ITT's Dollar Diplomacy
HERMAN, GEORGE E.
SORTING OUT THE DOUBLE-TALK ITT's Dollar Diplomacy BY GEORGE E. HERMAN Washington Behind the recently concluded Senate subcommittee investigation of International Telephone and Telegraph (ITT)...
...He'd be very upset, he said...
...When the time came for Gerrity to take the stand, he had a different story altogether...
...In this case the frontrunner was Salvador Allende, whose 36.3 per cent of the vote just barely nosed out Allesandri's 35.3 per cent...
...That much seems clear from a meeting Secretary of State William P. Rogers had with a group of representatives from the major U.S...
...And ITT...
...Gerrity thought the proposals unworkable and did not attempt to implement them...
...McCone asked Helms to have someone from the agency talk to Geneen...
...William R. Merriam...
...Assistant Secretary of State for Inter-American affairs...
...Washington was under the impression that Allesandri would win and took a position of absolute neutrality in accordance with international law and morality...
...Finally...
...He also said he was occasionally offered such private funds when he was the CIA's director and he always flatly refused them...
...Under Chilean law, if no candidate receives an absolute majority, the election is thrown into the chambers of Congress, where traditionally the candidate with the plurality is given the victory...
...who had served in the State Department for 35 years...
...Allende is a Communist, he said by way of total views on the subject...
...being corporate memo-mavens...
...operation against Allende...
...He met with his friend Richard Helms, who had succeeded him at the CIA, and discussed the Chilean problem...
...McCone said he would have strongly opposed such a gesture before the popular election, but saw nothing wrong with it afterward...
...A footnote: After trying to enlist other companies in its plans through the ad hoc committee it formed in Washington...
...he thought it would have been pious and sanctimonious to refrain from intervening in Chilean politics and working hard to head off Allende...
...Broe said the agency was merely discussing possible plans to see if they were feasible...
...Jack Neal...
...head of the CIA's Western Hemisphere division, and more importantly of its Clandestine Operations branch, to meet with ITT's top man...
...He offered them the same $1 million for the same purposes...
...It just doesn't hold together...
...ITT's men in Chile got different readings: They concluded that Allende would win and would carry out his campaign promises to nationalize their Chilean Telephone Company...
...and Rado-miro Tomic of the ruling Christian Democrats...
...It detailed ac tions that ITT and other companies could initiate to create economic-chaos inside Chile and thus pressure some wavering congressmen to vote against Aliunde...
...corporations having holdings in Chile...
...Taking the witness stand on the last day of the hearings, he declared that the $1 million was mainly a device to attract Washington's attention, the equivalent presumably of hitting the mule between the eyes with a sledgehammer...
...The Senators were astounded...
...asked bluntly...
...Broe handed Gerrity a plan, worked up by CIA staffmen at the direction of Helms...
...SORTING OUT THE DOUBLE-TALK ITT's Dollar Diplomacy BY GEORGE E. HERMAN Washington Behind the recently concluded Senate subcommittee investigation of International Telephone and Telegraph (ITT) activities in Chile lie these principal questions: ?Did the United States government take a position for or against one of the candidates in the Chilean Presidential election of September 4, 1970...
...At the same time, it was doing what it could to help out an important American corporation with high government contacts...
...was polite but plaintive in his response to Gerrity: "I think that what troubles us is the im-plausibility of all this...
...This must be a different million dollars," said Church...
...Did you consider using the million dollars in another way—to bribe, for instance, key members of the Chilean Congress to vote against Allende...
...Senator Frank Church (D.-Idaho I, chairman of the Subcommittee on Multinational Corporations, pointed out that Fidel Castro took over Cuba by force, while Allende won in Chile by fully legal use of the elective process...
...was not supporting any candidate in the Chilean election...
...Indeed, a dispassionate look at the schedule of events and the personalities involved suggests that the Administration was in the process of turning some attention from Vietnam to the Allende threat in Chile...
...Geneen agreed there were two purposes to his company's offer: first, to stop Allende...
...Geneen himself emerges from the whole sequence of events as the real moving force behind ITT's drive to stop Allende...
...asked, "off on a frolic of its own...
...as outlined in the ITT memos and the conferences with Administration officials: and...
...Yet he further asserted that everything was done with the full knowledge and at the orders of Richard Helms, who was a member of President Nixon's National Security Council...
...amusingly, referred to CIA's Broe as "our man...
...ITT decided to approach Allende's negotiators and persuade them to agree to a good deal with ITT...
...Latin American advisor to Henry Kissinger, and Charles A. Meyer...
...In the end, more by good luck than force of moral principle, the United States did not intervene in the internal political affairs of Chile, a fact President Allende has tacitly acknowledged in some of his recent speeches...
...On the contrary, the sum was meant to calm Salvador Allende, to r-eassure him that ITT was in Chile to stay and wanted to aid the country's economy...
...You may be resting your case on a very weak reed...
...Other companies denied it...
...know how to tell high officials of their companv what they think Geneen wants to hear, whether it is strictly true or not...
...But that is getting ahead of the story...
...There remains the more basic question: Was the CIA, in bringing a set of suggestions for economic action to ITT, following Administration directives, or was it, as Senator J. William Fulbright (D.-Ark...
...it became evident, was not really against Allende because he is a Marxist (the conglomerate has unhesitatingly negotiated extremely profitable business arrangements with the Soviet Union), but because he lacked the money to pay for his promised expropriation of ITT property...
...Jack Neal saw nothing wrong with the procedure...
...the former CIA chief (and still a consultant) who is now a director of ITT...
...Neal was unmoved...
...Meanwhile, another ITT man...
...loans and grants...
...The ITT senior vice president said his company's million dollars was not intended to oppose anybody...
...companies holding big interests in Chile...
...Henrv Kissinger...
...Then, five days later at a background briefing for some newsmen...
...ITT was accorded a polite and attentive hearing during all these meetings among old friends, but there were no takers...
...The money was to be used for building low-cost housing, for farm projects and the like...
...Broe declined the offer, saying that the CIA could not "serve as a funding channel...
...As for the propriety of his making available $1 million to support an official U.S...
...But by this point in the proceedings there was no escaping the sharp dichotomy in ITT's presentation to the subcommittee...
...and the next week he went to New York to talk to ITT Senior Vice President Edward J. Gerrity...
...Apparently, as the CIA's Broe told Gerrity, ITT was the only corporation responsive to the "problem...
...He then asked if there was a consensus that the United States should withhold from Chile spare parts for American-built machinery, as well as government funds and loans by private banks...
...The hearings haven't helped ITT...
...Obviously ITT men...
...Rogers told the group to keep conferring until it knew what it wanted...
...On July 16 Helms sent William V. Broe...
...Senators asked what $1 million could do after $1.4 billion had heen tunneled into Chile by U.S...
...This is a business Administration...
...Senator Church asked him how he would feel if a United States election were thrown into the House explanation and justification...
...Senator Charles Percy (R.-Ill...
...Under persistent questioning he fell back on the line of defense developed by Gerrity—the money was supposed to do all kinds of good deeds in Chile, to soothe Allende after his election...
...McCone answered in his usual soft voice and polite manner, but his face flamed scarlet...
...ITT paid almost $6 million for OPIC insurance against nationalization and is seeking $92.5 million for its losses...
...Did a major American corporation, or group of corporations, take action for or against one of the candidates...
...Kissinger called Allende a serious threat and said the Administration was closely following the situation in Chile...
...In the spring of 1970 McCone started along the old-school-tie circuit...
...The election itself was a three-way race between Salvador Allende Gossens, a Marxist representing a coalition of Communists, Socialists and dissidents from other parties...
...A week after Allende won his tiny plurality John McCone was back in Washington, meeting with Helms and President Nixon's advisor on national security...
...This time there was no question of "assembling" a fund with help from other U.S...
...McCone insisted that it was not improper to attempt to influence the congressional election...
...the Secretary said, "and its mission is to protect American business...
...This would enable Chile to be tougher on the other companies yet avoid adverse propaganda, ITT argued, for it could point to the good settlement with ITT as proof of its reasonableness and charge those who refused what they were being offered with intransigence...
...The claim is in dispute...
...it handled by the agency...
...Six days after that, Broe met with the head of ITT's Washington office...
...There was no consensus...
...he said...
...McCone offered "up to seven figures" in one version?a million dollars" of ITT's money, in his own words?for use by the CIA or the United States government in any plan to defeat Allende in the coming congressional runoff election...
...Jorge Allesandri Rodriguez of the Rightist National party...
...For at stake now is the amount of money ITT will get back from the government's Overseas Private Investment Corporation...
...Gerrity said this was seed money and other companies were to put some in, too...
...He saw no real difference between the two situations...
...The subpoenaed memos and the mass of testimony under oath all denied it...
...second, to placate and reassure Allende—a concept which Geneen admitted his men unaccountably forgot to tell the government or to put into any memos...
...He selected for that job white-haired, soft-spoken, highly reputable John A. McCone...
...and that the U.S...
...This is the sworn account of officials of the Anaconda Copper Company...
...Church tried to elicit McCone's of Representatives and a European company assembled a fund to affect the outcome...
...Ironically, the main effect of ITT's busy campaign was to strengthen the hand of Salvador Allende and perhaps weaken its own financial position...
...Broe testified that Geneen offered "to assemble" a substantial fund to defeat Allende and wanted George E. Herman is a member of the CBS-News Washington bureau...
...Senator Clifford P. Case (R.-N.J...
...approached his friends: Viron Vaky...
...McCone was mildly surprised...
...Preferring action to inaction, ITT President Harold Geneen set about waking up the United States government...
...Did the Central Intelligence Agency (CIA) take a role, however small, in plotting against one of the candidates on its own, without authorization from the President and the National Security Council...
...We had an obligation to keep Chile from becoming another Cuba...
Vol. 56 • April 1973 • No. 8
