339. Editorial Note
During the month of July 1973, President Richard M. Nixon’s administration debated whether to re-initiate funding for the Chilean private sector organizations, [text not declassified], as they were an important sector of the opposition to President Salvador Allende’s government. The Deputy Director for Operations of the Central Intelligence Agency, William E. Colby, sent a June 29 memorandum to the Chief of the Western Hemisphere Division, arguing that covert funding of private-sector organizations would prove useful if it could support the “necessary network by which the separate organizations interrelate and collaborate.” (Central Intelligence Agency, DDO Registry, DDO Policy and Management Files, 1974, Job 80–00197A, Box 2, “WH Division, 1973”) Ambassador Nathaniel Davis, however, argued that covert funding would drive a wedge between the political parties and the private sector organizations and that such funding would send a signal to the military to stage a coup. (Message 25376 from the Station in Santiago, June 25; ibid., DO Records [job and volume numbers deleted])
The day after this message was sent to Washington, Ambassador Davis reconsidered his position. He discussed a plan for passing funds [text not declassified] with Assistant Secretary of State for Inter-American Affairs John B. Kubisch during a meeting in Lima, Peru. Although he believed he had convinced the Assistant Secretary of the need for [Page 886] passing funds, Davis asked the Chief of Station not to send any information on the proposal to Central Intelligence Agency Headquarters until the Ambassador had a firmer commitment from Kubisch. (Message 2539 from the Station in Santiago, June 26; ibid., DDO Registry, DDO Policy and Management Files, 1974, Job 80–00012A, Box 3)
The July 26 inauguration of a strike by the Trucker Owners’ Federation forced the issue of U.S. funding [text not declassified] That day, the Station in Chile reported that funds from an unspecified source were passed through intermediaries to [text not declassified]. (Message 25763 from the Station in Santiago, July 30; ibid., DO Records, [job and volume numbers deleted]) A July 31 memorandum for the DDO stated that covert funding [text not declassified] “could greatly hasten economic disintegration and frustrate government plans to obtain more complete control of the economy before implementing drastic and unpopular reforms.” (Ibid., DDO Registry, DDO Policy and Management Files, 1974, Job 80–00197A, Box 2, “WH Division, 1973”)
On August 20, the 40 Committee approved funding for the covert operation, if Davis agreed to release the funds [text not declassified]. (See Document 342) On August 24, Davis and the Chief of Station decided to pass a portion of these funds [less than one line not declassified]. (Message 26108 from the Station in Santiago; Central Intelligence Agency, DO Records [job and volume numbers deleted])