Thursday, January 9, 2014

40 Years After CIA and ITT's 1973 Coup In Chile: A Look At `Democracy Now!''s ITT-Lannan Foundation Connection--Part 4

According to the 1973 book, "The Anderson Papers" by Jack Anderson:

“There had been a pattern of influence-peddling in ITT’s dealings with the government…Students of tax loopholes pointed out that by manipulating its tax payments, ITT in 1970 paid only 21 percent on its earnings as opposed to the statutory corporate income tax rate of 48 percent…ITT plotted…drastic action against any government that dared to oppose the company’s financial interests. There had been talk in Argentina, for example, of nationalizing the ITT telephone system; the conglomerate immediately began plotting a revolution. In 1968 the governor of Puerto Rico considered taking over ITT’s profitable but poorly serviced telephone company; ITT threw its resources against the governor, who was defeated at the polls….On October 23, 1970, ITT’s Washington vice president, William Merriam, sent a message to Henry Kissinger in the White House. It was stilted, rather ungraceful demand for tough American action to stop Allende.

“Kissinger’s reply, dated November 9 [1970], was a short acknowledgment: `I have read it carefully and I have passed it to those members of my staff who deal with Latin American matters…’”

And as the June 23, 1973 report of U.S. Senate Foreign Relations Committee Member Frank Church’s Subcommittee on Multinational Corporations, that was titled “The International Telephone and Telegraph Company and Chile 1970-73,” recalled:

“The Chilean political situation was discussed at an ITT Board meeting in the spring of 1970 and at the June 1970 board meeting…Mr. John McCone, a former Director of the Central Intelligence Agency, at the time a consultant to the Agency and a Director of ITT, held a number of conversations about Chile with Richard Helms, the CIA Director. At least two conversations took place in Langley, Virginia, and one at Mr. McCone’s home in San Marino, California. During these conversations, Mr. McCone told Helms that ITT expected Dr. Allende to win the election. He pointed out that Allende was campaigning on a platform calling for expropriation of American business, including ITT’s properties, and expressed the opinion that the American national interest, as well as business interests were involved…Mr. McCone asked Mr. Helms whether the United States intended to intervene…

“During one of the conversations, Mr. McCone suggested to Mr. Helms that someone on Helms’ staff contact Mr. Geneen [the ITT CEO], and this suggestion led directly to a meeting between Mr. Geneen and Mr. Broe, the [then-] Chief of the CIA’s Clandestine Services (also known as the Directorate of Plans), Western Hemisphere Division, on July 16, 1970, in the Sheraton-Carlton Hotel, Washington, D.C. In response to Mr. McCone’s request, Mr. Helms told Mr. Broe that Mr. Geneen, ITT’s Chief Executive Officer, would be in Washington on July 16, 1970, and that he should get in touch with Geneen to arrange a meeting. Thus it was Mr. McCone, through his suggestion to Helms, who set in motion a series of contacts between the ITT and CIA in connection with Chile.

“Mr. Broe was contacted by William Merriam, head of ITT’s Washington office, who told him that Mr. Geneen wanted to meet late in the evening. Mr. Broe waited for Mr. Geneen in the lobby of the hotel. Mr. Merriam arrived, introduced himself, and then took Mr. Broe up to Mr. Geneen’s suite to wait for him. Mr. Merriam left the suite before the conversation began…Mr. Geneen offered to assemble an election fund…Mr. Geneen said the fund would be `substantial’ and that he wanted the fund controlled and channeled through the CIA…Mr. Geneen…testified that he made a similar offer to the CIA in 1964…Following the meeting, Mr. Geneen told Mr. Broe to contact ITT Vice President Ned Gerrilty if Geneen was out of town.

“Mr. Broe called Mr. Geneen on July 27 [1970]…

“On September 9, 1970, the ITT Board of Directors met for its monthly meeting in New York City. Mr. Geneen expressed his concern to John McCone over the political situation in Chile. In Mr. McCone’s words: `What he told me at that time was that he was prepared to put up as much as a million dollars, in support of any plan that was adopted by the government for the purpose of bringing about a coalition of the opposition to Allende…’ Mr. Geneen asked Mr. McCone to support his proposal. Mr. McCone agreed and came to Washington several days later and met with Henry Kissinger, Assistant to the President for National Security Affairs, and Richard Helms. He communicated to both Kissinger and Helms Mr. Geneen’s offer of a $1,000,000 fund…to stop Allende. Dr. Kissinger, according to Mr. McCone, thanked him…

“On September 11, 1970, at roughly the same time Mr. McCone was meeting with Dr. Kissinger and Mr. Helms, Jack Neal, the International Relations Director in the ITT Washington office, telephoned Viron P. Vaky, Dr. Kissinger’s assistant for Latin American Affairs. He informed him that Mr. Geneen was willing to come to Washington to discuss his interest and that the company was willing to contribute a sum of money in seven figures…Vaky testified that he understood the officer of funds by Neal to be in the context of blocking Allende from becoming president…

“…Two ex-newspapermen, Hal Hendrix and Robert Berrellez, were responsible for reporting for ITT’s Corporate Relations Department on Chilean political developments…Following the Washington activities of Mr. McCone and Mr. Neal, Mr. Hendrix joined Mr. Berrellez in Santiago. On September 17 [1970] they cabled a joint report to ITT in the United States…The report…contained specific recommendations for supporting Chileans working to block Dr. Allende’s election…These recommendations were the following:

“`1. We and other U.S. firms in Chile pump some advertising into [the anti-Allende right-wing Chilean newspaper] Mercurio (this has been started)

“`2. We help with getting some propagandists working again on radio and television…’

“On September 29 [1970]…Mr. Broe, at the instruction of CIA Director Richard Helms, called Mr. Gerrity in New York and arranged to meet him there on September 29….Mr. Broe proposed a plan to accelerate economic chaos in Chile…As Gerrity summed it up, Broe made suggestions based on recommendations from `our representatives on the scene’…The specific suggestions were the following:…

“`…2. Companies should drag their feet in sending money, in making deliveries, in shipping spare parts, etc…’

“The contacts between ITT and the CIA continued after Mr. Broe’s meeting with Mr. Gerrity. On October 6 [1970], Mr. Broe talked to the deputy head of ITT’s Washington office, John Ryan, about the prospects of stopping Dr. Allende. Mr. Ryan testified…that Mr. Broe had urged ITT to keep the pressure on, and had suggested a run on the banks.

“Mr. Merriam met Mr. Broe for lunch on several occasions after that and when cables arrived from Santiago he called Broe and arranged to have a CIA messenger pick up copies…The company’s thinking is reflected in Mr. Merriam’s October 23 [1970] letter to Dr. Kissinger…The letter and memorandum proposed that the U.S. Government take a number of measures against the Allende government…The only apparent dissent in the company came from Richard Dillenbeck of the ITT Legal Department…The letter was acknowledged by Dr. Kissinger…

“In early 1971, ITT began to follow a two-track strategy with respect to the Allende government…Mr. Merriam invited the Washington representatives of major U..S. corporations having investments in Chile to form an Ad Hoc Committee on Chile. There were several meetings, the first of which took place in early January, 1971, in ITT’s Washington offices…The purpose was described in a memorandum by Mr. Ronald Raddatz, the Bank of America representative: …`ITT,’ said the memo, `believes the place to apply pressure is through the office of Henry Kissinger.’ `That is what we have been doing for the last year or so,’ said Mr. Merriam…

“…ITT’s primary investment in Chile was a 70 percent interest in the Chilean telephone company (Chiltelco). The estimated book value of this ITT investment was placed at approximately $153 million…$92.5 million of ITT’s $153 million interest in Chiltelco was covered by investment guaranty agreements administered by the Overseas Private Investment Corporation (OPIC) which provided insurance, among other things against expropriation…In addition to the Chiltelco property, ITT had other lesser holdings in Chile, including two hotels, a telephone directory book service, and an international cable company. The estimated book value of ITT’s investment in Chile, including Chiltelco, amounted to approximately $160 million…

“…Mr. Guilfoyle summed up the strategy in a July 9, 1971 note to the ITT Board…On September 29 [1971], the Chilean Government took over the management of Chiltelco…The government alleged that Chiltelco was deliberately allowing service to deteriorate…Shortly after the intervention in Chiltelco by the Chilean Government, Mr. Merriam…requested a meeting for Mr. Geneen with Henry Kissinger and Peter Peterson, Assistant to the President for International Economic Affairs. A luncheon meeting was scheduled.

“Because of the demands on Dr. Kissinger’s time, General Haig, his deputy, joined Mr. Peterson at lunch with Mr. Geneen…Following the meeting, Mr. Geneen instructed Mr. Merriam to put ITT’s suggestions in writing and forward them to Mr. Peterson. In response to the requrest, Merriam sent a letter to Peterson dated October 1, 1971, which had attached an 18-point action plan. Among other things the plan proposed the following specific measures to see to it that Allende would not `make it through the next six months’:

“`…Discuss with CIA how it can assist the six-month squeeze.

“`Get to reliable sources within the Chilean Military. Delay fuel delivery to Navy and gasoline to Air Force. (This would have to be carefully handled, otherwise would be dangerous. However, a false delay could build up their planned discontent against Allende, thus, bring about necessity of his removal.)…’

“In accordance with the company’s usual distribution procedures, the Merriam letter and 18-point plan were distributed within the company…Felix Rohatyn testified that the Executive Committee of the Board of Directors…was informed in April 1972, of McCone’s and Geneen’s 1970 offer of funds to the CIA…The highest officials of the ITT sought to engage the CIA in a plan covertly to manipulate the outcome of the Chilean presidential election…”
(end of part 4)

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