325.1121 Bethune, Larry K./12

The Ambassador in Chile (Culbertson) to the Secretary of State

No. 809

Sir: I have the honor to confirm my telegram No. 22, of today’s date, 4 p.m., reporting the release on bond of Mr. L. K. Bethune, Manager in Chile of the General Motors Acceptance Corporation. It is not likely that he will be again detained. This concludes the first chapter of an affair so unusual in many respects that it may become a “cause célèbre” in the treatment of foreigners under Chilean Civil and Criminal Law.

Some weeks ago the General Motors Acceptance Corporation dissatisfied with one of its local distributors transferred this representation to another firm. Immediately there were charges and countercharges culminating in three lawsuits, one of which resulted in the Chilean agent’s bankruptcy. In retaliation the said agents, through their lawyers, instituted criminal proceedings for fraud against Mr. Bethune, personally, and not against the General Motors Acceptance Corporation. Last Tuesday an order was issued for his appearance in court to answer these charges but the summons was never served. Instead he was arrested late that night and held “incommunicado”. His lawyers at once appealed to me for assistance and I sent Mr. Norweb and Mr. Sparks13 to the Section of Investigations where Mr. Bethune [Page 930] was held, with the request that I be granted permission to see and speak with him. This request was denied and later the same morning the same request was again refused. Thereupon I went to the Minister of Foreign Affairs and protested against the status of “incommunicado” and asked that I be allowed to speak to Mr. Bethune and to assure myself of his welfare. At the same time I requested him to make an investigation. The Foreign Minister promised to do so but maintained no exception could be made on the subject of “incommunicado” even for a diplomatic representative.

All that day Mr. Bethune was on the witness stand answering through a translator the questions which were put to him by the judge. Aside from this no one knew exactly what was happening. This questioning continued until after midnight and was resumed again this morning.

In the meantime having heard nothing from the Foreign Minister I again visited him and placed before him informally evidence indicating the misuse in this case of the criminal proceedings of the courts. This is set forth in the enclosed memorandum14 which I made for the Embassy records. Shortly after I returned from this interview Mr. Bethune was released on a 30,000 Pesos bond. He immediately called at the Embassy and his statement confirmed my suspicions that the fraud charges were a subterfuge and that the criminal proceedings in this instance were to all appearances instituted solely for the purpose of adducing evidence which could be used against the General Motors Acceptance Corporation in the civil cases now pending and that the judicial machinery of the Chilean Courts had been subverted to this end through the influence of the opposing lawyer Mr. Osvaldo Koch, the President’s son-in-law. Among other things Mr. Bethune stated that throughout the proceedings telephone conversations took place between the judge and Osvaldo Koch, (or some representative of Koch); that these conversations were in the court room and in his presence; that in most cases they were calls by Koch to the judge but in some cases the judge called Koch. Mr. Bethune does not understand Spanish very well but the judge on a number of occasions used the question “que dice el señor Koch?”, which would indicate that he was talking with someone in immediate communication with Koch.

Throughout it all Mr. Bethune had to work without the advantages of counsel or being able to refer to documents, whereas the other side through the compliance of the judge was virtually able to cross examine him at their pleasure.

I immediately took steps to bring all of these facts together and to call them to the attention of the Minister of Foreign Affairs. In addition [Page 931] therefore to stating our non-acceptance of the practice of “incomunicado”, I felt justified at the same time to request formally that the Government make an inquiry into the circumstances of Mr. Bethune’s arrest. (See enclosures Nos. 3 and 4).15

I have pressed this matter vigorously not only because I feel there has been a distinct denial of justice and that the measures adopted were unnecessarily harsh and arbitrary but especially because a definite stand was necessary in order to discourage similar tactics in the future. If our action does nothing more than this it will have been fully worthwhile. The case has attracted wide public attention and the outcome is being watched by many in case it should give an opportunity to delay or wriggle out of their commercial debts. It is already difficult enough for American business in Chile to collect what is owed without the additional complications and the expense of litigation.

I shall make a further report to the Department on the subject as soon as there is anything further to report from the Foreign Office.

A statement prepared for public distribution of the position of the General Motors Acceptance Corporation in the pending suits is enclosed.16

. . . . . . . . . . . . . .

Respectfully yours,

W. S. Culbertson
[Enclosure 1]

Memorandum by the American Ambassador (Culbertson) of a Conversation With the Chilean Minister for Foreign Affairs (Barros), March 19, 1931

Communicated to Sr. Barros orally. W. S. C

I desire to bring to your attention the criminal proceedings now pending against Mr. L. K. Bethune, Manager in Santiago of the General Motors Acceptance Corporation.

Before the criminal proceedings were instituted the issues between the General Motors Corporation and their former local agents were joined in two or three other suits pending in the Chilean courts. The adjudication of these cases will be sufficient to establish justice between the parties. No justifiable reason has thus far appeared why a criminal proceeding should also have been commenced against the Manager of General Motors and why it, being a State proceeding, should be prosecuted vigorously by the lawyer in the civil case.

[Page 932]

It is admitted, in fact, that Mr. Bethune is not personally guilty of any criminal action.

I consider the criminal proceedings against Mr. Bethune to be a malicious prosecution instigated by the lawyer in the civil suit for the former agents of the General Motors Corporation. This conclusion is supported by the unusual treatment which has been accorded to Mr. Bethune. He is a responsible individual and a representative of a responsible corporation. Even assuming that criminal proceedings were justified it would have been more in keeping with the circumstances if Mr. Bethune had been advised by your court to appear at a certain time and, if necessary, to request him to give bond for further appearance before your courts. Instead, he was arrested by a group of rough carabineros and imprisoned incomunicado. The following day he was forced to testify morning, noon and night, before a judge without the assistance of counsel. His testimony still continues. It appears from the 800 questions submitted that criminal procedure is being used to support the civil action of private individuals.

Mr. Bethune speaks no Spanish and it therefore was necessary for him to give his testimony through an interpreter unknown to him.

I have been led to the conclusion, after careful consideration of this case, that it constitutes a misuse of judicial procedure in Chile, that is, the use of criminal prosecution for the purpose of influencing a decision in the civil courts.

W. S. C[ulbertson]
[Enclosure 2]

The American Ambassador (Culbertson) to the Chilean Minister for Foreign Affairs (Barros)

No. 586

Excellency: I have the honor to inform Your Excellency that Mr. L. K. Bethune, Manager in Santiago of the General Motors Acceptance Corporation, was arrested night before last and was held incomunicado in the Prefectura de Investigaciones. Very early yesterday morning this matter was brought to my attention and I instructed the Counselor and one of the Secretaries of this Embassy to call at the Prefectura de Investigaciones and to request in my name permission to see Mr. Bethune. The officer in charge refused, stating that he had orders from the court to hold Mr. Bethune incomunicado.

I am instructed to-day by my Government to advise Your Excellency that we do not admit that American citizens arrested in foreign countries may be held incomunicado. It is expected that they shall be allowed to communicate with diplomatic and consular representatives of their country and with the attorneys whom they wish to employ in [Page 933] their defense. Specifically, I am instructed to request permission for myself to communicate with Mr. Bethune and also to request like permission for his counsel.

Mr. Bethune was released on bond to-day at one o’clock and for this reason the particular request relating to him, which I have made on the instructions of my Government, need not be pressed unless he is again detained. However, apart from the particular case of Mr. Bethune I wish by this note to repeat and emphasize the general position of my Government with reference to the principle of incomunicado.

I avail myself [etc.]

W. S. Culbertson
[Enclosure 3]

The American Ambassador (Culbertson) to the Chilean Minister for Foreign Affairs (Barros)

No. 587

Excellency: Confirming my oral request of yesterday, I have the honor to request an investigation of the criminal proceedings which were instituted on or about March 17th in your courts against Mr. L. K. Bethune, Manager of the General Motors Acceptance Corporation.

I avail myself [etc.]

W. S. Culbertson
  1. R. Henry Norweb, Counselor of Embassy, and Edward J. Sparks, Third Secretary of Embassy.
  2. See enclosure 1, infra.
  3. See enclosures 2 and 3, infra.
  4. Not printed.