ITT IN CHILE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000600100008-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 37
• Document Creation Date: December 19, 2016
• Document Release Date: October 18, 2005
• Sequence Number: 8
• Publication Date: March 26, 1973
• Content Type: NSPR

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