160. Telegram 942 From the Embassy in Chile to the Department of State1

942. Subject: Assistance to Christian Democratic Party (PDC).

1. Summary: After weighing factors pro and con, I recommend Dept agree to covert funding request [less than 1 line not declassified] for period July 1, 1973, to March 31, 1974. A necessary condition of transfer of funds would be clear acknowledgment that USG had no commitment whatever to further funding of any character, thus keeping our options as to future completely open. End summary.

2. Since my arrival at post, I have carefully considered what action USG should take re [less than 1 line not declassified] aid PDC and have reached conclusion noted in summary above.

3. Proposal as detailed to me here involves [less than 1 line not declassified] funds to PDC for following activities covering period July 1, 1973, to March 31, 1974:

[table not declassified]

[Page 429]

Total expenditure would be [dollar amount not declassified] this compares with annual subsidies of [dollar amount not declassified] and [dollar amount not declassified] in preceding years FY 1972 and FY 1973.

4. Factors in favor of continuing financing through March 1974 may be stated as follows:

A. Approval would permit us to maintain the good will of the PDC, while withdrawing from the large-scale support programs carried on during the Allende years. The funds requested are only a fraction of the subsidies given the PDC in FY 1972 and 1973 and are smaller still when the current local purchasing power of these funds is considered.

B. We have a contingent obligation of a sort for at least the period July 1 to September 11, 1973, since the PDC at that time had every reason to expect continuing U.S. government support in the struggle against the Allende regime. In fact, as you recall, a funding request for the PDC of $350,000 for FY 1974 was being processed when the military uprising occurred.

C. A complete cut-off of funds would likely be interpreted by the PDC as a signal that the U.S. government has abandoned the PDC after using it in the struggle against Allende. Granting the funding request, however, would keep our options open and, in the short run, assist in influencing the PDC in the direction of strengthening its policy of maintaining correct relations with the junta, support of constructive junta goals, and avoiding at all costs an open break with the government. The impossibility of providing further funding should an open break occur would be emphasized to the recipients.

D. The PDC is the only national, vertically-structured party in Chile that is non-Marxist and has broad popular appeal. Furthermore, it is the largest cohesive political grouping in Chile, having steadily obtained a third of the vote nationwide in recent years. In the event of reasonably free national elections in the foreseeable future, the PDC appears to be the odds-on-favorite, especially if all Marxist parties should be disfranchised.

E. Since we are approaching the end of the period covered by this request (March 1974), the granting of these funds should not lock us into any further funding commitments, which would be completely contingent on further events and our reading of them. I would insist that our completely uncommitted attitude towards any further funding in the future be spelled out to the PDC recipients and, as well, that they understand that we regard the situation post-coup as an entirely new and changed situation.

F. Funding would permit the PDC to carry out at least minimum programs in areas, especially those involving labor unions and among Campesinos organizations, that would otherwise be in danger of being [Page 430] left to the exclusive, albeit clandestine ministrations of the communist party and other Marxist groups.

G. The PDC has had an excellent record on the security of its funding arrangements. Knowledge of their existence has been strictly compartmented and highly restricted among PDC leaders. The risk of compromise is, we believe, slight.

5. The following adverse factors must also be taken into account:

A. I am reluctant to become involved in covert funding activities or other covert operations unless these can be reasonably expected to produce important results from the national policy standpoint not attainable in any other way.

B. This payment will continue our PDC funding into the post-coup period, albeit on a reduced scale. Although part of this funding covers the July–Sept pre-coup period, it will require great and continuing effort on our part to convince the PDC that we consider the situation to have changed and that we are completely uncommitted to any future funding.

C. The development of the relationship between the PDC and the government will have to be watched closely, since differences between them on human rights, economic policy, and labor union matters are likely to continue and perhaps grow. The chance exists that the relationship may become openly antagonistic at some point in the future. In these circumstances we would not want to be linked to the PDC, even as to past actions, at any point in the post-coup period.

D. Continued funding maintains the PDC’s dependence on us. It also raises questions about the PDC’s viability as a genuinely national and self-sustaining institution. The other interests involved, however, in my judgment outweigh this consideration. It is clear that without our support the PDC will under the exceptional situation created by the military seizure of power be far less able to maintain financial solvency than it was before.

6. On balance, I recommend approval of the funding request submitted in the amount of [dollar amount not declassified]. Because the period involved has virtually terminated, the demise of La Prensa last week will not affect the amount of the funding request.

Popper
  1. Summary: Popper recommended that the Department agree to support a proposal for covert assistance to the PDC.

    Source: Department of State, INR/IL Historical Files, Box 16, Santiago, 1963–1979. Secret. Roger Channel. In telegram 332 from Santiago, January 22, the Embassy reported that Ministry of Interior Decree 1899, which clamped down on all political activity, seemed to be “particularly aimed at Christian Democratic Party.” (National Archives, RG 59, Central Foreign Policy File, [no film number]) On March 2, Flannery sent the March 1 CIA proposal to Gardner, and on March 4, Gardner sent a copy of the proposal and telegram 942 to Shlaudeman. (Department of State, INR/IL Historical Files, Box 16, Santiago, 1963–1979.) On March 19, Phillips sent a memorandum to Gardner which maintained that continued PDC subsidies would liquidate obligations for which the PDC thought the U.S. Government responsible and maintain an important source of information, while termination of the funding might cause bitterness towards the U.S. Government. (Ibid.)