342. Memorandum From Director of Central Intelligence Colby to the President’s Assistant for National Security Affairs (Kissinger) and the Assistant Secretary of State for Inter-American Affairs (Kubisch)1


  • Proposed Covert Financial Support of Chilean Private Sector

1. On 20 August 1973, the 40 Committee approved the expenditure of [dollar amount not declassified] through June 1974 for support to the Chilean opposition political parties and the private sector.2 Of this amount, [dollar amount not declassified] was allocated to the private sector and [dollar amount not declassified] to a contingency fund. The 40 Committee specified in its approval that the contingency fund and the [dollar amount not declassified] allocated to the private sector could only be spent with Ambassador Davis’ approval.

2. Chile continues in a state of crisis and the pressures on President Allende and his government are increasing. Allende and his forces appear to be on the defensive, fearing a military coup and unsure of their ability to deal effectively with it if it comes. It is a crucial period in the revolutionary process being pursued by the Allende government. While the key to the situation undoubtedly lies with the military, the left and Allende, the opposition pressure is an essential element of the picture and encourages the military in its resistance to Allende and the left.3

3. Given this situation, the CIA Chief of Station in Santiago on 24 August recommended that covert financial support be given to the opposition, beginning with a [dollar amount not declassified] payment to the private sector, in order to keep the pressure on Allende [less than 1 line not declassified].4 The Chief of Station discussed his recommendation with Ambassador Davis with the latter indicating that he could not endorse his proposal, particularly support to the private sector, because such a course of action could lead to a de facto U.S. Government commitment to a coup which was a policy issue that only Washington [Page 891] could decide.5 The Ambassador did agree that soundings should be made in Washington on this matter.

4. The Santiago Station would not be working directly with the armed forces in an attempt to bring about a coup nor would its support to the overall opposition forces have this as its objective. Realistically, of course, a coup could result from increased opposition pressure on the Allende government. However, the broad consensus of the opposition appears to have the massive entrance of the military into the Allende government with real power as its present objective.

W.E. Colby
  1. Source: National Security Council, Nixon Intelligence Files, Subject Files, Chile 1973–. Secret; Sensitive. Sent through Jorden.
  2. See Document 340.
  3. See Document 338 and Document 138 in Foreign Relations, 1969–1976, vol. E–16, Documents on Chile, 1969–1973.
  4. Not found.
  5. See Document 341. A later August 27 memorandum from Phillips to Jorden clarified Colby’s memorandum. Phillips noted that Ambassador Davis opposed the CIA proposal to funnel money to the [text not declassified]. Phillips stated, “The Ambassador’s concern over providing funds to the Private Sector is because the Private Sector has a close relationship with elements of the military who are interested in overthrowing Allende. The Ambassador thus believes that any U.S. support to the Private Sector, and particularly to the [less than 1 line not declassified], could be interpreted as a violation of present U.S. policy towards Chile which he considers to be one of keeping the pressure on Allende, but not one of taking action to overthrow him.” (Central Intelligence Agency, Executive Registry,Job 80M01066A, Box 1, File C–7, Chile, 1973–)