Foreign Relations of the United States, 1977–1980 Volume XXIV, South America; Latin America Region

235. Memorandum From Secretary of State Vance to President Carter¹

Washington, October 19, 1979

RE

• Letelier/Moffitt Case

As you know, the Chilean Supreme Court has denied our request for the extradition of the three Chilean intelligence officers indicted by a United States grand jury for the assassination of Orlando Letelier (a former Chilean Ambassador to the U.S.) and Ronni Moffitt. Because the Court’s decision also rules out virtually any possibility that these three men will be tried in Chile, it is likely that this act of terrorism, committed on the streets of our nation’s capital, will go unpunished. We therefore now face the issue of how to respond to the Government of Chile.

Background. Letelier and Moffitt were killed in September 1976 by a bomb attached to their car. On August 1, 1978, a federal grand jury handed down indictments charging Michael Townley, a member of the Chilean secret police, and two others with having carried out the crime. The same grand jury charged three high-ranking members of the Chilean secret police with having planned and directed the killings. Townley and his two accomplices were subsequently tried and convicted in a U.S. District Court. The United States sought the extradition from Chile of the other three men.

Recommendations. The Government of Chile bears a two-fold responsibility for these crimes. First, high-ranking officials of that government have been charged with having planned and directed the crimes—and the overwhelming body of evidence that has been amassed by the Department of Justice makes it likely that those charges would be upheld if a fair trial could be held in either Chile or the U.S. Second, the Government of Chile has made no serious effort to investigate or prosecute these crimes on its own, and its judicial system has refused either to make the three Chilean officials available for trial in the U.S. or to order a thorough and effective local investigation.

By its actions—and its inaction—the Government of Chile has, in effect, condoned this act of international terrorism within the United States. We believe it is essential that we make clear, both to Chile and to others throughout the world, that such actions cannot be tolerated.

As you know, there have been suggestions from the Hill and elsewhere that we take extreme measures to demonstrate our displeasure, including enacting legislation to limit private bank lending to Chile, withdrawing our Ambassador, or even breaking relations altogether. I have considered these options, and while I share the outrage of those who have suggested them, I believe steps of this sort would not serve our interests in Chile or elsewhere. Instead, I recommend that the following steps be taken:

(1) Diplomatic Steps. During the course of the Letelier matter, Ambassador Landau has met regularly with Chilean officials to express the concern of the United States Government. In addition, we have recalled Ambassador Landau three times on consultations as a reflection of our displeasure at developments in the case, and Warren and I have made numerous demarches to Chilean officials. We will be meeting further with Chilean officials to reiterate our view that the Government of Chile’s failure to investigate this crime is unacceptable, and to explain the steps we are taking. I believe we should also make a reduction in the size of our Mission in Chile as a concrete indication of our displeasure. I am prepared to make such reductions in the State Department component of the Mission staff, and I will shortly be submitting to you a proposal for personnel reductions by other agencies operating in Chile.² No further diplomatic steps are possible at this time, short of recalling Ambassador Landau permanently or breaking relations, neither of which I recommend.³

(2) Terminate the FMS Pipeline. A relatively small amount of equipment remains in the FMS pipeline (we estimate the value to be approximately $7 million). I propose to terminate the pipeline in an orderly fashion, and to attempt to minimize any termination costs that might require a Congressional appropriation. However, I believe we should complete the termination of the pipeline by January 1, 1980, even if that does entail some minimal termination costs.⁴

(3) Withdraw the MilGroup. There are currently four U.S. officials in the MilGroup in our Embassy in Santiago. I propose to withdraw the Milgroup promptly. With the termination of the FMS pipeline by the end of the year, the Milgroup will no longer have any function to perform in Chile. I recommend, however, that our three Defense Attaches remain in Santiago.⁵

(4) Suspend EX-IM Financing in Chile. The Chafee Amendment to the Export-Import Bank Act authorizes the denial of EX-IM financing in cases where the President determines that such action would be “in the national interest” and would “clearly and importantly advance U.S. policy in such areas as international terrorism. . . .”⁶ We believe that Chile’s actions in the Letelier case justify the invocation of this extraordinary remedy. While the Congress intended that this sanction should be used only sparingly, it would be difficult to conceive of a more appropriate case than the present one—where high officials of a foreign government have been directly implicated in murders committed on United States territory, and where that government has effectively frustrated all attempts to bring the accused perpetrators of these crimes to justice.

Moreover, if the Chafee Amendment were not invoked in the present case, EX-IM activity in Chile would not simply remain at current levels; it would, instead, increase dramatically. Prior to the enactment of Chafee, EX-IM had for several years restricted financing in Chile to a maximum of $750,000 per project. Following Chafee’s enactment, that restriction was informally extended pending the final outcome of the Letelier matter and a determination of whether the Amendment would be applicable. In the absence of the Presidential determination described above, EX-IM believes it would not have a legal basis for maintaining the $750,000 ceiling and would therefore resume unrestricted lending in Chile, for the first time since 1974. EX-IM loans in Chile could therefore be expected to increase sharply.

I therefore recommend that you sign the proposed Presidential determination attached at Tab 1,⁷ both as an appropriate response to Chile’s actions in the Letelier matter, and to avoid the anomaly of seeming to reward those actions. Some elements of the business community will undoubtedly criticize us for taking this step, but I believe strongly that we must do so.⁸

(5) Deny Validated Licenses for Exports to the Chilean Armed Forces. A number of applications for licenses to export items to Chile for the use of the Chilean armed forces have been held, pending the resolution of the Letelier matter. I believe these applications should now be denied. Under the Export Administration Act of 1979,⁹ future applications, received after October 1 of this year, may be denied only if you determine that the absence of export controls would be “detrimental to the foreign policy . . . of the United States.” Under this Act imposition of controls would also require us to consult with the Congress and to attempt to dissuade other countries from exporting controlled products to the Chilean armed forces. The use of export controls can be expected to draw strong opposition from the business community. I nonetheless believe that this additional Presidential determination and the other steps called for by the new Export Administration Act would be appropriate in this case. If you approve denial of these future licenses for the armed forces, we will meet with Department of Commerce officials next week to prepare specific recommendations for your review.¹⁰

(6) Deny OPIC Guaranties. OPIC involvement in Chile is currently very limited. I propose that we not approve any future OPIC guaranties or other OPIC activities in Chile.¹¹

(7) Public Statement. In conjunction with the actions described above, I believe we should issue a statement reiterating our grave concern and deep disappointment at the Chilean Government’s actions, including in particular its failure to investigate this crime, and outlining the actions we are taking.¹²

I believe the actions I have suggested would be an appropriate and measured response to Chile’s outrageous conduct in this affair. While it is unlikely that our actions will persuade Chile to alter its course and to bring the three Chilean officers to justice, our actions will constitute a strong reaffirmation of our determination to resist international terrorism, and may help to deter others who might be tempted to commit similar acts within our borders.¹³

1. Source: Carter Library, Donated Historical Material: Zbigniew Brzezinski, Box 7, Alpha Channel (Miscellaneous)–9/79-12/79. Confidential. Sent via Alpha Channel. The memorandum was forwarded to Carter under covering memorandum from Brzezinski on October 25. In the top right-hand corner of the first page of the covering memorandum, Carter wrote: “Minimize backbiting–Put strong assessment of what we are doing. J”
2. Not found.
3. Carter checked and initialed the approve option.
4. Carter checked and initialed the approve option.
5. There is no indication of approval or disapproval of the recommendation. However, Carter wrote in the left-hand margin next to the recommendation: “Phase down to two—then we’ll assess.”
6. On October 2, 1978, the Senate adopted the Chafee Amendment. (“Senate Votes Not to Require President to Draw Up Foreign Trade Blacklist,” Washington Post, October 3, 1978, p. A10)
7. Not attached. Citing the Export-Import Bank Act of 1945, the proposed Presidential determination read: “I determine that it is in the national interest and would clearly and importantly advance United States policy in combating international terrorism for the Export-Import Bank of the United States to deny guarantees, insurance, extensions of credit and participations in the extension of credit in support of the purchase or lease of any product or service by any purchaser or lessee in Chile.” (Carter Library, National Security Affairs, Brzezinski Material, Brzezinski Office File, Country Chron File, Box 7, Chile)
8. Carter checked and initialed the approve option.
9. The Export Administration Act of 1979 (P.L. 96–72) was signed into law by Carter on September 29, 1979.
10. There is no indication of approval or disapproval of the recommendation. However, Carter wrote in the left-hand margin next to this paragraph: “Continue to hold license requests—we can disapprove new ones as they are presented for the time being.”
11. Carter checked the approve option.
12. Carter checked the approve option. For text of the November 30 statement see the Department of State Bulletin, January 1980, pp. 65–66. In a November 19 memorandum to Brzezinski, Pastor explained the delay in announcing the decision: “because our aid package was in Conference, and Henry Owen felt that announcement of the decision could have an adverse impact on it. When that problem was resolved, the Iranian crisis occurred, and Secretary Vance recommended that we hold off announcing the decision until the Iranian crisis was resolved.” Pastor noted, “While we have not felt much pressure because of the delay in making a decision on the Letelier case, it is not likely that we will enjoy a respite for much longer.” (Carter Library, National Security Affairs, Staff Material, North/South, Pastor, Country Files, Box 9, Chile, 1-12/79)
13. In an undated memorandum to Vance, Brzezinski transmitted Carter’s decisions and wrote that the actions “would constitute a strong reaffirmation of our determination to resist international terrorism and a deterrent to those who might be tempted to commit similar acts within our borders.” (Carter Library, National Security Affairs, Staff Material, North/South, Pastor, Chron Files, Box 92, Chile, 5/79-1/81)