Annotations for Countries: Costa Rica

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.

In yet another scandal, the New York Bank account of Costa Rica president Jose Figueres has grown by $325,000 dollars since that Central American nation gave haven to American financier Robert Vesco. According to the Wall Street Journal. The Journal said securities and exchange commission documents show that 325,000 was transferred to the Figueres account at the National Bank of North America in New York over a period from last August to early this year. The money, the Journal said, came from Vesco linked companies in The Bahamas and Costa Rica. 

Vesco is under indictment in New York, along with former Attorney General John Mitchell and former commerce secretary Maurice Stans on charges of trying to influence a securities and exchange commission investigation with a $200,000 dollar contribution to President Nixon's 1972 campaign. The SEC has brought suit against Vesco in the United States, charging him with defrauding shareholders of investors overseas services of $224 million dollars during a period when he was investing heavily here. 

Meanwhile, in Costa Rica, where Vesco has been a controversial figure since last summer, the 37-year-old financier was cleared of any charges of wrongdoing in that country by a special congressional committee, but it is estimated that he had put 5.25 million into Costa Rica nationalized banks, 1.5 million into a government housing institute, 1 million into a government waterworks institute, and an undisclosed amount in private residences, a coffee plantation, timber-works, and low income housing construction. This story from the Wall Street Journal. 

Another country faced with a choice, is Costa Rica. The Miami Herald reports from San Jose that the Costa Rican legislators may decide what to do with Robert Vesco, who is wanted in the United States, after two conflicting reports on the financier are debated at June 4th, in the Costa Rican legislative assembly. Vesco and 40 others are defendants in a US Security and Exchange Commission suit, charging them with both being shareholders of $224 million in investors overseas service limited funds.

Among those involved with Vesco is James Roosevelt, son of the former president Franklin Roosevelt. Vesco has also been indicted with former US Attorney General John Mitchell and former Commerce Secretary Maurice Stan in connection with Nixon's 1972 campaign. Vesco failed to appear in New York recently to answer the indictment.

US authorities are reported to be studying a 1922 extradition treaty with Costa Rica to see if Vesco could be forced to return home. The financier has renounced US citizenship and is now curing a Costa Rican passport. Vesco's interests have been closely linked with the financial business of President Jose Figueres of Costa Rica. The US financier has been in seclusion here. A majority report by a special committee formed to investigate Vesco's mutual funds in this Central American nation, defended his activities on the grounds that the funds were beneficial to the nation's economy.

Vesco's Costa Rican interests have been estimated at about $25 million, but the committee president Rafael Valladares, filed a dissenting opinion attacking the financier. Assembly sources say they expected a lengthy debate on the issue in the legislative assembly, June 14th. This AP copy from the Miami Herald.

The series of revelations about illegal actions on the part of political and governmental officials in the United States, known as the Watergate affair, has received wide coverage in the Latin American press. Rio de Janeiro's Jornal do Brasil, for example, devotes a full page to it daily. The editorial comment has also been extensive. Today, we will review some of this commentary on Watergate, and also describe how the scandal is having political consequences in one Latin American country, namely Costa Rica.

President Nixon has never been a popular figure in Latin America and the Latin press has shown little sympathy for his plight because of Watergate. Most papers clearly doubt that Nixon knew nothing of the break-in plans or the coverup. Rio de Janeiro's Opinião, for example, asks if Nixon can honestly maintain himself as President. The Weekly sees Nixon retreating from one strategic position to another in his statements as new facts emerge. Opinião concludes by wondering if Nixon's defenses will be strong enough to resist whatever facts are revealed next. 

La Prensa of Lima also sees Watergate as Nixon's Waterloo. If Nixon is getting a bad press in Latin America, the same cannot be said for American institutions. The Congress, courts, and especially the American press, has received wide praise in Latin America for pursuing the investigation. As La Prensa of Lima notes, "This may be Nixon's Waterloo, but nobody is talking about a Waterloo of democracy. It is precisely thanks to democracy," La Prensa continues, "That the secret sins have been unveiled." The Lima daily then concludes that only through a free press and enlightened public opinion can a democracy remain healthy and this is the most positive sign of Watergate.

Siempre! Of Mexico City says one of the characteristics of a representative democracy is that the authorities are not immune to punishment for crimes which they commit in the performance of their duties. Siempre! sees Watergate as proof that American institutions function well. Opinião of Rio de Janeiro also sees the scandal as a sign of the strength of American institutions. However, some of the revelations which have come from the Senate investigations have infuriated Latin Americans. This is especially true in Mexico since the congressional hearings have revealed that the Central Intelligence Agency has been operating there. 

Excélsior of Mexico City notes that the White House asked the FBI not to investigate certain aspects of the transfer of campaign contributions from Mexico because it would lead to disclosures of clandestine operations of the CIA. Excélsior thinks that fact deserves Mexico's protest and immediate change in United States policy, which flagrantly violates the principle of nonintervention. Excélsior continues the participation of the CIA in the internal affairs of Chile, the sending of Green Berets to Bolivia to combat Che Guevara, the aggression against the Dominican Republic, the case of the Bay of Pigs invasion, the invasion of Guatemala in 1954 to overthrow the Arbenz regime, are only some of the precedents of the intervention of Watergate in the affairs of Latin America.

Excélsior continues by noting that the CIA, a White House spokesman, and President Nixon himself have denied any connection of the CIA with Watergate in Mexico, but all have implicitly admitted that the CIA previously carried out operations there. Excélsior concludes that the Mexican government may not make a formal protest because of the friendship which unites the United States to Mexico. However, it will be necessary to employ firmness to demand that Mexico's political sovereignty is no longer violated by the CIA. While secret CIA activities are highlighted in the Mexican press, a different sort of problem faces the government of Costa Rica, which has been splashed with some of the mud of the Watergate scandal. 

Latin America reports that several days ago serious charges were leveled at the President of Costa Rica, Jose Figueres, claiming that $325,000 had been deposited in his New York Bank account through a Vesco-linked company. Vesco, a wealthy Wall Street financier, has recently been indicted of embezzlement and has been linked to the Watergate scandal. The Costa Rican President vigorously denied the allegations and defended Vesco's conduct saying that in Costa Rica, if nowhere else, it had been honest. As in so many other areas of the Watergate scandal, a great deal of questions concerning the high level involvement remained to be answered, this from the British News Weekly Latin America. 

Tri-Continental News Service in New York reported this week on the expanding market in human blood, which Tri-Continental calls the ultimate commodity. The shortage of blood plasma in this country has provided some enterprising US businesses with a profitable new commodity and has created a new source of misery for the poorest people in America. Donations of blood in the United States cover only about 60% of the annual need. The deficit, about two and a half million pints, comes from people who sell their blood in order to survive. The going rate in urban slums and poor southern states of the United States is from five to $15 a pint, which the companies then sell to hospitals for up to $35. 

Now, United States companies have found an even cheaper source of this strategic raw material. They have set up blood banks in half a dozen Latin American capitals, where unemployment rates of up to 50% assure a virtually unlimited supply of people willing to open up their veins for these merchants. The plentiful supply of blood has driven the price down, and prices are from $2 to $3 a pint are common. 

The blood exporting countries include Haiti, Guatemala, Costa Rica, Honduras, Mexico, El Salvador, Nicaragua, Columbia, and Brazil. A recent survey carried out by the Department of Experimental Surgery at the Autonomous University of Mexico estimated that the export of blood from Mexico alone was a $10 million annual business. Latin American blood is sent to West Germany and Israel in addition to the United States. 

Tri-Continental claims that many of the people who sell their blood are undernourished and anemic, and yet they will come in week after week to make their sale. The companies, which are not licensed or controlled by medical authorities, are not concerned with the loss of iron, which often results in the slow death of the chronic blood donor. 

Tri-Continental suggests that the reason why such practices persist is government corruption. When defense minister Luckner Cambronne was dismissed from his post in Haiti in November 1972, it was learned that he had been a partner in Hemo Caribbean, a US controlled blood company that also has branches in the Dominican Republic. Similar financial connections have been revealed between Carlos Arana Osorio, president of Guatemala, and the Sedesa company, which exports blood from that country, and in the case of the Samosas family's holdings in blood exporting companies in Nicaragua. This report from New York's Tri-Continental News Service.

The military Junta seems firmly in control in Chile after staging a successful overthrow of the government of President Salvador Allende on September 11th. The following report on recent events in Chile and world reaction to the coup is compiled from the New York Times, the Associated Press, the Miami Herald, the Mexico City daily, Excélsior, NACLA, Prensa Latina, and The Guardian. 

The Junta headed by General Augusto Pinochet issued a communique recently in which he said that the armed forces were searching the country to put down extremist forces. The military said they would expel from the country all of the Latin American leftists who had taken refuge there during Allende's rule. At the same time, relations were broken with Cuba and the entire Cuban diplomatic mission was put in a plane to Havana.

The Junta's interior minister, General Óscar Bonilla said the military took over the government because more than 10,000 foreign extremists living in Chile, including exiled guerrillas from Uruguay and Brazil, posed a threat to the country. The armed forces had to intervene in order to safeguard the destiny of the country, seriously threatened by extremist elements, Bonilla said.

Organizations in the United States, which have been expressing concern about the fate of the foreign exiles in Chile, also estimated their number at 10,000. Other sources have indicated that an equal number of Chileans were left dead in the wake of the coup. The military said that many Chileans and foreigners were being detained at the Ministry of Defense, the Military Academy, various military posts, and the dressing rooms of the national soccer stadium. A television station broadcast films of 60 prisoners in the dressing rooms, their hands clasped behind their heads. 

There were widespread reports that could not be confirmed that many former officials and supporters of Allende's popular Unity Coalition had been executed by the military. The North American Congress in Latin America, NACLA, a research group on Latin American affairs in the United States, monitored reports from Cuba and Inter Press News Service. They said that these sources and ham radio reports from Santiago all reported widespread fighting and the execution of many of Allende's associates and supporters. NACLA quoted Inter Press Service as saying that at least 300 foreign exiles were killed during and after the military takeover. 

NACLA also said the coup was an attack not only on the popular government of Chile, but the entire anti-imperialist movement in Latin America. Censorship was imposed on the Chilean media and foreign journalist dispatches. The Junta announced that 26 newspapers and magazines were told to suspend publication indefinitely because they were opposed to the Junta's goal of depoliticizing Chile. 

While the extent of resistance in Chile is uncertain due to conflicting reports, much of the rest of the world has raged in protest. An estimated 30,000 protestors filed past the Chilean embassy in Paris, brandishing red flags and banners and shouting "Coup makers, fascists, murderers!" and "Down with the murderers in the CIA!" Thousands of demonstrators marched in Rome, where a group calling itself the International Militant Fellowship claimed responsibility for a pre-dawn fire bombing of the Milan office of Pan-American World Airways. The group said the attack was in retaliation for participation in the coup by US imperialists. 

The West German government withheld recognition of the new Chilean regime for the time being, and in protest of the coup, canceled credits of 35 million marks, which it had agreed to extend to Chile. The World Council of Churches asked the Junta to respect the rights of political exiles in Chile, and the secretary general of that organization expressed the council's concern over the brutal rupture of Chilean democratic traditions. 

In Latin America, reactions were much stronger. The Argentine government declared three days of national mourning for the death of President Allende, and 15,000 marched in a demonstration in that nation's capital protesting the coup. Telecommunications workers in Buenos Aires staged a one-hour strike in solidarity with the Chilean workers who were killed by the troops of the military Junta.

Also in Buenos Ares, the movement of third-world churches condemned the coup and exhorted all Christians to fight the military dictatorship. Juan Perón, who will soon be elected president of Argentina, said that while he does not have the evidence to prove it, he believes that the United States engineered the coup. Venezuelan president Raphael Caldera called the military takeover a backward step for the entire continent.

In Costa Rica, thousands of students marched in protest of the coup and in solidarity with Chilean resistance fighters. While the Costa Rican government offered political asylum to Chilean political refugees. One of the loudest protests came from Mexico City where 40,000 joined in a protest march shouting anti-US slogans and burning American flags. 

An indictment of the type of economic colonialism, which had Chile in its yoke was voiced by Osvaldo Sunkel, a noted Chilean economist when he appeared last week before a United Nations panel investigating the impact of multinational corporations. The panel was created largely because of Chile's charges that the International Telephone and Telegraph Corporation had tried to block the election of Dr. Allende in 1970. United Nations officials maintained that there was a strong sentiment for such an inquiry apart from the ITT case. 

In his remarks, professor Sunkel charged that foreign corporations were bent on siphoning off resources of the developing countries. He heatedly disputed testimony by five corporate officers that their concerns had contributed to the health and welfare of the countries where they operated. He said, "I get scared, really scared when I hear such individuals speak of social responsibility. Who has appointed a small group of individuals to decide the fate of so many?"

Sunkel said, "The government of President Allende made an attempt at changing the structure of underdevelopment and dependence in Chile. It may have had many failings and committed many errors, but nobody can deny that it attempted to redress the unjust economic and social structure by fundamentally democratic means."

While much of the anger and protest around the world seems directed at the United States, State Department and White House officials have consistently denied that the US was involved in the coup in any way. Nevertheless, critics of the Nixon Administration's policy in South America blamed the United States for helping create the conditions in which military intervention became an ever stronger likelihood. Joseph Collins of the Institute for Policy Studies said the tactics were economic chaos.

Collins said that Chile had become the first victim of the Nixon-Kissinger low profile strategy in which credits are withheld while military assistance continues to pro-American armed forces. Military assistance to the Chilean regime continued throughout the three-year presidency of Allende, however development loans were halted. Collins said US companies had put pressure on their subsidiaries and on foreign associates not to sell vitally needed equipment and spare parts to Chile.

The following commentary on the role of the United States in the Chilean coup comes from The Guardian. "US involvement could be seen on several levels. US Ambassador Nathaniel Davis went home to Washington per instructions September 6th, returning to Santiago September 9th, only two days before the coup. Davis was a high-ranking advisor in the National Security Council from 1966 to '68 and later served as US Ambassador to Guatemala during the height of the pass pacification program against leftist forces there.

When Davis came from Guatemala to Chile in 1971, he brought a number of aides with him who had helped run the repression there. The State Department trains people for special jobs, and Davis seems to have specialized in these kinds of operations," says The Guardian.

According to The Guardian, Davis's philosophy of international relations was expressed in a speech in Guatemala in 1971. "Money isn't everything," he said, "love is the other 2%. I think this characterizes the US' policy in Latin America." The New York Times reported that the US was not at all surprised by the coup and that US diplomats and intelligence analysts had predicted a coup would come three weeks earlier.

"In another interesting possible prediction," claims The Guardian, "the State Department called back four US Navy vessels, which had been heading into Chilean waters for annual naval maneuvers scheduled to begin September 13th. The State Department claims that this was done when news of the revolt came, but some sources say that the order came before the beginning of the coup indicating prior knowledge."

The Guardian claims that US corporations were clearly pleased by Allende's overthrow. When news of the coup came, copper futures rose 3 cents on the New York Commodity Exchange, but the US government is cautioning against too optimistic a view on the part of expropriated companies since a too rapid return of nationalized properties would only heighten antagonisms and further reveal the coup's motivation. The preceding report on recent events in Chile was compiled from the New York Times, the Associated Press, the Miami Herald, the Mexico City Daily Excélsior, NACLA, Prensa Latina, and The Guardian. 

According to Marcha of Montevideo, Uruguay, many Latin American officials are dismayed at the Nixon administration's choices for ambassadors to Mexico and Argentina. Two of the most critical posts in Latin America, both men, Joseph Jova appointed ambassador to Mexico and Robert Hill appointed to Argentina have been criticized for their close connections with the CIA, the Pentagon and the United Fruit Company. 

Hill, a close friend of President Nixon recently chose to resign from his post as Assistant Secretary of Defense for International Security Affairs rather than comply with a Senate order to sell his extensive defense industry stock holdings 

According to Marcha, Hill's political career began in the State Department in 1945 when he was assigned to US Army headquarters in New Delhi, India. His job actually served as a cover for an intelligence assignment for the Office of Strategic Services, the precursor of the CIA. Throughout the rest of his career, he continued to work closely with the US intelligence community, including the CIA. Marcha describes his biography as a satirical left-wing caricature of a Yankee imperialist. A former vice president of WR Grace and a former director of the United Fruit Company, Hill personally helped organize the overthrow of the Nationalist Arbenz's Government, which threatened United Fruit's investments in Guatemala.

As Marcha details, "Ambassador Hill is particularly criticized for his participation in the CIA instigated overthrow of President Arbenz in 1954." The history of that coup centers to a large extent on the United Fruit Company. Arbenz and his predecessor worked hard to change the inequalities in Guatemala's social structure. Free speech and free press were established. Unions were reorganized and legalized. Educational reforms were enacted.

One of the most wide-sweeping and inflammatory changes was the Agrarian Land Reform Program, which struck directly at the interest of the United Fruit Company. The program called for the expropriation and redistribution of uncultivated lands above a basic acreage, while exempting intensively-cultivated lands. Compensation was made in accord with the declared tax value of the land. The appropriated lands were then distributed to propertyless peasants. 

Immediately afterwards, the McCarthyite storm burst over Guatemala. Arbenz was accused of being a communist agent and as such was thought to be a danger to the power of America and the security of the Panama Canal. The plan to overthrow Arbenz was concocted by the CIA. A Guatemalan colonel, Castillo Armas, was found to head up a rebel force in Honduras, in Nicaragua, and was supplied with United States arms. Marcha says that at the time of the coup, Hill was ambassador in Costa Rica and formed a part of the team that coordinated the coup. In 1960, he was rewarded by being elected to the board of directors of United Fruit. 

Hill has long enjoyed close relations with President Nixon, and in 1972 he returned from Madrid, Spain where he was serving as ambassador to work on the campaign for Nixon's reelection. Joseph Jova, the appointee as ambassador to Mexico, also shares with Hill a spurious background. The Mexican paper El Dia accused Jova of deep involvement in a successful 1964 CIA campaign to prevent the election of Salvador Allende as president of Chile. Jova was deputy chief of the United States Embassy in Santiago, Chile at the time. This report on the new United States ambassadors to Mexico and Argentina has been compiled from Marcha of Montevideo Uruguay and Mexico City's Excelsior.

The recent appointment of John Hill as United States Ambassador to Argentina, has drawn criticism in several Latin American nations. According to La Opinión of Argentina, the assignment has been condemned by the foreign minister of Venezuela, as well as by numerous political groups in Argentina. The Argentine coordinator of youth groups issued a statement last week, labeling Hill as an agent of the CIA with a well-known record of participating in military coups in other Latin American countries. 

According to a release from the Cuban News Agency, Prensa Latina, Hill has followed a political career, particularly as a foreign service officer, while maintaining close contacts with corporate interest back home. Hill began as a clerk in the US Foreign Service in 1943, but was quickly promoted to vice counsel at Calcutta, India. In 1945, he worked with the rank of Captain as a State Department representative assigned to the US Army Headquarters and the China Burma India Theater at New Delhi. Actually, this job served as a cover for an intelligence assignment for the Super Secret Office of Strategic Services, the forerunner of the CIA. Throughout the rest of his career, he continued to work closely with the US intelligence community, including the CIA. A fact confirmed in a report in the congressional record, July 14th, 1970. 

In 1949 continues Prensa Latina, Hill left government service to do a four-year stint as assistant vice president at the New York headquarters of W.R. Grace and Company, a US corporation with operations in 12 Latin American countries. In 1953, Secretary of State, John Foster Dulles appointed Hill as US Ambassador to Costa Rica. The following year, he was transferred to the same post in El Salvador. While stationed in Costa Rica, he did his best to protect the vast land holdings and related operations of the United Fruit Company.

In 1953, according to Prensa Latina, he personally took part in the negotiation of a contract between a United Fruit subsidiary and the Costa Rican government. He also helped organize the 1954 CIA overthrow of the Nationalist Arbenz' government, which threatened United Fruit's investments in Guatemala. In 1960, he was rewarded for his efforts by being elected to the board of directors of the United Fruit Company. He also served as a consultant for the company on international affairs.

Hill served briefly as assistant Secretary of State for congressional relations, 1956 to '57, during the height of the Cold War and the last years of the McCarthy period. He was then reassigned to the Foreign Service as ambassador to Mexico where he remained until 1961.

In Mexico, Hill developed a reputation for his anti-communism, accusing Castro of being a communist agent as early as 1958. Hill put on a sustained public relations campaign to bolster pro-US sentiment, but his efforts were set back when the Cuban Revolution found widespread support among Mexicans. In 1960, he forced the Mexican government to deny oil sales to Cuba. In return, he proposed to cut Cuba's sugar export quota to the United States and to raise Mexico's quota. Cuba's quota was cut shortly thereafter.

Hill left the Foreign service with the beginning of the Kennedy administration, according to Prensa Latina, and became involved in New Hampshire state politics. He took the lead from his close friend Richard Nixon and used this apparent retirement from political life to strengthen his business and political base. He became a director of United Fruit, Northeast Airlines, various mutual funds and other large corporations with substantial investments in Latin America.

Hill's expertise in international issues prompted his appointment in 1965 to the chairmanship of the Republican National Committee Task Force on foreign policy, which operated as a think tank for policies to be implemented later under the Nixon administrations. In 1968, he also joined the task force on national security. In May 1973, Hill was appointed by Nixon as Assistant Secretary of Defense for International Security Affairs. This biography of the new U.S. ambassador to Argentina was compiled from the Cuban news agency Prensa Latina and the Argentine daily La Opinión.

From San Jose Costa Rica, Excélsior of Mexico City reports of rumors of a coup d'état. Recently, thousands of students staged a demonstration in the center of the capital of that country in protest of an increase in the cost of living and against a new extradition law. The National Guard maintained a state of alert to prevent possible trouble. Rumors were circulating with greater persistence of the possibility of a coup aided by the CIA. The country's most critical period in the last four years began recently when a group of legislators denounced in the National Assembly, "the existence of plans for a coup d'état." Members of various parties accused the North American companies, Standard Fruit, Exxon and Texaco of promoting this coup. 

Without mentioning names, the politicians alleged that the plans of the coup relied on the blessing and aid of the CIA. A political leaders of various persuasions accused the US ambassador of inciting the students to stage uprisings. However, the US Embassy issued a communique in which it categorically denied that it was inciting or stimulating publicly or privately protests of any kind. 

The factors which greatly deepened tension in this country, according to observers, are the increase in the price of basic necessities, the exclusion of public employees from a recent salary increase and a new extradition law, which the legislator recently approved. This law establishes that no foreigner can be extradited from Costa Rica, provided he has a Costa Rican passport. It is widely believed that this act was passed solely to predict Robert Vesco accused of stealing one quarter million dollars from US sources. Vesco has made great investments in Costa Rica and is an intimate friend of the president, José Figueres. 

The situation is ripe for an uprising, said a presidential spokesman, especially while the Prime Minister is gone on a political tour of Latin America. This story from the Mexico City Daily, Excélsior. 

In a recent article entitled "Central America: Made Martyr by The Big Fruit Company", La Opinión, an Argentine newspaper reports on the US-based Standard Fruit Company. Standard Fruit unilaterally suspended its import of bananas from Honduras in reprisal for an agreement Honduras made establishing an export tax on bananas of $1 per case. According to Standard Fruit, the agreement will bring Honduras unemployment and cause a drop in wages, as well as affect banana production in all of Latin America's other banana-producing nations. The decision, reports La Opinión, was made public by Standard Fruit following an interview which several of the corporation's highest officials had with Honduran President López Arellano. 

Officials spokesmen have stated that Honduras remained firm in defense of its recent agreements, reached collectively with Panama, Nicaragua, Ecuador, Guatemala, Costa Rica, and Colombia. Standard Fruit alleged in a press statement that the rise in the export price of bananas will diminish North American banana consumption, thus making it necessary to adjust the supply in order to compensate for the new situation.

Standard Fruit announced its intention to take such action at a recent meeting of Latin American banana producers held in Honduras. During the meeting, a Standard Fruit official warned all of the various representatives that it would suspend all banana shipments out of Honduras if the $1 tax was agreed upon. The threat, which would hurt, especially Costa Rica, Nicaragua, and Honduras, was ignored by all of the representatives present. 

Following the meeting, a Costa Rican newspaper, Latin, reported on the reaction to Standard Fruits actions by Costa Rican President José Figueres. Figueres labeled Standard Fruit's operations colonialist. The Costa Rican President also said that Standard Fruit was the only foreign fruit company which had refused to pay the $1 export charge. Addressing his country in a national television broadcast, Figueres stated, "It is a typically colonialist attitude and has caused us great difficulty. However, we will not alter our approach and we'll do what must be done." 

Standard Fruit's hardline policy, reports La Opinión, is due to two chief factors. Standard Fruit fears that competitors will move in and capture its market when its prices rise. The company also fears that the banana producers, if not dealt with firmly, will pursue with greater interest their recent tendency towards trade with Socialist nations. 

This report on the banana trade in Central America was taken from the Argentine daily, La Opinión, and the Costa Rican paper, Latin.