SENATE PANEL OPENS INVESTIGATION OF ITT OPERATIONS IN CHILE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000600100017-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 68
• Document Creation Date: December 19, 2016
• Document Release Date: October 18, 2005
• Sequence Number: 17
• Publication Date: March 17, 1973
• Content Type: NSPR

WASIMICTON POST
Approved For Release 2005/14&11:1eA1-W6P91-00901R000
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By Laurence Stern
Washington Post Staff Writer
A special Senate subcommit- the Armed Services and Ap-
tee opened its investigation Ipriations Committees.
yesterdfy into charges that 'When a situation of this
the International Telephone sort arises, it is a matter for
and Telegraph Cc. engaged in negotiating the terms of refer-
covert political operations to (ince- in order to protect our
block the election of Chilean main concern--intellignce
President Salvador Allende in sources and methods," said
1970, one government official.
Meeting in closed session, ITT, the nation's seventh
.the Foreign Relations Subcom- largest industrial corporation,
mittee on Altiltinational Cor- owned a 70 per cent interest
poratiors heard testimony in the Chilean Telephone Co.
from IT]: board chairman Ha- (Chilleleo) when it was expro-
rold S. Geneen and former printed by the Allende goverm
Central Intelligence Agency ment in March, 1971. Chile
Director John J. MeCone, a broke off negotiations for
member of la"1"s board. compensating ITT after the
Subcommittee Chairman Anderson documents were
Frank Church (Li-Idaho) said rondo public last year.
both witnesses were "quite The iorporation has filed a
forthcoming . . . The ques-;$92.5 niillion claim with the
Hoes_ we asked were all an-! Overseas Private Investment
swers!d, Corporation (OPIC), a federal
The inquiry is expected to agency that insures U.S. him-
delve deeply into contacts be- I nesses against losses front con-
tween ryT executives and the ifiscation by foreign govern-
CIA's chief officer for covert 'merits.
intelligence operetions in La- Church said yesterday that
tion America, Willinm V. Boe, the outcome of his investiga-
before and immediately after tion would have "a direct
Allende's election. Broe, who I bearing" on OPIC's settlement
is Still F' CIA employee, is un- I with ITT. The contractual
derstood to have been lot cc- deadline for settlement of the
viewed by the subcommittee;lIT claim is next month, al-
but it is not clear whether he though it can be extended by
will testify. consent of the two parties.
ITT corporate memoranda " Irf would not be entitled to
Made pablic nbursement OL'IC found
Inst year by col- .
that its actions in the host
untnist .lack Anderson record
; couniry were sufficiently pro-
a series of ineetines between ; yogative to justify the expro-
the CIA official and top execu- Print ion.
tives of the communications ; Memoranda in the Anderson
conglomerate, among them file suggest that ITT execu-
Geneen, On one occasion, ac- lives Snuihit to encourilee op-
cording to the memoranda,: position within Chile to Al-
'Brno as:Jid for I'll's help in lende Os well as to influence
petting American hnsinesses policy to oppose his
in Chii:! to promote an eiim ? :Oarxist government. lItit
nonne !ice country, ? :here is no evident e in the
Church said yesterday thnt i'eeesd that the concloinerato
l'we haeci secured the CIA's iii,recol to carry out Broe's
;c0oper:vim-1 in the inyesth(i-, leeen plan 1 sahritai.,,e, the
;lion." T le testimony of aeinicy econemy,
'representatives, he 'added, To ju.tify it case for reirm
''Sold! 1),? in SOI011. HI] \,';'111-11., Ft l' ci y have to
C Church's ;nice rely heavily on testimony
'lion, it, was unTerstooil from 11 (611 tie) CIA cc is that its
'official sources outside 'lie actions in Chile \\A-'I'f' within
Foreien kelationi suheormeit-; the h'i'nds cii ProlirielY, 'Hue I
I (CT` tillt iho ()I CIA co-' ii,ienev, for its part, will have
ApproVed,Fon Release 2005111123 CIA,R1DiR91 -00901R000600100017-6
'Hon are still 1;eine inei,itellea.imietuneined approailies to
INorinally the ('I .\'; deniini.s; ITT did ion have Ile, appi oval
Ion 01 11111 HUH(' WI)0 till CIA.
SIAI
600100017-6
Approved For Release 21131C25/11128 TDIAARDP91-00901
1 C MAR "ii7,3
2 ITT. OFFICERS
TESTIFY ON MILE
Head of Senate Panel Says
His Concern Persists
By JAMES M. NATJGHTON
' speeiti tei The New York Times ? .
WASHINGTON, March 16?
After hearing closed-door
testimony by two officers of
the International Telephone
and Telegraph Corporation,
Senator Frank Church said to-
day that lie remained "con-
cerned about the implications"
of its involvement in the inter-
nal politics of Chile.
Senator Church, 'Democrat of
Idaho, declined to be specific,
but he said that the cause of
his concern would become evi-
dent when the Foreign Rela-
tions subcommittee he heads
resumes its hearings in public
next week.
- The corporation was accused
a year ago of having sought the
cooperation of the United
States?and the involvement of
the Central Intelligence Agency
--in preventing Dr. Salvador
Allende Gossens from taking
office as President ef Chile in
1970 and in trying to topple his
government a year later..
Harold S. Geneen, chairman
and chief executive officer of
I.T.T., and John A. McCone,
a director who once headed
the Central Intelligence Agen-
000600100017-6
cYi met with the subcommittee
on multinational corporations,
for two hours. Senator Church
said that the meeting had been
a courtesy intended to "review,
the general course of questions
we intend to ask in the public
hearings." ?
, A Two-Year Inquiry
The investigation will be the
beginning of a two-year inquiry
by the subcommittee into the
broader issue of how multina-
tional corporations can influ-
ence United States foreign pol-
icy and have a bearing on the
United States economy.
Senator Church said that the
hearings next 'week would be
important not only to get the
facts about I.T.T. and its rela-
tions with the Marxist Govern-
ment in Chile but also to help
establish guidelines for corpor-
ations to follow in foreign
countries.
I.T.T., has asked for $92.6-
million in compensation from
the Overseas Private Invest-
ment Corporation, a United
States Government agency, be-
cause of the seizure of
its Chilean telephone com-
pany by President Allencle's
Government.
Senator Church said today
that the hearings next week
could have some bearing on
whether. the compensation is
granted. At issue is whether.
I.T.T. involvement in Chilean
affairs might have provoked
justifiable reaction by the
Allende government.
Approved For Release 2005/11/28 : CIA-RDP91-00901R000600100017-6
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WASHINGTON rOST
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By Laurence :-.-ttern
' Wa:3h!r...lon 'V.'1?:tel"'
The first public inquiry
into the clandestine political
urwrations of? the Interna-
tional Telephone and Tele-
:.:raph Corp. against, the Al-
lende government in Chile
will unfold next month on
Capitol Hill.
It is expected to probe
deeply into the giant inter-
nal 1011211 re-
L'.iionship with the Central
Intelligence A::ency as well
as to raise questions about
ITTs own political intelli-
gence operations ;1i10'02 d.
which will
be conducted by the Deflate
Belation:1 Subeom-
inittee on Multinational Cor-
poratiOns,.?headed by Sen.
. Frank. Church (D-Idahol.
i ill ('isntlr,- Olt 111)01111.0 ef-
fOrtS !JV re0 officials in 1970
and 'Pl.; t to block the elec-
t:Mc' cijlean Pee.
Sch.' Allende and then
to 1- hia government by
s. an economic cid-
1-' Chile
;.,c ? 0 tile subieet of a
ni\-estl'....,Atiolt by
the r?eas
corf). (.(.)1'1(:),
-.:,-,11 a..i.iticy that irniera-
1.-.S.
till 1111.5115
, ',in:fiscal:ion by for-
'ye.crenients. 01)1C
nrit-t decide. tinticr an April
I fleadlirm,
to pay
in"lion claim to comperts.ate
seii.e..'e of the
Ii''; '10' ion's C:10.cati Tele-
; Co. if'itIltE:lcof
- ? ?-??m, n 10etis of IJOHl
-? , :21' 1,[el.
e.
ell'.01e1S
e' 1 /eel 'to) '\'u'5 1111:1
III 111
of \11.nide and
al),...mt his
I.
11111)1 lit'tl corpor:o. meing-
r;Inda, including at least one
session with ITT president
and hoard chairoman Harold
S. Oeneen.
In one of the In' memo-
randa, a "personal anti con-
fidential" cable sent on
Sept. 29, 1970. to Gcnek:n in
'Brussels. 'ITT senior vice
president E. J. Gerrity re-
ported that Broe had visited
.him and suggested that ITT
lIcip in promotim: a pro-
gram \vit.,' other American
businesses in Chile aimed at
"inducing economic col-
lapse" and provoking a gov-
ernment crisis.
A subequent Gerrity \vire
to ITT's \Vashinfdon office
indicated th.at Geneen con-
sidered lime's sue 2estions
"not workable" and that the
ITT head felt "we should be
very discreet in handling
'Erne."
The 1-v11,00in-flip between
ITT and CdA in the ami-Al-
Tondo campaigit are crucial
both to the Senate and the
OPIC inve.d.igat,ons.
The corporation would not
be entitled to a payoff on its
S92.6 million claim if OPIC
should find that 1-1"1"s COV-
Olt political activities in
Chile y:ere on such a s'ale
145 It) hove provoked the Iuv
CC11111011t into seizure. But
I 01 intriguing convcrit' of
this, as the OPIC-1TT con-
tract reads, is that the C0111-
pany is cm itled ii full reim-
bursement if it t'an prove
that its activities 110re car-
ried out at the request of
the U.S. g?iverninc:11.
And so one of lie central
issues nnon which the Sen-
ate hearii. ts is e\pceted to
focus Is tl:e relationship be-
tween Brno and top ITT ex-
ecutives. Was Bree provid-
plzlis and int ''ii 00111-c' to
on his own or On in-
structions from f.'s superi-
ors in the zu:,-enc.: 'tow MO
ITT acquire such elosc.. ac-
cess-to the top Latin
American Mtn:L.1 lcur covert
operatiern,'.' If It ?: conenoy
Li LI' c!'1!12c1iw:,
Wily 5-1,111 :II
%%till Oil'. 6i0-
1,i011 hich ?ayes in
t: i4
0'11
? e el
XI%
n:es in Chile have equal :ie...
ecss to the sonior U.S. Intel-
operative in Latin
meric
Former CIA Director
lliehard lehns, understand-
ably cnotn2h, declined to dis-
cuss the case with a re-
porter. lie is out of the
agency and on his way to his
nosy post as U.S. ambassador
to Iran. "It would be Map-
,
,propriatc." he said.
But on Feb. 7 the Senate
Foreign Relations Commit-
tee, on short notice, called
Helms to testify at a closed
session and the matter of
n"1"s relations With CIA
came up. -Ile minirnized the
whole episode." said a
knowledgeable official. "The
members didn't ready know
what to ask or how to pur-
sue the questioning."
One high-ranking govern-
ment official. who has been
intimately involved in the
ITT case since its irception,
commented that -IT T's rela-
tionship with the CIA is no
mystery. If you have John
.McCone on your board it
gives you a certain kind of
entree."
John MeCone is a member
Former CIA. Director)
of ITrs board and was kept
informed 1T1 ofticials of
the developments in Chile,
the corporate files revealed.
On Oct. 9, 1970. ITT's vice
president itIld Washington
office director William
Merriam filed a -personal
and confidential" PICI119 to
McCune. ?
-Today I had lunch with
our contact at the McLean
agency ICI AL_ and I somma-
rii.e for you the ??esults
our conversation:: 'Merriam
wi ate McClure. "Ile is stilt
very. ?...rv ntto,it
detemin:., Allen le \viten tlie
COT1:11``:,01-,N1 I:Ars
place 0.1. Aoortktelies
continue to l.te ht,n'e to
mcmhers of -lit: Armed
Force!, in an .:-.empt to
thefll 1-,0?10 M}l't -f
tntr:sing---no snece:tts to
. . no prot;-
rc-s' has It-en le;, :le ill Ii,
in.' to eel Amer,ca
i n
t?ttieff lo ((III (I in Ii
Fpr !vIpp.e 200/11/28::'9A-RDP91.-009101R
(11, ill-
?ThAt
hOpilig that el-crthin'..! will
work out all riidtt. Also, the
Bank of America had at2Tood
to close its doors in Santi-
ago but each day keeps post-
'fold wg the inevitable. Ac,
cording to my source, we
must continue to keep the
ressure on business."
Merriam did not nan
Broe in this memo, but he
had been identified in other
corporate exchanges as
IVI"s chief CIA contact.
Merriam is now in .14"Es
Rome office specializing on
international trade.
Another lirwanny bit of ITT
intelligence enterprise was
displayed in a "personal anti
confidential" memorandum
on Sept. 17, 1970, to. Gerrity
from ti.vo of tii(` company's
field operat:', former: As_
sociated Footle]. Rob-
ert Berrci;ez and Miami-
based Ar::erican corre-
spomb?nt liendrix who
won zer Prize in
1993 01, I'S on the So-
iviet bnildup in Cuba.
, Edwi.rd
Kie ." I :report od,
--nni!!;..- received a messa;e
front State Department
oim the .green light to
1110'C 1 name of ['resi-
dent .`;i K011. The messa"..se
eas e him maximum author-
ity to do ail possiole?shoil
of a .Lorniulean Republic
type action?to keep All
lende from taking power."
Typed over the message was
the sentence: "W. R. Met--
riam---This should be tightly
held."
Korry, xvho is now Wash
ington representative for
the 'Association of American
Publi.shers inc., is under-
stood to have taken the posi-
tion with various investiLta-
tors of the ITT case that
Bereliez and Ilendrix did
not i,et their informatit
from anyone in the embassy.
Althotr.th he declines to
comment On the case until
the hearitL;S,, 51' hi'))
he rilz,y won appe:n. a wit-
Korry if.: Tenably re-
ported to have taken no is- ,
sue :he au; hermicity of
the Pcitdlez-1 lendrix wire.
The record of' at-
tenn,ic(i iinerveetions in the
Che p(//iliC;11
e',11 S1111',Y:-? 1.1;1t. 1.11C
;11/111.0;ielle'd S11.(th
hie,11iY 111:10'd Ni1, admin.
OtiO600to00117-e, naluffird
,??:? ?,?1 ,??,i, Henry A.
, et, Ve1.11111... ;111',1 tHdeVie1e1;11',': .
Ceeti;e1111/11,.. hill Ill":
: te, tr. \ (11(111).,
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Approved For Release 2005411287:t1Alikbi:69:1-00901 000600100017-6
`... FE 3 I:, 73
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?
WASHINGTON?Since the Day of
Pigs, when the United States lost its
gamble under the Kennedy administra-
tion to overthrow Fidel Castro, the. Cen.
tral Intelligence Agency has suffered in
many areas of public opinion.
It has also. suffered ini?Jrnally, going
thru a succession of dircctors and los-
jag other key people under three Presi-
dents [starting with Kennedy] who did
not totally believe what the CIA reports
were saying.
The CIA WaS created in 1918 by the
late President Truman [as the Central
Intelligence. Group] from the skeleton
of the wartime Office of Strategic Stud-
ies. It was formed in an effort to col-
lect information be spy] on other na-
tions as much as they did on us. From
the start, it \VaS an al.j,ency cloaked in
semi-secrecy noted for genol'ating Ce-
bale,
//An early director, Adm, Roscoe II.
-Hillenkoetter, had warned the Truman
administration of the then impending
Communist invasi:oi of South Force---
end apparently v.-as repldced for his
accurate pi odiction by Gen. \\ alter
dell Smith.
Smith then grabbed hea:llines Idur;itq,
the, Sun. Joseph ll. McCarthy peri,A1
by stating, rublic there was a -moral
certainty" that ComrouniA .Atples had
penetrated every .securi:y :::cnt'3??ill
Washiw:tton.
Smith did net last long at the CIA
after that and was repli.ced by the.
pipe-smoking Allen W. Dulles, brother
of John Foster Dulles, President Eisen-
hower's secretary of stale. Dulles put
7.'deCarthy down after the senator
charged there were double agents oper-
ating within the CIA.
Pubes, .the first civilian chief of the
CIA, came off as sort of a super-spy
because of his exploits in the OSS dur-
ing World War II. After staving off
'McCarthy, he continued to build the
CIA fro.th a small agency Istartirci, ?vith
1,500 agents) to a v.-orlthvide network
that began to do more than make esti-
metes of what foreign powers might
do.
Still, the Hoover commission looked
into the operations of the. agency and
cmy,o up with a report ray,.:g 'it v,-;ts
baling in collecting "int.:Ili,,,,ence data
from behind the Iron Curtin." Mean-
while, jo CIA squabbled with the
hug-
est :.:1)1.i