The El Mercurio File
Secret Documents Shine New Light on How the CIA Used a Newspaper to Foment a Coup
September 11, a day of infamy in the U.S., is also a dark day in the history of Chile. This 9/11 marks the thirtieth anniversary of the coup that brought General Augusto Pinochet to power. Although former U.S. officials such as Henry Kissinger have insisted that Washington had no involvement in the military takeover, and was trying only to preserve democracy in Chile, CIA and White House records, analyzed here for the first time, show how the CIA used Chilean media to undermine the democratically elected government of Socialist Salvador Allende, an operation that "played a significant role in setting the stage for the military coup of 11 September 1973." From these documents emerges the story of the agency's main propaganda project — authorized at the highest level of the U.S. government — which relied upon Chile's leading newspaper, El Mercurio, and its well-connected owner, Agustín Edwards. In Chile, the aged Edwards remains an influential media power, and here in the U.S., covert action has again been unleashed and executive-branch secrecy is on the rise. The story behind 9/11/73 continues to echo.
For the better part of two years, a group of editors, journalism students, and human rights lawyers in Santiago, Chile, have been gathering evidence against their country's leading media mogul, Agustín Edwards, to, at minimum, have him expelled from the press guild, the Academy of Chilean Journalists. The editor of the leftist magazine Punto Final, Manuel Cabieses, has filed a formal petition accusing Edwards of violating the academy's code of ethics by conspiring with the Nixon White House and the CIA between 1970 and 1973 to foment the military coup that overthrew the elected government of Salvador Allende and brought General Augusto Pinochet to power, thirty years ago this month.
"Doonie," as Edwards is known to his closest friends, is the patriarch of the press - a Chilean Rupert Murdoch. His media empire encompasses Chile's renowned national newspaper, El Mercurio, a second national paper, Ultimas Noticias, and Santiago's leading afternoon paper, La Segunda, along with a dozen smaller regional journals. In September 1970, when Chileans narrowly elected Allende, a Socialist, to the presidency, Edwards was widely considered to be the richest man in Chile — and the individual with the most to lose financially from Allende's election.
The ethics charges against Edwards are likely to receive a boost from a careful analysis of formerly secret U.S. documents that shed considerable new light on CIA covert media operations in Chile. Since 1975, when a special congressional committee chaired by Idaho Senator Frank Church issued its report, Covert Action in Chile: 1963-1973, it has been no secret that the CIA provided significant funding to El Mercurio, put reporters and editors on its payroll, and used the paper, in the committee's words, as "the most important channel for anti-Allende propaganda." But with the declassification of thousands of CIA and White House records at the end of the Clinton administration, the history of the "El Mercurio Project" emerges in far greater detail. Among the key revelations in the documents:
- Even before Allende was inaugurated as president of Chile, Edwards came to Washington and discussed with the CIA the "timing for possible military action" to prevent Allende from taking office.
- President Nixon directly authorized massive funding to the newspaper. The White House approved close to $2 million dollars - a significant sum when turned into Chilean currency on the black market.
- Secret CIA cables from mid-1973 identified El Mercurio as among the "most militant parts of the opposition" pushing for military intervention to overthrow Allende.
- In the aftermath of the coup, the CIA continued to covertly finance media operations in order to influence Chilean public opinion in favor of the new military regime, despite General Pinochet's brutal repression.
The documents provide the most comprehensive record to date of one of the CIA's most famous covert propaganda projects, one that in retrospect played a far greater role than previously understood in the run-up to Pinochet's dictatorship. And they shed new light on the willingness of Chile's leading newspaper — a paper often compared in prestige and importance within Chile to The New York Times in America — to collaborate in fomenting the coup.
Going to Washington
Well before Allende became the first democratically elected socialist head of state in the Western Hemisphere, Agustín Edwards began to lobby the influential Americans he knew to press for aggressive U.S. intervention. In his autobiography published last year, David Rockefeller recalls that Edwards told him in March 1970 that "the United States must prevent Allende's election."
One day before Chileans went to the polls on September 4, Edwards took this message to the U.S. embassy. He "had plowed all his profits for years into new industries and modernization, and would be ruined if Allende won," Edwards told the ambassador, Edward Korry, as Seymour Hersh relates in his book The Price of Power. Korry predicted that another candidate, the one supported by El Mercurio — conservative patriarch Jorge Alessandri — would win.
But Allende eked out a narrow victory — his Popular Unity coalition made up of Socialists and Communists and several smaller non-Marxist parties won 36.3 percent of the vote in a three-way race. Several days later, Edwards asked the CIA station chief, Henry Hecksher, to set up another, more private meeting with Korry, outside the embassy. Korry recalled, "Edwards said that he wanted to ask me only one question: 'Will the U.S. do anything militarily — directly or indirectly?'" Korry responded: "My answer was no."
Edwards promptly flew to the United States where he immediately exerted all the influence he had on friends and officials close to President Nixon. In Washington, as Kissinger noted in his memoir, White House Years, Edwards stayed with Donald Kendall, chairman of PepsiCo., and one of the president's closest friends and largest campaign contributors. On September 14, Kendall went to the White House for a social visit with Nixon and told him what Edwards was saying. Henry Kissinger, the national security adviser, and the attorney general, John Mitchell, subsequently met with Edwards and Kendall, almost certainly at Nixon's request.
On the morning of September 15, Kissinger and Mitchell had breakfast with Edwards, who informed them of the significant threat Allende posed. Kissinger also called the director of the CIA, Richard Helms, and told him to meet with Edwards to get "whatever insight he might have" on Allende.
For thirty years, what Edwards told the CIA director when they met at a Washington hotel remained top secret. But now the CIA memorandum on "Discussion of Chilean Political Situation" has been declassified. Edwards's name is blacked out, but the text makes clear that the meeting can be none other than the Helms-Edwards conclave that Kissinger and others alluded to. The memorandum reveals that Edwards sought to push U.S. covert operations toward plotting a military coup to stop Allende from assuming the presidency. The memorandum records Edward's briefing on why Allesandri lost the election, and the "possibility of a constitutional solution" — a scheme initially pushed by the U.S. embassy, in which, their documents show, the CIA would bribe Chilean congressmen to ratify the runner-up, Allesandri, instead of Allende. Allesandri would then resign and new elections would be called in which the outgoing president, Christian Democrat Eduardo Frei, could run and presumably be elected.
But the memorandum also captured their discussion that the congressional solution entailed risks:
1. It might not work, and then what? . . .
2. Some Congressmen might move too soon or announce their intention prematurely, thereby triggering the Communists to "move into the streets."
3. Retired General Roberto Viaux, leader of the military dissension of October 1969 [deleted] or "some other nut" might try to stage a coup, thereby precluding any serious effort.
And the CIA memorandum recorded that Helms and Edwards also discussed another option, "Timing for Possible Military Action."
In a fifteen-minute meeting in the Oval Office on the afternoon of September 15, Nixon issued his now famous order to Helms to foment military action in Chile to prevent Allende from assuming office. "1 in 10 chance perhaps, but save Chile! . . . Not concerned risks involved . . . . $10,000,000 available, more if necessary. Full time job — best men we have," read the CIA director's handwritten notes on the president's instructions. Helms later testified before the Church committee that "I have this impression that the president called this meeting where I have my handwritten notes because of Edwards's presence in Washington and what . . . Edwards was saying about conditions in Chile."
Fuding El Mercurio
Despite a frantic effort by the CIA to foment chaos and create a climate conducive to a military coup in the fall of 1970, on October 24, Chile's Congress ratified Allende as president; on November 3, he was inaugurated. Three days later, Nixon convened his National Security Council to discuss a broader strategy to hurt Allende and, in the words of his secretary of state, William Rogers, "bring him down." Later that month, Kissinger presented the president with a five-point briefing paper on CIA operations designed to destabilize Allende's ability to govern. Point four called for "Assisting certain periodicals and using other media outlets in Chile which can speak out against the Allende Government."
U.S. assistance to the Edwards media group began even before Allende's inauguration. In late September 1970, even as administration officials were secretly lobbying U.S. companies and financial institutions to pull out of Chile in order to disrupt the economy, Ambassador Korry intervened with one of El Mercurio's American creditors, First NCB, to show leniency on Edwards's obligations. "I have spoken again [to] the First NCB manager here," Korry reported in a Top Secret/Eyes Only message on September 25, "re El Mercurio and why they are putting Mercurio to the wall. I told him I would not like to apprise the White House of this strange action that could only have the effect of muzzling the lone free voice in Chile but I would do so today." The manager, Korry advised, "said he would promptly change his tune with Mercurio."
At the time of Allende's election, El Mercurio already was in some financial difficulty with creditors. But Nixon's September 15 instructions to the CIA to "make the economy scream" and an invisible blockade to curtail bilateral and multilateral economic transactions in Chile, along with Allende's socialist program, clearly had an impact on the company's financial health, and on all large Chilean businesses. Facing labor strife from leftist dominated trade unions, and the Allende administration's curtailment of government advertising in the press — pursuant to a law passed by an opposition-controlled Chilean Congress — Edwards accused the Popular Unity government of deliberately trying to shut down the opposition media in Chile. Freedom of the press then became the number one theme in the Nixon administration's propaganda attack against Allende.
In early September 1971, an emissary from El Mercurio apparently approached the CIA station in Santiago and requested financial support. On September 8, the CIA presented a ten-page proposal to the 40 Committee — the secretive interagency group, chaired by Kissinger, which oversaw covert operations — arguing that "El Mercurio would need a minimum of $1 million to survive for the next year or two." The CIA claimed that "without such financial support it would be forced to close before the end of September. Although this closure would be for economic reasons," agency officials contended, "there is no doubt that these financial problems have been politically inspired."
The CIA request prompted a significant and revealing internal debate among U.S. policy makers. A declassified options paper marked "Secret/Sensitive/Eyes Only" presented to Kissinger, posed two "basic options":
A: To provide extensive financing for the newspaper with the understanding that this may not be sufficient to stop the Allende Government from closing the paper anyway (e.g., through control of newsprint, or labor stoppages). This would involve an initial commitment of at least $700,000.
B: Allow El Mercurio to go out of business and arrange a maximum propaganda effort on the issue of freedom of the press.
Option B was risky, the memo advised, because "Allende might be able to counter that by demonstrating that it was El Mercurio's financial ineptitude which resulted in its closing." The CIA station chief and Ambassador Korry favored funding; others within the administration believed that $1 million was "a very expensive price to pay for a little extra time" if the paper was going to close anyway.
Indeed, when the members of the 40 Committee were polled, their positions ran the gamut of opinion. Attorney General Mitchell, according to a summary of the discussion, felt "we should keep a strong voice alive but a weak one would not be worth it"; the Pentagon's representative, Admiral Thomas Moorer, stated "we were gambling with a loser and [the] expenditure [was] extravagant"; CIA director Richard Helms said that "the prospects were not good either for the short or long term." Kissinger's deputy, Arnold Nachmanoff, suggested "we should probably take both options and link them": the paper would receive $700,000 but the U.S. would "condition our support on an understanding that El Mercurio will launch an intensive public attack on the Allende Government's efforts to force them out of business."
Presidents are not often involved in micromanaging a covert operation,
let alone a clandestine effort to finance a foreign newspaper.
But, faced with a major disagreement regarding a specific anti-Allende
action, Kissinger simply decided to "take the matter to higher
authority." On September 14, 1971, documents show (see page
15), Nixon personally authorized the $700,000 — and hundreds
of thousands more — in covert funds to El Mercurio.
That evening, Kissinger called Helms to tell him that the president had approved the proposal for $700,000 and more if necessary to sustain the newspaper.
On the strength of the president's decision, Helms told his Western Hemisphere division to "exceed the authorized $700,000 and go up to, and even over, $1,000,000 provided it was warranted to keep the paper going." In short order, in a decision apparently kept secret from Senate investigators in 1975 and subsequently blacked out of almost every declassified CIA and NSC document, Kissinger personally approved the additional $300,000 for the newspaper, according to a CIA summary. Purchasing Chilean currency on the black market, the CIA provided the El Mercurio company with 67 million escudos.
Apparently, that amount was insufficient. In April 1972, the CIA requested "an additional $965,000 be made available to El Mercurio." This time the agency dropped the argument that Allende was threatening to shut down the paper; its financial solvency was the issue. The new allotment, Kissinger was informed in a top-secret memorandum, would be "used to repay a loan, to cover monthly operating deficits through March 1973, and to provide for a contingency fund of [deleted] to meet emergency needs such as credit requirements, new taxes, and other bank debts which could come up on short notice."
El Mercurio, according to the CIA argument advanced for this money, was "deemed essential" to help CIA-backed opposition candidates win the March 1973 congressional election — a major electoral test of Allende's popularity. In a proposal submitted by the new head of the Western Hemisphere division, Theodore Shackley, the CIA stated that the decision to continue funding "must be based . . . on a value judgment of the importance of attempting to ensure the paper's continued existence for political purposes." Now, as Kissinger aide William Jorden noted in a recently revealed secret White House "action" memorandum (marked "outside system" to prevent its distribution), the consensus was that "El Mercurio is important. It is a thorn in Allende's side. It does help give heart to the opposition forces." And if, in the end, the newspaper goes "down the drain," Jorden reminded Kissinger, "we have an excellent freedom of the press issue to use there and in the Hemisphere." On April 11, Kissinger's office approved the funds.
This would bring total CIA allocations for the paper to $1.95 million in less than seven months - some $8.4 million in today's dollars — and tens of millions of Chilean escudos on the black market. An additional undetermined amount flowed to El Mercurio through the CIA's main corporate collaborator in Chile — the ITT Corporation. A declassified May 15, 1972, memorandum of conversation between CIA officer Jonathan Hanke and ITT official Hal Hendrix recorded a discussion about $100,000 bank deposits ITT was secretly making to Agustín Edwards's company. Hendrix, as Hanke reported to his superiors, "told me money for the Edwards group went through a Swiss account."
Building a Coup
How was this money used? "Assistance provided to El Mercurio
has enabled that independent newspaper to survive as an effective
spokesman for Chilean democracy and against the UP [Popular Unity]
government," the CIA said in a Secret/Eyes Only memo to the
40 Committee. But leading the anti-Allende opposition was not
the same as supporting the democratic process in Chile. Indeed,
sustained by the covert funding, the Edwards media empire became
one of the most prominent actors in the fall of Chilean democracy.
By 1972, the paper was "publishing almost daily editorials
criticizing the Allende Government," and "had been guiding
and acting as a rallying point for the opposition," the CIA
reported in a summary of the El Mercurio Project. "El Mercurio
continues to play a leadership role in molding Chilean public
opinion," the CIA's Santiago station advised in a February
21, 1973, status report. "El Mercurio [deleted] launched
an extensive advertising effort to place the blame for Chile's
economic ills at the doorstep of the Allende Government, placing
ads wherever possible."
But the activities of the Edwards media group went well beyond placing ads and publishing incendiary articles and anti-Allende editorials. With CIA backing, El Mercurio positioned itself as a bullhorn for organized agitation against the government, and as an ally of procoup forces inside the Chilean military. On May 2, in one of the most damning cables written by the CIA station, the station chief cabled Langley headquarters on the activities of the political forces inside and outside the military pushing for Allende's overthrow. He identified the "El Mercurio chain of newspapers" as among "the most militant parts of the opposition" — other groups included the neo-fascist paramilitary group, Patria y Libertad, and the ultraconservative Partido Nacional, both of which had received agency funding — which "have set as their objective the creation of conflict and confrontation which will lead to some sort of military intervention." Each of these groups, the cable advised, "is trying to coordinate its efforts with members of the Armed Forces known to them who share this objective."
In June 1973, as social tensions rose dramatically and rumors of coup plotting circulated through Santiago, El Mercurio ran an editorial essentially calling for insurrection. Allende has ceased to be the constitutional president, the paper declared. On June 21, Allende invoked a libel law, passed under a previous administration, and ordered the newspaper closed for six days, but after only one day an appeals court ruled that the government had no standing to suspend the paper, and El Mercurio renewed its drumbeat of opposition and agitation.
Only a week later, on June 29, units of the Chilean military unsuccessfully attempted a coup. The situation deteriorated rapidly and Allende was overthrown less than three months later. On September 11, 1973, Chilean jets strafed and bombed the presidential palace; Allende died of a self-inflicted gunshot wound, and a military junta, led by General Pinochet, assumed control of the government.
In the aftermath, the CIA's Western Hemisphere covert action division credited El Mercurio with making the military takeover possible:
Prior to the coup the project's media outlets maintained a steady barrage of antigovernment criticism, exploiting every possible point of friction between the government and the democratic opposition, and emphasizing the problems and conflicts which were developing between the government and the armed forces.
In an actual admission that U.S. covert operations had directly contributed to the overthrow of Allende, the CIA asserted that "the Santiago Station's propaganda project," in which El Mercurio was the dominant actor, "played a significant role in setting the stage for the military coup of 11 September 1973."
Supporting Pinochet
In September 1974, when Seymour Hersh exposed the CIA's broad covert operations to destabilize Allende in The New York Times, President Gerald Ford was forced to publicly defend them as "in the best interest of the people of Chile, and certainly in our best interest." There was an effort by the Allende government "to destroy opposition news media, both the writing press as well as the electronic press," Ford told reporters. "The [covert] effort that was made in this case was to help and assist the preservation of opposition newspapers and electronic media . . . ."
It was, in fact, the Pinochet regime, not Allende, that would destroy Chile's free press. In the aftermath of the bloody military takeover — some 1,500 people were murdered by the military in the ensuing weeks — the junta closed down all but the government-controlled outlets. There were a few exceptions. The most prominent: El Mercurio.
Under the CIA's fiscal year 1974 propaganda budget for Chile, the Santiago station continued covertly to underwrite the Chilean right-wing press as it reincarnated itself from the voice of anti-Allende opposition to the main independent promilitary media in Chile. With funding due to expire in early 1974, the Western Hemisphere division determined an extension was necessary to allow the military regime's media oracles a smooth transition off the clandestine U.S. payroll.
Covert funding was "essential to maintaining the trust and continued collaboration of the [assets] and through them, to maintain our capability for influencing the Junta and molding Chilean public opinion," an adviser wrote to David Atlee Phillips, the CIA division chief, in a January 9, 1974, memorandum. The project had not only "played a significant role in setting the stage for the military coup," but was now essential to national and international propaganda efforts in support of the Pinochet regime. "Since the coup, these media outlets have supported the new military government," Phillips wrote in his own memo that same day. "They have tried to present the Junta in the most positive light for the Chilean public and to assist foreign journalists in Chile to obtain facts about the local situation . . . . The project is therefore essential in enabling the Station to help mold Chilean public opinion in support of the new government."
Faced with State Department pressure to close down its pre-coup covert action projects, the CIA's Western Hemisphere division appears to have sought, and obtained, an additional $176,000 to give "this multifaceted propaganda mechanism the opportunity to locate alternative funding sources," according to secret agency memorandums. But with Pinochet firmly entrenched, the need to continue the media project finally subsided. It appears from documents that in late February 1974, agents from the CIA station met with their Chilean conduits, and told them that "all subsidy support . . . would cease" at the end of the fiscal year. For these longstanding Chilean media assets, the CIA station chief reported back in a secret March 1, 1974, cable to Phillips, "this news came as a shock and disappointment."
Pinochet would stay in power for seventeen years. During that time, El Mercurio served as a shill for the dictatorship, maximizing its economic success and minimizing — to the point of distortion and obfuscation — its widespread repression, which included the murder and disappearance of thousands of Chileans, systematic torture, and multiple acts of international terrorism in Latin America, Europe, and even the U.S.
Thirty years after the coup, Chile is only beginning to open the book to this chapter of its past. General Pinochet's 1998 arrest in London — he fought extradition to Spain for human rights crimes and eventually was allowed to return to Chile, where the Supreme Court ruled he was mentally unfit for a trial — has led to indictments, arrests, and incarceration of a number of his military men.
And what of Edwards and his media company, and other private sector actors who actively collaborated in the downfall of electoral democracy and the advent of a brutal military dictatorship?
The effort to bring ethics charges against Agustín Edwards
at the Academy of Journalists is a wholly symbolic gesture, although
it does mark a growing movement to hold civilian collaborators
responsible for their actions. The U.S. government documents that
secretly recorded those actions may provide valuable evidence
— if not for legal action then at least for a moral accounting.
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