1973-03-22

Welcome to Latin American Press Review: a weekly selection and analysis of important events and issues in Latin America, as seen by leading Latin American newspapers. This program is produced by the Latin American Policy Alternatives Group. Comments and suggestions about the program are welcome, and may be sent to this organization at 2205 San Antonio Street in Austin, Texas.

It's hard to see how Panama can fail to achieve its objective of exerting painful diplomatic pressure on Washington through the meeting of the United Nations Security Council, which began last week in Panama City. Such meetings offer the poor nations of the underdeveloped world an opportunity to mobilize international support for their grievances against the rich nations in the glare of world publicity. The following excerpts from a front page editorial in the Panamanian newspaper, La Estrella de Panamá, comments on the current negotiations.

Our foreign ministry has engaged in able, patient and cautious diplomatic efforts since 1961 to serve as host to the meeting of the UN Security Council in Panama. That we have achieved this objective, considering that our only element of pressure was our moral force, constitutes a victory for the constitutional government and for the people that support our sound foreign policy. When the Security Council meets at the Arosemena Palace, our flag will be flown together with those of the 131 members of the United Nations. Panama will never again be alone in the long and painful battle in which it has been engaged since 1903. People everywhere are always fair and freedom-loving. The peoples of the world will be with us this March.

The editorial continues, "In October 1971, Panamanian foreign minister Juan Antonio Tack, addressed the 16th UN General Assembly and strongly denounced the existing situation in our country caused by foreign intervention in our sovereign territory." He said, "In 1903, Panama had imposed upon it a treaty that enabled the construction of a canal. A treaty that is humiliating to my country in most of its stipulations. By virtue of that treaty, a foreign territory known as the canal zone was embedded in the heart of our republic with its own government and laws issued from the United States." This from the Panama Daily, La Estrella de Panamá.

A further comment on the Panama situation from the Mexico City daily, Excélsior. "For 70 years", says General Omar Torrijos, "strong man of this country. Panama has provided the bodies and the US has provided the bullets." He's referring metaphorically to the colonial treaty, which is now under consideration of the United Nations Security Council. The 44-year-old General said that the approval of the new treaty can take place only by a plebiscite of the Panamanian people. With complete respect for the sovereignty of Panama, and without the qualifications that it be a perpetual or non-limited agreement.

Torrijos said, "One does not negotiate sovereignty. When we speak of sovereignty, they speak of economics. They say, 'Why are you so scornful of money?' As if money could buy everything. Sovereignty and only sovereignty is the question."

By airplane, car, and on foot, Torrijos toured the north of his country with Excélsior reporters. They observed the drama, the sadness, and the misery of the Panamanian peasants. Torrijos said, "We are subjugated by drought and erosion, as well as by a canal. An agrarian reform was initiated four years ago," and Torrijos said that this has total priority, but the canal by its very nature, is a more international issue.

Generation after generation, we have fought over this canal to change this situation. We haven't got a thing. The US has always insisted on a bilateral treaty and bilateral negotiations. We agreed with this and we're loyal to this until we realize that the canal is a service to the entire world. The world must realize that Panama is more than a canal, and that the canal is more than a ditch between two oceans. Around this ditch is a country, a nation, and a youth ready to sacrifice itself to regain jurisdiction over 1400 square kilometers now fenced off under the control of a foreign government.

Torrijos says that the legislature decided not to continue accepting the payment of $1.9 million so that the world can see that we are not being rented, we are being occupied. Excélsior asked Torrijos under what conditions he would sign a new treaty. The main problem he singled out was the length of time of the commitment. The US had been persistently pressing for an agreement in perpetuity, and their compromise offer of 90 years was evidently also too long for Torrijos. When the interviewer asked, "Do you feel that the other Latin American countries are behind you?" The general replied, "Yes, the sentiment of Latin Americans is almost unanimous." This was from Excélsior, the Mexico City daily.

And finally the London magazine, Latin America interprets the security council meeting in Panama as having important implications for US Latin American relations. Latin America says, "There is every reason to suppose that most, if not all, Latin American nations will use the occasion to air virtually every major complaint they have against the United States. During a visit to Mexico earlier this month, the Columbian foreign minister said that during the meeting, the countries of this continent must bring to discussion the disparity in the terms of trade, the growing indebtedness, the classic instability of raw material prices and the lack of markets which obstruct industrialization. The question of the 200-mile limit is also likely to be raised."

Latin America goes on to say, "It is the question of the canal and Panama's relations with the United States that are at the heart of the meeting, and it is here that the United States is most embarrassed. In the wake of the withdrawal from Vietnam, the Nixon Administration is anxious to follow a less exposed foreign policy and sees playing the world's policemen. It would be happy to make Panama substantial concessions, which if it were a free agent, would doubtless include formal recognition of Panamanian sovereignty over the Canal Zone and an end to the perpetuity clause of the 1903 treaty; much bigger payments to Panama for the use of the canal; probably a phasing out of the Canal Zone status as a colony of the United States; and perhaps even a gradual disbandment of the huge anti-guerilla training and operational base in the zone.

Though this would touch upon the sensitive question of continental security although Washington has made some concessions. Last month in a symbolic gesture, it removed the 20-foot-high wire fence separating the zone from Panama proper. The fence against which more than 20 Panamanians were killed in clashes with the United States Army in 1964. The United States ambassador, Robert Sayre, has publicly recognized that the zone is a Panamanian territory, though under United States jurisdiction. This commentary from the weekly Latin America.

Ercia from Santiago reports on political struggles within the ruling Popular Unity government in Chile. The slogan, "The United Left will Never be Conquered," had large repercussions in the 1970 presidential campaign. It arose from the round table discussions, which the Communist party, the Socialist Party, and other left groupings attended. The leaders of the Popular Unity made it clear that victory was possible only if this slogan was applied and cooperation strong. That was in fact the case in 1970. Now after 27 months of power, the apparent ideological strength of the left has begun to unravel a bit. The threatening split between the communists and the socialists, concerns the extent of the social or state sector. As well as disagreement over methods of rationing and distribution. In Chile, the Communist Party represents a fairly cautious conservative position, and they have accused the socialists of supporting a far left grouping, the movement of the revolutionary left. The members of this organization have been calling for the creation of public institutions independent of the government. Examples of these would be labor groups, community associations, and peasant leagues. This published in Ercia from Santiago.

The Allende Government's substantial vote in the Congressional elections may prove to be a deceptive success if the pronounced differences between the two principle ruling parties are allowed to continue, the Peruvian Latin American Press News Agency comments on the situation in Chile.

In a rare display of toughness, the Movement of Popular United Action, MAPU, expelled 15 of its members from the party last week. Its action, coming so soon after the congressional elections, is an omen of the likely state of internal politics within the ruling Popular Unity Coalition in the next few months. For now, the electoral excitement has settled. It has become evident that the potential for conflict and division within the coalition is greater than it was before. The incident was provoked by the publication of an internal MAPU document by the right-wing daily El Mercurio four days before the elections. Frank and detailed, the report contained an analysis of the two and a half years of Allende's administration. Naturally, it was a godsend to the opposition, which exploited it to the full. Particularly stressing its admissions of error by the government, and its criticism of the government for bringing in military cabinet ministers. The government was clearly embarrassed by the affair, and President Allende, speaking to foreign journalists two days before the elections, made no secret of his irritation. "The party should have burnt the document after it had been discussed", the President said.

Privately, Allende did more than express irritation, said Latin American Press. "He summoned the leaders of MAPU and told them bluntly that unless they offered a satisfactory explanation quickly, he would be forced to ask for the resignation of every MAPU member in high government position. The party took his demand seriously and on the 7th of March, expelled 15 members, explaining that the group had refused to accept the revolutionary character of the government. But in fact, the reverse is true. The expelled group was close to the movement of the revolutionary left, the extreme left-wing organization, which although outside the government supported it in the recent congressional elections. Like the mayor, the expelled members of MAPU have doubts about the participation of the armed forces in the government. And are completely opposed to the Communist Party's strategy of consolidation within the coalition, and reconciliation with the Christian Democrats. The remainder of MAPU is moderate in feeling, although it claims a certain distinction between its position and that of the communist." This commentary is from the Latin American Press Agency in Lima.

The Brazilian weekly, Opinião, reported this week from Rio on the further activities of the Catholic Church in opposing the military government. Brazil's bishops, in their strongest and most detailed declaration of human rights, have denounced various types of discrimination in this country and the limitation on basic freedoms here. According to conclusions of the 13th General Assembly of the National Conference of Brazilian Bishops made public last week, "It is the duty of the Roman Catholic Church to inform public opinion of the violations of human rights and to defend those rights." The question of human rights was one of the main topics on the agenda of the General assembly that met in Sao Paulo for 10 days last month. A total of 215 bishops or 80% of the episcopate of the world's largest Catholic country, took part in the meeting.

Opinião continues, "The document is not really an open challenge to Brazilian authorities, but a clear statement of the church's position on the question of human rights, and an offer to work with the authorities to improve the situation. In the last year, individual bishops and groups of bishops have publicly attacked Brazil's military regime on its social policies. In particular, they have denounced police and military authorities for arbitrary and repressive actions which have included torture. They have also attacked civilian authorities for allowing large business interests to exploit rural workers in the name of economic development."

The basic human rights, said by the bishops to be among those least respected, were the right to liberty and physical integrity when faced with excessive repression. The right to political participation, in particular denied to the opposition party. The right to association, especially in regard to labor unions. The right to expression and information. The right to a legal defense, in view of the absence of habeas corpus provision. The right to possess the land on which one works. The right not to be subjected to systematic, political, and social propaganda, and aggressive and indiscriminate commercial advertising. And the right of the church to greater participation in social activities sponsored by the civilian authorities.

Opinião concludes, "The bishops came out even more strongly in denouncing various types of discrimination in Brazilian society. Including discrimination in favor of big landowners and against peasant families. For business management against workers. For whites against blacks. For pro-regime, political parties against the opposition. And for men as opposed to women. The bishop's strongest denunciation was directed against the oppression of Brazil's Indian population. The document charged that about 100,000 Indians were in the process of being exterminated. The document urged that the church make a study of the present condition of the Indians and that all persons engaged and work with Indians join forces to help them." This is from the Brazilian weekly Opinião.

The second round of bilateral talks between Chile and the United States is to open next week in Washington, in an effort to resolve some of their main outstanding differences. Particularly questions of finance, trade and aid, and compensation claims by United States and copper companies.

Argentina, Guatemala, and Venezuela, all of which have territorial disputes with Britain or former British colonies, strongly opposed Britain's application for permanent observer status at the Organization of American States. Venezuela also raised the issue of colonialism, which was criticized by Brazil and Peru on the grounds that other colonial countries such as Portugal have been granted observer status as a matter of routine. They also pointed out that Britain gave regular technical assistance to the OAS.

You're listening to Latin American Press Review. A weekly selection and analysis of important events and issues in Latin America, as seen by leading Latin American newspapers. This program is produced by the Latin American Policy Alternatives Group. Comments and suggestions about the program are welcome and may be sent to LAPAG at 2205 San Antonio Street in Austin, Texas. This program is distributed by Communication Center, the University of Texas at Austin.

This week's feature deals with one case study in the controversy between multinational corporations and Latin American nationalist governments, which pose a threat to corporate investments in Latin America. The ITT secret memorandums concerning its interventions in Chile, have made the headlines again recently, calling attention to the strong power these companies wield in Latin America.

Senate hearings in Washington this week have been delving into the activities of ITT's busy Washington office, this time involving its campaign to get Nixon Administration help in protecting ITT properties in Chile from Marxist President Salvador Allende. The Wall Street Journal reports that ITT officials bombarded the White House with letters and visits, called on the State Department, huddled with the US ambassador to Chile, and lunched often with a Central Intelligence Agency spy boss, known as "Our Man." What ITT wanted during this hectic pleading in 1970 and '71, was for Washington to threaten the newly elected Allende government with economic collapse, according to William Merriam, who was then head of the company's Washington office. "If Allende was faced with economic collapse, he might be more congenial toward paying us off", Mr. Merriam told a Senate Foreign Relations Subcommittee. The Chilean government had expropriate the ITT-controlled Chile Telephone Company without, the company says, offering adequate compensation.

The Wall Street Journal goes on to say that the Senate subcommittee, chaired by Senator Frank Church, was created especially to investigate the influence of big multinational companies like ITT on US foreign policy. ITT's involvement in the 1970 Chilean presidential election, was first brought to light a year ago in columns by Jack Anderson, who had obtained a stack of memos, cable grams, and letters between ITT officials. So far, ITT has had little luck protecting its investments in Chile. It claims that the ITT-controlled telephone company that was intervened by the Allende government in September 1971, has a book value of $153 million. ITT has filed a claim for $92 million with the US government's Overseas Private Investment Corporation, which ensures American property against foreign expropriation. But OPIC has a rule against provocations or instigation by its insurance clients, unless the activity was requested by the US government. So the question of who took the lead in meddling in the 1970 Chilean election, ITT or the CIA, could determine whether the insurance claim is valid.

Mr. Merriam told Senator Church that ITT Chairman Harold Geneen introduced him in July of 1970 to William Broe, the CIA's Latin American Director for Clandestine Services. Mr. Merriam said he was instructed to stay in touch with Mr. Broe in the future. Without saying who initiated this meeting in the Washington Hotel, Mr. Miriam made it clear that the CIA was impressed with political reporting on the Chilean situation by ITT'S operatives in Latin America. He said Mr. Broe sent CIA messengers to his office to get the reports. The September 17th, 1970 cable from Bob Barella and Hal Hendrix, two ITT officials in Latin America, suggested Mr. Allende's election might be headed off with help from we and other US firms in Chile. The cable recommended that advertising funds be pumped into a financially shaky conservative newspaper in Chile. The cable also suggests, concludes the Wall Street Journal account, "that ITT bring what pressure we can on the US information service to circulate the newspaper's editorials in Latin America and Europe."

In a memo dated September 14th, 1970, an ITT operative in Chile wrote that he had spoken with the state department's Latin American advisor to Henry Kissinger. "I told him of Mr. 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." The threat to its interest explains in a nutshell why ITT worked so hard in the period between September 4th and November 4th to prevent the Allende government from taking power in Chile. ITT had a great deal to lose in Chile.

Its holdings consisted of six affiliates, employing about 8,000 workers and worth around $200 million. 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. Among foreign investors in Chile, only the copper holdings of Anaconda and Kennecott exceeded the worth of ITT's Chilean subsidiaries. In 1969, the Frei administration agreed that the telephone company be guaranteed a minimum annual profit of 10%. Profits for ITT have further been augmented by special foreign exchange arrangements for the communications monopolies in Chile.

The following memos illustrate how far ITT was willing to go to keep these investments. They also reveal the close ties between ITT executives and the US government, including the Central Intelligence Agency. And in the relations between ITT and the Chilean right. ITT had access to the centers of Chilean domestic power as well, having recruited prominent Chileans through career and investment ties. The memos expose ITT as a corporate nation on which the sun never sets. As Jack Anderson summarized, "ITT operates its own worldwide foreign policy unit, foreign intelligence machinery, counterintelligence apparatus, communications network, classification system, and airliner fleet with total assets equal to the combined gross national products of Paraguay, Guatemala, Costa Rica, Haiti, Bolivia, and Chile. ITT can wield its power almost at will."

The key memoranda begin on September 17th, 1970, 6 Weeks prior to the historic presidential election, which placed the Allende government in power. ITT field officials, Hendrix and Barella, advised an ITT vice President, E.J. Gerrity about the Chilean presidential campaign, suggesting alternatives which could thwart Allende's election chances.

The report stated that, "The surface odds and foreign news media appear to indicate that Salvador Allende will be inaugurated as president November 4th. But there is now a strong possibility that he will not make it. The big push has begun in Chile to assure congressional victory for Jorge Alessandri on October 24th as part of what has been dubbed the Alessandri formula to prevent Chile from becoming a communist state. Late September 15th, US Ambassador Edward Korry finally received a message from State Department giving him the green light to move in the name of President Nixon. The message gave him maximum authority to do all possible, short of Dominican Republic type action, to keep Allende from taking power."

The report further contended that the Mercurio newspapers are another key factor. "Keeping them alive and publishing between now and October 24th is of extreme importance. They're the only remaining outspoken anti-communist voice in Chile and under severe pressure, especially in Santiago. This may well turn out to be the Achilles heel for the Allende crowd. The Allende effort more than likely will require some outside financial support. The degree of this assistance will be known better around October 1st. We have pledged our support if needed."

Then on September 29th, Vice President Gerrity cabled ITT President Harold Geneen in Brussels, giving more details of the measures being considered to induce economic collapse in Chile. The cable says, "Subsequent to your call yesterday, I heard from Washington and a representative called me this morning. He was the same man you met with Merriam some weeks ago. We discussed the situation in detail and he made suggestions based on recommendations from our representative on the scene, and analysis in Washington. The idea presented is to follow economic pressure. The suggestions follow. Banks should not renew credits or should delay in doing so. Companies should drag their feet in sending money. And making deliveries in shipping, spare parts, etc. Savings and loan companies there are in trouble. If pressure were applied, they should have to shut their doors, thereby creating stronger pressure. We should withdraw all technical help and should not promise any technical assistance in the future.

A list of companies was provided, and it was suggested that we should approach them as indicated. I was told that of all the companies involved, ours alone had been responsive and understood the problem. The visitor added that money was not a problem."

He indicated, the cable continued, "that certain steps were being taken, but that he was looking for additional help aimed at inducing economic collapse. I discussed the suggestions with Guilfoyle, another ITT vice president. He contacted a couple of companies who said they had been given advice, which is directly contrary to the suggestions I received. Realistically, I did not see how we can induce others involved to follow the plan suggested. We can contact key companies for their reactions and make suggestions in the hope that they might cooperate. Information we receive today from other sources indicates that there is a growing economic crisis in any case."

The Gerrity cable was followed by a memorandum, dated October 9th, from another of the ITT vice presidents, William Merriam to John McCone, Director of the CIA from 1962 to 1965, and now a director of ITT. Merriam concluded that, "Practically no progress has been made in trying to get Latin American business to cooperate in some way so as to bring on economic chaos." GM and Ford, for example, say that they have too much inventory on hand in Chile to take any chances. And that they keep hoping that everything will work out all right. Also, the Bank of America has agreed to close its doors in Santiago, but each day keeps postponing the inevitable. According to my source, we must continue to keep the pressure on business. I was rather surprised to learn that in this man's opinion, the Nixon Administration will take a very, very hard line when and if Allende is elected.

As soon as expropriations take place, and providing adequate compensation is not forthcoming, he believes that all sources of American monetary help either through aid or through the lending agencies here in Washington will be cut off. He assures me that the president has taken, at this time better late than never, I guess, a long, hard look at the situation and is prepared to move after the fact. We had heard previously from the lower level at the State Department that Hickenlooper would not be invoked. This policy has either changed or the lower echelon does not know of this change. This is the first heartening thing that I have heard because with few exceptions, Nixon has paid very little attention to Latin America."

Subsequent memos indicate that, although both ITT and the CIA, gave verbal assurances of material support to Chilean general Roberto Viaux, who was maneuvering inside the army to stage a possible coup in late October. The attempt failed to materialize. None of ITT's efforts were effective in preventing Allende's election on November 4th, 1970. Although the memos indicate that the ITT maneuverings fail, we know that in the one and one half years that have passed since the Popular Unity government assumed power, the Chilean right aided by the US government and US business interests has continued to engage in subversive activity against the Allende government. This activity has taken many forms, including assassination attempts against the Chilean president 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. All of these tactics were suggested in the secret memos.

ITT has struggled for a year to ring from the UP a generous compensation for its interest in the Chilean telephone company, Chi Telco, which the Allende government earmarked for expropriation immediately upon its inauguration. Chi Telco was ITT's most profitable Chilean asset. Throughout the first part of 1971, ITT bickered over the terms of the expropriation, and finally on September 30th, 1971, the government took over operation of Chi Telco, claiming its services were highly deficient. Since then, ITT and UP have continued to negotiate over how much the government should pay for ITT's 70% share in Chi Telco. ITT valued the company at $153 million, but the government claimed it was only worth $24 million. Based on its past experiences in other Latin American countries, ITT has every reason to believe that it would be reimbursed. 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.

The memorandum that cited earlier may destroy ITT's chances for compensation from the Allende government, and may lead to further nationalization of ITT properties in Chile. In order to appropriate a corporation, the Chilean Congress must pass a constitutional amendment in each case. Presumably, these documents are giving the government more fuel in its effort to regain control of Chile's industries from the North American investors. As nationalism grows in Latin America, the threat to US corporations abroad also grows. As the documents make clear, US corporations are urging the US government to take a firm stand against unfriendly acts of expropriation by Latin American government, and are prepared to resist this trend by actively interfering in the internal affairs of other nations to safeguard their interests.

You've been listening to Latin American Press Review. A weekly selection and analysis of important events and issues in Latin America, as seen by leading Latin American newspapers. This program is produced by the Latin American Policy Alternatives Group. Comments and suggestions about the program are welcome, and may be sent to LAPAC at 2205 San Antonio Street in Austin, Texas. This program is distributed by Communication Center, the University of Texas at Austin.