Allende’s Chile and the Inter-American Cold War (23 page)

In this context, the relative consensus that had characterized policy toward Chile between late 1970 and mid-1971 broke down internally as a growing impetus to punish Allende overtly for the temerity of his nationalization policies clashed with continuing fears that doing so would bolster his chances of success and undermine Nixon’s foreign policy reputation. During three strategy review meetings Kissinger called between June and November 1971, therefore, administration officials primarily discussed who would be blamed for Allende’s growing economic difficulties. While Treasury officials lobbied Nixon to stand up and be counted—to defend economic interests at all costs—Kissinger joined the State Department and CIA analysts in arguing that this would be too risky for the United States’ prestige in Latin America and the Third World. To this latter group, the U.S.-Chilean relationship was increasingly presenting itself as a test case of Washington’s commitment to development, democracy, and
détente that it could not fail—or at least not publicly. And once the Eximbank affair had undermined Washington’s “correctness” and had given Allende a basis on which to rally support, Kissinger’s priority was to recreate the impression of meaningful cooperation.

After Allende nationalized copper, the White House had faced increasing pressure from business leaders to retaliate.
⁵⁴
Within the Nixon administration, Treasury Secretary John Connally had also begun challenging Nixon’s “correct but cool” policy toward Chile and lobbying the president to take a harder line in the context of an overhaul of U.S. policy toward the Third World. Specifically, Connally argued that Chilean nationalization projects formed part of a “snowballing” trend of expropriations in Latin America and the Caribbean, which could no longer be dealt with “in a piecemeal fashion.”
⁵⁵
To stop expropriations by Third World nationalists—and especially Allende—he therefore demanded that the United States make an example out of Chile by issuing severe and overt reprisals.
⁵⁶
Initially, at least, Nixon, who was impressed by Connally, had responded sympathetically by personally being the one to instruct Eximbank to withhold credits while an in-depth study of U.S. policy toward expropriation (NSSM 131) was conducted.
⁵⁷

Although Kissinger sanctioned this study, he nevertheless tended to side with the State Department in opposing the Connally-Nixon line. As Deputy Assistant Secretary of State for Latin American Affairs John Crimmins argued at the time, Connally’s demand to punish
all
expropriating states on an immediate and automatic basis was a “frontal attack on the basic concepts” of the Nixon administration’s Latin American policy, which emphasized political flexibility rather than economic interests.
⁵⁸
Kissinger surprisingly agreed with the State Department on this occasion and, as far as the Eximbank loan was concerned, believed that it was better to appease the Chileans than provoke open confrontation over the issue.
⁵⁹
Then, when Chilean economic difficulties grew in the latter half of 1971 and people began accusing the United States of being responsible, Kissinger joined the majority of the administration’s foreign policy team in urging tactical caution. As Ambassador Korry and intelligence analysts argued, the United States had to avoid giving the UP a “scapegoat” to blame for the deterioration of the Chilean economy.
⁶⁰

This was essentially the position that the NSC’s Senior Review Group adopted when it met in September 1971. As the Ad Hoc Interagency Working Group on Chile reported to it, there was little chance of forcing the Allende government to pay U.S. copper companies compensation and thus
no obvious gains in pursuing more overt credit freezes. While the Working Group dismissed direct negotiation on the assumption that this would boost “Chile’s image as a new model of a ‘democratic’ Marxist state,” it also cautioned against open confrontation on the grounds this would enhance Chile’s stance as a “popular cause in Latin America and elsewhere in the underdeveloped world, with corresponding disadvantage” to Washington.
⁶¹

In this respect, the formal adoption of Allende’s “excess profits” ruling came at just the right time. With it, the United States had a more obvious pretext for economic pressure on Chile’s democratically elected Socialist president in the supposedly nonideological era of détente. The result of the administration’s review of U.S. policy toward Third World expropriations, which was enshrined in National Security Decision Memorandum 136 on 8 October 1971, also helped. In reality, NSDM 136 was a compromise rather than a victory for Connally, as it prescribed only the “presumption” that Washington would punish any state that expropriated private U.S. companies without “reasonable steps to provide compensation” rather than giving a concrete order, and ironically it excluded Eximbank operations. Even so, the United States’ tougher overall stance on expropriation, elaborated in public by Treasury Department officials, was now used retrospectively to justify Washington’s obvious economic pressure on Chile to domestic and international audiences.
⁶²

Privately, U.S. administration officials also used it to explain why more credits were not being granted to Chile when they met with Allende’s representatives, and all the while indicated that they wanted to avoid escalating tension between Washington and Santiago. Kissinger played a key role in this respect. During back-channel discussions with Letelier, he even went so far as to offer to visit Chile in search of a modus operandi.
⁶³
In early October 1971, Kissinger then met with Foreign Minister Almeyda while the latter was in Washington, and according to a Chilean record of the conversation, he bent over backward to give the impression that the United States was not hostile to the Chilean government:

Referring to the Chilean revolutionary process, Kissinger indicated to Minister Almeyda that … he profoundly admired the way in which President Allende was leading the Chilean political phenomenon. He signaled … his interest in Chile and in maintaining the most constructive relations possible…. He also indicated that if at any moment the Chilean government wanted to present his government with a proposal of a confidential character with respect
to the relationship between both countries … this could be managed through him at a presidential level in the assurance that there existed [in the Nixon administration] an attitude of understanding and orientation toward facilitating constructive links between both countries…. as far as his country was concerned, Chile had a great importance within Latin America, and he indicated that it would be very incongruous if, while the United States was able to seek a form of understanding with the PRC from which it had been separated for so many years, it could not find positive solutions to problems with Chile…. In this respect, he alluded to the tendency toward ideological pluralism in international relations.
⁶⁴

Two months later Kissinger was still insistent. Pulling Letelier to one side at a private dinner party in December 1971, he underlined once again that the United States was “not intervening in Chile.” Eximbank’s position had not been a question of politics but a “natural reaction” to questions of nationalization and compensation, as he put it. The Chilean ambassador replied warily but acknowledged, yet again, that it was difficult to ignore such a “categorical” assertion.
⁶⁵

Because there are still no available U.S. records of Kissinger’s back-channel approaches to Letelier, they have been unexamined to date. But they are particularly intriguing, given how effective they were. In his correspondence back to Santiago, the Chilean ambassador continued to believe Kissinger’s word carried weight and should not be dismissed. To be sure, he was not totally fooled by the national security adviser’s silver tongue, but Santiago’s leaders were interested enough to devote considerable time throughout 1971 and 1972 to exploring whether they should take Kissinger up on his offer of private negotiations.
⁶⁶

While Kissinger was trying to convince the Chileans that Washington meant no harm, U.S. policy makers simultaneously contented themselves that Chile’s economic difficulties had already begun taking their toll on Allende’s government.
⁶⁷
In November, Allende had announced a moratorium on debt payments and applied to reschedule them. Although Washington deemed Allende’s financial difficulties not “exclusively” the result of U.S. efforts, the Ad Hoc Working Group on Chile concluded that U.S. policy had been a “fairly good success”: Allende’s victory did not seem “irreversible,” and financial measures had begun to “take their effect.”
⁶⁸
The question was whether the Chileans could do anything to reverse this deterioration or whether the Soviet Union would step into the breach.

The Nixon administration had been receiving indications that the Chileans were cozying up to the East throughout the second half of 1971. True, observers noted that Soviet credits were “not always immediately or fully implemented” and that both the Chileans and the Soviets had shown immense caution in forging closer relations with each other. But the State Department was also cynical about the UP’s professed nonalignment.
⁶⁹
By August, U.S. intelligence analysts had concluded that closer ties between Santiago and Moscow were inevitable, that the Soviet bloc would “probably help Allende in an economic crisis,” and that the Soviets would “continue to cultivate channels of influence” in Chile.
⁷⁰
In Ambassador Korry’s words, Allende was attempting “to enjoy all worlds, capitalist, nationalist and revolutionary, populist and ideological.” “Almeyda can in Moscow seek association with COMECON at the same time that Chile pursues uninterrupted flows from the IDB, IBRD and the EXIM,” he complained. “Allende can call for the best possible relations with the U.S. while stating that his foreign policy is based on creating a special relationship with … the socialist world. He can invite Castro to Chile while arranging for a prior journey to Colombia … Perhaps it was a slip of the lip … when he referred to his government once … as representing the ‘Popular Democratic Republic of Chile.’”
⁷¹

Certainly, President Nixon viewed Chile’s government as a “communist dictatorship—elected, but communist.”
⁷²
And it is also now clear that the Pentagon had its own Cold War concerns, having been particularly worried that any Boeings Chile purchased would furnish a new route between Santiago and Havana and thus help spread Cuban subversion in Latin America. (In fact, Washington had warned UP officials of these concerns in early 1971 and had received no reassurances, but a bigger issue was not made of it because the State Department had been reticent about inciting Chilean charges of undue political pressure, and in the end, the Chileans had offered little reassurance on the issue.)
⁷³
The Chilean government had also played on Washington’s Cold War fears to extract concessions by exaggerating Chile’s ability, and desire, to turn to the East.
⁷⁴
In this respect, Letelier’s private insinuation that Allende would turn to the Soviet Union if the UP could not buy Boeings in the United States had not only been jumping the gun in regard to Chile’s exploration of the options it had but must surely have added to the feeling that the Chileans were trying to blackmail Washington.
⁷⁵

Allende’s efforts to get Latin Americans to unite and speak with “one voice” had also encouraged U.S. intolerance for regional “disobedience.”
In October 1971, Nixon privately talked of instituting a “program of reward and punishment—not openly but just quietly” rewarding Latin American countries “when they start acting properly!”
⁷⁶
This was hardly the “mature partnership” that Nixon had announced two years earlier. But it did reflect the disdain for regional politics that characterized much of the United States’ foreign-policy-making community at the time. Looking back on nationalist and revolutionary ferment during the early 1970s, Nixon’s ambassador at the OAS, Joseph Jova, recalled that Secretary of State William Rogers “didn’t understand Latins.” According to Jova, Rogers “felt there was too much hot air, and … anti-Americanism.”—“I remember,” Jova continued, “I used to say, ‘Remember what Don Quixote said … when they were attacked by dogs, or unfriendly villages, or something of that sort of thing.’ … [He] rode off quietly without even replying…. So some of these things you have to realize were just part of the game.”
⁷⁷

The problem was that when Allende challenged this “game” in late 1971, U.S. officials began worrying about what would happen if they rode off into the sunset. When Kissinger had ordered a study of U.S. policy toward Latin America (NSSM 108) after Allende’s election, State Department officials reported that regional threats to U.S. interests were, overall, not “serious.” However, Kissinger’s assistant for Latin American affairs at the NSC, Arnold Nachmanoff, had vehemently disagreed. As he had advised his boss, Latin America’s situation by itself was “tolerable,” but the decline of Washington’s regional influence was “excessive and more rapid” than NSSM 108’s authors acknowledged. He also argued that the State Department had inadequately considered “where Latin America fits into our global policy.” “The loss of U.S. influence in Latin America and an increase of Soviet influence in what is perceived throughout the world as our backyard,” he warned, “will affect the global balance of power in political and psychological terms, if not necessarily in strategic terms.” He had then gone on to suggest a reranking of U.S. foreign policy priorities: “If Southeast Asia is the most imminent test of the Nixon doctrine,” he contended, Latin America could “well be its most serious test in time. The pressures for intervention should there be two or three Chiles or Cubas in our backyard would undoubtedly be high.”
⁷⁸

In many respects, the Nixon administration seemed to be searching for a more coherent policy toward the hemisphere. When the SRG had met to discuss NSSM 108 in August 1971, its members had pinpointed various vague objectives: the United States had to “ameliorate” anti-Americanism (“or at least eliminate its negative effects”), assist Latin Americans’ quest
for economic progress (but “encourage more realistic expectations of such progress”), boost the idea that the United States and Latin America shared a set of common interests, and “limit or protect against the increasing Soviet diplomatic, trade and military presence in the region.”
⁷⁹
Together, these aims then translated into concrete action as evidenced by the jump in the total U.S. military assistance to Latin America and the Caribbean from $26.1 million in fiscal year 1970 to $96.9 million and $86.9 million in 1972 and 1973 respectively.
⁸⁰
Kissinger also requested that the bureaucracy reexamine its previous conclusions about the United States’ position in Latin America and ordered more “intensive utilization of different bilateral approaches.”
⁸¹