
15
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 STAT
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CHICAGO, 00-
PEWS
E - 434,849
MAR 2 10973
I
. I f ij` i f~'1 t3 k 15
I-,y William J. Eaton
of Our W 'asliingcon Bureau
WASHINGTON .- The Cen-
tral Intelligence Agency once
proposed action by American
letuie's leading opponent in
Chile. 13roe said lie turned
dox n that offer.
ITT executives feared that
Allende, a Marxist, woulcl na-
tion line the ITT-owned Chi-
companies to create economic t lean telephone company if he
chaos in Chile to bloc.: the I became president. He won the
the presidency a. top CIA elan elution in the Chilean Con
election of Salvador Ailende to
has testified.
Nilliam V. Broc, director of
gress and has moved to take
over the ITT-owned cor,~pany.
Broe, who said he acted with
CIA and a director for ITT, re-
layed through Helms to Broe,
the agent testified.
IIEIII'S AN excerpt from
the transcript:
Sen, Frank Church I)-Ida.):
Did Mr. Geneen say to you
that lie was willing to as-
semble an election fund for
one of the Chilean presidential
candidates, MIr. Jorge E. Ales-
sandri?
Broe: Yes, he did.
Church: Did you c;:plain to
W. Gen nn why the CI;1 could
not accept such a fund?
Broe: I told him we could
CIA's clandestine services for the approval of former CIA Di-
the Western Heaiisghere, said rector Richard Helms, testi-
he made the suggestion 'lute in I find that he g~ve Gerrity a list
September, 1970, to Edward J.
(Ned) Gerrity, senior vice
president of International Tele-
phone and Telegraph Corp.
Gerrity ha,d tcs i -i,.d
.lu~~, earlier
that. he rejected the plan as
impractical.
A transcript of Ur'G.'s testi-
mony, cleared by the CIA, was
made pit'u.ic late > ednesday
by a Senate subrutri-.Iitttee On
imdtinationni Cornc:c.ut os. It
,vi.; the firsC }:n0:'. n ec n t'eS
sional testimony by a CIA
agent about a secret oa ration.
IMO',: SAID that rig Oise time
ITT president Haro!d S. Gen-
em had oaered th CIA a
substantial" fund to help Al-
of U.S. companies operating in
Chile as possible (? ,,rticipants
in the economic
WE CIA plan 4?;t::. presented
jve dk.~'s after Allu nde had
been the top vote-getter in the
popular election but still re-
quired approval from a major-
ity of the Chilean Congress.
"There was a thenis that ad-
e 1 t i:1 the
drciior tion
C'CQI'.imic. situation Could In-
a number of Gin istian
Democratic congressrflcnl who
were planning to '; o .c+ for Al-
lenclc," ]tree said.
Ainong otjler step:,, Broc
said, he mentioned the p,ossi-
bl]ity of banks not ng
credits in Chile, dale o Al
:peridin,o by
Companies aird relays in deli'.-
crit. , v.itir.Im pal c; tn.hnical
llcip ...1!t ])?,'4'Ut_ In alit t.....
hours of sn in;a and ioz,n
Ci:,tiol; ,
11'?:G.A!:')It (-i of I'.5..
Cl)ii j~;U;a': ti1'Jtt ~. lu 1?C: held
Geri tlht. CC:i1-
wa. i...- a lt?. . .
E'.C'tl u:i Jay Iti, ]veal, r;t;r Al??
\'cril "I ]e riteit 1',.15 i:_.d at
t It C. sit 0 i, e s t i a 11 01 1 Iii
1icce nsti, fornnur uircc.tur of the
not absorb the funds and serve
as a funding channel. I also }
told him that -the U.S. govern- i
ment was not supporting any
candidate in the Chilean elec-
tion.
Church: During the dis-
cussion did ?Err. Geneen at any
tittle il: l;cat that t:ie fun
was ir;t'ti16'Ju for cnrst eCtiVe
use, technical asistancc to ag-
riculture, the budding of
houses or anything of that
character?
Prm: No, it was to support
Jorge Alcs sandri.
Other IT.f mecutives have.
said the I'i'T liad offered to put
up ;1 tailion for social. pro-.
'1 n Ica]
,jams, housir.n and t~ ci
aici to ;:. lt:c;nca the outcome of
(.h.^ t.a:]]~::U7 el`ctions.
Ce!le:'P, l.tse Fitt'']] .CU111Iiic"ncCl
to tt`slli MM AY.
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 Approved For Release 20{ D-rTr 91 - 09018000600100006-8
By Laurence Stern
Weshrngton Post Staff Writer
Senate investigators sought to elab-
ora,te yesterday on a report that the
Central Intelligence .laency was au-
thorized to spend $400,000 for covert
propaganda action against Marxist
presidential candidate Salvador A1-
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 i n t e l l i g e n c e
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
tto CIA Director James R. Schlesinger
on the question of whether the NSC
policy group allocated 5400,000 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 tinder the direction ef: 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. AlcCone told the subcommittee he
had been advised by Richard M. Helms,
2 f'F 14AF, 1973
IN CA j
Fund - ie:`1O -
S TAT
twcen an embassy and its government,"
the former ambassador told the sub-
committee.
The question of Washington's in-
structions to Korry came in the con
text of an ITT document in
the subcommittee's possession
- -a copy of a cable from two
executives of the firm on Se pt.
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
came 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
(lid personally favor a strategy
to block Allende's election by
Congress. This strategy, the
"Alessandri Formula," was do-
the a.oen y's director in 1970, that "a
minimal effort" had been authorized in
the Allende election "within the fle.d-
bility" of the CIA's buchtet.
NIcCone said Helms also told him
the senior interdepartmental coma-
tit-tee, known as the Forty Committee,
had considered the matter and decided
that nothing, of a major nature should
be done to block Allende's election.
The subconuiriilee is examining whe-
ther the International Telephone and
Teleorarti
to sell them," lie testified.
Thr-re was strong American;
gorporate support for the plans
until it became clear that it
did not have crioup;h support
in the Chilean Cnn;~ress.
The su'nc?nnrill ltr e cirnoirric-
ed that it will r(':en r the Ir molly of lilt' CIA's longer chef
for Western Ileill ispiiere clam-I -
\'
\Vilir
i
anr
ons,.
destine operat
11roe, today after it has heetil
iu viewed by agency director
t chlesilwer.
Broe testified for nearly 451
minutes during a closed sos-I
lion yesterday ninrnin? on his)
dealings with Ill.' hoard chair-l
man Ilarold S. Geneen and'
other officials of the company
in the Chilean affair. Geneen
will be asked o :give his ver-
sion of those riealin,s when
he testifies on Thursday.
tails of privilee efp,pprove&Fdr,l 'lease 2006/07/25: CIA-RDP91-00901 R000600100006-8
 Approved For Release 200 /a7725`T-CIA-RDM1-009
2 ;; ~ i3/3
VASh'Ja~ T~P~ CLOSE-UP
t;l I3 ? 4.s' -v C, ifr ~+ T !I L' !~_Y ~i b (7 11 4 ti' t3!J ~sS ~x Gt tr9 e
When last heard of, Interna-
tional Telephone & Telegraph
was sending its flacks to
shrinks to keep them under
wraps, bribing San Diego to
accept the Republican con-
vention against the city's bet-
ter judgment, receiving most-
favored-nation treatment f rom
White House -praratch;ks,
causing, Justice Department
lawyers to have second
thoughts about the advisabili-
ty of belting the old corn. be-
fore becoming federal judges,
and throwing all available
papers into the fai:hful shred-
ding machine.
It was an elaborate pro
gram, but basically just an
elegantly articulated varia-
tion on classic In :lhct:vets in
the way of a corxwr ation with
a politician. Bing corps. have
been dazzling snla'd pals with
a bit of the boodle ever since
John D. Rockefeller bought
the Pennsylvania loolslature
at distressed ]merchandise
prices.
That's really all the ITT
potseh against the 1`: hite
House and the antitrust divi-
sion mounted to, a '.ve]i-
thot.-, l;.ou t limit,"-up of the
ath+lroto is le clesiucre.ta and
disercet pres-ntration of
t':r'rl to the correct aplr