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A joint project is started in which students from Chile will be sent to learn economics at the University of Chicago using funding for tuition and other expenses from the US government as well as private organizations such as the Ford Foundation. The University of Chicago’s Department of Economics is at this time a bastion of strict adherence to pro-free market thought. The chairman of this department, Theodore W. Schultz, came up with this plan along with an official from the US government during a meeting in Santiago, Chile, in 1953. Schultz himself stated that he desired that the countries of the third world, “work out their economic salvation by relating to us and by using our way of achieving their economic development.” By 1970, some 100 students from Chile will have sought advanced degrees from the University of Chicago. [Klein, 2007, pp. 59-60]
During the Chilean election campaign, when it becomes clear that leftist candidate Salvador Allende will win (see September 4, 1970), the US ambassador to Chile, Edward Korry, says: “Not a [US] nut or bolt will be allowed to reach Chile under Allende. Once Allende comes to power we will do all within our power to condemn Chile and Chileans to utmost deprivation and poverty.” Weeks later, President Nixon declares his intention to “smash” that “son of a b_tch Allende” (see September 11, 1973). [Hunt, 9/1/2009, pp. 7]
Socialist Salvador Allende is elected as president, despite extensive CIA efforts (mainly through propaganda) to prevent him from winning (see 1964). He pursues a leftist program, establishing diplomatic relations with Cuba and moving Chile closer to communist countries such as China, North Korea and North Vietnam. He also nationalizes various industries, several of which have significant US business interests. The US responds by continuing support of the opposition and working systematically to weaken Chile’s economy. [US Congress, 12/18/1975, pp. 148-160; Keen, 1992, pp. 332-336; Federation of American Scientists, 9/11/2998]
“The Brick,” a 500-page economic blueprint later used by Augusto Pinochet to formulate Chile’s economic policy, is drafted by a ten-man group, eight of whom had previously studied at the University of Chicago (see 1956). The group was put together by Orlando Sáenz, president of the National Association of Manufacturers, to “prepare specific alternative programs to government programs” that the military could use. Saenz took this step following a meeting between the heads of various Chilean businesses to discuss plans for toppling the regime of democratically-elected leader Salvador Allende as well as a suitable replacement. [Klein, 2007, pp. 70-71]
Sergio De Castro, leader of the Chicago University movement in Chile and the head author of “The Brick,” is made a chief economic adviser to Augusto Pinochet’s authoritarian regime almost immediately after the overthrow of the democratically elected government of Salvador Allende. During the first one and a half years of Pinochet’s rule, Chile is subject to a large array of neoliberal economic reforms. These include the privatization of state-owned firms, financial deregulation, removal of import tariffs, a ten percent cut in government spending (with the notable exception of military spending), and the termination of price controls. As a result, the cost of basic goods will skyrocket while domestic industries are put out of business by imported goods. Orlando Sáenz, who originally recruited the Chicago School graduates to redesign the Chilean economy (see September 1971-September 11, 1973), will declare the consequences to be “one of the greatest failures of our economic history.” [Klein, 2007, pp. 79-80]
CIA agent Richard Hirschfeld sends large amounts of weapons to Iraqi government officials, apparently at the behest of his CIA superiors. Hirschfeld, already a convicted criminal, is facing federal charges of wire fraud, arms peddling, drug running, and more. While he is trying to prove that everything he did was authorized by the CIA, he also works to leave the impression that he is a man of money and influence. He drives around Richmond and Norfolk, Virginia, and Fort Lauderdale, Florida, his bases of operations, in a yellow Rolls-Royce, spends a lot of time on the phone with Senator Orrin Hatch (R-UT), and tells people he is boxer Muhammad Ali’s lawyer. Hirschfeld has been exchanging Colombian cocaine and marijuana for arms in Panama—Soviet-made small arms, automatic weapons, and hand grenades captured by Israel in the 1967 and 1973 wars with Syria and cached since then. According to investigative reporter Nat Bynum: “the drugs went to the US and the bills of lading said the arms were going to General [Augusto] Pinochet in Chile, but they weren’t. A guy from Chile was shipping them straight to Iraq, to Saddam Hussein’s army.… Richard said he’d done it all for the CIA.” It is unclear whether Hirschfeld is telling the truth about working under CIA orders with the arms shipments. [Kolb, 2007, pp. 163]
The US ends its 20-year moratorium on sales of advanced military equipment to Latin America (during which time it had remained the largest supplier of military equipment to the region) by offering to sell jet fighters to the Chilean military, which is headed by former dictator Augusto Pinochet. [Foreign Policy in Focus, 12/1997 ]
A CIA report is released admitting that the CIA knowingly supported the Pinochet regime’s brutalities, and revealing that the head of Pinochet’s dreaded secret police (responsible for the assassination of an American in Washington DC) was a paid CIA asset. [Central Intelligence Agency, 9/19/2000; Associated Press, 9/19/2000]
Dr. Antonio Banfi. [Source: Public domain]A letter containing anthrax is mailed to Dr. Antonio Banfi, a pediatrician in Santiago, Chile. Although the return address is Orlando, Florida, the postmark is Zurich, Switzerland. The letter is sent via DHL, which uses a Swiss bulk mail shipper in New York and a Swiss postmark. Unlike the anthrax letters with US addressees, the letter to Chile is mailed in a business envelope and has a typewritten return address, a business in Florida. Dr. Banfi receives the letter, but finds it suspicious and gives it to the Chilean authorities. No one is known to have been infected with the material contained in the letter. The letter baffles American and Chilean officials because, according to the New York Times, “as they dig deeper, nothing quite adds up.” The New York Times article states, without direct evidence and with ambiguous citation of unnamed “officials” from either Chile or the US, that the anthrax strain most likely originated in Chile, despite the Swiss origin of the letter. The strain is reported to be a different one than used in the US attacks, and is said to be similar to a strain in Turkey. Dr. Banfi says he has no strong political views or known enemies. [New York Times, 11/29/2001]
Frank Koza, chief of staff in the “Regional Targets” section of the National Security Agency, issues a secret memo to senior NSA officials that orders staff to conduct aggressive, covert surveillance against several United Nations Security Council members. This surveillance, which has the potential to wreak havoc on US relations with its fellow nations, is reportedly ordered by George W. Bush and his national security adviser, Condoleezza Rice. Koza, whose section spies on countries considered strategically important to US interests, is trying to compile information on certain Security Council members in order to help the United States to win an upcoming UN resolution vote on whether to support military action against Iraq (see February 24, 2003.
Targeted Nations Include 'Middle Six' - The targeted members are the delegations from Angola, Cameroon, Chile, Mexico, Guinea, and Pakistan, who together make up the so-called “Middle Six.” These six nations are officially “on the fence,” and their votes are being aggressively courted by both the pro-war faction, led by the US and Britain, and the anti-war faction, led by France, Russia and China (see Mid-February 2003-March 2003. [Observer, 3/2/2003] Bulgaria is another nation targeted, and that operation will apparently be successful, because within days Bulgaria joined the US in supporting the Iraq war resolution. Mexico, another fence-straddler, is not targeted, but that may be because, in journalist Martin Bright’s words, “the Americans had other means of twisting the arms of the Mexicans.” (Bright is one of the authors of the original news report.) The surveillance program will backfire with at least one country, Chile, who has its own history of being victimized by US “dirty tricks” and CIA-led coups. Chile is almost certain to oppose the US resolution. [Australian Broadcasting Corporation, 3/6/2003] It is also likely, some experts believe, that China is an ultimate target of the spy operation, since the junior translater who will leak the Koza memo in February, Katharine Gun, is fluent in Mandarin Chinese and is unlikely to have seen the memo unless she would have been involved in translating it into that language. [AlterNet, 2/18/2004]
Operation Ruined US Chances of Winning Vote - Later assessment shows that many experts believe the spying operation scuttled any chance the US had of winning the UN vote, as well as the last-ditch attempt by the UN to find a compromise that would avert a US-British invasion of Iraq. [Observer, 2/15/2004]
Chile 'Surprised' to be Targeted - Chile’s ambassador to Britain, Mariano Fernandez, will say after learning of the NSA surveillance, “We cannot understand why the United States was spying on Chile. We were very surprised. Relations have been good with America since the time of George Bush, Sr.” [Observer, 3/9/2003]
Mexico Suspected Spying - Mexico’s UN representative, Adolfo Aguilar Zinser, will tell the Observer a year later that he and other UN delegates believed at the time that they were being spied upon by the US during their meetings. “The surprising thing was the very rapid flow of information to the US quarters,” he will recall. “It was very obvious to the countries involved in the discussion on Iraq that we were being observed and that our communications were probably being tapped. The information was being gathered to benefit the United States.” [Observer, 2/15/2004]
Memo Comes Before Powell's UN Presentation - The memo comes just five days before Colin Powell’s extraordinary presentation to the UN to build a case for war against Iraq (see [complete_timeline_of_the_2003_invasion_of_iraq_442]]), and is evidence of the US’s plans to do everything possible to influence the UN to vote to authorize war with that nation. The memo says the eavesdropping push “will probably peak” after Powell’s speech. [Baltimore Sun, 3/4/2003]
NSA Wants Details of Voting Plans, More - The NSA wants information about how these countries’ delegations “will vote on any second resolution on Iraq, but also ‘policies’, ‘negotiating positions’, ‘alliances’ and ‘dependencies’—the whole gamut of information that could give US policymakers an edge in obtaining results favorable to US goals or to head off surprises.” [Observer, 3/2/2003] Bright will tell other reporters on March 9, “It’s quite clear what they were going for was not only the voting patterns and the voting plans and the negotiations with other interested parties such as the French or the Chinese, it wasn’t just the bare bones, it was also the office telephone communications and email communications and also what are described as ‘domestic coms’, which is the home telephones of people working within the UN. This can only mean that they were looking for personal information. That is, information which could be used against those delagates. It’s even clear from the memo that this was an aggressive operation. It wasn’t simply a neutral surveillance operation.” According to Bright’s sources, the orders for the program came “from a level at least as high as Condoleezza Rice, who is the President’s National Security Adviser.” [Australian Broadcasting Corporation, 3/6/2003]
'Surge' of Covert Intelligence Gathering - Koza advises his fellow NSA officials that the agency is “mounting a surge” aimed at gaining covert information that will help the US in its negotiations. This information will be used for the US’s so-called Quick Response Capability (QRC), “against” the six delegations. In the memo, Koza writes that the staff should also monitor “existing non-UN Security Council Member UN-related and domestic comms [office and home telephones] for anything useful related to Security Council deliberations,” suggesting that not only are the delegates to be monitored in their UN offices, but at their homes as well. Koza’s memo is copied to senior officials at an unnamed foreign intelligence agency (later revealed to be Britain). Koza addresses those officials: “We’d appreciate your support in getting the word to your analysts who might have similar more indirect access to valuable information from accesses in your product lines [intelligence sources].…I suspect that you’ll be hearing more along these lines in formal channels.” The surveillance is part of a comprehensive attempt by the US to influence other nations to vote to authorize a war against Iraq; these US attempts include proffers of economic and military aid, and threats that existing aid packages will be withdrawn. A European intelligence source says, The Americans are being very purposeful about this.” [National Security Agency, 1/31/2003; Observer, 3/2/2003; Observer, 2/8/2004]
US Media Ignores Operation - While the European and other regional media have produced intensive coverage of the news of the NSA’s wiretapping of the UN, the American media virtually ignores the story until 2004, when Gun’s court case is scheduled to commence (see February 26, 2004). Bright, in an interview with an Australian news outlet, says on March 6 that “[i]t’s as well not to get too paranoid about these things and too conspiratorial,” he was scheduled for interviews by three major US television news outlets, NBC, Fox News, and CNN, who all “appeared very excited about the story to the extent of sending cars to my house to get me into the studio, and at the last minute, were told by their American desks to drop the story. I think they’ve got some questions to answer too.” [Australian Broadcasting Corporation, 3/6/2003] Most US print media outlets fail to cover the story, either. The New York Times, the self-described newspaper of record for the US, do not cover the story whatsoever. The Times’s deputy foreign editor, Alison Smale, says on March 5, “Well, it’s not that we haven’t been interested, [but] we could get no confirmation or comment” on the memo from US officials. “We would normally expect to do our own intelligence reporting.” The Washington Post publishes a single story about the operation, focusing on the idea that surveillance at the UN is business as usual. The Los Angeles Times fixes on claims by unnamed “former top intelligence officials” believe Koza’s memo is a forgery. (When the memo is proven to be authentic, both the Post and the Los Angeles Times refuse to print anything further on the story.) Author Norman Solomon writes, “In contrast to the courage of the lone woman who leaked the NSA memo—and in contrast to the journalistic vigor of the Observer team that exposed it—the most powerful US news outlets gave the revelation the media equivalent of a yawn. Top officials of the Bush administration, no doubt relieved at the lack of US media concern about the NSA’s illicit spying, must have been very encouraged.” [ZNet, 12/28/2005]
UN to Launch Inquiry - The United Nations will launch its own inquiry into the NSA surveillance operation (see March 9, 2003).
Entity Tags: United Nations Security Council, Washington Post, NBC, New York Times, Martin Bright, Condoleezza Rice, George W. Bush, Alison Smale, Britain Mariano FernÃ¡ndez, Los Angeles Times, CNN, Fox News, Colin Powell, National Security Agency, Frank Koza
Timeline Tags: Events Leading to Iraq Invasion
US special envoy to Latin America Otto Reich meets with Chilean President Ricardo Lagos of Santiago to discuss Chile’s position on the US-British-Spanish UN draft resolution declaring Iraq in further material breach of past UN resolutions. Prior to the meeting, Chile had been openly against the passing of another resolution. But after Reich’s visit, the president says that force should be used against Iraq if it does not comply with the UN, but “by a broad coalition of countries.” [Washington Post, 3/1/2003]
Diplomats from six UN Security Council member-states secretly meet one night to write an alternative resolution to the US-British-Spanish draft (see February 24, 2003). The compromise resolution would give UN weapons inspectors additional time to complete their work. But the next morning, a US diplomat contacts the Mexicans and tells them not to proceed with the alternative draft. Former Mexican Ambassador to the UN Aguilar Zinser will tell the Associated Press almost a year later: “Only the people in that room knew what that document said. Early the next morning, I received a call from a US diplomat saying the United States found that text totally unacceptable.” [Associated Press, 2/12/2004; Observer, 2/15/2004 Sources: Adolfo Aguilar Zinser] “When they [the US] found out, they said, ‘You should know that we don’t like the idea and we don’t like you to promote it.’” Zinser will also tell The Observer. [Observer, 2/15/2004] Aguilar Zinser believes that US knowledge of the secret initiative meant that the meeting had been under surveillance. “It was very obvious to the countries involved in the discussion on Iraq that we were being observed and that our communications were probably being tapped,” Aguilar Zinser will later explain to the Associated Press. “The information was being gathered to benefit the United States.” [Associated Press, 2/12/2004; Observer, 2/15/2004 Sources: Adolfo Aguilar Zinser] Chile will make similar claims, saying that its UN mission telephones were under surveillance. [Associated Press, 2/12/2004]
The Observer breaks the Koza memo (see January 31, 2003) story. Neither the US State Department nor the White House denies the authenticity of the leaked memo. White House Press Secretary Ari Fleischer tells reporters, “As a matter of long-standing policy, the administration never comments on anything involving any people involved in intelligence.” And Patrick Weadon, speaking for the NSA, says, “At this point, we’re not issuing a statement.” [Sydney Morning Herald, 3/4/2003; Washington Post, 3/4/2003; Baltimore Sun, 3/4/2003] The intended victims of the operation are deeply angered by the memo. President Ricardo Lagos demands an immediate explanation from the US and Chile’s ambassador to Britain Mariano Fernandez explains to The Observer, “We cannot understand why the United States was spying on Chile. We were very surprised. Relations have been good with America since the time of George Bush Senior.” [Observer, 3/9/2003] Martin Bright, one of the reporters who helped break the story, later tells the Australian Broadcasting Corporation that the exposed operation has “caused an enormous diplomatic rift between the Chileans and the Americans and the UK.” He says he believes that the leaked memo is partially responsible for Chile’s increasingly defiant stance at the UN. The UN quickly begins a top-level investigation of the spy operation. [Australian Broadcasting Corporation, 3/6/2003; Observer, 3/9/2003] The Observer notes that the leaked memo could make it more difficult for the US to obtain UN authorization to wage war on Iraq. [Observer, 3/2/2003] The US media networks largely ignore the story. Though NBC, CNN, and Fox News Channel all arrange for interviews with Martin Bright soon after the story is broken, all three quickly cancel. In an interview with the Australian Broadcasting Corporation, Bright explains, “It happened with NBC, Fox TV and CNN, who appeared very excited about the story to the extent of sending cars to my house to get me into the studio, and at the last minute, were told by their American desks to drop the story.” [Salon, 3/3/2003; Australian Broadcasting Corporation, 3/6/2003]
The Wall Street Journal reports that a government investigation into activities at Riggs Bank may be hampered because of its “longstanding relationship with the Central Intelligence Agency” (see July 2003). [Wall Street Journal, 12/31/2004] Yet this story attracts almost no mention or follow up in the US media. For instance, the Washington Post, which covers Riggs Bank more than other newspapers because the bank is based in Washington, mentions the CIA connection only in one paragraph near the end of article in the newspaper’s business section two months after the Wall Street Journal article: “Another potential cloud for any acquirer is the bank’s long-standing relationship with the CIA. Sources familiar with the bank’s operations and sources in the intelligence community say that since the 1960s Riggs at least held funds related to CIA operations or agents, and several officers of Riggs had high-level security clearances. However, law enforcement authorities say Riggs’s CIA connections had nothing to do with the bank’s violations of anti-money-laundering laws. And the subject did not arise in the bank’s negotiations with the US attorney for the District over Riggs’s guilty plea, the sources said.” [Washington Post, 2/9/2005] Only Slate appears interested, publishing two stories highlighting the Riggs-CIA connection. In one, it is noted that the connection “invites speculation that the Justice Department might abort the prosecutions lest courtroom brawls reveal more about Riggs and the CIA than the government wants made public.” [Slate, 1/10/2005] The other Slate article will lament, “Where is the rest of the press on the Riggs-CIA connection? Spooks, sheiks, dictators, millions in laundered money, and a $766 million merger in the balance! What does it take to entice an assignment editor these days, a tsunami or something?” [Slate, 1/7/2005]
Riggs Bank and two of its executives, Joe L. Allbritton, and his son, Robert, agree to pay a total of $9 million to victims of former Chilean dictator Augusto Pinochet for the bank’s alleged role in laundering $1.6 million from Pinochet’s bank account in London to the Riggs branch in Washington in 1999. Joe and Robert Allbritton will pay $1 million while the bank will pay the remaining $8 million. The suit was brought against the bank in a Spanish court by Madrid prosecutor Baltasar Garzon. In Spain, anyone can be tried for genocide, torture, or other human rights abuses that are committed against Spanish citizens. In exchange for the payment, the Spanish court has agreed to drop criminal charges against current and former directors and officers of Riggs. [Washington Post, 2/26/2005]
US District Judge Ricardo M. Urbina approves a plea agreement requiring Riggs Bank to pay a $16 million criminal fine for its failure to report suspicious transactions by former Chilean dictator Augusto Pinochet and leaders of Equatorial Guinea that occurred between 1994 and 2003. The judge calls the bank “a greedy corporate henchman of dictators and their corrupt regimes.” [Washington Post, 3/30/2005] Jonathan Bush, uncle to President Bush, has been a top executive at Riggs Bank since 2000, running their investment management division. [Washington Post, 5/15/2004] The plea agreement clears the way for Riggs Bank to be bought. It is dissolved into PNC Financial Services Group Inc. in May 2005. [Washington Post, 10/13/2005]
McClatchy reports that economies in Latin America are beginning to improve following the global financial crisis. The signs of the recovery include a “booming” construction industry in Peru, strong property sales in Peru, and expanding software companies in Chile. However, McClatchy says that the recovery in Mexico and other Central American countries is lagging behind, due to the slow recovery in the US. Prior to the global financial crash, Latin America had experienced its best five years of prosperity since the 1950s. [McClatchy Newspapers, 9/28/2009]
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