The first thing one noticed upon entering Santiago in March 1972 was the omnipresent political graffiti. It was as if every vertical space had grown its own slogan. The walls sliding by the bus window called out in a din of dripping reds and scrawled yellows "A People United Cannot be Defeated," "Vote for Popular Unity," "Che Lives," "Defeat Yanqui Imperialism." But there was a somber tone to the city that no amount of revolutionary prose could conceal. The Latin American autumn was quietly stealing the bright leaves away, leaving them in gray-brown piles that merged with the concrete sidewalks and the people walking along them. And there was an undefined tension in the people one met and a sense of resignation to a foe one could not see.
Like a city under siege Santiago lay brooding among itself. The lines of people waiting with ration coupons for cigarettes or soap. The almost begging appeal of shopkeepers with nothing to sell, standing in open door ways watching you pass by. An old woman crouching by a park bench stuffing a toothless craw with a heel of bread, as if something might take it away before she could finish it. And very beautiful young women prostituting themselves for five U.S. dollars to make enough money to leave the country or feed a family, they said.
Politics imbued some life into the streets. Middle-and upper-class housewives would march in chanting, charging cavalcades with a crashing of pots and pans, protesting food shortages and inflation. Passers-by would turn to watch. It was the best entertainment in town, but even the policemen seemed bored by it all. Strikes were a daily happening. The bus drivers would refuse to work or the doctors would threaten to walk out. One day the Catholic Church gathered all its parochial schools together to stage a demonstration in the center of town: thousands of Catholic high school students in their blue uniforms chanting political slogans in pre-pubescent tones behind stone-faced priests robed in black, each looking like a latter day Moses with his flock. Although the demonstration was a serious protest to the government's stated intention of abolishing all parochial education, the men on the street corners seemed more concerned with the passing rows of bumping teen-age backsides than with any political message their backsides than with any political message their owners might have been peddling.
The political graffiti, the demonstrations, the gray-brown tones of city and people, the tension and resignation underlined the realities of Chilean life in March 1972. Allende's Popular Unity Party had just gained more seats in the congressional elections, against the predictions of domestic and international political seers. The "Chilean road to socialism" was still being paved, but no one really knew where it would lead. Inflation was climbing above 200 percent. The black market thrived like a parasite on the rationed existence of the people. International credit was all but nonexistent. Copper prices had fallen on the world market, leaving Chile bereft of its most profitable source of international monetary reserves. There were threats of violence and whisperings of coups.
Over all this lay something more. Two weeks before a North American newspaperman named Jack Anderson had told the world what Allende had been telling Chileans for years. ITT, an American corporation, had attempted to influence the electoral process in Chile through the CIA. Moreover, ITT was involved in efforts to provoke the Chilean military into a coup, and to cut off all international financial aid to Chile. ITT had also funded Allende's major opponent in the press, the newspaper E1 Mercurio, owned and operated by the Edwards family, which was popularly identified as Chile's most capitalistic of capitalist families. Allende was vindicated. He scored the United States and ITT. One had the feeling that they were one and the same for many Chileans in those heated days. It was Allende's smoking gun and he displayed it with a style that would have brought tears to Perry Mason's eyes.
The Popular Unity Party's policy of nationalizing and expropriating U.S. businesses was widely acclaimed and a pulsing nationalism seemed to speak of more to come. The unknown foe was at last revealed. The hand behind the inflation and food shortages and political disruptions now had a face. Yes, Chile was under siege and times were correspondingly bad. But one could feel a special elation in the cafes that at last a culprit had been clearly identified and found guilty. Through all the chaos and personal trauma of political and economic deterioration there was finally some small cause for hope, symbolic though it may have been. And symbolic it was.
March 1972 was the beginning of the end for Allende's Chile. The congressional electoral victory had set Allende's opponents firmly in motion to destroy him after they realized he would not be voted out of office by the Chilean people. Though no one knew it at the time, the ITT disclosures were not so much cause for future hope as they were indications of future tragedy.
After Allende's election plurality of 36 per cent in the presidential race of 1970, the world waited for a month to see if the Chilean Congress would vote for the first democratically elected Marxist in history. It did by a majority vote of 78 per cent. On October 24, 1970 Chile inaugurated a constitutionally elected Marxist pledged to forge a socialist state. One of Allende's first moves was to open discussions on the expropriation of the Chilean Telephone Company, owned by ITT. Allende wanted more telephones for the poor and claimed ITT had run the telephone system carelessly. ITT denied the charges. ITT said the Chilean Telephone Company was worth $153 million; Allende offered $24 million to open negotiations. ITT officials felt that negotiations on that level were meaningless and sought other means to maintain company control and property. ITT went to the CIA and the White House for help.
ITT's pitch was strong. The corporation had a platform and a plan. ITT argued that it was illegal for Chile to expropriate U.S. owned property without just compensation. Besides being bad business and illegal, ITT investments were insured by the U.S. government's Overseas Private Investment Corporation, which offered ITT financial protection. However, if Chile expropriated without compensation the U.S. taxpayer would end up footing a $100 million bill on the insurance. This gave the U.S. government a financial stake in ITT's private investments.
Beyond all these legalistic cost/benefit analyses, ITT had another line to sell, one that spoke of ideology, not dollars and cents. ITT noted in its memos on Chile, which are cited in the Senate Multi-National Sub-Committee report, that "we must decide whether we, ourselves, are to return to fundamental principles on which this country [the U.S.] was founded, but also whether we are to stand firm for democracy for the sake of those friends of ours in Latin America who have based their hopes and aspirations on our strength. This is not a time to deny our own heritage, but is a moment of truth when we must stand erect and be counted."--"Our prestige is at a low ebb in Latin America--this is a consensus. It is low because our policy has been weak and indecisive."--"Freedom is dying in Chile and what it means to Latin America and to us--to free men everywhere--is not pleasant to contemplate."
With this combination of economic and ideological argument ITT sought to stop Allende's election in 1970 and convince the U.S. government to help in the effort. But Allende was elected and ITT lost the Chilean Telephone Company properties to expropriation, as did other U.S. corporations. It seemed then that ITT had lost the war.
ITT had not lost the war, however; it had in fact started it in earnest or given impetus to an ongoing conflict. Since 1961 the U.S. had spent $1.5 million on economic aid to Chile. This was in a continuing effort to "keep Chile from going Marxist," according to an ITT memo.
Chile had the oldest Communist Party in Latin America. It started in 1924. In the 1964 presidential elections Allende received more of the vote than he did in the 1970 elections. However, he still did not receive a plurality while his opponent, Eduardo Frei, did. A group of U.S. businesses, ITT among them, gave Frei financial support in 1964.
What ITT did not know was that the CIA also supported Frei's election with $3 million. And while the U.S. government claimed, according to Charles A. Meyer, former assistant secretary of state for Latin American affairs, that "we financed no candidates, no political parties before or after September 4 ," and despite the fact that Nixon stated in October 1969, "We will deal with governments as they are," it is now clear that the U.S. government deeply influenced Chilean politics to the extent of buying votes in the Chilean congress and funding political candidates as early as 1964. While ITT officials were trying to give the CIA $1 million to stop Allende's election, the CIA was already spending its own millions buying votes and advertising. According to testimony by William Colby, director of the CIA, before the House Armed Services Intelligence Subcommittee last April, the CIA then spent $8 million more after Allende's election in 1970 to "destabilize" the Chilean government.
The CIA was not alone in the U.S. government in taking action against Chile. According to an ITT memo cited in the Senate Multi-National Subcommittee report, U.S. Ambassador Edward Korry, received the "green light" from the State Department "to move in the name of President Nixon." The memo says Korry was given "maximum authority to do all possible--short of a Dominican Republic type action--to keep Allende from taking power." Korry had a reputation in Chile as a virulent Allende-hater. He was a Nixon appointee.