325.1121 Bethune, Larry K./12
The Ambassador in Chile (Culbertson) to the Secretary of State
[Received March 27.]
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
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Respectfully yours,