Salvador Allende had come into office as the leader of a coalition called Unidad Popular (UP, or Popular Unity). It consisted of the Communist Party; Allende’s own Socialist Party, which lacked the tactical prudence of the Communists while sharing their ideology; and splinter groups for the most part even more radical and explicitly dedicated to revolutionary violence. (The coalition contained one small democratic left-wing party, the Radical Party, which split apart in 1971 as Allende’s orientation became more obvious, with many of its leaders joining the opposition by early 1972.) The coalition never had a majority in the Chilean Congress. To govern, Allende needed the left wing of the Christian Democratic Party, which shared many of his socialist objectives without, however, giving up its dedication to Christian values and democratic processes. Allende thus faced a dilemma. If he adopted Christian Democratic methods he would alienate his radical wing, dedicated as it was to violent change of the existing order. If he failed to resist the violent tactics of his principal partners he would risk the support of the left-wing Christian Democrats and his ability to pass legislation through the Congress. Through incompetence, conviction, or overconfidence in his manipulative skills, Allende never faced up to that dilemma. He did not crack down on his revolutionary left wing. He acquiesced in their violent takeover of Christian Democratic radio stations and other enterprises. He failed effectively to oppose — indeed, he was suspected of encouraging — a mutiny of noncommissioned navy officers and illegal seizures of land by peasants in the countryside. Large quantities of arms were imported into Chile via the Cuban Embassy, outside the control of either the Chilean military or police.
Allende’s policies thus drew the democratic parties together. It was he who unintentionally brought about the alliance between the right-wing National Party and the Christian Democrats, the absence of which in 1970 had made his own electoral victory possible. The absence of a Congressional majority for his increasingly radical policies in turn tempted Allende to resort to extraconstitutional legerdemain: physical occupation of enterprises, exploitation of ingenious loopholes to evade constitutional provisions, and the use of century-old laws for purposes never intended.
Polarization turned to confrontation toward the end of the first year of Allende’s rule. The Chamber of Deputies impeached Allende’s close confidant and Minister of the Interior, José Tohá Gonzalez, on the ground that he had failed to oppose the growing violence of extremist groups. The Chamber voted on January 6, 1972, to suspend Tohá from his post — an extraordinary procedure in a system based on separate, coequal branches of government. On January 7, 1972, Allende showed his disdain for the Congressional action by merely switching Tohá to the equally important post of Minister of Defense. The government suffered a major electoral setback on January 16, when its candidates lost two by-elections, one for the Senate and one for federal deputy. In a memorandum to Nixon dated January 20, 1972, I summed up the implications:
It will almost certainly increase the polarization of Chilean society and political life which has been developing quite rapidly in recent months. The outcome will increase the confidence of the opposition parties and should demonstrate to them the benefits of cooperation. The results may also lead to a schism in Allende’s UP coalition. The Socialists are likely to insist that the Government turn away from the democratic path it has followed up until now and take the reins of power into its own hands in order to impose a socialist revolution, by force if need be. However, the other two major parties in the UP, the Communists and the Radicals, as well as Allende himself, will probably be reluctant to do this out of fear of the Armed Forces, which have remained neutral and apolitical thus far but made clear that they will react sharply to any violation of the Constitution.
The prediction was only partially borne out by events. Allende continued his efforts to alter constitutional practices. By September 1973 the Congress and the Supreme Court had declared his administration outside the law and Constitution. They charged, in short, that the democratic process was being undermined by the constitutional President of Chile.
As Chile moved toward totalitarianism at home, it set a course for confrontation with the United States in its foreign policy. On January 1, 1972, Pablo Neruda, the poet who served as Chile’s Ambassador to France, charged that the United States was trying to overthrow Allende through economic pressures and encouragement of subversion. On January 3 Luis Herrera, the Chilean Ambassador to the OAS, on assuming the chairmanship of the OAS Permanent Council, spoke of the US–Latin American relationship as one of “serfdom in the economic, political, social and even cultural realms.”
Chile was pursuing the policy that has since become standard among radical governments. On the one hand, it was assaulting American economic and political interests; on the other it denounced as “imperialism” our inevitable reaction to its provocation. Allende was acting — as have several other Third World leaders after him — as if he had a right to be subsidized by the United States in pursuing anti-American policies. He attempted, and even partially succeeded in, an extraordinary feat: to default on his debts, expropriate American companies without compensation, win a rescheduling of Chile’s foreign debt, and at the same time maintain all previous aid and credit relationships with American and international lending institutions.V
Allende’s actions produced the need for decisions, many of which were more significant for the light they shed on the balance of forces within the Administration than on our strategy toward Chile. There was, in fact, a gap between the internal rhetoric of the Administration and its actions. The language of our decisions was usually tough; the outcome of our actions, on the contrary, quite forthcoming.
Our reaction to Allende’s repudiation of Chile’s debt on November 9, 1971, illustrates this. Since Allende had repudiated almost all foreign debts, our actions had to be concerted with other creditor nations. A meeting of the creditors — in effect, the industrialized Western countries — was scheduled for early 1972 in Paris (informally called the Paris Club). As is too frequently the case, the United States’s position was less the product of an overall strategic assessment than the uneasy result of interdepartmental feuding. For once, the conflict was not between my office and the State Department but between State and the Treasury Department, headed by the redoubtable John Connally, who was once again seeking to confirm his predominance in economic matters.
Connally had been appointed Secretary of the Treasury in December 1970 when Nixon, shaken by the unexpected Democratic success in the midterm Congressional elections, coopted the man whom he considered the most formidable Democratic opponent for the Presidency. There was no American public figure Nixon held in such awe. Connally’s swaggering self-assurance fulfilled Nixon’s image of how a leader should act; he found it possible to emulate this conduct only in marginal comments on memoranda, never face to face. As a result, Connally was spared the maneuvers by which Nixon pitted his associates against one another. Nor did Nixon ever denigrate him behind his back — a boon not granted to many. He could identify with Connally, who had arisen from similar humble origins without seemingly being driven by his insecurities.
I suspect that the difference was not in the existence of insecurities but in the way Connally and Nixon handled them. Neither cherished being challenged; neither was really quite sure of himself. But Connally sought to cow opposition while Nixon’s strategy was to outmaneuver it. For Connally a victory was meaningless unless his opponent knew he had been defeated; for Nixon the most exquisite triumphs were those in which the victim did not know who had done him in, or maybe even immediately that he had been done in.
It did not take Connally long to grasp that the combination of Nixon’s fear of confrontation and genuine admiration gave him a headstart in the maneuvering that determines the pecking order of Presidential advisers. He wasted little time before exposing the fragility of the vaunted White House staff system by the simple device of refusing to submit his memoranda to the President through any White Ho
use Assistant. Fortunately for my bureaucratic position, I had ceded my responsibilities for foreign economic policy to Peter G. Peterson, my opposite number in the area of international economics. Connally proceeded to give Peterson — himself an able and strong man — a short course in the fact of life that no Presidential Assistant can stand up to a strong Cabinet member determined to insist on his prerogatives. When he had something to take up with the President, Connally would simply walk across the street that separated the Treasury Department from the White House and insist on an appointment. He personally delivered any memorandum in which he was interested; he was prepared to demand an immediate reply. And Nixon was incapable of turning down even a less formidable personality to his face — this indeed was the reason for the staff system in the first place.
By January 1972 Connally had defeated Peterson utterly for leadership in international economic policy and was ready to take on the State Department. He used the identical methods. He personally brought to Nixon’s attention a memorandum implying that his opponents in State were prepared to reschedule Chile’s debt payments, that is, agree to stretching them out, and that this in turn would stampede other creditor countries into the same cowardly course. Connally argued that the real purpose of the Paris meeting should be to isolate Chile.
All this was grist for Nixon’s mill. It sounded tough. It confirmed his worst suspicions about the effete State Department. It had an anti-Allende thrust. He did not concern himself with the central contradiction of Connally’s position: If the objective was to isolate Chile, we would have to overcome European reluctance about confrontation and the preference of our allies for rescheduling. If we insisted on being tough and opposing rescheduling, the chances were that it was the United States that would end up isolated.
Connally was aware of this, of course. His real point was to ensure that the Treasury Department would be in charge of our delegation so that “we fully protect our economic interests and keep the pressure on Chile.” Nixon covered the memorandum with marginalia that any agreement to reschedule Chilean debt was “totally [Nixon’s underlining] against my instruction” and that the isolation of Chile was our policy. How we could combine these objectives was not explained. In short order and without consultation with anyone (including me), a memorandum emerged from the Oval Office addressed to the Secretary of the Treasury with copies to the Secretary of State and me:
With reference to your [Connally’s] memorandum of January 15, I hereby appoint Treasury to head the United States Delegation to Paris on the Chilean loan matter. Any suggestion, expressed or implied, that I favor U.S. support of an agreement to renegotiate the Chilean loan is in total contradiction to the views I have expressed on a number of occasions in various meetings on this matter with representatives of the departments involved.
As was usually the case with Connally, his actual conduct was far more subtle than his brutal insistence on prerogative. For one thing, State had made no such proposal as Connally alleged. He undoubtedly was not far off the mark in analyzing its predilections. But at this point we did not even know officially the attitude of the other creditors and had not yet taken a formal position. Moreover, Connally’s insistence that we work with other nations to isolate Chile only clothed in the language of confrontation the course that I also preferred (and I suspect State too) as a matter of deliberate strategy. My view, as expressed in several staff memoranda, was that while we should take a strong line at the Paris talks, we should in the end act in concert with the other creditor nations. If we separated from them, Allende would be able to transform a repudiation of all foreign debts into a confrontation with “Yankee imperialism.” This would rally patriotic support among the democratic opposition and the armed forces against the Yankee colossus. Allende would then be free to settle with his other creditors and cancel only his American debts, which constituted 60 percent of Chile’s total foreign obligations. Much better, in my view, to develop a common front with the other creditors and to insist that Chile adhere to an agreed formula for renegotiating all its obligations. If the terms were unsatisfactory, we could always dissociate at that point.
Conversations with Connally confirmed that he agreed the United States should maneuver to bring about a consensus of the creditor nations so that the onus for a showdown would not fall on us. If the European nations insisted on rescheduling, we would go along. In short, for all the tough rhetoric, the decision was to postpone Chile’s debt repayments — an indirect form of economic assistance.
While the debt talks proceeded in Paris, the Administration also continued to show public restraint. In a statement on January 19, 1972, Nixon reaffirmed that the law of the land as a result of the Hickenlooper amendment required that nations expropriating American property without adequate compensation could not receive new American aid. Nixon offered to work out, together with other interested nations, agreed criteria for what constituted just compensation. And on February 9, 1972, the President’s annual Foreign Policy Report held out the olive branch once again:
Chile’s leaders will not be charmed out of their deeply held convictions by gestures on our part. We recognize that they are serious men whose ideological principles are, to some extent, frankly in conflict with ours. Nevertheless, our relations will hinge not on their ideology but on their conduct toward the outside world. As I have said many times, we are prepared to have the kind of relationship with the Chilean Government that it is prepared to have with us.
This too was rebuffed. Allende seemed in the grip of his ideological zeal and that of his fanatical adherents. He continued the expropriation, in effect without compensation, not only of foreign but also of Chilean companies. In early January 1972, his government listed 53 firms subject to nationalization, with 38 others slated for a combination of state and private ownership. A month later (February 7), in a speech in Concepción, Allende vowed to nationalize another 120 companies over the coming year, to expropriate 2,000 farms, and to complete the state takeover of banking and foreign trade.
Meanwhile, the democratic majority in the Chilean Congress had become increasingly determined to resist Allende’s policies. On February 19, 1972, the Chilean Congress passed a series of constitutional amendments attempting to restrict the state’s right to take over the private sector. The measures, retroactive to October 1971, prohibited the government from expropriating any enterprise without specific authorization by Congress. On February 21, Allende announced that he would veto the bill. If Congress overruled the veto, he threatened, he would appeal to the Chilean Constitutional Tribunal (a special court on which a majority were his appointees). The opposition parties challenged Allende to hold a plebiscite on his plans for socializing the national economy.
The battle lines were now drawn. Allende was heading for a showdown both within Chile and in Chile’s relations with the United States.
ITT and the Mounting Crisis
THE first explosion was triggered, strangely enough, by an American newspaperman. The syndicated columnist Jack Anderson published alleged internal documents of the International Telephone and Telegraph Company (ITT) outlining an effort in 1970 — nearly two years earlier — to prevent Allende’s election as President. Anderson’s column of March 21, 1972, claimed that on October 9, 1970, the head of ITT’s Washington office, William R. Merriam, had reported to ITT director (and former CIA chief) John McCone that his CIA contact was “very, very” pessimistic about the prospects of “defeating Allende.” Nevertheless, “approaches continue to be made to select members of the armed forces in an attempt to have them lead some sort of uprising. . . . Practically no progress has been made in trying to bring on economic chaos.”
Anderson’s March 22 column described a phone conversation of September 11 between J. D. Neal (ITT’s director of international relations) and Viron P. Vaky, my NSC staff associate responsible for Latin America, in which Neal spoke of ITT President Harold S. Geneen’s “concern about the Chile situation.” Neal allegedly asked Vaky to tell me t
hat ITT was “prepared to assist financially in sums up to seven figures.” The Anderson column noted the “generally polite but cool reception” given this ITT initiative at the White House, by the NSC staff, and at the State Department, but went on to note its “more friendly” reception at the CIA.
I do not know how accurate the internal ITT documents were, but the thrust of Anderson’s revelations about the NSC was true enough. I had, in fact, seen two officers of ITT in September 1970 at the request of Peter Flanigan, then a Presidential aide. They had offered financial assistance to an effort to prevent Allende’s accession to office. I turned them away, politely, because I considered this sort of activity inappropriate for private enterprise.
But in the heated atmosphere of 1972, the Anderson columns added momentum to Allende’s rush toward radicalization. The plan to which they referred had, in fact, never been accepted by the United States government — as indeed Anderson’s columns made clear. Our governmental efforts in the same direction — of which Allende was presumably unaware — had been abandoned as well nearly two years earlier. Still, the Allende government wasted no time in seeking to implicate the democratic opposition in an alleged CIA-directed plot. On March 23, 1972, four marches were organized by the Central Labor Confederation (CUT) to support the government against “imperialist intervention.” Exploiting the mood of nationalist indignation, ultra-leftist Interior Minister Hernan del Canto charged on March 28 (without producing any evidence) that right-wing conspirators — by implication abetted by the United States — had planned to assassinate Allende and seize power a few days before.
When the Chilean Congress reconvened, it voted on March 28 to appoint a thirteen-member commission to investigate the allegations of ITT interference in Chile in 1970. Opposition leaders, on the defensive now and angrily denying any dealings with the CIA, demanded that a commission also investigate another allegation by Anderson: that the Cuban Embassy in Santiago was a center for fomenting armed revolution. Jack Anderson, for a brief period, had become a central figure in Chilean politics.
Years of Upheaval Page 58