Allende’s Chile and the Inter-American Cold War (17 page)

Days after the U.S. démarche was delivered, Almeyda privately approached Korry at an embassy reception to express hope that the United States would avoid the issue of copper being “inflated by ideological or global considerations.” In particular, he stressed that the deterioration of U.S.-Cuban relations after 1959 should not be repeated. Yet, for someone trying to limit associations with a worldwide ideological struggle, Almeyda then incredibly told Korry that he “followed Mao’s advice in separating short-term tactics from longer-term strategy” and urged U.S. policy makers to deal with one specific problem at a time.
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Korry seems to have been rather unsurprised and unfazed by the wider implications of this message. What he did note was a “kind of pragmatism … when confronted with the possibility of firm confrontation.” There was “a chance of a deal” for the copper companies, he advised, if—and he underlined that this was the “essential question”—the United States wanted to encourage one.
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While the Nixon administration was privately deliberating the pros and
cons of a deal over the next month, the Chileans began feeling the pressure to modify their nationalization program. As the Chilean Embassy in Washington warned, the Nixon administration could quite easily use this issue to justify a hard-line policy toward Chile if they did not.
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In the meantime, U.S. pressure was becoming “serious and unsatisfactory,” principally because threats were so ambiguous.
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In an effort to ascertain exactly what the nature of an eventual clash with Washington would look like, the ministry asked Chilean diplomats in Washington to investigate the legal and political implications of nationalizing Chile’s mining industry.
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And in early 1971, the UP also received two Foreign Ministry commissioned reports from U.S. law firms on Washington’s previous responses to nationalization programs in Mexico, Iran, Guatemala, Brazil, and Cuba. These spelt out that U.S. law required “adequate, prompt and effective compensation” for expropriated U.S. companies (within six months). Yet the lawyers also underlined Washington’s proclivity to deal on a “case-by-case” basis, advising Santiago it was “impossible to predict the precise moves” the United States would take.
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As late as July, Letelier was also reporting that State Department officials were exhibiting “extreme caution” when discussing nationalization, making it difficult to come to any firm conclusions.
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Indeed, the Nixon administration’s diplomacy during these months was particularly effective in not giving away the United States’ position on Allende’s nationalization plans. It was also cleverly throwing the Chileans off the scent when it came to U.S. objectives in Chile. As Chilean Embassy reports from Washington surmised, the United States’ policy toward Allende seemed to be “a rough draft,” if that.
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As we know, although it is true that Washington’s officials had not yet formulated a coherent plan regarding the stance they would take in the event of Chilean expropriations, they
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clear about wanting to bring Allende down while pretending that they were not intervening in Chile. In conversation after conversation with Chilean diplomats during the first months of 1971, senior members of the administration therefore tried to deflect Chilean questions by underlining the possibility of establishing a working U.S.-Chilean relationship. In one such conversation, Deputy Assistant Secretary for Latin American Affairs John Crimmins told Letelier that “there was a major disposition on the part of the U.S. government … to resolve [any future] problems.”
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And when Letelier underlined Chile’s proud constitutional history as he presented his diplomatic credentials to Richard Nixon, the president offered his own reassurances about respecting Chilean democratic politics:

The beliefs of the American people regarding democracy, cherished and vigorously defended in the almost two hundred years of this nation’s independence are also well known. It is, inevitably, our hope that the blessings we perceive in free and democratic processes will be preserved where they now exist and will flow to an ever greater number of the peoples of the world. We do not, however, seek to impose our beliefs on others, recognizing that perhaps the most important freedom of all is that of selecting one’s own path, of determining one’s own destiny. The path represented by the program of your government is not the path chosen by the people of this country, but we recognize the right of any country to order its affairs.
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Henry Kissinger then added his own gushing guarantees to the Chileans when he met with Letelier at the end of March. As the ambassador optimistically wrote to Almeyda, the meeting had been “much more positive … than hoped.” Kissinger promised that the U.S. government “did not wish in any way to interfere with the internal affairs of Chile” and had even stated twice in a forty-minute meeting that the way Allende was leading the new Chilean process was “worthy of great admiration.”
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Considering Kissinger’s pivotal position in Washington’s foreign policy establishment, Letelier believed this assurance to be highly significant. Indeed, together with the results of the embassy’s public relations campaigns in the United States, he concluded that the “stridency” of anti-Allende factions was “melting” along with the snow in Washington.
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There were two key problems with Letelier’s analysis besides the fact that he had been misled by Kissinger’s duplicitous diplomacy and was therefore essentially wrong. First, the Chileans’ inability to get an exact indication of U.S. reprisals undermined their already limited ability to avert them or confront them head on. Second, focusing on nationalization policies to determine Washington’s approach to Chile diverted the UP’s attention away from understanding the Nixon administration’s fundamental concerns. To be sure, Nixon believed private investment was the answer to development, faced aggressive lobbying from multinationals, and was eager to protect investments in Chile.
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But, as already indicated, from the moment Allende was elected, the U.S. president’s predominant concerns had been Allende’s impact on Latin American instability and the United States’ influence in the region, not Chile’s potential impact on U.S. finances.

Having largely ignored the nationalization question in the immediate aftermath of Allende’s election, Nixon administration officials had only in early 1971 begun to decide whether to become directly involved in negotiations or to let private U.S. copper companies go it alone. Washington officials clearly distrusted the Chileans, and Kissinger questioned whether Allende was really adopting a nonconfrontational position or merely hoping to postpone a clash while he consolidated his position. Was Allende trying “to suck the U.S. government into the negotiations” so that he could use them to “bargain for leverage in other areas,” he asked.
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When Kissinger’s NSC staff had examined these issues in February 1971, it had outlined three major concerns regarding direct governmental involvement in negotiations: first, the effect these negotiations would have on the companies’ chances of getting compensation; second, the implications of failure for the administration’s ability to sustain a “correct but cool” policy toward Allende; and, third, the extent to which they might undermine U.S. economic sanctions against Allende that were already being put in place.
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Ultimately, the National Security Council’s Senior Review Group (SRG) had postponed making a final decision on copper, having agreed only to try to influence the character of Chilean nationalization programs through dialogue.
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At the end of March, Kissinger had then personally told Letelier that the administration did not consider this to be a political or governmental issue. Washington “already had a sufficient amount of enemies abroad” without making Chile into a new one, he had insisted.
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Notwithstanding Kissinger’s platitudes, the Nixon administration had simultaneously been pursuing a comprehensive destabilization campaign in Chile in line with NSDM 93 since November 1970. As the acting chairman of the NSC’s Ad Hoc Interagency Working Group on Chile concluded, “restraint” did not mean “passivity or inaction.”
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Already, during Allende’s first two months as president, the administration had instructed U.S. representatives at the Inter-American Development Bank and the World Bank to work behind the scenes to delay Chilean loans and pose awkward questions about the UP’s economic programs, business and labor leaders were informed of the U.S. government’s “discouraging view” of Chilean developments, and the State Department Agency for International Development (AID) and the Export-Import Bank were explicitly told to “withhold” loans and investment guarantees “until further notice.”
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Compared to the $110 million AID administered in Chile between 1968 and 1970, Chile would receive approximately $3 million during Allende’s presidency. Similarly, between his election and his overthrow in 1973, IDB loans totaled $2
million compared to $46 million in 1970, and the World Bank approved no loans at all compared to the $31 million it had granted in the two years before Allende assumed power.
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Meanwhile, as part of the Nixon administration’s Covert Action Program inside Chile, Washington had been boosting Allende’s political opposition parties. Primarily, U.S. covert operations focused on the biggest of these, Chile’s Christian Democrat Party (PDC) and its prospects in Chile’s forthcoming municipal elections in April 1971, but it also delivered funds to the right-wing National Party (PN) and the conservative wing of the Radical Party. Intervening in municipal elections was nothing new for the United States; in 1969 Washington had expended $350,000 to help the PDC.
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However, two years later, denying the UP a majority in an election that was widely regarded to be a “plebiscite” on Allende’s mandate was considered well worth quadruple that amount. According to a memorandum drafted for the purpose of persuading 40 Committee members to support the allocation of substantial funds, the United States’ financial contribution was necessary to “slow down Allende’s progress in establishing a totalitarian Marxist state in Chile.” In January the 40 Committee heeded such warnings, granting $1.24 million for improving media capabilities and ensuring that the opposition was able to conduct a “vigorous electoral effort to maintain the morale.” As far as U.S. government officials were concerned, supporting Chile’s opposition parties had widespread benefits—“any opposition voice will be helpful,” Kissinger’s new assistant for Latin American Affairs, Arnold Nachmanoff, had written to him ahead of the 40 Committee meeting in January. With extra support, it would be “more difficult for the [Chilean] Government to pressure or squeeze out opposition…. The parties do not have sufficient resources nor access to other sources of funds.” Nachmanoff also warned that “a massive UP electoral victory would have significant psychological repercussions not only in Chile but throughout Latin America.” Given this threat, the United States was concerned about the opposition’s lack of unity and its failure to launch a coordinated attack against him. As Nachmanoff had informed his boss in January, the CIA was “urging cooperation.” However, just over two weeks before the election the situation had not improved. Indeed, the director of the CIA reported to the 40 Committee that “factionalism” continued and that the PDC was “urgently seeking” more support from the United States in the context of the Allende government’s “impressive election effort” and a lack of anticipated funds from industrial and commercial sectors. The Nixon administration was only too happy to fill the gap; it responded
positively to this request, granting an additional $185,000 to the PDC on 22 March.
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In the end, however, this financial investment fell short of denying the UP victory. When Chileans went to the polls on 4 April 1971, the UP’s parties gained 49.7 percent of the vote, a sizable share compared to the 36.4 percent that Allende had received six months earlier. To a large extent, the results indicated the success of the UP’s domestic program that, by April, had achieved a partial redistribution of income, a modest decrease in unemployment and inflation, and support for its nationalization and agrarian reform programs.

However, the municipal results were by no means decisive when it came to the balance of power between the UP and its opposition. In spite of the increased support for parties on the Left, the CIA also claimed success, concluding that denying the UP an outright majority and restoring the Chilean opposition’s confidence were the “fruits of U.S. government financial assistance.” Furthermore, the CIA congratulated itself on achieving this without significantly raising Allende’s suspicion. As U.S. intelligence analysts concluded, the UP’s opposition was “buying time and remaining viable,” even if they were pessimistic about Allende’s future revolutionary programs.
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Washington was concurrently focusing on courting the Chilean military, which it believed would be pivotal in any “potential future action” against Allende.
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In 1971 there were 146 Chileans being trained to fight communism at the U.S. Army School of the Americas in the Panama Canal Zone (the number would rise to 257 by 1973). There, they took courses on counterguerrilla operations, the use of informants, counterintelligence, subversion, countersubversion, espionage, counterespionage, interrogation of prisoners and suspects, handling mass rallies, populace and resources control, psychological operations, raids and searches, riots, surveillance, and terror and undercover operations.
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When the issue of Chilean requests to the Foreign Military Assistance program had come up in February 1971, the Pentagon had also indicated its predisposition to help. As a paper drawn up by the Defense Department noted, assistance would “1) strengthen our influence in the Chilean military services and thus attempt to harden resistance to communist domination of Chile; 2) increase Chilean dependence on U.S. sources of supply for spares; and 3) pre-empt communist suppliers of equipment from an association with Chilean military services.”
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