ITT in Chile
In a memo dated September 14, J.D. Neal, an ITT operative in Chile, wrote that he had spoken with "Pete" Vaky, the State Department's Latin American advisor to Henry Kissinger: "I told him of...
...With total assets equal to the combined GNP's of Paraguay, Guatemala, Costa ' Rica, Haiti, Bolivia and Chile, ITT can weild its power almost at will...
...As the documents make clear, U.S...
...Geneen's deep concern about the Chile situation, not only from the standpoint of our heavy investment, but also because of the threat to the entire hemisphere...
...Although the memos indicate that the ITT maneuverings failed, we know that in the one and one half years that have passed since the Unidad Popular government assumed power, the Right, aided by the U.S...
...It operated the Chilean Telephone Company (one of ITT's biggest earners abroad), had investments in telephone equipment, assembling and manufacturing, directory printing and international communications, and operated hotels...
...The threat to its interests explains in a nutshell why ITT worked so hard in the period between September 4 and November 4 to prevent the Allende government from taking power in Chile...
...and reveal the close ties among ITT executives and the U.S...
...corporations are urging the U.S...
...That same year, ITT had contracted to undertake a four year $140 million expansion program...
...These memos illustrate the case of ITT in Chile, an example that is all too common in Latin America...
...As nationalism grows in Latin America, the threat to U.S...
...Based on its past experience in other countries, ITT had every reason to believe that it would be reimbursed...
...In order to expropriate a corporation, the Chilean Congress must bass a constitutional amendment in each case...
...ITT valued the company at $153 million, but the government claimed it was only worth $24 million...
...Neal, an ITT operative in Chile, wrote that he had spoken with "Pete" Vaky, the State Department's Latin American advisor to Henry Kissinger: "I told him of Mr...
...Its holdings consisted of six affiliates employing about 8,000 workers and worth around $200 million...
...This activity has taken many forms, including assasination attempts against Allende, outright, but abortive military coups, manipulation of food and other resources to exacerbate scarcities and create economic chaos, and, of course, the withholding of aid and loans as a "big stick" to whip the government in line...
...The memos expose ITT as a corporate nation on which the sun never sets...
...Profits for ITT have further been augmented by special foreign exchange arrangements for the communications monopolies in Chile...
...EXPROPRIATION AND NEGOTIATION ITT has struggled for a year to wring from the UP a generous compensation for its interests in the Chilean Telephone Company (CHITELCO), which the Allende government earmarked for expropriation immediately upon its inauguration...
...The memoranda printed below may destroy ITT's chances for compensation from the Allende government and may lead to further nationalization of ITT properties in Chile...
...government, including the Central Intelligence Agency (referred to as the McLean Agency in the documents), and between ITT and the Chilean Right...
...for CHITELCO...
...corporations abroad also grows...
...Presumably, these documents are giving the government more fuel in its effort to regain control of Chile's industries from the North American investors...
...Throughout the first part of 1971, ITT bickered over the terms of the expropriation, and finally, on September 30, 1971, the government took over operation of CHITELCO, claiming its services were "highly deficient...
...As Jack Anderson summarized, "ITT operates its own worldwide foreign policy unit, foreign intelligence machinery, counterintelligence apparatus, communications network, classification system and airliner fleet...
...ITT had a great deal to lose in Chile...
...CHITELCO was ITT's most remunerative Chilean asset, with sales in 1968 of $60.16 million...
...In 1969, the Frei administration agreed that the telephone company be guaranteed a minimum annual profit of 10 percent...
...government and U.S...
...business interests has continued to engage in counter-revolutionary activity against Allende...
...government to take a firm stand against "unfriendly" acts of expropriation by Latin American governments, and are prepared to resist this trend by actively interferring in the internal affairs of other nations to safeguard their interests...
...In the past three years, the governments of Peru, Ecuador and Brazil have all "nationalized" the ITT-owned telephone companies in their countries on terms extremely favorable to ITT...
...Since then, ITT and the UP have continued to negotiate over how much the government should pay for ITT's 70% share in Chitelco...
...All of these tactics were suggested in the memos printed below...
...ITT had access to the centers of Chilean domestic power as well, having recruited prominent Chileans through career and investment ties...
...Among foreign investors in Chile, only the copper holdings of Anaconda and Kennecott exceeded the worth of ITT's Chilean subsidiaries...
...Why should we believe that ITT gave up on overthrowing Allende as early as November, 1970...
...INTRIGUE AND DIPLOMACY The memos below illustrate how far ITT was willing to go to keep these investments...
Vol. 6 • April 1972 • No. 4
