Chile Firsthand – A Report From Santiago (Part II)


Chile First-Hand — A Report From Santiago


June 13, 1974


People in the United States have no conception of how people in Chile feel about their former President, Salvador Allende. We Yankees, with our tame politics, have never felt that way about one of our Chief Executives. We have historical memories which give us some basis for comparison; for instance, we remember how Americans in the millions turned against Herbert Hoover, and the older Republicans among us can remember the peculiar hatred that blazed in some quarters against Franklin Roosevelt. But these comparisons do not bring us very far. We have never had the firm conviction, in the majority of the electorate, that one of our duly elected Presidents was using the full power of his office not only to enrich himself and to pervert justice but to change even the basic rules of the game: to bend and break the Constitution itself.

But maybe we are getting there. What if it’s all true, what they say about Richard Nixon?

Nobody thinks of comparing Allende and Nixon, probably because the one was a man of the Left and the other … well, would you call him a man of the Right or a non-ideological crook? Some would say both. In any event, historical figures are rarely compared across ideological lines (except maybe Hitler and Stalin, who are both perceived as criminal types rather than men of ideas). We even tend to type-cast failings incommensurably as “Right- wing” or “Left.” For example, when we look for the warts of a Left-wing figure — say, Rosa Luxemburg or Bela Kuhn — we tend to think in terms of ideological deviation, excess “idealism,” lack of practicality, or something of that sort. Right-wing faults, on the other hand, are thought to be personal venality, official corruption, militarism, racism, jingoism, etc. This typology influences just about all of us, even though we realize it is nonsense, if we think about it. The Soviet Union is militaristic; Mao’s China is jingoistic; the great Ogsefwo, Kwame Nkruma, was a racist to shame even Lester Maddox. And Richard Nixon, assuming he is guilty of everything the Washington Post charges, is not nearly so corrupt as was Salvador Allende.


This will come as a surprise to most Americans, because our newspapers have been curiously uninterested in reporting this aspect of recent Chilean reality. But the facts which I am about to discuss are amply documented — so much so, that Chileans are astounded at our ignorance of them.

Let’s begin by making a brief list of the charges against Mr. Nixon, after which we can turn in the same order to comparable and proven improprieties of Allende.

  1. Official corruption: special favors for Vesco, ITT, the dairy interests; irregularities in political fund-raising by CREEP.
  2. Personal venality: faulty tax returns, lucrative improvements on Nixon’s houses in Key Biscayne and San Clemente, failure to register the Saudi Arabian jewels with the White House Gift Unit, etc.
  3. Subversion of the political process through “dirty tricks”: the destruction of Sen. Muskie’s primary campaign, political use of the IRS, and other hijinks.
  4. Cover-up: some evidence just disappears totally, like the missing eighteen and one-half minutes of tape or the briefcase full of papers destroyed by L. Patrick Gray; other evidence is hidden as long as possible appeals to Executive Privilege, etc.
  5. The use of espionage tactics in domestic politics. Here we have the Watergate break-in itself, White House “plumber” operations against various Federal agencies, the Ellsberg break-in, and — more generally — the serious consideration which the Administration apparently gave to the internal security schemes of Thomas Charles Huston, schemes which the FBI wouldn’t touch with a ten-foot pole. Basic here was a distinctive attitude on the White House’s part toward Nixon’s political opposition: an attitude scorning the old-fashioned restraints of democratic politics and declaring an all-out (but secret) war.

Hypertrophy of presidential power. Closely connected with the above two charges is a grand scheme to alter the constitutional balance of the Nation decisively in the Presidency’s favor. Nixon is accused of devising a mode of governing which would not require a congressional majority: he would rule through impoundments, vetoes, and special temporary appointments (like the celebrated Howard Phillips at OEO).

Such in general are the charges which have brought Mr. Nixon into the deepest kind of political discredit. The situation is one that all of us have lived through and hence understand; now we shall see how shockingly good an analogue it is for understanding Allende’s even deeper discredit.


Let’s start with the Estanco Automotriz, an Allende-created state monopoly in the distribution of automobiles. About the middle of the first year of the Unidad Popular (UP), the government “intervened” in the firms that were selling automobiles on credit, allegedly to “protect the buyers.” Middle-class Chileans had long been avid to own cars, but the high cost had discouraged many individuals. Hence, to promote sales, a system of group-financing had been created, whereby several buyers could get together and make monthly payments into a common fund. The common fund would permit the group to buy one or two vehicles, which would then be shared. More than 30,000 people were taking part in this system when the government muscled in. All the group-financing arrangements were suppressed and replaced by the state pool or Estanco. The pool promised to respect the existing delivery lists (many of the orders were being filled abroad) and not to make exceptions for any reason. In reality, of course, the pool became a means of putting vehicles in the hands of Allende cronies and denying them to everyone else.

Meanwhile, the government froze prices, printed currency, and allowed the inflation to rise unchecked. Hence a new car, at the frozen price, quickly became a grand bargain — if you could obtain one. And paradoxically, since a free market was allowed in used cars, it quickly became the case that old cars cost more than new ones. The few cars which the pool did deliver, then, at a nominal value of x, had a real value three or four times greater on the black market.

Now, one of the constituent parties of Allende’s popular front coalition was a pro-Marxist split-off from the Christian Democrats; this party was called MAPU (Movimiento de Accion Popular Unitaria). Its leadership hit upon a nifty idea for funding both party activities and their own pockets. (Maurie Stans, please take note). MAPU used its political influence to have the state pool send over fifty new Fiats “for use in party activities” at the official price. Immediately, MAPU diverted these cars to the black market, realizing a profit of 100 million escudos. And to make matters worse, the MAPU leaders never did get around to paying back the Estanco, which, in turn, had never reimbursed Fiat.

One of the top MAPU leaders implicated in the affair, Jaime Gazmuri, claimed the deal was justified “because the money was being put to the service of the revolution.” But this claim was proven hollow by other frauds which came to light after the military coup. It seems that these same MAPU militants had set up an organization to forge and alter Estanco documents, so that they could, at will, withdraw from the pool vehicles which had been assigned to other people. These vehicles, too, were sold on the black market, with the profits going permanently into the militants’ pockets.


This scandal reached straight into La Moneda (the Chilean White House) when it was discovered that the same Estanco had delivered at least twenty-two (and perhaps as many as forty-five) new automobiles to a woman named Miria Contreras Bell, who just happened to be Allende’s personal secretary (his Rosemary Wood, so to speak). I shall have much more to say about this interesting woman a little further on, but in this connection it is interesting to point out how her ownership of this improbable fleet became public knowledge. It seems there was a nasty traffic accident in mid-1972 near Curimon, on the highway to Argentina. Involved was a small truck driven (drunkenly) by MIRista extremists and carrying a cargo of arms. The Congress demanded a thorough investigation, during which it turned out that the truck was registered to Mrs. Contreras. Thereupon, an examination of the lady’s tax returns (which I have personally seen) disclosed the existence of her other conveyances. Moreover, another curious thing came to light: the property of the huge, new Cuban embassy complex had been sold to the Cubans by this same, enigmatic “secretary.”

Now that the career of the Estanco has introduced us to the black market situation, we must hasten to add that automobiles were not, by any means, the only things diverted by Allende administration officials and sympathizers from the artificially depressed official market and sold illegally. The products of every one of the 535 businesses nationalized by the UP (and referred to as empresas estatizadas) travelled the same murky, but lucrative, route: refrigerators, stoves, sinks, heaters, radios, TVs, stereos, automobile accessories (especially tires) and textiles. The main profiteers were Communist and Socialist bureaucrats (called “intervenors”) whom the government sent in to run the nationalized companies — without bothering to require, of course, that the new “managers” should know anything about the industries placed in their hands. (I might mention parenthetically that Allende was notorious for putting incompetent party hacks in sensitive positions. The Minister of Commerce in the first cabinet, for instance, was an elderly typesetter from the provinces, named Americo Zorrilla. This man’s sole qualification for high post was the fact that he had been treasurer of his local Communist Party organization. One delightful story tells how, one day, old man Zorrilla was rummaging frantically through all the drawers and cubbyholes of his desk. His secretary came in and asked what he was looking for. “I can’t find,” he answered, “where the previous Minister left the Balance of Payments.”)

During the three years of Allende’s rule, the inventories of the nationalized companies simply disappeared, as did almost all of the products made during that time. What wasn’t sold on the black market by the “Managers” was given to the loyal Leftist workers (a small minority in most plants) in lieu of wages. The workers would then sell these products at the factory door for five or ten times the official price, or else trade them for other products from other plants. This practice explains how the UP “managers” and their favorites accumulated personal fortunes while the nationalized companies themselves, taken together, suffered a deficit on the order of 150 billion escudos per year! No wonder the stores were empty!


Another splendid racket involved propaganda — one of the few commodities in which Socialist systems are invariably productive. Each of the parties in the UP coalition had organs of publicity like newspapers and magazines. In order to secure advertising, these publications would pay an “agents’ commission,” amounting to up to fifteen percent of the cost of publication, to the advertiser or public relations firm which sent them work. Thus government officials could make a nice income by pushing pro-Allende propaganda through the UP publications, all the money remaining “in the family,” so to speak. Imagine the furor which would be raised in this Country if, analogously, all Federal contracts for public relations work went to the same three of four Madison Avenue firms, which subsequently turned out to be owned wholly or substantially by the Republican National Committee.

Eventually, of course, everybody wanted to get rid of escudos. Day by day, the real value and the “official” value of this currency diverged more absurdly. Thus by 1973, the Banco Central was still giving 350 escudos per dollar, although on the ubiquitous black market the same dollar would buy up to 3,000 escudos. This situation, utterly disastrous to any ordinary Chilean who wanted to travel abroad, was highly profitable to a ring of highly-placed Allende officials who organized a traffic in foreign currency, with the help of fellow revolutionaries in Buenos Aires.

Here’s how it worked. Agents of the UP and the MIR carried millions of escudos to the Argentinian capital, where an outfit called the Eiercito Revolucionario del Pueblo (People’s Revolutionary Army) was enlisted to exchange them for dollars or pounds sterling at the “official” rate. The Argentinian extremists took a commission for this service, which they used to finance their own violent activities, of course, and the rest went back to Chile. There the dollars or pounds sterling could be sold in the black market for an enormous profit in escudos, or else salted away in anticipation of rainy day.

Practices such as these are today under investigation by the military government, which has reorganized and revitalized a unit called the Service for the Investigation of Economic Crimes. This same unit existed under Allende and was manned by his henchmen, who contrived to draw emolument even from this agency. In fact, recent investigations have turned up evidence that Allende’s appointees to this service were bought off, to the tune of $30 million a month, to facilitate the creation of a conduit through Chile for the sale of narcotics in the United States and Europe. The UP was willing to play along, apparently, in order to get dollars for arms purchases.


Yet another source of enrichment was the odd rule whereby the UP required that reserves of farm and dairy products be maintained in certain zones of the country. In order to make sure that these reserves would exist, people were forbidden to sell their produce in Santiago. There were actually customs inspections along the roads to stop you, and you couldn’t ship by train because the railroads had been nationalized. However, the right amount of money in the right official palm would buy an exception in the form of a “free transit” order. Apparently, the market in bribes for these free transits was so attractive, that other state agencies wanted a share of the take. Hence, the state-owned fishing enterprise, the Instituto de Fomento Pesquero, started hiring out its boats to farmers in remote parts of the country who wanted to ship crops to the capital for sale on the black market.

There was also a chaotic situation at the Central Bank (which is also the national mint). The number of bank employees was quickly doubled in order to accommodate the demands for jobs by Communist and Socialist worthies. But the bank’s Office of Foreign Commerce, newly created, was considered so sensitive that no native Leftists were good enough for it. Instead, Allende imported a complete staff from Cuba and ensconced these people in the Sheraton San Cristobal, the poshest hotel in Santiago, as guests of the government.

Perhaps the key man at the Banco Central was Jaime Barrios, a member of the Central Committee of Allende’s Socialist Party. Barrios had title of General Director and used his position to finance guerrilla groups. In a letter now in the hands of the military government, Barrios wrote to a friend as follows: “I was with N. in Curico, and we settled on the form by which to aid the POR (Partido Obrero Revolucionario, an Argentine group) through our Central Bank.” We also have Barrios’ signature on a personal cheque-stub for $400,000, made out to a Swiss bank. When Barrios left the General Directorship in 1973, he settled in La Moneda as a direct economic advisor to Allende. Both he and another high official of the Central Bank, Alfonso Inostroza, were active in the violent MIR.


Meanwhile, it was also through the Central Bank that plans were made for a very special sale. We have a confidential letter from former Ambassador Hernan Santa Cruz (who represented Chile to various international bodies, mostly in Geneva) to President Allende, arranging for the sale of Chile’s entire gold reserves on the European market. When the army seized power on Sept. 11th, it was discovered that the gold was already packed in crates, waiting for shipment.

One of the most telling proofs that such massive and repulsive corruption really took place is the extraordinary amount of foreign currency which was found in the hands of various Allende officials as they attempted to flee after the military coup. David Silbermann, for example, had been the Allende- appointed director of the nationalized Chuquicamata Copper Mine. He was captured at the border with $25,000 in his pockets. Roberto Sapiain Rodriguez, head of the Development Corporation of Valparaiso and Aconcagua (a state agency), was picked up in his house, while packing his bags. He had $80,000 on him, as well as seven million escudos. (Sapiain’s case is especially interesting because he was director of the professedly Catholic party in the Unidad Popular, a break-off from the Christian Democrats and from MAPU called the Izqierda Cristiana, or Christian Left. Apparently even the clerico- Marxists were crooks!) One of the hideouts of Miguel Enriquez, the top commander of the MIR, was found to contain $50,000. Luis Guastavino was a Communist member of Congress and a long- time Allende stalwart. $145,000 was found in one of his residences, and in another (a house at the exclusive Renaca resort) Guastavino had sheets of uncut 5,000 escudo notes, fresh from the mint.

I can’t resist quoting a remark which Admiral Merino made, apropos of this case. “Here am I, with forty years of service,” he said, “and I have less than $15 in my current bank account, a 1960 automobile, and a modest, old house. For somebody to get hold of $145,000 in just three years, he must have had a morality which we soldiers can only call robbery, plunder, or gangsterism.”

But nobody had his hand further into the cookie jar than Salvador Allende himself. $45,000 turned up at his vacation residence (about which I shall say more in a moment), but $6 million had already been sent out of the country by Allende’s private secretary (the incredible Miria Contreras Bell again!) and deposited in a bank in Ottawa. A classic case of the inutil precautione, as Rossini would have said. All of which brings us to our next subject.


Salvador Allende would not have gotten along with Billy Graham, it is safe to say, but like a certain other President, he knew the political uses of righteousness. “In thirty-two years of being in politics,” Allende said on one occasion, “I have been called every name in the book, except a thief or a queer.” And on another occasion he said something that the National Catholic Reporter no doubt would consider highly evangelical. “Violence,” he said, “is living in opulence while thousands of Chileans live in shacks. Violence is wasting food while others haven’t even a crust of bread.” Was there a personal honesty or asceticism to back up these words? Let the reader judge from what follows.

For twenty years before the fateful autumn of 1970, Allende lived in a small house on the border of the Providencia district in Santiago. It was a typical residence for a middle-class professional, very much in keeping with Chile’s political tradition. An old and stable democracy, Chile had always been worlds apart from the banana-republic atmosphere of presidential flamboyance. Quite the contrary, the Chilean electorate expected a marked austerity on the part of its Chief Executives. Hence there was a certain amount of talk when it was announced, a month after Allende came to power, that the “Presidency” would buy the huge mansion of a construction tycoon named Dante Yaconi, located at Calle Tomas Moro 200.

The move at first seemed sensible enough: the old presidential quarters in La Moneda could not accommodate much of a crowd, and of course Allende’s own house was even smaller. People could see that the President needed some place adequate, just as a few years ago most Americans understood that Mr. Nixon surely needed to get away from the goldfish bowl on Sixteenth and Pennsylvania. But eyebrows in Chile were raised by the fact that the Yaconi mansion had a swimming pool, gardens and tennis courts, in a country where such amenities were reserved for those whom Allende had always attacked as “filthy capitalist exploiters.”

The new house was quickly fortified by a high, concrete wall with a steel gate and guardhouses. Nobody but presidential cronies ever got into the place.


According to the eyewitness report of Francisco Castillo, a Chilean reporter who was one of the first people to get into the Tomas Moro house after the coup, what Allende had done to the place was quite astonishing: “He had added new wings, so as to create three separate living areas (one entirely of glass with photosensitive panes), twenty guest suites, underground storerooms for food and arms, and an enormous kitchen in which up to 100 luncheons were prepared daily.

“Aside from the recreational facilities, there was also a small fortress. Disguised closets in the guardroom contained rifles, machineguns, and a large supply of ammunition.” None of this had congressional approval, needless to say. Towards the end, Allende even started to put up anti-aircraft defenses.

Castillo further reports: “The interior was decorated in the style of his former house, but on a grand scale: Oriental and European brocades, carpets, porcelain, Ivories, China and crystal.

Next to the swimming pool was a full-sized , stuffed crocodile, a gift from Fidel Castro. In the bathroom, gymnastic equipment and a mini-sauna.

“The quarters for the servants and bodyguards, on the other hand, were like a cheap motel, with small rooms and common baths, built over what used to be the tennis courts. This sector was quite cramped inside; it looked dirty and foul-smelling.” So much for equality.

There were enough automatic weapons at Tomas Moro to equip a company of 125 men. There were even bazookas and 50mm cannon. “In a subsequent inventory,” Castillo writes, “other surprises turned up which began to remove the veil from hitherto unknown aspects of Allende’s personality: in a strongbox were found almost $9,000 and over five million escudos in specie, and in a private compartment were discovered numerous (unmentionable) gadgets of the sort advertised in European and North American pornographic publications, as well as some enormous photographs and Swedish magazines.”

But this is only the beginning. You see, Allende also had another new house, a vacation place at El Canaveral in the Andean foothills on the road to the Farellones ski lodge.

El Canaveral was originally the property of a former president of the Pacific Steel Company, a man of vast personal fortune named Flavian Levine. Because of its ritzy amenities, the place had been glowingly written up in the Chilean equivalent of Better Homes and Gardens. Now, Levine was married to Lila Contreras Bell, the sister of Allende’s personal “secretary,” Miria. The marriage went on the rocks, and Lila got El Canaveral as part of the settlement. Subsequently, she is supposed to have “sold” this place to her sister, who immediately put it at Allende’s disposal.


Now the funny thing is that Miria Contreras, unlike Lila, had never been married to a tycoon. She had nothing like the kind of dough that a place like El Canaveral must have cost. For years, she had been a neighbor of Allendes’ in their modest, original circumstances. Her husband was a moderately salaried bureaucrat in CORFO Corporacion de Fomento de Produccion), who, conveniently enough, was packed off to Paris during the Allende years. (Shades of David and Bathsheba.) So, the acquisition of El Canaveral is a story as fishy as … well, suppose good old Rosemary Wood suddenly came up with the scratch to buy the Merriwether Post estate, which she then offered to Nixon as yet another White House!

El Canaveral consisted of three main buildings of three stories each, four cabins, four swimming pools, a private movie theater, and, screened by a grove of trees, another motel larger than the one at Tomas Moro, which included a meeting-room for eighty people.

Here Allende and his cronies combined guerrilla maneuvers, sex, alcohol, and Marxist indoctrination.

Now suppose that Richard Nixon had fired the Secret Service or restricted it to White House ceremonial duties and made new provisions for his security by hiring a bunch of tough-looking characters called “Friends of the President” (FPs). The FPs were all over the place at San Clemente and allowed nobody to get near it, especially not reporters. Suppose, further, that one of the FPs murdered one of the San Clemente gardeners right on the presidential property, and police were called in to investigate. Four reporters from Newsweek, Time, and the Washington Post show up and try to photograph the scene of the crime, whereupon they are shot at by Nixon’s FPs. There would be just a little bit of howl, right?

Well, in Chile it all happened, just that way. Allende organized his own corps of bodyguards, called GAP (Grupo de Amigos Personales — the head amigo being, incidentally, a militant of the MIR), who murdered a gardener at El Canaveral and, with gunfire, drove off a crowd of reporters attempting to cover the story. I have yet to see a single report of this incident in the Ameripress, otherwise so solicitous of journalists’ rights.


On that decisive Tuesday morning, Sept. 11th, almost all of the GAP had gone with Allende into La Moneda, so that El Canaveral was captured intact with hardly a shot fired. The astounded soldiers discovered a scale of luxury several times above that of even Tomas Moro. One terrace had been used as Allende’s personal shooting range, where he played with Soviet-made machineguns and drowned his sorrows in booze. Twenty-gallon bottles of Chivas Regal, empty, were found of this terrace. Elsewhere five refrigerators bulged with food, and there were freezers full of meat along with a wine cellar and stocks of imported liqueurs — commodities which the average Chilean, not to mention the very poor, had no chance of buying, even after ten or twelve hours waiting in a food line.

Allende’s taste in movies could be gleaned from what was discovered in the projection room of his movie house. Half the films depicted sexual orgies, and the other half were guerrilla training films from Cuba, Vietnam, Czechoslovakia and the Soviet Union — all with Spanish subtitles.

There is no doubt that El Canaveral was being used as a guerrilla training center. Behind some trees was an exercise field with rope ladders, barbed wire, tunnels, etc. Entrance to this area was protected on the East by a trench set with machineguns and on the West, would you believe, by a mine field.

Remember the fulminations when Sen. Joseph McCarthy was accused of stashing away a few guns — where was it, in the basement of the Senate Office Building? Anti-Communists are such amateurs!

Well, I am just scratching the surface. Let’s see, according to the original outline, I still have to talk about “dirty tricks,” cover-up, espionage tactics and the hypertrophy of presidential power. There is so much to talk about in each of those categories that I am going to have to put them off till the next installment. But by way of preview, let me pique your curiosity, dear reader, by saying that I am going to talk about my personal contacts with Chileans actually tortured under Allende, and I am going to make some comments about the American Bishops’ favorite Latin-American expert, Fr. Frederick McGuire.

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