Latin America 1975

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Latin America 1975

Latin America 1975

Edited by Hal Kosut

Writer: Chris Hunt

Indexer: Grace M. Ferrara



Latin America 1975 © Copyright, 1976, by Facts on File, Inc. All rights reserved. No part of this book may be reproduced in any form without the permission of the publisher except for reasonably brief extracts used in reviews or scholarly works. Published by Facts on File, Inc., 119 West 57th Street, New York, N.Y. 10019. Library of Congress Catalog Card No. 73-83047 ISBN 0-87196-255-1


Contents Page FOREWORD........................................................................ 1

REGIONAL DEVELOPMENTS......................................... Political Affairs................................................................... U.K.-Guatemala Dispute Over Belize................................ CIA Role...........................................................:................ Press & Military................................................................. Economie Affairs................................................................ Other Economie Affairs.....................................................

3 3 6 8 9 10 13

ARGENTINA....................................................................... Government, Politics & Economic Unrest......................... Violence............................................................................... Other Developments...........................................................

19 19 30 42

BOLIVIA................................................................................ Political Plots Suppressed.................................................. Economic Developments.................................................... Foreign Developments.......................................................

45 45 46 48

BRAZIL................................................................................. Tortureof Prisoners Charged............................................. Other Developments........................................................... Atomic Energy & Oil.......................................................... CHILE.................................................................................... Arrests, Expulsions & Other Political Developments........ The Economy...................................................................... U.S. Role in Chilean Affairs...............................................

51 51 55 57 59 59 65 68

COLOMBIA........................................................................... Guerrilla Groups Fought......................

73 73

The Economy....................................................................... Lopez Visits U.S..................................................................

77 78

CUBA........................................................................................ 81 U.S. Plot Against Cuba Charged; Other U.S.-Cuban Developments.................................................................... 81 OAS Lifts Cuba Sanctions.................................................. 89 Other Foreign Developments............................................. 89 Domestic Developments......................................................... 91

DOMINICAN REPUBLIC................... Political Unrest, Guerrilla Incursions................................. Military & Political Shifts................................................... Economic & Labor Developments...................................... ECUADOR............................................................................ Rightist Coup Crushed........................................................ Economy & Labor............................................................... U.S. Tuna Boats Seized.......................................................

93 93 96 96 99 99 102 104

HONDURAS........................................................................ President Lopez Ousted in Banana Bribe Scandal.............. Other Developments...........................................................

105 105 110

MEXICO................................................................................ Violence & Unrest.............................................................. Political Developments............................. .......................... Economic Developments..................................................... Foreign Developments........................................................

113 113 116 117 120

PANAMA.............................................................................. 125 U.S. & Panama Dispute Control of Canal......................... 125 Other Developments............................................................. 132

PERU..................................................................................... 135 Violence & Political Unrest................................................. 135 Foreign Financial Developments.......................................... 144 Other Developments...................................................... 145 URUGUAY............................................................................. Political Unrest: Government Curbs Press........................... Economic Developments....................................................... Other Developments.............................................................

147 147 149 150

VENEZUELA.......................................................................... Oil Developments...................................................................

151 151

Other Economie Developments.......................................... Other Developments...........................................................

155 157

OTHER AREAS................................................................... Costa Rica.......................................................................... El Salvador......................................................................... Guatemala.......................................................................... Haiti.................................................................................... Nicaragua........................................................................... Paraguay............................................................................ Puerto Rico......................................................................... Trinidad & Tobago..............................................................

159 159 160 161 163 164 165 167 168




This is the fourth volume of the Facts on File annual on Latin America. It records the history of Latin America and the Caribbean area during 1975. The purpose of this series is to give researchers, students, ed­ ucators, librarians and others a convenient, reliable, unbiased and inexpensive source of information on the many events that take place each year in this important part of the world. The 1975 volume, therefore, records the essential details of such events as the overthrow of President Juan Velasco Alvarado in Peru, the assassination of Colombia’s inspector general of the armed forces and the dispute between the U.S. and Panama over the future of the Panama Canal and Canal Zone. But it also covers more than just the most important occurrences. It provides facts on economic developments, guerrilla operations, labor action, diplomatic relations, government corruption, political maneu­ verings, student activism, military affairs and the many other events that make up the history of Latin America and the Caribbean area during 1975. The material of the book consists largely of the Latin Ameri­ can record compiled by Facts on File in its weekly reports on world events. Such changes as were made in producing this book were largely for the purpose of eliminating needless repetition, supplying necessary amplification or correcting error. Yet some useful repetition was provided deliberately: for example, when two countries are involved in a single event, the report, or at least part of it, is often carried in the chapter for each of the two



countries; this means more complete coverage of each country in the place the reader is most likely to look, makes it less likely that these items will be overlooked and reduces some of the need to consult the index and other chapters to locate a specific fact. As in all Facts on File works, a conscientious effort was made to record all events without bias and to produce a reliable and useful reference tool.

Regional Developments

believed the “new dialogue is in jeopardy,” but he reaffirmed his plans to visit Argen­ tina and four other South American coun­ tries before the Organization of American states’ General Assembly in April. “I want to say now that I place great stress on our relationship with Latin America and that I will go at the earliest possible opportunity that I can do justice to this visit,” he declared.

Political Affairs Kissinger parley postponed. The Ar­ gentine goverment Jan. 27 indefinitely postponed a meeting between Latin American foreign ministers and U.S. Sec­ retary of State Henry Kissinger, scheduled for March in Buenos Aires. Argentine Foreign Minister Alberto Vignes said the reason for the action was the 1974 U.S. Trade Reform Act, which, “by its rigidity and unfairness, damages fundamental interests of the Latin American countries.” Vignes stressed that Kissinger’s avowed “new dialogue” with Latin America was only being postponed, not “interrupted.” He said the foreign ministers’ conference could take place as soon as the U.S. re­ voked provisions of the trade act which Latin American countries considered dis­ criminatory. The U.S. State Department replied Jan. 27: “We cannot but consider it inap­ propriate that some Latin American countries have insisted on conditions for the Buenos Aires meeting which they know to be incompatible with our consti­ tutional processes, as well as substan­ tively unjust.” Kissinger lamented the postponement at a press conference Jan. 28, saying he

Kissinger keeps military gifts program— Kissinger had decided not to terminate gifts of military equipment to Latin America in 1976 despite pressure to do so from his senior advisers and from Congress, the New York Times reported Jan.11. Although the military grants program was worth only $10 million in 1975, Kiss­ inger decided to retain it through 1981 be­ cause “he never knows when a million here and there might come in handy,” and because “it is a matter of principle with Henry not to give in to Congressional pressures to tie his hands,” an unidentified official told the Times. Kissinger had been urged to drop the program by Carlyle Maw, his undersec­ retary of state for security affairs, by the State Department’s Latin American bu­ reau, by all U.S. ambassadors in Latin America, the National Security Council staff and the Office of Management and



Budget, the Times reported. He had been asked to retain the program only by the Pentagon, which argued the program was important in maintaining close relations with Latin American military leaders. Nine nations received grant military aid under the program: Bolivia, Dominican Republic, El Salvador, Guatemala, Hon­ duras, Nicaragua, Panama, Paraguay and Uruguay. According to Pentagon recom­ mendations, Kissinger agreed to cut off the program in Central America by 1979 and in South America by 1981.

Bertrand Russell court scores U.S. The second Bertrand Russell Tribunal held another session in Brussels, Belgium Jan. 11-18 to study the reasons behind repression in Latin America, particularly in Brazil, Bolivia, Chile and Uruguay. The court issued a verdict Jan. 18 “morally condemning” U.S. President Ford, Secretary of State Henry Kissinger and former President Nixon for “en­ couraging and favoring” foreign economic domination of Latin America and for causing the military coup against the late Chilean President, Salvador Allende Gossens. The court “particularly condemns Kiss­ inger, whose responsibility in the fascist coup [in Chile] is evident,” said Elio Basso, the Italian Socialist senator who presided over the tribunal’s session. Allende’s widow, Hortensia Bussi, at­ tended the tribunal’s closed hearings. The court accused multinational cor­ porations of “pillaging” Latin American countries and of being responsible for repression, pollution and the sterilization of women there. The latter two abuses were “particularly grave and systematic” in Puerto Rico, the tribunal declared. During the session, Latin American representatives presented “acts of accu­ sation” against the military governments of Chile, Brazil, Bolivia and Uruguay, alleging they had allowed foreign domi­ nation of their economies and resorted to systematic repression to remain in power. One document, submitted Jan. 11 by Pedro Vuskovic, a member of Allende’s Cabinet, asserted the four governments constituted a threat to all Latin American and Third World countries. Vuskovic analyzed the “mechanisms” which


allowed foreign economic domination in Latin America and called for interna­ tional action against them. CIA, Venezuela Exxon ties—A former U.S. Central Intelligence Agency agent who had served for' several years in Latin America, Philip Agee, told the court Jan. 12 that his work as a CIA agent had included carrying out personal name checks of Venezuelan employes of Creole Petroleum Corp., the Venezuelan sub­ sidiary of the U.S. Exxon Corp.

In 1960, Agee said, Creole was “letting the CIA assist in employment decisions, and my guess is that those name checks. . . are continuing to this day.” The CIA customarily performed this service for subsidiaries of large U.S. corporations in Latin America, according to Agee. An Exxon spokesman in Washington denied Agee’s claim Jan. 13. The Russell Tribunal was an interna­ tional panel whose 25 members included former President Juan Bosch of the Dominican Republic; writers Gabriel Garcia Marquez of Colombia and Julio Cortazar of Argentina; Nobel laureates George Wald of the U.S. and Alfred Kastler of France; pediatrician Benjamin Spock of. the U.S.; and Omar Abu, representing the Palestine Liberation Or­ ganization.

Cuba joins U.N. Latin caucus. Cuba participated in a formal caucus of the 26 Latin American delegations to the United Nations Jan. 29. The action ended 11 years of Cuban isolation from the Latin group, and marked another step toward full acceptance of the island’s Communist government in the hemisphere. The caucus had met informally since 1963 to prevent Cuban participation. The decision to meet formally this time was made by the caucus chairman for January, Jamaican Ambassador Don Mills, who “decided that enough of this travesty was enough,” a Latin American diplomat told the New York Times. The caucus reportedly discussed Latin at­ titudes toward the U.N.’s work program for 1975.


Ambassador Ricardo Alarcon Ques­ ada, who represented Cuba in the caucus, said of his inclusion: “The Latin American group now reflects the times and the spirit of the U.N. For some in it, it was a tran­ sition from the stone age to modern times in one afternoon.” Communists meet. Communist Party leaders from 24 Latin American and Ca­ ribbean nations held a four-day meeting in Cuba in June and issued sharp denuncia­ tions of both the U.S. and China. In a document released in Havana June 16, after the conference ended, the Com­ munists denounced U.S. imperialism as their “principal and common enemy” and criticized the Chinese government for recognizing Chile’s military junta and for supporting unnamed “groups of pseudorevolutionaries who . . . divide the left, attack the Communist parties, block the progressive process and often behave as agents of the enemy at the core of the revolutionary movement.” The document offered other leftist parties in Latin America “mutual respect” and “a frank and total analysis” which would lead to leftist unity and achievement of a “second independence” for the continent. Referring to the overthrow of the late Chilean President Salvador Allende, the hemisphere’s first elected Marxist pres­ ident, the document said Communists would continue to seek power by demo­ cratic means but would “use the force of arms to defend conquests made by revolu­ tionary forces.”

OAS lifts Cuba sanctions. The U.S. joined 15 Latin American countries July 29 in voting to lift the diplomatic and commercial sanctions imposed against Cuba by the Organization of American States. Three voted against and two ab­ stained. A resolution passed at a meeting of OAS foreign ministers in San Jose, Costa Rica, allowed signatories of the Inter­ American Treaty of Reciprocal As­ sistance (Rio Treaty), under which the sanctions were invoked, to “normalize or conduct” relations with Cuba “at the level and in the form that each state deems

5 advisable.” The sanctions, imposed in 1964, were already being ignored by seven of the treaty’s 21 signatories. Costa Rican Foreign Minister Gonzalo Facio, a major opponent of the sanctions for the past three years, said after the vote that “more countries will establish rela­ tions with Cuba.” As for resumption of American relations with Cuba, William Mailliard, chief U.S. delegate to the San Jose meeting, would say only that there might soon be “conversations that might lead to some kind of normalization” be­ tween Havana and Washington. There was also no indication that Cuba might seek readmission to the OAS. Premier Fidel Castro had denounced both the OAS and the Rio Treaty at a press conference in Havana June 20, calling the latter a “shameful alliance between the shark and the sardines” under which the U.S. hoped to keep Latin America dis­ armed to allow multinational corpora­ tions to continue to “exploit” the con­ tinent. Voting to lift the sanctions, in addition to the U.S., were Argentina, Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Panama, Peru, the Dominican Republic, Trinidad & Tobago, and Vene­ zuela. Three nations—Chile, Paraguay and Uruguay—voted against the reso­ lution, and two—Brazil and Nicaragua— abstained. Guatemala switched from abstention to a favorable vote in a gesture of “solidarity” with the majority. Although the resolution against the sanctions received a two-thirds majority vote, it had needed only a simple majority following approval of an amendment to the Rio Treaty at a meeting of OAS dele­ gates in San Jose July 16-26. Other reforms of the treaty approved by the delegates included an endorsement of “ideological pluralism” in the Americas and a controversial clause on “collective economic security” in the hemisphere. The U.S. voted against the economic security amendment, asserting July 23 that “this is not the time, nor the Rio Treaty the opportunity, to try to resolve the complex economic problem.” Several Latin American delegates denounced the U.S. stance, notably Nander Pitty Velasquez of Panama, who criticized U.S.


economic policy in Latin America since the end of World War II. The delegates July 21 defeated a Peruvian resolution that would have freed Rio Treaty signatories of their com­ mitment to defend the U.S. if it were at­ tacked from outside the hemisphere. Delegates and newspaper reporters characterized the U.S. as a prime mover in the effort to lift the Cuba sanctions at San Jose. Mailliard had committed the U.S. vote against the sanctions July 15, asserting the Washington wanted Cuba to become an issue for.bilateral negotiation. Only one incident of violence was reported in connection with the San Jose meeting. The Costa Rican ambassador to the U.S., Rodolfo Silva, escaped injury July 18 when a bomb exploded near him on a street in Washington, D.C. A man calling himself “the Cuban scorpion” claimed responsibility for the explosion in a telephone call later to the Miami offices of United Press International. He claimed membership in a group whose “goal is to punish anyone who recognizes Cuba.” Orfila heads OAS—Alejandro Orfila, former Argentine ambassador to the U.S., took office as OAS secretary general July 7. Both he and outgoing sec­ retary general Galo Plaza of Ecuador asserted it was “imperative” that the OAS move quickly to resolve two major problems in inter-American relations: the isolation of Cuba and negotiation of a new treaty to govern the Panama Canal and Zone. In an inaugural address considered markedly friendly to the U.S., Orfila proposed that Latin American countries join Washington in forming associations of producers of raw materials within the OAS, and that Latin nations not turn the OAS into a forum for confrontation with the U.S. Orfila, whose family owned a large food company in Mendoza, Argentina, had ex­ tensive diplomatic and business contacts in the U.S., having served in several diplo­ matic posts in the country and having spent 10 years in Washington as a representative of ADELA, a private in­ vestment group channeling the funds of multinational corporations into Latin America, according to the London news­ letter Latin America July 4.


U.K.-Guatemala Dispute Over Belize Great Britain and Guatemala were in dis­ pute over the British colony of Belize in 1975. The two nations held discussions on the status of the territory but failed to resolve the matter. Britain sent troop reinforcements to Belize to block possible invasion threats from Guatemala. The United Nations en­ tered the dispute by backing independence for Belize. Guatemala denies invasion threat. Britain reinforced its army garrison in the self-governing colony of Belize (formerly British Honduras) Nov. 5-8, in response to an alleged threat of invasion by neigh­ boring Guatemala, which had claimed sovereignty over the territory since 1859. Guatemala denied the invasion threat Nov. 5 and called the British move “an act of intimidation.” President Kjell Laugerud warned Nov. 6 that Guatemala would “respond to force with force.” However, the British governor of Belize, Richard Posnett, declared Nov. 7 that British reinforcements would remain in Belize as long as the possibility of an in­ vasion existed. Britain increased its Belize garrison from 650 to 950 soldiers, sent in six jet fighters equipped with air-to-ground mis­ siles, and dispatched the naval frigate HMS Zulu to Belizean waters. The British said they acted after receiving reports that Guatemala had sent 10 armored person­ nel carriers and as many as 1,000 soldiers to its border with Belize in apparent pre­ paration for an invasion. Guatemalan Foreign Minister Adolfo Molina asserted Nov. 5 that the Guatemalan troop move­ ments were “a normal operation and a sovereign right which Guatemala exercises within its territory.” Great Britain had resumed talks with Guatemala in July to determine Be­ lize’s future. However, the talks had broken down when Guatemala demanded sovereignty over all of southern Belize, which was presumed to contain petroleum deposits, it was reported Aug. 1. Guate­ mala subsequently said it was prepared to defend its right to sovereignty over Belize by armed force.


Britain had agreed to resumption of the talks in February after eight months of overtures by Guatemala, which had broken off the talks in March 1972 after Great Britain rushed reinforcements to Belize in fear of a Guatemalan invasion. Guatemala recently had softened its position, saying it would respect the “traditions, administrative structures and social and political institutions” of Belize under future Guatemalan sovereignty, it was reported Feb. 28. However, Pablo Rodríguez, mayor of Belize City, said March 6 that Belize sought full inde­ pendence. Britain’s Prince Philip, on a visit to Belize March 5, reaffirmed the British government’s “continuing and un­ stinting support for the [Belizean] as­ piration of independence.” British troops increased their patrols along Belize’s border with Guatemala Feb. 23 after Prince Philip’s impending visit was announced, according to trav­ elers quoted by the French news agency Agence France-Presse. Britain was con­ cerned over a proposed arms deal between Guatemala and the U.S. under which Guatemala would get 25 phased-out U.S. patrol boats, according to “confidential reports from London” cited by the Reporter of Belize City April 6. The internal political situation in Belize had turned further against Guatemala, the London newsletter Latin America reported Feb. 28. Premier George Price had promised complete independence “soon,” following losses by his People’s United Party (PUP) to the United Demo­ cratic Party (UDP) in general elections in October 1974 and in Belize City council elections later in 1974. UDP leaders fa­ vored continued ties with Britain, ac­ cording to Latin America. Guatemala’s claim to Belize was sup­ ported by other countries in Central America, but it was opposed by the move­ ment of nonaligned nations, which passed a resolution favoring Belizean inde­ pendence at its meeting in Peru Aug. 2530. Mexico took contradictory positions on the issue, first supporting Guatemala and later renewing its own claim to part of Belize. Mexican President Luis Echeverria en­ dorsed Guatemala’s “historic rights” to


Belize Oct. 11, during a brief visit to Mexico by Guatemalan Vice President Mario Sandoval Alarcon. The Mexican press chided Echeverria for overlooking a treaty signed by Mexico and Guatemala in 1882 in which Mexico claimed sovereignty over northern Belize, and Mexican For­ eign Minister Emilio Rabasa subsequently said Mexico had not abandoned the claim, it was reported Oct. 31. Belizean Premier George Price visited Mexico Oct. 11-15 in an unsuccessful at­ tempt to obtain Mexican support against Guatemala. He warned during the visit that Guatemala was preparing to invade Belize, but he denied making the warning when he returned to Belize, according to the Belize Reporter Oct. 16. Price tried to blame the Mexican press for starting the invasion rumors, according to the Reporter. U.N. backs Belize independence—The United Nations General Assembly passed a resolution Dec. 8 reaffirming “the in­ alienable right of the people of Belize to self-determination and independence” and declaring that the territorial integrity of the British colony “must be preserved.” The resolution, adopted by a vote of 110 to 9 with 16 abstentions, called on Great Britain and Guatemala “urgently to renew their negotiations to resolve as rapidly as possible their differences over the future of Belize.” Guatemala chal­ lenged the U.N.’s authority to intervene in the matter. Resumption of the negotiations had been announced Nov. 28 during a visit to Guatemala by Edward Rowlands, minister of state at the British foreign office, and Ivor Richard, Britain’s am­ bassador to the U.N. The two had visited Belize the day before. Guatemala had received an earlier blow Nov. 8 when Venezuela withdrew its sup­ port for Guatemalan sovereignty over Be­ lize and urged the U.N. to rule on the colony’s future. Venezuelan President Carlos Andrez Perez said that for his­ torical reasons Venezuela had always sup­ ported Guatemala’s claim to Belize and opposed colonial situations in the Western Hemisphere, but it could not overlook the fact that the customs, language and way of life of Belize were different from those of Guatemala.

8 Mexico, meanwhile, continued to hint that it would renew its claim to part of northern Belize if any or all of Belize were transferred to Guatemalan sovereignty. Mexican President Luis Echeverria said Nov. 15, after a three-day visit to Guate­ mala, that “Guatemala has rights [in Be­ lize], as do Belize and also Mexico.” Guatemalan President Kjell Laugerud rejected Mexican claims to Belize Nov. 18, asserting “Guatemala is the only country with juridical and historical rights” over the colony. Belize, located on the Caribbean coast of Central America between Mexico and Guatemala, had some 130,000 inhabitants of mixed Spanish, Indian and African de­ scent, with English as the official lan­ guage. Central American nations did not support Belizean self-determination be­ cause inhabitants of Belize were not in­ digenous but came mainly from the British West Indies, according to Costa Rican Foreign Minister Gonzalo Facio Oct. 22. Central American nations did feel, however, that Belizeans had some “rights” and “must be given some au­ tonomy” under Guatemalan rule, Facio added.

CIA Role U.S. agency, government links. The inte­ rior ministers of nearly all Latin American governments “collaborated” with the U.S. Central Intelligence Agency, according to David A. Phillips, former chief of CIA operations in Latin America. Phillips told a press conference in New York May 10 that although the Latin officials worked with the agency, they did not know “everything that the agency does” in their countries. The CIA’s major preoccupation in Latin America was un­ covering “the activities being prepared” by the Soviet and Cuban intelligence services, he added. Phillips denied that the agency had or­ ganized the overthrow of any Latin American head of state—notably, the late Chilean President Salvador Allende—but he conceded that “this type of operation might have been discussed as a possi­ bility.”

LATIN AMERICA 1975 Former President Jose Figueres of Costa Rica had said in an interview March 9 that most Latin American presidents collaborated with the CIA, and that he personally had worked “in 20,000 ways” for the agency. Figueres praised the CIA for its “excellent work in espionage and counterespionage,” but he expressed regret that the agency had frustrated several plots against Latin American mil­ itary dictators on which he had worked during the past three decades. Harrison Salisbury, a former corre­ spondent and editor for the New York Times, asserted in an article in the U.S. magazine Penthouse, reported by the Mexican newspaper Excelsior April 17, that the CIA maintained links with the se­ cret police and armed forces of “all Latin American governments.” Salisbury said Latin American police chiefs and their top aides were brought to the U.S. for CIA training. Salisbury said the CIA had participated in the overthrows of Guatemalan Pres­ ident Jacobo Arbenz in 1954 and Allende in 1973. Allende’s ouster and death were the “culmination” of a 10-year CIA effort which began with opposition to Allende’s presidential candidacy in Chile’s 1964 elections, Salisbury said. Book reports CIA activities—A book describing day-to-day operations by the U.S. Central Intelligence Agency (CIA) in three Latin American countries was published in London by Penguin Books, it was reported Jan. 14. The book, “Inside the Company: CIA Diary,” was written by Philip Agee, who worked for the agency in Ecuador, Uruguay and Mexico in 1960-68. Agee described the CIA as an instru­ ment to frustrate revolution and protect capitalism. The book listed nearly 250 persons whom Agee called officers, local agents, informers or collaborators of the CIA. They included businessmen, labor and student leaders, and politicians in the countries where Agee served; in Mexico, Agee named as collaborators two former presidents, Gustavo Diaz Ordaz and Adolfo Lopez Mateos, and the current president, Luis Echeverria Alvarez. He said Echeverria cooperated with the CIA


only in his capacity as interior minister, before he was elected president. Agee said that during his years in Latin America, the CIA’s main objective was to counteract Cuban influence in the hemi­ sphere. He described CIA infiltration of local political parties, cooperation with local police forces to eliminate leftist sub­ versives, tampering with local mail services, and wiretapping embassies of Communist countries. The truth of Agee’s account was not questioned, according to press reports. Miles Copeland, a former high-ranking CIA official, said in a review of the book in the British magazine the Spectator: “The book is. . . an authentic account of how an ordinary American or British ‘case officer’ operates. . . All of it. . . is pre­ sented with deadly accuracy.”

Press & Military IAPA meets. The Inter-American Press Association (IAPA) held its 31st general assembly in Sao Paulo, Brazil Oct. 22-24, with some 400 editors and publishers from the U.S., Canada, Latin America and the Caribbean attending. Delegates to the meeting elected a new president of the group—Raymond Dix, co­ publisher of the Wooster, Ohio Daily Record—and approved a report by the IAPA’s freedom of the press committee which asserted press freedom in the Western Hemisphere was more threat­ ened than ever before. There was no press freedom in 10 coun­ tries (Brazil, Guyana, Chile, Cuba, Haiti, Nicaragua, Panama, Paraguay, Peru and Uruguay) and there were problems be­ tween the information media and the governments in seven other nations and territories (Antigua, Grenada, St. Kitts, St. Vincent, Argentina, the Bahamas and Trinidad & Tobago), according to the report. Among threats to press freedom, the report cited political terrorism, self­ censorship and government intervention in the information media and the indus­ tries or companies on which they de­ pended. The report detailed press prob­ lems in individual countries including the

9 U.S., where “the judicial power has in­ creasingly curbed the freedom of news­ papermen to report on developments in the courts,” and Chile, where there was no press freedom but where the situation of the press had allegedly improved since the 1973 military coup. The freedom of the press committee ac­ knowledged Oct. 21, before the general assembly began, that it had received a telegram from the Sao Paulo Professional Newspapermen’s Union denouncing the recent arrest of several journalists in Sao Paulo State.

Military leaders score communism. Se­ nior military officers of the U.S. and most Latin American countries met in Montevideo, Uruguay Oct. 20-25 and ap­ proved a series of resolutions aimed at ending Communist “subversion” in the Western Hemisphere. The resolutions recommended an “ag­ gressive fight” against leftist subversives, a tightening of border controls and re­ moval of Marxist-oriented governments from inter-American security organiza­ tions, among other actions. Passage of the resolutions represented a victory for Chile, Brazil, Paraguay and Uruguay, which adopted the most con­ servative stances at the conference, and a defeat for Peru, whose representative, Gen. Jorge Fernandez Maldonado, de­ fended his country’s leftist military government Oct. 23 and asserted security could not exist if it was based on “misery, hunger, illiteracy and a lack of secure housing, a liberating education, health and social well-being.” Panama, too, adopted a reformist stance, asserting Oct. 23 that terrorism could be synonymous not only with com­ munism but with “capitalism or any other fanaticism.” There was such a thing as right-wing subversion, “whose inspiration consists of the search, conquest and ex­ ploitation of the natural resources of the weakest regions of the world [without concern for] the sovereign rights of coun­ tries, the free determination of peoples or respect for human rights,” the Pana­ manian delegate asserted. Military leaders and diplomats of six of the countries represented at Montevi­ deo—Bolivia, Colombia, Chile, Ecua­



dor, Peru and Venezuela—had met in Santiago, Chile Sept. 1-5 to continue discussion, which began at the end of 1974, on arms limitation in the Andean region. They agreed to urge their governments to ban nuclear, biological, chemical, toxic and other highly sophisticated weapons and offensive arms. (Three of the countries—Peru, Bolivia and Chile—agreed later to set up procedures for consultation and exchange of information on military activities in their border regions, according to an an­ nouncement Oct. 16 by Gen. Oscar Var­ gas Prieto, Peru’s prime minister, war minister and army commander, who pro­ posed the measure. Relations between Peru and Chile had been strained over ideological differences and over reports that Chile might grant Bolivia a corridor to the Pacific Ocean through land that Chile took from Peru in the 19th century. Brazil regional military leader. Brazil’s armed forces led Latin America in number of active servicemen and number of combat aircraft, according to statistics in Air Force magazine of the U.S., reported by the news agency Efe Jan. 4. Brazil had 358,000 active soldiers, followed by Cuba with 329,000 and Ar­ gentina with 162,000. Brazil had 230 combat aircraft, while Cuba had 205 and Argentina 132. Argentina had the region’s highest military budget, followed closely by Brazil. Argentina Bolivia Brazil Chile Colombia Cuba Dominican Republic Ecuador Mexico Paraguay Peru Uruguay Venezuela

Active Soldiers

Combat Aircraft

162.000 29.000 358.000 90,000 98,000 329,000

132 61 230 50 18 205

$ 1.3 billion $35 million $1.2 billion $213 million $117 million $290 million

25.000 28,100 82,000 23,400 74,000 43,000 49,500

35 21 27 10 90 12 100

$36 million $52 million $423 million $ 19 million $226 million $68 million $337 million

Military Budget

Economic Affairs New economic group formed. Repre­ sentatives of 25 countries in Latin Amer­

ica and the Caribbean signed the charter of the Latin American Economic System (SELA) Oct. 17 at the end of a three-day meeting in Panama City. SELA, which excluded the U.S. and in­ cluded Cuba, pledged to defend regional economic interests and present a unified Latin American position at international forums. It effectively replaced the Special Latin American Coordinating Committee (CECLA), which had similar aims but had functioned only sporadically since its founding in 1969, never establishing a per­ manent secretariat or headquarters. SELA’s headquarters would be in Caracas, Venezuela, and its first secretary general, elected Oct. 17, was Jaime Moncayo, a former finance minister of Ecuador. Creation of SELA had been proposed by Mexican President Luis Echeverria in 1974 and subsequently promoted by Mexico, Venezuela, Costa Rica and Panama. Representatives of the member nations began drafting its charter at a ministerial meeting in Panama July 31Aug. 2. The promoters moved cautiously at the meeting to insure participation by all countries in the region, including Brazil, Uruguay and Chile, which were wary of SELA because it might damage their relations with the U.S. (Chile angered other Latin nations by sending a low-ranking diplomat as its representative to the first meeting in Panama. However, it joined in the unani­ mous votes approving creation of SELA Aug. 2 and endorsing the SELA charter Oct. 17.) Panamanian Planning Minister Ni­ colas Ardito Barletta, host of SELA’s constituent meetings, declared Oct. 17 that the signing of the charter constituted an “regional act of self-awareness . . . that should have transcendental reper­ cussions.” He urged “the vigorous and creative participation of all the signatory countries” so the organization could “realistically recognize the true needs of each one and the possibilities for success by the whole in finding solutions.” Latin America in 1975 was “a mosaic of pluralist experiences, from the diversity of its resources, geography and historical traditions as well as its economic and political systems,” Ardito continued. “With all we have in common,” he said,


“we must recognize that in economic mat­ ters it has been very difficult to find the adequate means to achieve the benefits of a real integration of our markets. “Despite the enormous potential of our resources, we lack communications, means of transport and access to natural resources and to producers and con­ sumers in our own markets,” Ardito asserted. “Frequently we have competed against each other on the world market as producers of raw materials.” Cuba was among the most enthusiastic backers of SELA. Premier Fidel Castro declared Aug. 18 that SELA was “the antithesis of the Alliance for Progress” of the Organization of American States and “one of the great initiatives” of Mexican President Echeverria. Events leading to SELA’s formation The creation of SELA had been formally proposed March 20 by Presidents Eche­ verria and Carlos Andres Perez of Vene­ zuela. The regional unit decided to ex­ clude the U.S. because of its 1974 Trade Reform Act, which denied preferential benefits to members of the Organization of Petroleum Exporting Countries (OPEC), two of whose members were Venezuela and Ecuador. Latin American nations contended that the law was coercive and discriminatory. SELA’s formation also had been prompted by the 1974 failure of the Organization of American states to lift its sanctions against Cuba. Perez and Echeverria issued a joint commu­ nique in Mexico City, during a state visit by Perez, inviting the heads of state of 24 nations in Latin America and the Carib­ bean to appoint representatives to orga­ nize constituent meetings for SELA. “Latin American nations must rely on their own, permanent system of consul­ tation and economic cooperation . . . which should be capable of truly and effec­ tively responding to their common needs and aspirations,” the communique stated. It emphasized that SELA would not “du­ plicate or replace” existing regional orga­ nizations—notably the Organization of American States (OAS)—but would “complement” their efforts. Among the “broad aims” of SELA cited in the communique:


■ To promote national and regional de­ velopment projects and the creation of Latin American multinational companies. ■ To defend the prices of Latin American raw materials and manufac­ tured goods, to insure foreign markets for them, and to guarantee their regular sup­ ply to Latin American nations. ■ To help improve food supplies to all countries in Latin America—particularly those of relatively lower economic de­ velopment—and to create regional multi­ national schemes for the production and supply of fertilizers. ■ To promote the acquisition of capital goods and technology for the region, and to foster scientific and technical cooperation among Latin American na­ tions and among world, inter-American and subregional organizations. Venezuelan and Mexican representa­ tives had traveled throughout Latin America and the Caribbean in late Febru­ ary and early March seeking support for SELA. Mexican National Patrimony Minister Francisco Javier Alejo, who visited a number of countries and con­ ferred with their presidents, asserted March 12 that SELA was endorsed by all nations in the region, including Brazil. (Brazilian Foreign Minister Antonio Azeredo da Silveira had said Feb. 20, after meeting with Alejo in Brasilia, that Brazil would not join an organization whose ob­ jectives would lead to “confrontation” with the U.S. However, Alejo said March 12 that Brazilian President Ernesto Geisel had shown “alert sympathy” for SELA.) President Carlos Andres Perez had visited Mexico March 17-22. He toured Mexico’s oil-producing regions and conferred extensively with President Echeverria, with whom he made public speeches condemning the 1974 American Trade Reform Act and supporting eco­ nomic independence for Latin American and other underdeveloped countries. Perez said March 18 that Venezuela, Ecuador and Mexico, as Latin America’s only petroleum exporters, had a com­ mitment to aid other countries in the hemisphere that were affected by the high price of oil imports. During his visit Perez tried to persuade Mexico to join the Orga­ nization of Petroleum Exporting Coun­

12 tries (OPEC), but Mexico resisted in ap­ parent fear of damaging its relations with the U.S., according to diplomatic sources cited by El Nacional of Caracas March 20. Perez and Echeverria issued a joint communique March 22 which denounced the U.S. Trade Reform Act as “a coercive instrument which contradicts the princi­ ples of equity which should prevail in international relations . . . [and] repre­ sents a flagrant violation of the basic prin­ ciples of the inter-American system [the OAS], which is frankly in crisis.” The communique proposed that the OAS be changed so it “takes into account . . . the right of each nation to adopt the political and economic system which most suits it,” in apparent reference to Cuba, which was still under an OAS diplomatic and commercial embargo. It suggested that Article 17 of the Inter-American Treaty of Reciprocal Assistance, under which the Cuba sanctions were imposed, be amended so a two-thirds majority was no longer required to lift such “coercive measures.” The communique also cited more than a dozen cultural, economic, industrial and technological agreements reached by Ve­ nezuela and Mexico during Perez’ visit. These included the future establishment of a Latin American multinational cor­ poration to market oil industry equip­ ment; construction of a binational petro­ chemical complex; and technological and commercial cooperation between the Venezuelan and Mexican steel industries. Leaders, OAS score U.S. trade law— The U.S. trade law had come in for earlier criticism in January from Latin American leaders and the Organization of American States. The law prompted cancellation of U.S. Secretary of State Henry A. Kissin­ ger’s scheduled meeting in March with Latin American foreign ministers in Buenos Aires. The protests were led by Venezuela and Ecuador. Venezuelan President Carlos Andres Perez called the law “offensive” Jan. 1, noting that Venezuela “un­ selfishly” had supplied steel and petro­ leum to the U.S. for decades, even during the Arab oil embargo. Ecuadorean


Foreign Minister Antonio Jose Lucio Pa­ redes said the same day that the law was “coercive” and as a result Ecuador would boycott the meeting of hemispheric foreign ministers scheduled for Buenos Aires in March. The meeting had been planned as part of U.S. Secretary of State Henry Kissinger’s avowed “new com­ munity” in Latin America. Perez cabled Ecuadorean President Gen. Guillermo Rodriguez Lara Jan. 4 to express his support for Ecuador’s withdrawal from the meeting. Perez asserted that the trade law, as an act of “economic aggression and political pressure,” violated statutes of the Organi­ zation of American States (OAS). He urged Latin American nations to work to strengthen the OAS and not hold any meetings outside its structure (the Buenos Aires conference was one such meeting). Peru joined the protests Jan. 6, with President Juan Velasco Alvarado sending telegrams of support to Perez and Rodriguez Lara. Brazil added its voice the next day when Trade Minister Severo Gomes criticized a clause in the law that denied preferential treatment to shoes, textiles, watches and steel, and other products which Brazil exported. The permanent Council of the Organi­ zation of American States passed a resolu­ tion Jan.' 23 denouncing the U.S. Trade Reform Act as “discriminatory and coercive.” Twenty Latin American nations voted for the resolution and the U.S. abstained. The vote came at the end of a special fourday meeting of the council to air Latin complaints against the U.S. law. The resolution expressed the deep con­ cern” of the OAS over “the deteriora­ tion of inter-American solidarity caused by provisions of the United States for­ eign trade act of 1974, which in the unanimous opinion of the representatives of the Latin American countries distort the general system of preferences, estab­ lish discriminatory and coercive measures in detriment to the countries of Latin America [and] run counter to the funda­ mental provisions of the charter of the OAS.” Voting for the resolution were Argen­ tina, Barbados, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecua­

REGIONAL DEVELOPMENTS dor, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Trinidad-Tobago, Uru­ guay and Venezuela. Delegates from Bolivia and Haiti were absent. When the council meeting convened Jan. 20, representatives of 16 Latin gov­ ernments had criticized the trade law, which imposed restrictions on U.S. im­ ports, including denial of preferential tariff treatment to nations that joined commodity cartels, curbed U.S. access to their raw materials, expropriated U.S. companies without adequate compensa­ tion, or inadequately controlled the nar­ cotics traffic from their borders to the U.S. The Latins charged that the law threatened not only Venezuela and Ecuador, which belonged to the Organiza­ tion of Petroleum Exporting Countries (OPEC), but any nations which banded together to protect the price of their raw materials exports. They added that some restrictions in the law violated U.S. com­ mitments as a signatory to the OAS Charter. One of the sharpest attacks on the law was made by Venezuelan Ambassador Jose Maria Machin, who called it “de­ plorably negative and discouraging.” Ma­ chin said the law sought to “distort the policy of fair setting of prices” and affected “all the peoples of the continent. Among the threatened are producers of coffee, sugar, copper, bauxite, and even some manufactured products such as shoes.” Machin was particularly concerned about the law’s threat to Venezuela, which, he noted, “has consistently sup­ plied oil to the United States, without hag­ gling or selfishness, for decades. . . . The nation which has benefited most from our resources, the nation with which we have maintained the best relations, repays us by making us the object of a discrimina­ tory law.” The law was defended only by the U.S. delegate, John Ford, who asserted that anyone who was “familiar” with the law’s text could see it was aimed at “liber­ alizing” trade and was beneficial to Latin America in the balance. He added that the Ford Administration would not move to amend the law’s restrictions on imported manufactured goods because this would “not be productive.”

13 Before the OAS session, various Latin governments had denounced both the law and Secretary of State Henry Kissinger’s desired “new dialogue” with Latin Amer­ ica. Venezuela had announced Jan. 6 it would not attend a meeting between Kiss­ inger and Latin foreign ministers in Buenos Aires in March. Panama charged Jan. 8 that the “new dialogue” could not resolve problems between Latin America and the U.S., and called instead for a thorough reform of the OAS. In an apparent effort to resolve the conflict, Mexican Foreign Minister Emilio Rabasa flew to Washington Jan. 14 and met with Kissinger. Rabasa said after­ wards that he had protested the trade law’s “discriminatory” clauses against Mexican goods, and had urged Kissinger to contact the foreign ministers of Vene­ zuela and Ecuador to insure their atten­ dance at the Buenos Aires meeting. (Kiss­ inger sent a note to Venezuelan President Carlos Andres Perez Jan. 18.) Mexican President Luis Echeverria had issued a strong denunciation of the trade law Jan. 13. Representatives of 24 Latin and Carib­ bean nations were called to the U.S. State Department Jan. 14 for a briefing on the law by William D. Rogers, assistant sec­ retary of state for in ter-American affairs, and Maynard W. Glitman, deputy assis­ tant secretary for international trade policy. Rogers gave the representatives a copy of the law, asking them to study it before making further criticism, and Glitman said the Ford Administration hoped to obtain modification of the legis­ lation as it applied to Venezuela and Ecuador. Latin representatives later character­ ized the briefing as “disgraceful,” noting that Kissinger had not attended it.

Other Economic Affairs CIPEC sets copper exports cut. Peru, Chile, Zambia and Zaire agreed to reduce copper exports by another 5% to raise prices on the world market, a high Chilean official announced Feb. 20.


The four nations, joined in the Inter­ governmental Council of Copper Exporting Countries (CIPEC), had cut ex­ ports by 10% in November 1974. Only Chile had also cut production by that amount. Peru announced Feb. 25 that it would reduce production by 10% despite plans to expand copper extracting and refining fa­ cilities. Peru’s current annual production was estimated at 220,000 tons, according to the Associated Press. Coffee producers to limit exports. Mem­ bers of the 42-nation World Coffee Producers Group agreed Feb. 16 to limit exports in an attempt to reverse the de­ cline of coffee prices on the world market. A communique issued in San Salvador, El Salvador, where the group met Feb. 14-16, said members would withhold 20% of the exportable coffee produced in January-March and 10% of the ex­ portable reserves from OctoberDecember 1974, “until our price objec­ tives are reached.” Fausto Cantu Pena of Mexico, the group’s president, said the percentages amounted to 17.5 million 132-pound bags of coffee. He said the decision to withhold them represented the “consensus” of all the group’s members, which together produced 90% of the world’s coffee. However, the newsletter Latin America reported Feb. 21 that Brazil and Colombia, the world’s leading producers, had refused at the meeting to participate in any new plan to withhold coffee from the world market. Brazil, which had a serious balance of payments deficit, did not want to carry the brunt of the operation as it had when producers with­ held coffee in 1974, Latin America noted. In addition, many producers feared retaliation from the U.S., a major consuming nation, under terms of the new U.S. Trade Reform Act. Meanwhile, coffee wholesale prices continued to drop, having fallen by about 25% over the previous six months and reached a low of almost $50 a bag, ac­ cording to press reports. Some producing nations claimed they were no longer meeting expenses, the Associated Press reported Feb. 16.


Coffee multinational formed—Presidents Perez of Venezuela and Echeverria of Mexico presided March 22 over the for­ mation of a multinational coffee corpora­ tion by representatives of Mexico, Vene­ zuela, Costa Rica and El Salvador. The company, called Cafes Suaves Centrales, would regulate the coffee ex­ ports of Mexico, Central America and the Caribbean in an effort to maintain high coffee prices on the international market, according to a communique issued by the Mexican Coffee Institute. Mexico and Ve­ nezuela signed an agreement to build a coffee plant in Mexico. Cafes Suaves Centrales would have headquarters in Venezuela, which was ex­ pected to provide its major financial backing. Four-nation oil deal planned. Mexico, the Soviet Union, Cuba and Venezuela planned to cooperate in selling crude oil and petroleum to countries that lacked an oil-producing capacity, it was announced in Havana May 20. The proposed agreement, revealed by Mexican Information Minister Jose Campillo Sainz, was in the form of a triangular trading company through which the oil commitments of one nation could be filled by another if the buyer were situated closer to the latter producer. Campillo said Mexico had granted Cuba a revolving credit line of $20 million to be used for Cuban purchase of Mexican machinery, equipment and industrial raw materials.

IDB holds assembly. The Inter­ American Development Bank held its 16th annual assembly in Santo Domingo, Dominican Republic May 19-21, with more than 1,000 delegates, observers and guests attending from more than 40 coun­ tries in Europe, Asia, Africa and the Americas. The IDB issued its annual report May 19, noting that it had provided a record $1.11 billion in social and economic de­ velopment loans to member nations in 1974, 26% more than the 1973 record level. In addition, the bank provided $22 million worth of technical cooperation in


1974, compared with $6.4 million in 1973. Nevertheless, bank officials said the IDB needed an additional $4 billion in capital to maintain projected lending levels. Ten European countries, Israel and Japan had said in 1974 that they sought membership in the bank and would contribute $745 million to it in the next three years, the IDB report noted. U.S. Treasury Secretary William Simon announced May 20 that the U.S. was prepared to contribute $1.8 billion to the bank in the same period. “The eco­ nomic development of Latin America continues to be a high priority of the United States government and we look upon the bank as a major vehicle by which that objective can be realized,” Simon said. (U.S. Assistant Secretary of State William D. Rogers said May 20 that the U.S. would give commodity-by-commodity consideration to easing its import restrictions on primary products from Latin America and the Caribbean. The U.S. Trade Reform Act of 1974, which placed restrictions on a number of products from the area, had caused considerable resentment of the U.S. among Latin nations.) Dominican President Joaquin Balaguer opened the assembly May 19 with a call for international economic coopera­ tion to resolve the serious difficulties of Latin nations. He suggested that the price of Latin raw materials be raised, and that of oil imports lowered. “The crisis unleashed by the rise in oil prices—the new factor that has brought world inflation to near catastrophic pro­ portions—forced many of our countries to call a halt to development plans and made more difficult our common efforts to . . . solve the population explosion and bring about the social reforms which are so urgently needed to prevent the on­ slaught of chaos and violence that can nullify or minimize our civilizing goals,” Balaguer declared. Finance Minister Hector Hurtado of Venezuela, the hemisphere’s largest oil ex­ porter, defended current oil prices before the assembly May 20. He said a reduction of the price of any Third World exports would be “self-defeating,” and he accused developed nations of failing to keep earlier


promises to cooperate with developing countries. Oil exporting nations had clearly indicated their willingness to “cooperate in a reordering of the interna­ tional economy,” Hurtado declared. In another development May 21, IDB President Antonio Ortiz Mena of Mexico said Cuba could join the bank despite the sanctions imposed against the island by the Organization of American States. Several nations belonged to the bank without belonging to the OAS, he noted.

ECLA adopts plan. The United Na­ tions’ Economic Commission for Latin America (ECLA) met in Port-of-Spain, Trinidad May 6-14 and adopted a plan for regional economic development. The plan was approved May 10, with 17 Latin American and Caribbean nations voting in favor and the U.S. voting against. Among its proposals: ■ Creation of new organizations of ex­ porters of raw materials to protect the price of these exports in international markets. (The U.S., which opposed the action plan on the basis of this proposal, urged instead that producing and consuming nations negotiate agreements to guarantee just prices for raw materials and stable supplies to international markets.) ■ Establishment of Latin American multinational enterprises, beginning with a fertilizer corporation sponsored by Venezuela. ■ Creation of a regional mechanism to promote cooperative activity in invest­ ment, production and trade among coun­ tries and groups of countries. Venezuela and Mexico had already proposed such an agency, calling it the Latin American Eco­ nomic System. ■ Intensification of existing regional in­ tegration programs, notably those of the Latin American Free Trade Association (LAFTA) and the Central American Common Market. Closer cooperation was urged between the Andean Group and LAFTA member nations, and among Ca­ ribbean countries. ■ Establishment of a regional authority to supervise the activities of foreign multi­ national corporations, setting strict



REGIONAL DEVELOPMENTS operating conditions and a code of con­ duct for the enterprises. ■ A fund to aid Latin countries with serious balance of payments deficits, notably non-oil exporting nations. ■ A program to improve regional bargaining power in the acquisition of new technology, including establishment of a pool of information available to Latin American countries buying technology. The ECLA delegates also voted to set up working groups to study various as­ pects of regional economic development and integration, and they decided May 13 to exclude from the groups all developed countries outside the region, including the U.S., Great Britain, France and Canada. The excluded nations objected, but Trini­ dadian Prime Minister Eric Williams re­ plied May 14: “What we have seen here is the full emergence of a powerful and dynamic

17 Latin American personality, fully com­ petent to stand on its own two feet, speak for itself and deal with its own particular problems. It has shown no malice in its at­ titudes and no truculence.”

Pessimistic economic outlook—Before the Trinidad meeting convened, a panel of experts organized by ECLA issued a report, cited by the Mexican newspaper Excelsior April 29, which predicted Latin America’s spiraling inflation, trade deficits, foreign loan restrictions and eco­ nomic growth reduction would continue into 1976. The panel’s projections for 1975-76 in­ dicated that nine Latin American coun­ tries would have trade deficits equal to 30% or more of the value of their exports, and that non-oil exporting nations would have to invite more foreign investment to avoid drastically reducing their imports.


Government, Politics & Economic Unrest Lopez Rega promoted. President Maria Estela Martinez de Peron Jan. 3 pro­ moted Social Welfare Minister Jose Lopez Rega to the rank of secretary to the presidency, formalizing his power as her closest adviser. Lopez Rega’s powers, however, were short-lived. Pressure from Congress, the armed forces and labor unions forced him to resign July 11. The promotion allowed Lopez Rega to coordinate the President’s activities and control all access to her. It also allowed him to require any information from any Cabinet minister or other public official, according to the London newsletter Latin America Jan. 10. Lopez Rega’s power had grown steadily since Mrs. Peron’s ac­ cession to the presidency in July 1974. Government under attack. Mrs. Peron’s government found itself increasingly under political attack as 1975 advanced. The Authentic Party had held its first national constituent assembly in Buenos Aires March 11, with some 200 delegates attending, among them many former Peronist government officials. Messages of support were sent by other former officials, including ex-Gov. Alberto Martinez Baca of Mendoza Province, and

by the Montoneros, the Peronist guerrilla group. (The Montoneros had formed a new political party, Peronismo Leal [Loyal Peronism], with a platform similar to that of the Peronist coalition, which won the March 1973 elections, the newsletter Latin America reported Jan. 17.) Delegates to the meeting drafted a document titled, “Peronism Returns to Authentic Peronism,” which supported “the revolutionary definition of Peronism given us by our unforgettable comrade Evita [Peron].” This definition was upheld by the platform that Frejuli (the ruling Justicialista Liberation Front) had adopted in the 1973 elections but later had abandoned. This definition of Peron­ ism implied “a struggle against mo­ nopoly, participation of workers in the control and planning of the economy, de­ nunciation of the commitments con­ tracted by imperialism behind the people’s back, and protection of the small- and medium-sized producer,” the document stated. The document charged that the govern­ ment had taken “contradictory” mea­ sures since its election in 1973, violating Peronist ideals and assuring Argentine “dependency.” Loyal Peronist “comrades are being massacred and shot,” the document added. “It is a strange paradox,” the document continued, “that the present



administration has taken the same princi­ ples as [Gen. Alejandro] Lanusse when he was in charge of the military govern­ ment [before the 1973 elections], carrying out an economic plan that punishes the poor sectors of the population, the smalland medium-sized producers, the busi­ nessmen, the teachers and the pro­ fessionals. It has organized repression by letting the army do it directly, and has called elections in Misiones in an attempt to constitutionalize a representation it lacks.” Social Welfare Minister Jose Lopez Rega called the Authentic Party a “de­ formation” March 12, characterizing its members as “traitors to the sentiment for the greatness of the fatherland.” Pres­ ident Peron denounced the party April 4, and the government expelled from the Justicialista movement 13 Peronist leaders who had supported the Authentics, including Alberto Martinez Baca and two other former governors, Oscar Bide­ gain of Buenos Aires Province and Jorge Cepernic of Santa Cruz. (In a related development April 22, ex­ President Hector Campora was also ex­ pelled from the official Peronist party. He lived in self-imposed exile in Mexico.) In addition to the Authentic Party, another group of former government sup­ porters, the Integration and Development Movement (MID), also attacked the Peronist administration. A MID state­ ment issued March 14 accused the government of pursuing economic policies that went “contrary to the national inter­ est” and were “inspired by . . . monop­ olistic groups.” the MID had been a member of Frejuli. (Walter Goes, a correspondent for the Brazilian newspaper Jornal do Brasil, reported March 21 that he had seen a “se­ cret document” of Argentina’s security forces implicating MID leader Arturo Frondizi, a former president, in a subver­ sive plot with ex-President Lanusse. Lanusse asserted the report was false, and Goes was expelled from Argentina April 4.) Government wins Misiones vote. The ruling Justicialista Liberation Front (Frejuli) won elections for a new governor and legislative assembly in Misiones

LATIN AMERICA 1975 Province April 13. The vote was considered a referendum on the adminis­ tration of President Peron. (The federal government had taken over the Misiones Province Jan. 18 asserting the province’s population was “unhappy” and the provincial adminis­ tration “inefficient.” It was the sixth time since 1973 that the federal administration had removed an elected provincial govern­ ment.) Official results gave Frejuli 46% of the ballots, to 38% for the opposition Radical Civic Union and 9% for two dissident left­ wing Peronist groups, the Authentic Party and the Third Position. Frejuli candidate Miguel Angel Alterach was elected governor, and Frejuli members won 16 of 32 seats in the legislature. Radicals won 13 seats, the Authentic Party won two, and the Third Position, one. Seven other parties competed unsuc­ cessfully in the elections, which were necessitated by the death of Misiones’ governor and deputy governor in an air­ plane crash in November 1974. Frejuli leader Demetrio Vazquez called the elections a victory for Mrs. Peron, who, he said, “has shown that she is the sole legitimate heir to [President Juan] Peron and Eva Peron.” However, ob­ servers .noted that Misiones was not representative of Argentina, being less populated and more agrarian than the average province, and that the Radicals had considerably cut into Frejuli’s popu­ larity since the 1973 elections. Frejuli’s vote total fell by 14% from its level in the second round of the 1973 elections, while the Radical total rose by 9%. Both the Radicals and dissident Peronist leftists had charged before the elections that the government was buying votes. The government had announced new farm credits and raised the prices of key crops, while Frejuli candidates had distributed mattresses, clothes, household products and money to voters. Frejuli gubernatorial candidate Alte­ rach said the government’s generosity in Misiones was “part of a plan that will be put into effect throughout the country and just happens to coincide with the election.” The showing by the Authentic Party and the Third Position was unexpectedly


poor, according to press reports. The newsletter Latin America noted April 18 that the Authentic Party was officially forbidden to use its name or any labels or slogans identifying it as a Peronist splinter group, and was forced to run as “List 12.” Lopez Rega widens powers. Social Wel­ fare Minister Lopez Rega expanded his powers as the country’s economic troubles mounted. Lopez May 31 forced the resignation of Economy Minister Alfredo Gomez Morales and replaced him with Celestino Rodrigo, who had been his assistant for social security in the Social Welfare Ministry. Lopez had already made his son-in-law, Raul Lastiri, first in line to succeed Mrs. Peron. He secured the resignation April 25 of the Senate president, Jose Antonio Allende, and persuaded the Peronist bloc in the Senate not to elect a successor to Allende, thus leaving Lastiri, as president of the House of Representatives, next in line for the presidency. In further enhancement of his power, Lopez secured the army command for a close military associate, Gen. Alberto Numa Laplane. Army Commander Gen. Leandro Anaya resigned May 13 after disagreeing with Defense Minister Adolfo Savino and President Peron on several issues, including potential military inter­ vention against steel strikers. The strikers reportedly ended the strike in order to avoid a confrontation with Numa Laplane, who was said to favor military intervention. President Peron ousts Lopez Rega. Under intense pressure from Congress, the armed forces and striking labor unions, President Peron canceled a wage rollback instituted in June and dismissed Lopez Rega. Mrs. Peron July 8 approved recently negotiated industrial wage increases of 100%-135% after a 38-hour general strike by the General Labor Confederation (CGT) paralyzed Buenos Aires and other cities. The strike, the first of its kind against a Peronist government, followed 10 days of protests by teachers, bank and

21 railroad employes, and workers in the automotive, textile and metals industries. Mrs. Peron July 11 reluctantly ac­ cepted Lopez Rega’s resignation as social welfare minister, secretary to the presi­ dency and personal secretary to the presi­ dent. She made three other cabinet changes, but her cabinet remained dominated by associates of Lopez Rega, including Economy Minister Celestino Rodrigo and Labor Minister Cecilio Conditti, both of whom were reappointed to their posts. (The entire cabinet had resigned late July 6 in an unsuccessful attempt to head off the general strike. In her cabinet shuffle July 11 Mrs. Peron named Carlos Villone as social welfare minister, Jorge Garrido as defense minister and Ernesto Corvalan as justice minister, and she shifted Antonio Benitez from the justice portfolio to the interior ministry. Of the eight cabinet ministers, five—Villone, Rodrigo, Conditti, Education Minister Oscar Ivanissevich and Foreign Minister Alberto Vignes—were considered close to Lopez Rega. Villone’s brother Jose Maria was named personal secretary to the presi­ dent.) Labor and congressional protests continued despite the wage increases and cabinet changes, as the government sought to salvage its economic austerity program and prices continued to rise. Political, congressional and labor leaders July 12 denounced the retention of Rodrigo, who was considered to have de­ vised the unpopular austerity program with Lopez Rega. In a continuation of the program July 15, the government deva­ lued the peso by 18%. Strikes were reported July 15 by 300,000 teachers and by transit, paper, chemical, pharmaceutical, sugar, tele­ phone and judicial workers across the country who sought wage increases com­ parable to those of the CGT. The CGT charged the increases were already being eaten up by price increases, which had brought the annual inflation rate to 200%, according to unofficial sources cited in press reports. Some 300 employes of Ford Motor Ar­ gentina had been fired July 14 for striking to protest recent price increases which they put at 300%. Public transport fares were increased by 200% that day and the


prices of cigarettes and of telephone, postal and shipping rates were doubled. The political and economic crisis had worsened steadily since July 1, when the Peronist bloc in the Senate and the eight minor parties associated with the Justicialista (Peronist) Party declared their support for labor leaders demanding an end to the wage rollback and the dismissal of Rodrigo and Lopez Rega. The Cordoba CGT called an indefinite general strike July 3, and the national CGT called July 4 for a 48-hour general strike to begin at midnight July 6. The Na­ tional Statistics Institute reported July 4 that the cost of living had risen by 21.3% in June, for an official annual inflation rate of 110%. The armed forces threw their weight on the side of the protesters July 3, recom­ mending cabinet changes and giving Mrs. Peron a military report which linked Lopez Rega to the Argentine Anticom­ munist Alliance (AAA), the right-wing assassination squad. The armed forces commanders subsequently leaked the report to the newspaper La Opinion, and they rejected Lopez Rega’s suggestion that they intervene against the CGT. La Opinion cited the report on Lopez Rega July 6 and reported that the military chiefs were concerned over a number of issues, including the lack of dialogue be­ tween the executive branch and other “factors of power” including the armed forces; the “lack of representativeness” of the government and its growing se­ paration from the political parties; government control over the information media and excessive government propa­ ganda campaigns; adherence “in certain official circles” to “pseudoreligious” sects (a reference to Lopez Rega’s membership in an Afro-Brazilian spiritualist sect called Umbanda; he was also a practicing as­ trologer); use of government funds for political campaigns; the impunity under which right-wing terrorists operated, and the general insecurity among Argentines and lack of confidence in the police and armed forces; and the government’s serious mismanagement of the economy. To combat these problems, La Opinion reported, the armed forces had recom­ mended the dismissal of “the most irri­ tating figures and those considered responsible for a long series of errors that


have carried the country to the brink of a grave institutional conflict”; the im­ mediate opening of “a broad political dia­ logue which would include all sectors of national life, to study a series of emergency measures”; and “the fullest observation of the, institutions, as de­ termined by the Constitution.” The military chiefs met with Mrs. Peron several times before she agreed to abandon the wage rollback July 8. After her concession the CGT immediately called off the general strike, and pledged that workers would give the government a day’s pay for each month of their new contracts to help speed an economic recovery. The strike crisis reportedly cost the country $804 million from its begin­ ning June 27 until work resumed July 10. The armed forces, the political leadership and the labor movement all pledged their support to Mrs. Peron’s presidency, but work continued against Lopez Rega and his policies. The Senate elected itself a president July 8, upsetting the arrangement under which Raul Lastiri, the Chamber of Deputies presi­ dent and Lopez Rega’s son-in-law, was first in line to succeed Mrs. Peron. The new Senate president, now first in the line of succession, was Italo Luder, a Peronist who reportedly had good relations with labor, the armed forces and the opposition parties. In a further slap at Mrs. Peron and Lopez Rega, the Senate heavily amended and sent to the Chamber of Deputies a law on the succession introduced by the executive. Under the Senate’s version, if the president died or left office the presi­ dent of the Senate would rule the coun­ try until a joint session of Congress elected a new president from among its own members and the provincial governors. Mrs. Peron’s version would have passed the presidency to the presi­ dent of Congress, a new post to which she hoped Lastiri would be elected, and allowed the subsequent election of cabinet ministers to the presidency. The Senate’s version was approved by the Chamber July 12. Peronist Deputy Jesus Porto proposed the impeachment of Lopez Rega July 10, calling him the “instigator and intellectual author” of AAA terrorism, accusing him


of “fraud against the state” in the pur­ chase of oil from Libya for allegedly excessive prices, and noting he had officiated at an Umbanda ceremony in Buenos Aires in defiance of the Consti­ tution, which made Roman Catholicism the state religion. Porto had recently survived an assassination attempt by the AAA, as had another deputy, Santiago Raico, who publicly challenged Lopez Rega to a duel July 5 and again July 6. Miguel Radrizzani, a Buenos Aires lawyer, filed charges against Lopez Rega in court July 14, accusing him of being the AAA’s “political supervisor.” Radrizzani cited the military report on Lopez Rega and the organization, which, he said, named Luis Almiron, head of Mrs. Peron’s bodyguards, and Juan Ramon Morales, chief of Lopez Rega’s body­ guards, as military heads of the AAA.

Previous labor unrest —The labor un­ rest in July had been preceded by major strikes in March-April and a nationwide walkout in June by workers protesting the high cost of living and austerity measures, including the rollback of wage increases negotiated earlier in several industries. The protests culminated June 30 when hundreds of thousands of workers struck despite orders from the president to return to their jobs and accept across the board wage increases of 50%. The regional offices of the General Labor Con­ federation (CGT) called general strikes in Cordoba, Mendoza and Chubut Provinces, and striking workers paralyzed the automobile, metals, textile and construction industries in Buenos Aires. President Peron met that night with the CGT’s national leadership and pledged further meetings to end the crisis. (The CGT leaders met with her cabinet July 2.) The labor leaders asked workers to return to their jobs July 1, but thousands of workers continued to strike, notably in Cordoba—the nation’s automotive center—and La Plata, where Peronist insurgents had seized the local CGT leadership and vowed to continue fighting for higher wages. The crisis had begun June 4, when Labor Minister Rodrigo announced an emergency program to deal with Argentina’s severe

23 economic problems, including an esti­ mated 100% annual inflation rate. The program included a 50% devaluation of the peso, sharp increases in interest rates and in the prices of fuel, gas, electricity, water and transportation, and a 38% ceiling on wage increases. (The ceiling also constituted a wage offer.) The ceiling would revoke wage in­ creases negotiated recently in a number of industries, some as high as 100%-135%. Labor leaders rejected the ceiling June 5 and strikes began, starting with automo­ tive workers in Cordoba. Rodrigo raised the ceiling to 45% June 12, but the CGT rejected this the next day. Strikes and antigovernment demon­ strations were reported June 17 in Men­ doza, Cordoba, Mar del Plata, Rio Negro and Bahia Blanca, and workers at General Motors plants were reported on strike June 18. Workers at certain industrial plants accepted 45% wage increases June 19-20, but others stayed on strike. About 200,000 teachers struck across the country June 26 to demand wage raises, and workers at the General Mo­ tors plant in Cordoba seized 20 executives and held them hostage to press wage de­ mands. The CGT and the “62 Organizations,” the Peronist umbrella group, called a general strike June 27, virtually paralyzing Buenos Aires, Cordoba, Santa Fe, Tucuman, La Plata and Rosario. In the capital some 80,000 workers marched on the government palace to demand the resignation of Rodrigo and of Social Welfare Minister Jose Lopez Rega. Mrs. Peron responded to the workers’ demands June 28 by offering a final wage increase of 50%, with further 15% raises in October and in January 1976. The only alternatives to her offer were accelerated inflation and mass unemployment, she declared. Labor Minister Ricardo Otero resigned immediately after Mrs. Peron’s decla­ ration, and the opposition Radical Civic Union announced its support for labor demands, declaring them “legitimate and necessary.” The next day local CGT leaders in Lanus and Avellaneda, two industrial cen­ ters in Buenos Aires, called strikes and withdrew their allegiance from Mrs.


Peron as head of the Justicialista Party, the Peronist political movement. Mem­ bers of the Peronist bloc in the Senate at­ tempted to meet with the president but were rebuked; they immediately voted to elect a new Senate president, upsetting Lopez Rega’s arrangement for the suc­ cession, with debate on the election begin­ ning June 30. Amid the crisis, the government an­ nounced two economic developments which it termed hopeful. It announced June 18 an agreement with eight foreign automobile firms which deferred for two years about $500 million in government payments for imported materials, though it allowed the companies to increase prices by as much as 30%. The govern­ ment announced June 23 that it had signed a letter of intent with First National City Bank (Citibank) of New York for Citi­ bank to raise $250 million in credits for Argentina.

Strike halts steel production. A strike by workers at the Villa Constitución steel mills in Santa Fe Province entered its fourth week April 10, paralyzing Argen­ tina’s steel industry and threatening to halt automobile production. The strike finally ended May 10 under threat of mil­ itary intervention. The two leading auto firms, IK.ARenault and Ford Motor Argentina, an­ nounced April 10 they would have to shut down their plants if steel production did not resume. The other seven car com­ panies in the country were also reported running out of essential steel products.

Workers at the Villa Constitución steel mills in Santa Fe Province went on strike in mid-March to demand the release of 150 persons, including 46 labor leaders. They had been sized earlier in March for allegedlyplotting to disrupt production in the industrial belt along the Parana River northwest of Buenos Aires. Most ob­ servers felt the alleged plot was an excuse devised by the government to arrest leftists who had legally gained control of the local branch of the Metallurgical Workers Union (UOM).


A slate of leftist and moderate dissi­ dents had easily won the local UOM elec­ tions in November 1974, defeating a slate backed by Lorenzo Miguel, the union’s conservative national leader. Miguel was said to have great influence in the federal government, particularly with Labor Minister Ricardo Otero, a former UOM official. Residents of Villa Constitución said armed right-wing unionists had ac­ companied police during the March ar­ rests, pointing out dissident leaders for detention, it was reported April 13. Police occupied the steel plants and ar­ rested a number of strikers March 27 in an unsuccessful effort to end the strike. In an apparent demonstration of support for the strikers, members of the Peronist Montoneros guerrilla group killed the Villa Constitución police chief March 23. Alleged guerrillas attacked the local police station the next day. The Villa Constitución strike coincided with other strikes and protests against the government’s economic policies. Subway workers in Buenos Aires struck for higher wages April 7-9; the government declared the strike illegal and police arrested 49 picketers. Farmers in the five major agrarian provinces—Buenos Aires, La Pampa, Entre Rios, Santa Fe and Cordoba —had struck for higher agricultural prices and lower taxes March 3, refusing to send animals to slaughter or grain to market. Even conservative Peronist labor leaders, considered the backbone of the govern­ ment, expressed displeasure with its policies. Leaders of the powerful General Labor Confederation (CGT) circulated an internal document calling for the resigna­ tion of Economy Minister Alfredo Gomez Morales and Social Welfare Minister Rega. In an effort to regain CGT support, Mrs. Peron visited union headquarters in Buenos Aires April 4 and promised to consult with labor leaders more often. She denounced unidentified “traitors” in the government and said she would hand over to the CGT the Mayo publishing company, which had put out the Peronist newspaper “Democracia” during the first two Peronist administrations in the 1940s and 1950s. The 62 Organizations, the Peronist umbrella group, declared their support for


Mrs. Peron April 9, asserting that in her speech to the CGT she had “fully exercised the political bossism which is appropriate to those elected.” The commerce unit of the General Economic Confederation (CGE), a man­ agement group which normally supported the government, criticized the govern­ ment’s economic policies in a statement March 14. It charged that Economy Minister Gomez Morales had helped fuel inflation, reduce production and encourage hoarding by approving a wage increase and then freezing prices and devaluing the peso.

Wages up, peso devalued—The govern­ ment March 1 announced a $40-a-month raise for all workers to offset inflation, which reached 43.5% in 1974 and 13.4% in the first two months of 1975. It decreed a 50% devaluation of the peso against the U.S. dollar March 4, and accompanied this with a new mechanism to authorize price increases. Gomez Morales denied the mechanism amounted to a price freeze, but the CGE, which had gone along with the wage increase, withdrew in protest from the National Commission on Prices, Income and Standard of Living. The peso devaluation was designed to stimulate Argentine exports. The nation had enjoyed a S650 million trade surplus in 1974, according to Gomez Morales, but agricultural production was expected to drop sharply in 1975 because of weather conditions, mounting costs, labor dis­ putes, and hoarding by producers. The Agriculture Ministry foresaw a 26.8% drop in wheat production, falling short of Argentina’s domestic and export needs. President Peron made a few changes in the cabinet and the military leadership July 18-Aug. 27, as the economic crisis grew and the armed forces took a larger role in directing thé government. The first changes, demanded by the mil­ itary and by the Peronist labor move­ ment, removed the cabinet officials linked to Jose Lopez Rega, the ousted social welfare minister and presidential adviser. Lopez Rega left Argentina for Spain July 19 despite a travel ban imposed on him by Congress because of impeachment


procedures begun against him in the Chamber of Deputies and court charges filed against him for allegedly leading a right-wing assassination squad. Economy Minister Celestino Rodrigo, a close associate of Lopez Rega, resigned July 18 after the General Labor Con­ federation (CGT) said it would begin a 72hour strike unless he quit along with Social Welfare Minister Carlos Villone and Labor Minister Cecilio Conditti. Villone and Conditti were close to Lopez Rega, and Conditti had been appointed labor minister without the customary consultation with the CGT. Villone resigned July 21 and was re­ placed by Rodolfo Roballos, another associate of Lopez Rega. Pedro Bonanni, a conservative Peronist and former finance minister, was named economy minister July 22. He declared an im­ mediate price freeze, but the freeze did not head off strikes for higher wages by doc­ tors, airline pilots and telephone workers July 22-24. The Chamber of Deputies July 23 voted out its president, Raul Lastiri, who was also forced to resign as vice president of the Justicialista (Peronist) Party. The Authentic Peronist Party, a leftist group linked to the Montoneros guer­ rillas, July 22 called for Mrs. Peron’s res­ ignation, new general elections and a re­ turn to the center-left policies on which Peronist candidates campaigned in 1973. The Montoneros demanded July 25 that Mrs. Peron resign. Mrs. Peron revised her cabinet Aug. 11. She reappointed only two officials— Defense Minister Jorge Garrido and Jus­ tice Minister Ernesto Corvalan—and she left the economy portfolio temporarily vacant. The five new appointees were Pedro Arrighi as education minister, Car­ los Emery as social welfare minister, Car­ los Ruckauf as labor minister, Angel Ro­ bledo as foreign minister and Vicente Damasco, an army colonel, as interior minister. The appointment of Col. Damasco, a former military aide to the late President Juan Peron, raised a furor in the armed forces. Senior military leaders reportedly were consulted on the appointment of all cabinet ministers except Damasco, with


whom the Peronists apparently hoped to forge an alliance with the armed forces. A number of army generals, despite insisting on a say in the appointment of cabinet ministers, felt the presence of Damasco in the cabinet unwisely tied the armed forces to the government’s fal­ tering policies. Officers in the navy, the most conservative of the armed forces, reportedly feared that Damasco had pres­ idential ambitions and left-wing Peronist sympathies. A number of military officers Aug. 13 asked Mrs. Perón to fire Damasco. Ten army generals met to debate the issue the next day, and Gen. Alberto Numa La­ plane, the army commander, forged a compromise in which they accepted Damasco’s appointment but declared the army’s “total independence” from the cabinet. They added that, in compliance with army rules, Damasco must leave the cabinet or retire from the army within two months. However, the controversy continued after the compromise, with increasing hostility in all armed services toward Damasco and Numa Laplane. Five leading army generals, including the com­ manders of three of the nation’s five gar­ risons, joined the navy and air force chiefs Aug. 26 in demanding that Damasco and Numa Laplane resign. Mrs. Perón agreed to fire Numa Laplane but proposed to re­ place him with Gen. Alberto Caceres, the most junior of the generals, whose ap­ pointment would force the retirement of all generals opposing Damasco. The gen­ erals rejected this Aug. 27. They placed their garrisons on alert, and Gen. Carlos Delia Larroca, the most senior general next to Numa Laplane, declared himself army commander. Mrs. Perón, fearing a military coup, then fired Numa Laplane and named as the new army chief Gen. Jorge Videla, next in line after Delia Lar­ roca, whose retirement was thus forced. Videla, a reputed opponent of military involvement in politics, began a purge Aug. 30 of officers considered close to the Peronist movement. The retirement of Gen. Caceres was confirmed that day, as was the dismissal of Col. Jorge Sosa Molina, chief of the presidential military guard and a supporter of Damasco.


Damasco, an army colonel whose resignation had been demanded by the top military leaders, was replaced by Foreign Minister Angel Robledo. The foreign affairs portfolio was temporarily left va­ cant. Garrido was replaced by Tomas Vottero. Meanwhile, Mrs. Peron appointed a new economy minister, Antonio Cafiero, Aug. 14. Cafiero, a former Argentine envoy to the European Economic Com­ munity, announced a program Aug. 25 to stem the growing unemployment rate, currently estimated at 7%. Government credits would be made available quickly to businesses and public agencies, even at the risk of added inflation, Cafiero said. Cafiero also pledged an effort to contain inflation through cuts in govern­ ment spending, but he rejected sudden “shock” measures that would create a stronger recession. He said controls would be imposed on basic necessities to aid working-class families, but there would be no return to the widespread price controls of the past two years.

Mrs. Peron takes leave, returns. Presi­ dent Peron began a month-long leave of absence Sept. 13, ostensibly for health reasons. She returned Oct. 16. Senate President. Italo Luder served as interim president. Mrs. Peron had spent most of August in bed, reportedly suffering from nervous and intestinal problems. She had lost much weight during her 14 months in office, and had spent little time at her official duties since her closest adviser, former Social Welfare Minister Jose Lopez Rega, was driven from office and into exile in July. Luder, described as a moderate Peronist lawyer who had good relations with both the armed forces and the labor movement, would exercise full pres­ idential powers during Mrs. Peron’s absence. Mrs. Peron said any major deci­ sions made by Luder during her absence would have her support. Luder had helped draft the 1949 Peronist constitution and had defended the late President Juan Peron against treason charges in 1955-56, after Peron’s second administration was ended by a military coup. He was the fifth person to

ARGENTINA assume the presidency of Argentina since the 1973 elections.

Interior, defense ministers quit—During his first full day in office Sept. 15, Luder accepted the resignations of Interior Minister Vicente Damasco and Defense Minister Jorge Garrido. In another shift, Luder replaced Mrs. Peron’s private secretary and her press secretary Sept. 16. The new private sec­ retary, Luder’s son Ricardo, supplanted Julio Cesar Gonzalez, the last official in the presidential palace considered to have been close to Jose Lopez Rega, the exiled former social welfare minister. Luder Sept. 18 dismissed the right-wing governor of Cordoba Province, Brig. Gen. (ret.) Raul Lacabanne, who had waged a brutal campaign against leftist subver­ sives but allowed unrestricted assaults by the Argentine Anticommunist Alliance, the right-wing assassination squad al­ legedly organized by Lopez Rega. Laca­ banne was replaced by Raul Bercovich Rodriguez, a veteran Peronist party official. Luder Oct. 2 named a new foreign minister, Manuel Arauz Castex, a former law professor and Supreme Court judge who pledged to follow “the traditional Peronist attitude: a third position, be­ tween liberalism and Marxism.” Luder vowed Sept. 16 to allow re­ porters greater access to information and freedom of movement in the Government House. The next day left-wing Peronists were allowed to print and distribute a publication for the first time since 1974. The new magazine, El Autentico, was the organ of the Authentic Peronist Party, which had links with the Montoneros guerrilla group. Its first issue attacked the government, saying it had been dominated by the armed forces since before Mrs. Peron’s departure. Luder met frequently with political, labor and military leaders, but he was unable to reconcile rival factions within the Peronist political and labor move­ ments. In Congress, some 17 members of the Peronist bloc feuded with party leaders over “verticality,” the principle that Peronist legislators must abide by all decisions of the party leadership. In the labor movement a minority of leaders de­ manded that Mrs. Peron resign.


Victorio Calabro, governor of Buenos Aires Province and treasurer of the Me­ tallurgical Workers Union (UOM), declared Sept. 30 that if Mrs. Peron did not resign and allow effective leadership to be restored, there would be a military coup. The 62 Organizations, the Peronist umbrella group headed by UOM sec­ retary Lorenzo Miguel, denounced Calabro’s statement as “subversive” Oct. 4. Carlos Menem, governor of La Rioja Province, said Oct. 5 that Calabro’s re­ marks were “serious, imprudent and too suggestive of treason.” Andres Framini, an Authentic Peronist leader, called Oct. 13 for Mrs. Peron’s resignation, asserting: “This is the worst government we have ever endured.” However, ex-President Hector Campora, whom the Authentics claimed as a leader, had called Sept. 29 for unity in the Peronist movement. Campora had been allowed to return to Argentina Sept. 27 after a year-long, self-imposed exile in Mexico during which he was expelled from the Justicialista (Peronist) Party.

Mrs. Peron returns—President Peron returned to office Oct. 16, rejecting ad­ vice by political and military leaders to continue her leave of absence or resign in view of the nation’s continuing political and economic crisis. Addressing a Loyalty Day rally in Buenos Aires Oct. 17, Mrs. Peron pledged to complete her term of office and urged Argentines to support the armed forces in their “battle against subversion.” “Their dead are our dead,” she said, referring to military casualties in clashes with leftwing guerrillas. Interim President Italo Luder and Foreign Minister Angel Robledo had visited Mrs. Peron at her retreat in Cordoba Province Oct. 7 and urged her to extend her vacation or resign. Luder and Robledo reportedly were supported by the armed forces leadership and by sectors of the Peronist political and labor move­ ments. Left-wing Peronists outside the official movements also urged the pres­ ident to step down. Mrs. Peron resisted, however, and returned to Buenos Aires Oct. 15. Mil­ itary leaders including Gen. Jorge Videla, the army commander, accepted her de­



The peso was devalued by 26.4% in eight separate actions by the government Sept. 15-Dec. 29 as the economic crisis worsened with continuing inflation and strikes by workers in several sectors. The devaluations, making a total of 13 for 1975, were by .3.3% Sept. 15, 2.1% Sept. 26, 3.4% Oct. 13, 4.5% Nov. 5, 4% Nov. 22, 4.6% Dec. 3, 4.5% Dec. 15 and 4.57% Dec. 29. The cost of living continued to increase at a rapid rate, rising by 12.6% in October for a total increase of 261 % in the first 10 months of the year, it was reported Nov. 14. The January-October figure included a 273.8% price rise for food, a 237.9% rise for clothing, 265% for general costs (in­ cluding medicine and education), 110% for housing and 325% for furniture. Workers struck a number of indus­ tries to demand higher wages to offset the price increases. Cattle ranchers struck Sept. 18-Oct. 3 and again Oct. 24-Nov. 2, withholding cattle from the market and from slaughterhouses, sending the price Economic crisis heightens. The General of meat soaring. In addition to the cattle EconomicConfederation(CGE), a manage­ ranchers, workers in textile mills, auto­ ment group, said few businesses were “in mobile and farm-machinery plants and at a condition to pay salaries for the second least six Buenos Aires banks were re­ half of July” or to restock raw materials ported on strike Oct. 24. (Some 120,000 automobile workers and supplies, it was reported Aug. 3. Auto began a wildcat strike Nov. 26, paralyzing and manufacturing companies reported the auto industry. The workers, most em­ sales down by 45%-80% since June, when ployed by foreign firms, protested a the government tripled the price of government attempt to force them to gasoline and halved the value of the peso, leave the independent mechanics’ union, causing a rise in prices which in turn caused successful demands by workers for Smata, and join the Metallurgical Workers Union [UOM], which supported higher wages. Wholesale prices rose by 42% in July, according to the Aug. 3 the government’s economic policies.) report. To combat the growing crisis, the The government suspended imports of government came up with a new about 100 items Aug. 5 and suspended ex­ emergency economic plan and arranged a port duties on wool, leather, rice and new “social pact” between Peronist labor and management groups. frozen chickens in an apparent attempKo gain foreign exchange. The peso was de­ The economic plan, reported Oct. 10, would reduce the budget deficit from valued by an average 16% Aug. 9. The CGT, which demanded a greater 13.3% to 6.5% of the gross national pro­ role in the government, particularly in the duct. It proposed a GNP growth rate of economy and social welfare ministries, 4.4% and a reduction of the unem­ urged Mrs. Peron Aug. 7 to declare a ployment rate from the current 6% to a maximum 4%. state of economic emergency and a freeze on layoffs for 90 days. Economy Minister The social pact, signed Oct. 24 by Bonanni called the same day for a wage­ leaders of the General Labor Con­ price “truce,” but this was rejected by the federation (CGT) and the General Eco­ CGE Aug. 9 on grounds that it would nomic Confederation (CGE), would sus­ “condemn businessmen to bankruptcy.” pend strikes and dismissals of workers for

cision but reportedly expressed concern that under Mrs. Peron the government would once again be run by a small group of presidential advisers isolated from Congress, the armed forces, the labor unions and other Argentine institutions. Luder had replaced several cabinet ministers and eased restrictions on the press, but he had not decisively assumed national leadership during Mrs. Peron’s absence, according to press reports. He had also given the armed forces a greater role in national security following a series of attacks on military officials and in­ stallations by leftist guerrillas. Two senators of the opposition Radical Civic Union, Carlos Perette and Fernando de la Rua, urged Mrs. Peron Oct. 3 to consider whether her return to office would do more harm than good. Ricardo Balbin, the Radical leader and former presidential candidate, had urged Luder Sept. 30 to move the 1977 elections up to 1976 to help end political uncertainty.


180 days while the government enacted a system of price controls and regulated wage increases. President Maria Estela Martinez de Peron ordered a 20% acrossthe-board wage raise Nov. 4, following a 75% increase in the family allowance of workers Oct. 23. The government also arranged millions of dollars worth of foreign loans, many obtained by Economy Minister Antonio Cafiero on an 11-day visit to the U.S. and Venezuela. After returning to Argentina Sept. 9, Cafiero said he had arranged credits worth $1.6 billion from sources in­ cluding the International Monetary Fund, the Inter-American Development Bank and U.S. and Venezuelan banks. One loan agreement, worth $170 million, was signed Nov. 3 by Argen­ tina and a consortium of U.S. banks headed by Chemical Bank of New York. The credits would cover future Argentine grain imports. Among other economic developments: The government took over the financially troubled airline Aerolineas Argentinas Oct. 1. The airline had been struck sporadically by workers since July, and had suffered from fuel price increases and a passenger falloff. Domestic oil production had fallen by 4.3% in January-July, it was reported Nov. 21. Latest estimates put the 1975 wheat harvest at 8.2 million tons, 37% above the 1974 harvest, it was reported Dec. 12. Illegal exports of Argentine grain, fruit, tobacco, wine, timber, pharmaceutical products, edible and industrial oil, and other consumer goods and manufactures had reached an annual value of $650 million, the London newsletter Latin America reported Nov. 21. Most of the goods were sent through Paraguay to Brazil, although some also went to Chile, Uruguay and Bolivia. Smugglers operated in the open with virtual impunity, protected by officials in Formosa and other border provinces, the newsletter said.

Air force revolt fails. Right-wing air force officers seized two airports in Buenos Aires Dec. 18-22 in an unsuc­ cessful attempt to overthrow President Maria Estela Martinez de Peron. They


gave up after the three armed forces com­ manders refused to join the revolt. The rebels, led by Brig. Gen. Jesus Orlando Capellini, seized Jorge Newbery airport in Buenos Aires and the Moron air base outside the capital Dec. 18. They briefly held the air force commander, Gen. Hector Fautario, and they urged the army chief, Gen. Jorge Videla, to form a military government that would “eradi­ cate corruption and Marxist subversion in its causes and effects.” The government at first treated the re­ bellion as an internal air force matter, replacing Fautario with Gen. Orlando Agosti Dec. 18 in hopes of appeasing the rebels. However, the rebels held onto the airports Dec. 19 and flew planes over the capital, buzzing the Government House and dropping leaflets which denounced the Peron administration. They broadcast radio proclamations criticizing Peronist “misgovernment” and alluding to the prosperity of neighboring Brazil, which was ruled by its armed forces. The three military commanders met with Mrs. Peron Dec. 19 and told her that although they would not join the rebels, they felt only her resignation could end the nation’s political crisis, according to sources cited by the New York Times Dec. 20. Gen. Videla refused to send in army troops to end the revolt. Major labor organizations refused to support the rebels. The rebels negotiated with Gen. Agosti, but after talks broke down Dec. 20 Agosti ordered air force jets to strafe the Moron base. The rebels finally surrendered Dec. 22; the air force command said they would be “subject to sanctions to be decided by military justice.” Mrs. Peron praised the armed forces for their loyalty Dec. 22 and pledged to “exercise fully the powers that the people have given me.” She admitted that her government had “committed errors that we are trying to overcome every day,” but said she would “not accept that anyone, for any reason, try to usurp the power that belongs to the Argentine people.” Mrs. Peron was under continual criticism from political, labor and mil­ itary leaders for the alleged impotence and corruption of her administration. In an attempt to appease her critics and head off a military coup, she had decided Dec.



17 to move up the March 1977 elections to October 1976. The updating had first been suggested by the Radical Civic Union, the major opposition party. Much of the criticism of Mrs. Peron centered on judicial and congressional inquiries into alleged corruption in the social welfare ministry and the Crusade for Justicialista Solidarity, a semi-official Peronist charity. The congressional investigation was stalled Nov. 17 when Mrs. Peron refused to allow the investigative panel access to records of either the social welfare ministry or the Crusade. She ordered the four Peronist members of the seven­ member panel to abandon the investi­ gation, but only three complied, enabling the panel to begin its work Nov. 25 with a four-member majority composed of three opposition deputies and the Peronist deputy Luis Sobrino Aranda. (Although the corruption investigation proceeded, a committee of the Chamber of Deputies Dec. 12 threw out a bill of im­ peachment filed against Mrs. Peron by the San Juan Party Bloc, a Radical splinter group. The committee said the bill was “improper” and its charges lacked “sufficient grounds.”) In the judicial investigation, Judge Al­ fredo Nocetti Fasolino Nov. 20 ordered the arrest of former Social Welfare Minister Carlos Villone. Nocetti Dec. 11 ordered Jose Lopez Rega, the exiled former social welfare minister and pres­ idential adviser, to appear before him Dec. 29 to testify in the investigation. Mrs. Peron’s response to the investi­ gation and her alleged “monarchical” style of government had caused 28 Peronist deputies to break away from the government bloc in the Chamber, re­ moving the government’s majority there for the first time since May 1973, it was reported Dec. 17. Before the breakaway, the government had held a 142-101 ma­ jority.

Mrs. Peron cleared in corruption probe. A federal judge in Buenos Aires Dec. 30 cleared President Maria Estela Martinez de Peron of criminal liability in the drawing of a check for more than $700,000 from the Crusade for Justicialista Solidarity, a semi-official charity which Mrs. Peron headed.

Judge Alfredo Nocetti Fasolino, who was investigating alleged corruption in the Crusade and the social welfare ministry, found that Mrs. Peron had deposited the check in July in the bank account of the estate of her late husband, President Juan Peron, but had had the check withdrawn nine days later. She had drawn the check from the Crusade on the advice of ex-Justice Minister Antonio Benitez, Nocetti said. Nocetti ordered the arrest of former So­ cial Welfare Minister Lopez Rega, under whom the corruption in the social welfare ministry was alleged to have taken place, it was reported Dec. 30. Lopez Rega’s daughter had told Nocetti Dec. 29 that for health reasons Lopez Rega could not return to Argentina from Spain. Under strong pressure from the armed forces and her own political party, Mrs. Peron Dec. 30 dismissed Lopez Rega as her “ambassador extraordinary” in Eu­ rope. She also ended her attempts to block a congressional investigation of govern­ ment corruption, ordering the social welfare ministry to provide information sought by the investigating panel, it was reported Dec. 28. The archbishop of La Plata, Most Rev. Antonio Jose Plaza, charged Dec. 29 that Argentina was “falling apart because of the impotence of a government that lacks the authority to fulfill its duties.” The country was in “a situation of scandal” caused by inflation, contraband, “para­ sitic bureaucracy” and administrative in­ competence, Plaza asserted. “The bad ex­ ample set at the top encourages disorder, public thievery and subversion,” he de­ clared, “because there has never been such shameless corruption.” Archbishop Antonio Tortolo, vicar general of the armed forces and president of the National Council of Bishops, was reported Dec. 23 to be acting as an emissary for military leaders seeking Mrs. Peron’s resignation or leave of absence to end the political and economic crisis.

Violence Argentina spolitical and economic unrest in 1975 was coupled with mounting violence


throughout the country in the form of widespread political assassinations and as­ sociated killings. The year’s death toll was reported more than 1,000.

Most of the murders were presumed committed by rightists. Press reports noted that although police had arrested thousands of alleged leftist assassins under the state of siege, they had seized no rightists. Police were widely assumed to participate in right-wing terrorist attacks. The victims died in ambushes attributed to three terrorist organizations—the right­ ist Argentine Anticommunist Alliance (AAA), the Marxist People’s Revolu­ tionary Army (ERP) and the left-wing Peronist Montoneros group—and in shootouts between the terrorists and police.

Bombings & shootings. There were a series of bombings Jan. 2 in Tucuman, Santa Fe and Mendoza Provinces. The ex­ plosions caused considerable property damage but no casualties. The bombing targets included the He­ brew Society in Rosario (Santa Fe), and the home of a Communist Party leader in Mendoza and a university administrator and a professor in Tucuman. A policeman died Jan. 2 after being shot by presumed leftist guerrillas in Buenos Aires Dec. 30, 1974. He was the 227th victim of political violence in Argentina since the beginning of 1974, according to United Press International. The majority of the victims were leftists, UP1 reported. Rodolfo Saurnier, manager of an auto­ motive parts factory, was kidnapped out­ side Buenos Aires Jan. 8 by professed Montoneros guerrillas. There had been more than 100 abductions in Argentina in 1974, most by common criminals imitating leftist guerrillas and demanding large ransoms, according to UPI.

Anti-guerrilla officers killed— Thirteen senior army and police officers who were experts in counterinsurgency were killed in an airplane crash Jan. 6 in the moun­ tains of Tucuman Province, where leftist guerrillas were believed to be operating. One of the victims was Gen. Enrique Sal­ gado, commander of the 3rd Army.


Assassinations resume. At least 12 persons were killed Jan. 10-25 as right­ wing and left-wing extremists resumed their political assassination campaigns. The bodies of five persons were blown up in two separate bomb explosions in Buenos Aires Province Jan. 10. University student sources later said the victims were members of the left-wing Peronist Youth. A leftist Montonero guerrilla was mortally wounded Jan. 15 in a suburban Buenos Aires factory where he and nine comrades forcibly rounded up workers for a political indoctrination session. The same day, the left-wing People’s Revolu­ tionary Army (ERP) sent a message to the press asserting it would kill a busi­ nessman or government official for every “revolutionary” slain by authorities. A group of ERP guerrillas killed a Buenos Aires policeman Jan. 17 when he attempted to prevent one of them from distributing subversive pamphlets. The next day a police intelligence officer was murdered by presumed leftists in the Buenos Aires suburb of San Justo. About 15 ERP members briefly seized a television station in Cordoba Jan. 20 and broadcast a message denouncing the federal government and its take-over of the Cordoba provincial government in 1974. The federally-appointed governor of Cordoba Province, Gen. Raul Lacabanne, had instituted virtually indiscriminate repression which helped him combat leftist guerrillas but alienated all political parties, including the governing Justicialista Party, according to the London newsletter Latin America Jan. 17. (Cordoba’s provincial police chief, Hector Luis Garcia Rey, had resigned a week earlier. The government said he quit to protect his family, which was allegedly threatened by leftist guerrillas, but Latin America reported he was dismissed be­ cause members of the provincial police had beaten a federal police official to whom one of their victims had threatened to complain.) Some 30 members of the Argentine An­ ticommunist Alliance (AAA), the right­ wing assassination squad, invaded the plant of the moderate Cordoba newspaper La Voz del Interior Jan. 23 and blew up its printing presses, causing an estimated

32 $600,000 in damages. The paper, Cordoba’s largest, had angered many po­ licemen in 1974 by detailing charges against 19 police officers accused of exe­ cuting five farmers after mistaking them for guerrillas. The home of the publisher of El Diario, an apolitical newspaper in La Plata, was bombed by unknown assailants Jan. 24. The explosion caused some property damage but no injuries. Right-wing Peronist labor leader Alberto Bayarsky was assassinated in Bahia Blanca Jan. 24, and two young men apparently linked to the ERP were killed in Tucuman the next day. Fortunato Canziani, a high official in the Labor Ministry, was killed by ERP members in Buenos Aires Jan. 28. His bodyguard also was killed. Police in La Plata announced the arrest of 14 ERP guerrillas Jan. 29, asserting they included two French citizens and four Paraguayans. The ERP said in a commu­ nique the next day that if 19 captured guerrillas were not proved to be “safe and sound” within 72 hours, it would “indis­ criminately execute officials of the govern­ ment and leaders of the ruling party.” Twelve more ERP members were ar­ rested Jan. 31 in Cordoba and Santa Fe, according to police. Oscar Lallia, a conservative Peronist and union leader in La Plata, was assassinated Jan. 29. Rodolfo Chavez, a labor leader in Tucuman, was murdered along with three bodyguards Feb. 4, and Antonio Muscat, an executive in the Bunge & Born trading conglomerate, was murdered in Quilmes, Buenos Aires Province Feb. 7. The Montoneros, the left-wing Peronist guerrillas, claimed to have killed Muscat and kidnapped Carlos Goguei, another Bunge & Born executive, Feb. 7. Eleven bombs exploded in Rosario early Feb. 1, damaging the homes of several political officials and business executives. In San Luis, explosions partly destroyed the homes of Sen. Carlos Franco and Deputy Luis Cazanza, critics of the provincial government. Twenty-one ERP guerrillas were ar­ rested in Mar del Plata and another 12 were seized in Cordoba Feb. 11, au­ thorities reported.

LATIN AMERICA 1975 Hipólito Acuna, a right-wing Peronist deputy from Santa Fe, was assassinated Feb. 14. The same day two leftist labor leaders were killed in San Justo, outside Buenos Aires, presumably by the Ar­ gentine Anticommunist Alliance (AAA), the rightist assassination squad. Although thousands of leftists had been arrested under the state of siege, no AAA members had been seized. The squad was widely believed to consist of off-duty police and soldiers. Interior Minister Alberto Rocamora made the government’s first attack on the AAA Jan. 28, denouncing its Jan. 23 raid on the Cordoba newspaper La Voz del Interior. Security forces carried out a nationwide sweep against alleged subversives Feb. 15, reportedly arresting about 1,000 persons in Buenos Aires, Cordoba, Mendoza and Santa Fe Provinces. Presumed members of the AAA killed and then blew up the body of newsman Jaime Luciano outside Salta Feb. 16. Police conducted about 40 raids in Buenos Aires, Salta and Cordoba Provinces Feb. 18, reportedly arresting 206 persons on suspicion of “extremist actions.” One policeman was killed and three others were wounded by terrorists in Buenos Aires Feb. 19. Teodoro Ponce, a right-wing Peronist labor leader in Rosario, was assassinated Feb. 21. Army pursues guerrillas. President Maria Estela Martinez de Perón Feb. 9 ordered the army to destroy a “rural column” of the left-wing People’s Revolu­ tionary Army (ERP) in Tucuman Province. Some 3,500 soldiers began pursuing the guerrillas in the Tucuman mountains, joined later by 1,500 more troops and police. They occupied towns and villages and patrolled roads, but fought few clashes with the insurgents. One clash, reported Feb. 15 near the locality of Pueblo Viejo, left one soldier and three guerrillas dead, and three soldiers wounded. Some 50 insurgents were reported arrested by Feb. 19. The military campaign, supported by a $5.1 million federal contribution to the Tucuman provincial treasury, was en­ dorsed by virtually the entire Argentine


press, according to the Washington Post Feb. 20. Reporters were not allowed into the military operation area. (Ricardo Balbin, leader of the op­ position Radical Civic Union, said Feb. 17 that ERP leader Roberto Santucho had declared a 620 mile “liberated zone” in Tucuman and demanded international protection for its borders as well as treatment of captured guerrillas as prisoners of war.)

U.S. aide assassinated. The U.S. hon­ orary consul in Cordoba, John Patrick Egan, was kidnapped by Montoneros guerrillas and murdered after the govern­ ment refused to negotiate for his release. Egan, a retired businessman, was seized by the Peronist insurgents at his suburban home Feb. 26. A communique to the press the next day said he would be “executed by firing squad” at 7 p.m. Feb. 28 unless the government proved that four recently arrested Montoneros were “safe and sound” by showing them on television. The note called Egan “the principal representative of Yankee interests” in Cordoba and it accused the government of “subjecting the people to economic ex­ ploitation and to police and army repression while it hands our country over to the Yankees.” Interior Minister Alberto Rocainora said Feb. 28 that the government would not negotiate with the guerrillas “for any reason.” That night Egan’s body was found at the side of a road outside Cordoba, shot once through the head and wrapped in a Montoneros flag. The Montoneros issued a “war commu­ nique” March 1 blaming the govern­ ment’s intransigence for Egan’s execution and accusing the regime of “sending its own accomplices to their deaths.” U.S. Secretary of State Henry Kis­ singer denounced the murder Feb. 28 as “a senseless and despicable crime which shocks the sensibilities of all civilized men.” President Ford March 1 called the assassination “a vicious act which will be condemned by men of decency and honor everywhere.” U.S. aides in Argentina made unofficial protests to the government because Egan’s police protection had been with­


drawn a few days before the kidnapping, the Washington Post reported March 4. Cordoba police March 3 arrested 50 per­ sons in connection with Egan’s death.

Guerrilla action. The Monteneros Feb. 28 kidnapped the president of the Buenos Aires Province Supreme Court, Hugo Al­ fredo Anzorreguy, saying they would hold him until the government freed Sergio Schneider, an imprisoned guerrilla. One policeman was killed in Cordoba and another in Rosario in ambushes by unknown persons Feb. 23. A civilian bystander was killed in La Plata the same day during an attack on a passing police car. In Salta, the police chief said he had arrested three persons who had allegedly plotted to kill the provincial governor, the mayor of the capital, and the local Justicialista Party chief. Police disclosed Feb. 24 that two mem­ bers of the leftist People’s Revolutionary Army (ERP) had been killed outside Buenos Aires Feb. 21 while resisting ar­ rest for distributing subversive literature. Two more ERP members were killed by police in Cordoba Feb. 24. Montoneros killed three policemen in an ambush in Buenos Aires Feb. 28. Another policeman died in a bomb explo­ sion in Tucuman. Adolfo Cavalli, a former petroleum workers union leader and Justicialista official, was murdered March 1. Unidentified gunmen March 2 gravely wounded Eustaquio Tolosa, a Peronist port workers’ leader in Buenos Aires. The same day a soldier was killed when a bomb exploded in his car in Tucuman, and the body of a Buenos Aires Province official was found outside the capital. At least four persons were killed in Tucuman March 4 when a bomb exploded in their car. Four bombs exploded March 8 at the homes of councilmen in Santa Fe, but they caused only property damage. Two policemen were killed and two more wounded March 8 in a shootout with guerrillas in Buenos Aires. A police coroner was reported killed in Rosario March 9, a police officer was assassinated in Tigre (Buenos Aires Province) March 10, and two more officers were murdered in a suburb of the capital March 11.


Police in Buenos Aires found the bulletriddled bodies of five young men in a va­ cant lot March 12. Two of the five were later identified as members of the So­ cialist Workers Party, and their murder was tentatively attributed to the AAA. A member of the left-wing Peronist Youth was killed in La Plata March 13, pre­ sumably also by the AAA. Two more bullet-riddled bodies were found in La Plata March 14. A policeman was killed in Cordoba March 13 when he refused to hand over his gun to men who intercepted him as he descended from a bus. The same day in Buenos Aires police killed three men who resisted when asked for identification. Two sailors were wounded March 16 when unidentified gunmen attacked a naval station in Berisso, south of Buenos Aires. The next day police killed three alleged leftist guerrillas in San Antonio de Padua, just west of the capital. A policeman and a female guerrilla were killed in separate shootouts in Buenos Aires March 18. The next day police found the bullet-riddled and burned bodies of four persons in a garbage dump in a suburb of the capital. Amid the bloodshed, the government announced that it had broken up a “vast subversive terrorist operation” designed to assassinate labor leaders and to paralyze production in the industrial belt along the Parana River northwest of Buenos Aires. Security forces subsequently arrested hundreds of persons, including many workers and labor leaders belonging to a dissident leftist branch of the Metallur­ gical Workers Union (UOM), which was run by conservative Peronists and strong supporters of the federal government. To protest the arrests, hundreds of workers struck March 20 22 at steel plants and other factories in San Nicolas (Buenos Aires Province) and in Villa Constitución and Rosario (Santa Fe Province). The national leadership of the UOM recently had been losing the support of workers in the Parana belt who were dis­ gruntled over economic conditions, the New York Times noted March 22. According to the government, the alleged plotters had planned to take over trade union headquarters in the area and

LATIN AMERICA 1975 to prevent workers in key posts from car­ rying out their duties, thus “paralyzing the most important production lines” in every company, the Times reported March 21. The plot “clearly specified the use of terrorism in all its forms, including the physical elimination of people who op­ posed the conspiracy,” the government asserted. The alleged plot was discovered as the current wave of political violence cul­ minated in 24 killings March 20-22. The victims included a left-wing Peronist coun­ cilman, a priest and several trade unionists and policemen in La Plata, Buenos Aires, Mar del Plata, Tucuman, Cordoba and Bahia Blanca.

Anzorreguy freed—Hugo Alfredo Anzorreguy, the Buenos Aires Supreme Court judge kidnapped by leftist guerrillas Feb. 28, was freed by his captors March 5 after the government released Sergio Schneider, an imprisoned subversive. Schneider was deported to Peru March 3. Schneider belonged to the small Liberation Armed Forces (FAL), which collaborated with the Montoneros in Anzorreguy’s abduction. It was the first time the two terrorist groups had worked together, according to the London news­ letter Latin America March 7. Schneider declared in Peru that his group sought “the creation of a socialist state in Argen­ tina through the only alternative, a revolu­ tionary war.” Among other kidnap developments: Alfonso Marguerite, an executive of the Bunge & Born trading conglomerate kid­ napped in 1974, was freed March 8 after a ransom of $500,000 reportedly was paid to his captors, presumed to be Monto­ neros. Aldo Tedeschi, an automobile parts factory owner also kidnapped in 1974, was also freed March 8. No ransom was reported.

Violence protested. Protesting the ter­ rorism, federal deputies from the op­ position Radical Civic Union demanded April 2 that the government tell the Chamber of Deputies what “measures are being taken to discover the assassins of


policemen and soldiers as well as the authors of the barbarous killings that oc­ curred in Temperley, Lomas de Zamora and Mar del Plata.” Police in those three localities recently had found the dy­ namited bodies of 13 persons kidnapped earlier, presumably by the AAA. The Radicals noted that while the government was effectively combatting “violence unleashed by the extreme left,” it had not arrested a single member of the AAA. “This impunity,” they declared, “cannot be attributed to the inefficiency of our security organisms, and it com­ promises the government itself.” “Bodies appear by the hundreds along public roads, but so far the government has not investigated a single case or ar­ rested one culprit or suspect,” the deputies asserted. These bodies usually bore the accepted “signatures” of the AAA—signs of torture, dozens of bullet wounds and, often, mutilation by fire or explosives. Responding to the Radicals’ demand, the armed forces commander, Lt. Gen. Leandro Anaya, briefed legislators on the ERP April 17. He said the guerrilla group was linked to the Fourth Communist International and to the Cuban govern­ ment. He added that the ERP kept in close touch with the Montoneros, despite their ideological differences, and the two groups had agreed that the ERP would operate in rural areas and the Monto­ neros in Argentina’s cities. Interior Minister Alberto Rocamora appeared before Congress April 19 and disclosed that the government was holding 1,117 detainees under the state of siege. He denied widespread rumors that the AAA was a parapolice group. “What makes a repressive police action [against the AAA] difficult is that it acts . . . against the left, a task in which the armed forces and security forces are also en­ gaged,” Rocamora said. The AAA distributed leaflets April 25 threatening to kill 16 prominent newsmen and actors unless they left the country by April 28. The 16, who included the wellknown Uruguayan writer Mario Benedetti, went into hiding rather than emigrate, the London Times reported April 29.


Among other recent terrorist develop­ ments: In Mar del Plata, the bullet-riddled body of a university administrator was found by police March 24, and a left-wing Peronist medical student was found mur­ dered March 28. The killings were at­ tributed to the AAA. Presumed leftist guerrillas killed army Col. Martin Rico in a suburb of Buenos Aires March 27. A policeman was killed in Santa Fe Province March 29, reportedly by the ERP, and a policeman and army colonel were shot to death in Buenos Aires April 2 in an assassination attempt by presumed leftists against Gab­ riel Morales, an aide to Social Welfare Minister Jose Lopez Rega. Morales was seriously wounded. Police killed two presumed leftists in Buenos Aires Province March 29, and they announced the arrest of 19 ERP and Montoneros guerrillas in Cordoba April 2. The army reported killing two ERP members April 3 when the guerrillas tried to ambush a military patrol. Police in Buenos Aires reported killing two ERP members and arresting some 50 leftists April 3, including 20 members of the Tupamaros guerrilla group of Uruguay. The Buenos Aires branch of the ItaloBelgian Bank was damaged April 4 by a bomb presumably detonated by leftists. Leftists were also held responsible for the bombing the same day of the home of Norberto Kozaim, a Social Welfare Ministry official, and for the murder April 5 of Jose Chirino, a conservative leader of the Metallurgical Workers Union. Police found six bullet-riddled bodies April 6 on the road from Buenos Aires to Ezeiza International Airport. Next to the victims was a placard, attributed to the AAA, saying: “We were from the ERP, the Montoneros and the FAR.” The last group, the Revolutionary Armed Forces, was a leftist guerrilla band. Police said April 8 that four of the victims were Chil­ ean. (Chilean journalist Ernesto Carmona reported in the Venezuelan newspaper El Nacional April 26 that Argentine security forces were carrying out a “pogrom” of Chilean leftists who had taken refuge in Argentina after the 1973 military coup


against the late Chilean President Salvador Allende. The persecution and murder of Chileans in Argentina was car­ ried out in collaboration with the Chilean embassy in Buenos Aires and the Chilean military intelligence service, Carmona said.) The government news agency Telam reported April 7 that police had arrested 13 leftist subversives in Mendoza Province and 17 in Comodoro Rivadavia. Police in Buenos Aires announced April 10 that they had discovered a leftist arms factory in Moron and arrested four Argentine and 21 Uruguayan guerrillas who were meeting to coordinate subversive activities by the ERP, the Tupamaros, the Revolu­ tionary Left Movement of Chile and the National Liberation Army of Bolivia. A policeman guarding the home of the British ambassador in Buenos Aires was killed April 25 when a bomb exploded in front of the residence. Police killed four alleged ERP guer­ rillas in a shootout in the Buenos Aires suburb of San Justo April 11, and they killed five alleged Montoneros in the suburb of Campana the next day. Guer­ rillas killed an army colonel in a raid on an army arsenal outside Rosario April 13, and they killed two policemen in Jujuy April 17. Two guerrillas were killed in the Rosario incident and two more in the Jujuy attack. Police announced the arrest April 17 of three prominent leaders of the left-wing Peronist Youth (JP)—Juan Carlos Dante Gullo, Dardo Cabo and Emiliano Costa— for allegedly plotting to assassinate Chil­ ean President Augusto Pinochet Ugarte during Pinochet’s visit to Argentina April 18. Authorities said the three leaders and several comrades were preparing to receive a large ransom for the business executives Juan and Jorge Born, who were kidnapped in 1974 by the Montoneros, the JP’s armed wing. , Police reported killing seven ERP members in a shootout in Salta April 20 and another five guerrillas in Buenos Aires April 22. The second group reportedly was preparing a jail break for imprisoned comrades. AAA assassinations increase. Presumed members of the right-wing Argentine


Anti-communist Alliance (AAA) assassi­ nated at least 29 persons in May and they killed at least eight more in the first half of June despite pledging May 30 to suspend operations for 90 days. Among recent AAA victims was Jorge Money, financial reporter for the Buenos Aires newspaper La Opinion, whose bullet-riddled body was found May 18 near Ezeiza airport outside Buenos Aires. Journalists and typographers in the capital went on strike to protest the murder May 20, closing down five of the city’s eight newspapers. The AAA also threatened other prominent liberal journalists, forcing at least three—an economic specialist of La Opinion and the editor and publisher of the Roman Catholic magazine Christian Family—to leave the country, it was reported May 24. In addition, presumed AAA members May 24 blew up the front of the building of the newspaper La Voz del Pueblo in Monte Grande, south of Buenos Aires. AAA actions against liberal journalists coincided with new government restric­ tions on the press, protested vigorously by the Association of Argentine Newspaper Enterprises. A decree enacted May 20 forbade Argentine publications to print reports on Argentina by foreign news agencies, and ordered all news agencies and their correspondents to register with an unspecified government agency within 90 days. The government also specifically attacked La Opinion and the Buenos Aires daily El Cronista Comercial, implying in a television broadcast May 18 that they aided subversives. Other recent AAA victims included Al­ fredo Ongaro, son of the jailed typogra­ phers’ union leader Raymundo Ongaro, slain outside Buenos Aires May 8, and Ramon Zaragoza, a La Plata student leader whose assassination was reported by the Federation of Communist Youths June 10. Protests against AAA terrorism grew in May, particularly among legislators and leaders of the opposition Radical Civic Union. A Radical document released May 24 charged: “The fear that anguishes and enervates is taking over the body of the re­ public,” and “the authors of [AAA] vio­ lence act amid an evident impunity.” The

ARGENTINA statement referred to the fact that while hundreds of left-wing terrorists had been arrested, not a single member of the AAA had been captured. Interior Minister Alberto Rocamora May 27 denied charges from Radicals and others that the government was pro­ tecting the AAA, whose members were rumored to be police and military officers. Social Welfare Minister Jose Lopez Rega, whom many observers linked directly to the AAA, asserted May 29 that the government “will not tolerate” terrorism from any group and that it would investigate the “motives” and “members” of the AAA. The next day news agencies in Buenos Aires received a communique signed by the “Federal Command” of the AAA pledging an end to terrorism for 90 days while the group decided on new methods to “combat adequately the Marxist guer­ rilla.” In the meantime, the communique said, the government should order the death penalty or life imprisonment for ter­ rorists and their direct or indirect sup­ porters. Despite this pledge, another commu­ nique signed by the AAA “National Executive Board” and sent to news agen­ cies June 3, pledged to kill four prominent military men and politicians who were found to be “incompatible with the final objectives of our movement and the in­ terests of the fatherland.” The four were Adm. Emilio Massera, the navy com­ mander; Gen. Jose Videla, an army di­ vision commander; Francisco Manrique, a right-wing politician and former pres­ idential candidate; and Raul Alfonsin, a Radical leader who was particular critical of the AAA’s freedom of operation. The AAA’s truce pledge was also abrogated by the murder of Ramon Za­ ragoza June 10, and the slaying of two per­ sons in La Plata and five more outside Buenos Aires June 15.

Montoneros free Bom brothers. Juan and Jorge Born, top executives of the Bunge & Born trading conglomerate, were released after their company paid a reported $60 million ransom to the Mon­ toneros guerrilla group, which had kid­ napped them in September 1974.

37 Jorge Born was freed June 20 at a clan­ destine press conference held by Monto­ neros leader Mario Firmenich. Juan reportedly had been released more than a month earlier after suffering psycho­ logical problems in captivity. Both brothers had been treated well by the Montoneros, according to family sources. The massive ransom distressed govern­ ment and military officials. The govern­ ment ordered an investigation of the payment June 23 to determine whether it violated tax or foreign exchange laws. (Much of the ransom was presumed smuggled into Argentina in U.S. dollars.) Seven Bunge & Born executives were ar­ rested June 25- 26, according to police. In addition to the $60 million (a figure Bunge & Born neither confirmed nor denied), the company also distributed $1.2 million worth of food and clothing in poor neighborhoods around the country—some of which the police claimed to have inter­ cepted—and it paid for the publication June 19 of a Montoneros statement in Ar­ gentine and foreign newspapers. The statement accused Bunge & Born of having exploited Argentine workers and having supported the 1955 military coup against the late President Juan Perón. The Born brothers had been “tried” on these charges and sentenced to one year in prison, reduced to nine months, and their company had been sentenced to pay the ransom and to immediately resolve labor conflicts it had experienced since the brothers’ abduction, according to the statement. At his press conference June 20, Firme­ nich asserted the ransom money would be used to create “people’s power; to develop an integral war against imperialism, and to establish definitive national liberation.” The money “stolen from the people is being returned to the people,” he said. Firmenich unexpectedly criticized the late President Perón, asserting Perón had committed “many errors for which we are now paying dearly.” Among these was allowing the rise to political prominence of Social Welfare Minister Jose Lopez Rega, who the Monteneros “had con­ demned to death by firing squad,” Firmenich said. The Borns’ ransoming followed a number of guerrilla attacks by the Mon­ toneros and the other major left-wing ter­


rorist group, the People’s Revolutionary Army (ERP). Among recent develop­ ments: Some 50 presumed Montoneros April 25 attacked the police station in Villa Concepcion (Santa Fe Province), where steel workers had been on strike for more than a month. Several policemen and guer­ rillas died. Montoneros assassinated the public relations officer of the local steel woiks May 17, and they shot and wounded the town’s mayor June 6. Montoneros June 4 murdered Raul Amelong, manager of the Acindar steel firm in Rosario, in reprisal for alleged repression against striking employes. David Bargut, another Rosario steel executive, had been assassinated the day before, but he was presumed killed by the ERP, which had sprayed his home with machinegun fire in 1974. Soldiers in Tucuman Province, the center of ERP operations, had fought two battles with the Marxist guerrillas May 30, in which one insurgent and five soldiers were reported killed. The army announced June 24 that soldiers had killed seven ERP members in Tucuman in the previous 48 hours. ERP guerrillas had engineered the es­ cape of 26 female political prisoners in Cordoba May 25. Three policemen were murdered in Cordoba June 12, pre­ sumably by guerrillas, and two guerrillas were killed by police there June 24, ac­ cording to official reports. Juan Enrique Pelayez, a bank workers’ leader linked to the Peronist right wing, was assassinated in Sante Fe June 10, pre­ sumably by leftists. Angel Iglesias, a unionist in La Plata, was murdered June 29. In Bahia Blanca the same day, presumed leftists exploded a bomb at the home of Adalberto Wimer, press sec­ retary of the local branch of the General Labor Confederation. The bomb caused property damages but no casualties.

Deaths mount in political violence. At least 102 persons were killed in political violence throughout Argentina July 27 Sept. 12. The victims included policemen, sol­ diers and members of the two major leftist guerrilla groups, the People’iRevo-

LATIN AMERICA 1975 lutionary Army (ERP) and the Monto­ neros. Soldiers pursued ERP insurgents in the mountains of Tucuman Province, while police fought Montoneros and ERP members in Cordoba, Buenos Aires, La Plata and other cities. The victims also included leftist ci­ vilians presumed killed by the AAA. In response to the violence, the govern­ ment formally outlawed the Montoneros Sept. 8, forbidding any mention of the group’s activities in the press. The battle against leftist guerrillas became the prin­ cipal concern of the army under its new commander, Gen. Jorge Videla, it was reported Sept. 12. Several of the guerrilla attacks were connected with the third anniversary of the killing of 16 guerrillas at the naval air base at Trelew, Chubut Province on Aug. 22, 1972. Several bombs exploded in Cordoba Aug. 22, and the Montoneros blew up a missile-launching frigate at the naval shipyard in Rio Santiago, south of Buenos Aires. Right-wing assassins claiming alle­ giance to the late President Juan Perón had killed four relatives of the slain guer­ rilla Mariano Pujadas Aug. 15 in an ap­ parent attempt to provoke extensive guer­ rilla violence that would encourage the army to seize power. Guerrillas killed five policemen in Cordoba Aug. 20 in apparent retaliation for the Pujadas murders. Policemen and soldiers claimed to have killed and arrested dozens of leftist insur­ gents in August and September, particu­ larly in Tucuman. An unidentified army general in Tucuman said Aug. 30 that 800 guerrillas, including ones of Chilean and Uruguayan nationality, had been killed, wounded or arrested during the army’s seven-month offensive in the province. A bomb exploded by the Montoneros at the Tucuman airport Aug. 28 set fire to a military transport airplane carrying some 120 antiguerrilla troops. At least four sol­ diers were killed in the fire and 25 were wounded. In other terrorism, Charles Agnew Lockwood, the British financier kid­ napped by the ERP and ransomed for some $2 million in 1973, was abducted again July 31. Police rescued him in suburban Buenos Aires Aug. 31, killing four of his captors, all ERP members.


Frank Ingrey, an Anglo-Argentine businessman, was found dead in Buenos Aires Sept. 10. He had been kidnapped and held for 20 days in April by an unidentified guerrilla group. Julio Larrabure, an army major kid­ napped by the ERP in 1974, was found dead in Rosario Aug. 23. The ERP reported the day before that he had com­ mitted suicide in captivity. The ERP had offered Aug. 2 to free Larrabure and end all terrorist operations if the government freed all political prisoners, lifted the ER P’s illegal status and revoked “all repressive legislation.” The government made no reply to the offer.

150 die in one-month period. At least 150 persons were killed in political violence Sept. 15-Oct. 13. Most of the victims were soldiers, po­ licemen or members of the two major left­ wing guerrilla groups, the People’s Revo­ lutionary Army (ERP) and the Monto­ neros. Other victims were bystanders slain in shootouts between police and guerrillas, and leftists murdered by right­ wing commandos, notably the Argentine Anticommunist Alliance (AAA). The violence culminated Oct. 5-8 with separate series of attacks staged by the Montoneros in Formosa and the ERP in Tucuman. The attacks and subsequent se­ curity sweeps against the guerrillas left 86 persons dead, a majority of them guer­ rillas, according to officials. At least 30 persons were killed in Formosa Oct. 5 when the Montoneros assaulted the local army garrison, the air­ port and the federal prison. The first two attacks were apparently intended to divert attention from the third, an unsuccessful attempt to free several jailed insurgents. The Montoneros asserted in a commu­ nique Oct. 8 that they were forming “a regular army” to help “the people take power in the country.” The Formosa operation showed “the weakness of the enemy,” proving there was “no place in the country, not even the most isolated garrisons, where the military forces of reaction at the service of imperialism and the oligarchy can feel secure,” the Monto­ neros declared.


An intensive search for guerrillas began in Formosa Oct. 6 as the army com­ mander, Gen. Jorge Videla, flew in from Buenos Aires. At least 12 Montoneros were killed in the city that day, five at­ tempting to free wounded comrades from a hospital. At least four guerrillas were killed and 30 arrested Oct. 7. More than 200 ERP members attacked three military garrisons in Tucuman Province and set off eight bombs in the city of Tucuman Oct. 8, killing at least 31 persons. One of the bombs badly damaged the palace of the Roman Catholic arch­ bishop. The attacks, commemorating the eighth anniversary of the death of guer­ rilla leader Ernesto “Che” Guevara and the 80th birthday of the late President Juan Peron, brought a wave of arrests in Tucuman, Buenos Aires, Mendoza, Santa Fe and La Plata. Some 165 persons were reported seized in Buenos Aires and 29 ERP members were reported arrested in La Plata. In response to earlier guerrilla violence, including the murder of the military in­ telligence chief Sept. 17, Interim Pres­ ident Italo Luder had created a National Defense Council Oct. 2 to direct secu­ rity operations. The council consisted of Luder, Defense Minister Tomas Vottero and the three armed forces commanders. To carry out the council’s directives, Luder Oct. 6 established an Internal Se­ curity Council composed of himself, the cabinet ministers and representatives of all security forces. As in the past, the government took no apparent notice of murders by the AAA and other rightist commandos. Two law­ yers who had defended leftist political prisoners were murdered in Rosario Sept. 30, presumably by the AAA. The next day an editorial in the Buenos Aires news­ paper La Opinion, said: “In Argentina there are more executions than in Spain, but no member of the international com­ munity feels obligated to protest the 100 death sentences [carried out but] not made official in September.” Marcos Osatinsky, a Montoneros leader arrested Aug. 8, was tortured and then executed in Cordoba Aug. 21, according to the French newspaper Le Monde Oct. 9. A group of French lawyers who visited Argentina in May on behalf of the Inter­


National Federation for the Rights of Man and the International Movement of Catholic Jurists, asserted Oct. 9 that repression, terrorism and torture had be­ come “a form of government” in Argen­ tina. Government repression was directed “only against armed groups of the ex­ treme left,” allowing rightist commandos to operate “with total impunity,” the lawyers said. The expulsion from Argen­ tina of former Social Welfare Minister Jose Lopez Rega, the alleged organizer of the AAA, “does not seem to have changed the situation substantively,” they added. In other terrorism, 10 bombs were exploded by presumed left-wing guerril­ las in Cordoba Sept. 23, one severely damaging the office of Xerox Corp, of the U.S. Police reported Sept. 24 that an executive of another U.S. firm, Otis El­ evator Co., had been kidnapped by the ERP July 9 and ransomed for $2 million Aug. 22. The executive, Jean Deloubieux, was a French citizen on a business visit to Argentina. New antiguerrilla campaign begun. The armed forces Nov. 17 announced the be­ ginning of a new, nationwide campaign against left-wing guerrillas, following the deaths of another 50 persons in political violence since Oct. 14. More than 1,000 persons were arrested in Buenos Aires and other cities in the first week of the campaign, according to mil­ itary sources quoted in press reports Nov. 22. Some 1,300 persons had been reported arrested in Mendoza Province Nov. 9, and large-scale arrests had also been reported in Cordoba, Rosario, Santa Fe, Bahia Blanca and Mar del Plata. Under the new campaign the army took command of antiguerrilla operations by the police, and the navy joined in security sweeps for the first time. The air force had joined the action earlier, making its first air strikes against guerrillas of the People’s Revolutionary Army (ERP) in Tucuman Province Nov. 7. Among those arrested as the campaign began were 300 striking workers at an iron mine in the southern town of Sierra Grande, it was reported Nov. 20, and several officials of the Authentic Party, a left-wing Peronist organization that had


ties with the Montoneros guerrilla group, it was reported Nov. 28. In Tucuman, where nine ERP guerrillas were reported killed Oct. 25-Nov. 8, the army claimed the insurgent movement was all but defeated. However, the London newsletter Latin America re­ ported Nov. 28 that the guerrillas were surviving, although they were confined by the army to the uninhabited mountains southwest of San Miguel, the provincial capital. The army had lost 29 men while killing more than 110 guerrillas since Feb­ ruary, it was reported Nov. 11. (Many observers discredited the army’s reports of its clashes with the ERP, which always listed at least twice as many guer­ rilla casualties as army victims, Latin America noted Nov. 28. According to local journalists, the favorable body count was maintained by killing detainees held “in a special reservoir of suspected guer­ rilla activists,” the newsletter reported.) The antiguerrilla sweeps were accom­ panied by continued harassment of the press by authorities and by rightist com­ mandos. The English-language Buenos Aires Herald was raided by police Oct. 22 and its political columnist, Andrew Graham-Yooll, was arrested and held until the next day on charges of having ties to a guerrilla group. Ana Basualdo, a reporter, for the magazines Abril and Claudia, was kidnapped, beaten and threatened by rightists Oct. 18, and Heriberto Kahn, political columnist for the newspaper La Opinion, was threatened in the rightist magazine El Caudillo Nov. 8. Rightists also threatened a number of federal deputies. A group calling itself Liberators of America warned 10 deputies of the opposition Radical Civic Union Nov. 10 that they would be killed within 72 hours unless they voted to unseat a Peronist deputy, Jaime Dri, who was reportedly linked to the Montoneros. Members of the Argentine Anticom­ munist Alliance threatened to kill mem­ bers of the congressional panel which was investigating charges of corruption in the federal administration, it was reported Nov. 16. Rightists were also held responsible for a bomb explosion in Cordoba Nov. 16 that destroyed the site of a planned congress of the Authentic Party. The congress began


at another location that day and the party renewed its call for the resignation of President Maria Estela Martinez de Perón. Among other terrorist incidents: The bullet-riddled body of a policeman was found in suburban Buenos Aires Oct. 14 and three other bodies were discovered in Rosario Oct. 15. Police killed two alleged ERP guerrillas outside Buenos Aires Oct. 15, and unidentified gunmen killed Reinaldo Dalbosco, an Italian executive of an electronic supplies factory, and his bodyguard, who apparently resisted an attempt to kidnap Dalbosco. Alleged ERP guerrillas killed a po­ liceman in suburban Buenos Aires Oct. 20, while other leftists murdered a leader of the Metallurgical Workers Union in Rosario. The assistant chief of the federal police escaped an ambush by some 40 guerrillas in Buenos Aires Oct. 24, but five policemen were killed in an ambush in the suburb of San Isidro Oct. 26. Arturo Longriotti, a retired naval commodore, was murdered by presumed guerrillas in the Buenos Aires suburb of Castelar Oct. 25. Heinrich Franz Metz, production manager of the Mercedes-Benz’ truck plant in Buenos Aires, was kidnapped by Montoneros guerrillas Oct. 24. A com­ munique from the kidnappers Oct. 27 said Metz would be held until Mercedes re­ hired 200 workers fired earlier and satisfied the economic demands of some 4,000 workers on strike since Oct. 8. The Montoneros Oct. 29 murdered Alberto Salas, personnel manager of two com­ panies owned by the Fiat auto manufac­ turers in Cordoba. Leftist guerrillas invaded the town of Alejandro Korn (Buenos Aires Province) Oct. 31, robbing the local bank and firing on the police station. Leftists were held responsible for the murders Nov. 3 of Ramon Rojas, a federal deputy in San Juan Province, and Jose Elio Robles, a re­ tired police commissioner of Cordoba. Three policemen and a suspected left­ wing extremist were killed in shoot-outs in La Plata and Buenos Aires Nov. 13. The government was also vexed by a continuation of political violence, most from the extreme right. An estimated 55 persons were killed in politically moti­

41 vated attacks in Buenos Aires and other cities Dec. 1-15. Rightists in Tucuman Dec. 1 blew up a small truck containing the bodies of at least seven presumed left-wing guerrillas. Four persons were killed in Tucuman the next day as presumed rightists bombed the home of relatives of Clarisa Laplace, a leftist guerrilla killed by authorities in 1972 at the Trelew prison in Patagonia. Members of the Montoneros guerrilla group Dec. 3 assassinated retired Gen. Jorge Caceres Monie and his wife, ac­ cusing Caceres in a communique of leading “repression against the Peronist people” when he served as federal police chief under the military government which gave up power in 1973. In retaliation for Caceres’ murder, members of the right­ wing Liberators of America group killed nine students at Cordoba University early Dec. 4. (Five of the Cordoba victims were Boli­ vian citizens. Their deaths provoked widespread protests in Bolivia Dec. 5; the Bolivian foreign ministry asked Argentina to make a full investigation of the killings Dec. 6.)

100 killed in arsenal attack. More than 100 persons were killed Dec. 23-24 when left-wing guerrillas attacked an army arsenal outside Buenos Aires in an unsuccessful attempt to steal automatic rifles and heavy weapons. The guerrillas, numbering 500-1,000, invaded the Domingo Viejobueno arsenal at Monte Chingolo late Dec. 23, while diversionary attacks were made on an in­ fantry regiment and police stations else­ where outside Buenos Aires. At the ar­ senal the guerrillas were surrounded and subjected to a withering assault by troops and police on the ground and in he­ licopters. The battle lasted several hours before the insurgents succumbed. The army said 107 persons—88 guer­ rillas, seven soldiers and 12 civilians—died in the battle at the arsenal and in the sub­ sequent pursuit of the guerrillas. How­ ever, military sources quoted in press re­ ports put the death toll closer to 150. Sources quoted by the London Times Dec. 29 said the army had been fore­ warned of the attack.

42 The guerrillas were officially identified as members of the Marxist People’s Revolutionary Army (ERP), but military analysts quoted in press reports believed the attack was a joint operation of the ERP and the Peronist Montoneros guer­ rillas. The two insurgent groups had in­ creasingly coordinated their attacks in re­ cent months. Army Commander Gen. Jorge Videla hailed the repulsion of the attack Dec. 24 as a “resounding triumph for the forces of order.” In a warning to the government, Videla said the army demanded immediate “reforms in the country,” punishment of “immorality and corruption,” and an end to “political, economic and ideological speculation.” In a further move against the govern­ ment, Videla blocked attempts by Peronist labor leaders to obtain the re­ moval of the governor of Buenos Aires Province, Victorio Calabro, who had repeatedly called for the resignation of President Maria Estela Martinez de Peron, it was reported Dec. 27. The Peronists claimed the attack at Monte Chingolo proved Calabro was “unable to control armed bands” in his province, but Videla sent Calabro a telegram thanking him for “the brave and efficient action of the provincial police and the diligence with which the provincial authorities responded to the subversive action.” In related developments: Roberto Quieto, a top Montoneros leader, was reported seized by armed men at a beach outside Buenos Aires Dec. 28. Quieto’s wife said his captors had shown credentials of the federal police and mil­ itary intelligence services. The police re­ fused to confirm or deny Quieto’s arrest. Some 20 leftist guerrillas attacked an army communications base at City Bell, outside La Plata, Dec. 27. They were driven off by soldiers who killed two guer­ rillas and wounded another two. A bomb exploded Dec. 30 on the fifth floor of the army’s general command headquarters in Buenos Aires, injuring at least six persons. Ricardo Balbin, leader of the Radical Civic Union, the largest opposition party, escaped unharmed when unidentified ter­ rorists set off two bombs and fired ma­ chineguns at his home in La Plata Dec. 26.


The Montoneros freed Henrich Franz Metz, production manager of the Mer­ cedes-Benz truck plant in Buenos Aires, after his company paid a ransom, granted a series of labor demands and paid for the publication in foreign newspapers of a Montoneros statement which predicted civil war in Argentina, Mercedes an­ nounced Dec. 25. Metz, who was kid­ napped in October, was flown to West Germany.

Other Developments Kissinger parley postponed. The Ar­ gentine goverment Jan. 27 indefinitely postponed a meeting between Latin American foreign ministers and U.S. Sec­ retary of State Henry Kissinger, scheduled for March in Buenos Aires. Argentine Foreign Minister Alberto Vignes said the reason for the action was the new U.S. Trade Reform Act, which, “by its rigidity and unfairness, damages fundamental interests of the Latin American countries.” Vignes stressed that Kissinger’s avowed “new dialogue” with Latin America was only being postponed, not “interrupted.” He said.the foreign ministers’ conference could take place as soon as the U.S. re­ voked provisions of the trade act which Latin American countries considered dis­ criminatory.

’74 Soviet trade surplus. Argentine trade with the Soviet Union in 1974 totaled $330 million, with $290 million recorded in sales to the U.S.S.R., the newsletter Latin America reported Jan. 10. The largest So­ viet purchase had been $50 million worth of wool. Argentina was not expected to substan­ tially increase grain exports in 1975 be­ cause of low sowings for the 1974-75 season, according to the Andean Times’ Latin America Economic Report Jan. 10. An extended drought in the South and the normal 1.5% annual growth in local de­ mand would cut further into the grain sur­ plus available for export.

ARGENTINA In another economic development cited in the report Jan. 3, the government post­ poned until March 1976 the pre-selection of engineering firms to build the $1 billion deep-water superport at Cabo San Antonio. Most sources believed the government, which planned a 10%—15% cut in expenditures, could not afford the project. The 1974 budget deficit was ex­ pected to reach $2.8 billion, according to the report.

Publisher accused. The government ac­ cused Hector Garcia, publisher of the Buenos Aires newspaper Cronica, of car­

43 rying out a “criminal” campaign to en­ courage Argentine invasion of the Falk­ land Islands, which Great Britain took from Argentina by force in 1833.

Cronica was closed under the state of siege law Dec. 20, 1973 after it encouraged an invasion in the face of British refusal to return the islands. Garcia was subse­ quently arrested, and a judge set his bail at $20,000, according to a report Jan. 10. In another press development, the leftist newspaper La Calle was closed after only 10 weeks in operation, it was reported Jan. 3.


Political Plots Suppressed

which belonged to the coalition, had been deported. Ayoroa and Patino had been accused of plotting in November 1974, when Banzer removed the last vestiges of civilian par­ ticipation in the government, but they had been acquitted by a military court. The new conspiracy charge was lodged after Ayoroa published a denunciation of the government in La Paz newspapers Jan. 5. Ayoroa’s document, titled “Words from a Soldier,” criticized the govern­ ment’s political and economic programs and called for a return to institutional democracy. Ayoroa said he had broken with the regime over its decision to cancel elections scheduled for 1975. The government reported details of another plot against Banzer that it claimed to have foiled. Interior Minister Pereda said Jan. 16 that 17 alleged plot­ ters had been arrested in the Catavi-Siglo XX region, and that 18 political prisoners had been expelled to Paraguay. He added Jan. 20 that the plot was led by three former presidents—Juan Jose Torres, Victor Paz Estenssoro and Hernan Sites Zuazo—and that Siles had been arrested Jan. 18 in La Paz, where he had allegedly been making contacts with dissidents. Siles was deported to Chile Jan. 24 along with more than a dozen associates, au­ thorities reported.

Bolivia’s direct military rule, imposed in November 1974, was challenged in 1975 by political dissidents plotting to over­ throw the government of President Hugo Banzer Suarez. A ll the alleged conspiracies were crushed, according to authorities.

Ex-ministers ordered deported. Two former Cabinet ministers were dismissed from the army and ordered deported for allegedly plotting against President Hugo Banzer Suarez. They immediately went into hiding. Interior Minister Juan Pereda Asbun said Jan. 6 that former Industry and Trade Minister Miguel Ayoroa Montano and ex-Housing Minister Jose Patino Ayoroa had been stripped of their rank as colonels and ordered expelled because they had conspired against Banzer with ex-President Hernan Sites Zuazo, who allegedly re-entered Bolivia recently, made “subversive” contacts with several labor unions, and then fled to Peru. Pereda added that several members of the Nationalist Popular Front (FPN), the former government political coalition, had been arrested in the alleged conspiracy. He said the next day that two leaders of the Bolivian Socialist Falange,



Government smashes 4 plots. The govern­ ment claimed to have smashed four leftist plots against President Banzer in JulyDecember, arresting more than 60 persons. About 40 persons were arrested in Oruro July 13 on charges of planning a general strike against the government with aid from labor groups in Argentina, Chile, East Germany and Czechoslovakia. The detainees included directors of the outlawed Bolivian Workers Union (COB), leaders of peasant, miners and student or­ ganizations, and three Spanish nuns. The nuns were later expelled from Bolivia, provoking a protest July 23 from the Roman Catholic archbishop of La Paz and other religious leaders. The arrests were protested July 14 by student and miners groups. The Bolivian Mineworkers Federation (FSTMB) de­ manded an unlimited amnesty for political prisoners July 31 and issued a statement Aug. 3 denouncing the government as an “apparently fascist” dictatorship which had “erased all the democratic, social and economic gains of the workers.” Some 5,000 tin miners in the Catavi-Siglo XX district held a 24-hour strike Aug. 4 to de­ mand the amnesty and protest the “misery and lack of liberty” in Bolivia. The government freed 45 political prisoners Aug. 5 in a limited amnesty to celebrate the 150th anniversary of Bo­ livian independence. Nineteen common criminals also were released. The govern­ ment said it still held 60 political prisoners, but independent observers put the number closer to 200, according to press reports. Interior Undersecretary Freddy Vargas announced Aug. 26 that another leftist plot had been broken up with the arrest of about 20 persons in La Paz, Oruro and Cochabamba. Some of the detainees were freed after questioning, Vargas said. The army claimed to have dismantled another conspiracy Nov. 28, and the government reported Dec. 11 that yet another plot had been smashed with the arrest of several Argentine, Chilean and Bolivian “ex­ tremists” including Antonio Peredo, a leftist journalist and brother of two Boli­ vian guerrillas who had been killed in 1967 alongside the late guerrilla leader Ernesto “Che” Guevara.


In a related development, the army an­ nounced Sept. 9 that retired Maj. Gary Prado Salmon and five other retired offi­ cers who had plotted against President Banzer in 1974, had returned to active military duty. Meanwhile, Banzer.pledged July 14 and again July 26 that the armed forces would return the government to elected civilian officials by 1980. All political parties ex­ cept “extremist” groups would be allowed to run in the elections, he said. However, the army commander, Gen. Carlos Alcoreza, said Nov, 5 that the government was preparing a political statute which would require political parties to register at least 10,000 adherents, a figure which none of the 20 political groups in Bolivia commanded. Banzer, who completed four years as president Aug. 21, had been in office longer than any other Bolivian chief executive. There had been 187 coups d’etat in Bolivia’s 150 years of inde­ pendence.

Economic Developments Wage-price freeze enacted. President Banzer Jan. 14 announced a freeze on wages and on prices of essential goods in an effort to assure monetary stability. To protect the buying power of wages, Banzer announced measures to reduce taxes on transport vehicles and household articles, drastic sanctions against hoarders and speculators, and provisions to reduce the price of pharmaceuticals. Among other economic developments: Bolivia had enjoyed an export boom in 1974 which produced a 206% increase in its international reserves, it was reported Jan.10. The government was studying a group of 27 projects, submitted by the state oil firm YPFB, which involved investment of more than $1.5 billion over the next five years. Much of the money would go to construction of five new oil pipelines and expansion of existing lines, according to the Andean Times’ Latin America Eco­ nomic Report Jan. 3. The remaining funds

BOLIVIA would finance construction of a series of refineries and other plants. The government would also diversify the sugar industry, according to the report Jan. 10. Diversification projects in­ cluded construction of two furfural plants costing about $16.6 million. Furfural was a sugar by-product used in the making of dyes and lacquers. Government sources said Jan. 13 that government spending in defense, educa­ tion and health would rise by 20% in 1975.

Catholics score economic policy. The Bolivian Justice and Peace Committee, a Roman Catholic organization, charged Jan. 13 that the government’s economic policies favored “powerful economic groups” and “privileged groups,” leaving the average Bolivian with “low wages and an alarming level of undernourishment.” In a document published by the news­ paper Presencia, the committee cited statistics from the United Nations Eco­ nomic Commission for Latin America showing that Bolivia’s economic growth index for 1974 was only 6%, compared with a 7% average in Latin America. The sectors of largest growth were oil, minerals and sugar, in that order, the committee noted. The price index rose by 61.25% in 1974, with an inflation rate of 30%, according to the committee.

Miners strike. An estimated 5,000 workers at the Catavi and Siglo XX tin mines, in the southwest, went on strike Jan. 13—26 to seek increased wages, union recognition, release of arrested union leaders and the reopening of four local radio stations. The miners returned to work Jan. 27 after having virtually all their demands rejected. The only demand met was the reopening of three of the radio stations. The government apparently would not allow the reopening of a fourth radio station it had closed, Radio Pio XII, which was run by Roman Catholic oblates. The executive committee of the Na­ tional Council of Bishops issued a state­ ment Feb. 3 denouncing the closing and other government actions against priests.


The bishops said such acts represented “a policy of intimidation, before which we will not back down, because of our loyalty to the priestly ministry.” The army cut off access and communi­ cations to the region Jan. 19, after the strikers declared it a “liberated zone” and called on young military officers to join them in fighting the government. To protest the blockade, some 7,000 workers at the Colquiri and South Central Council mines began stoppages of their own Jan. 25. The government said the next day that one-quarter of Bolivia’s tin industry was paralyzed, at a cost of $1 million daily in export revenues. The strike had begun Jan. 13 to pro­ test the closing of the four stations. Several persons were reported arrested that day, including Sinforoso Cabrera, a mine­ workers leader, and two Roman Catholic oblates who ran one of the stations, Radio Pio XII. Interior Minister Juan Pereda Asbun asserted Jan. 14 that the stations had broadcast calls by labor leaders for resistance to the government, and the police claimed Jan. 20 that air time had been given to members of two foreign guerrilla groups, the Tupamaros of Uruguay and the People’s Revolutionary Army of Argentina. The closing of the stations was protested by the Roman Catholic Church hierarchy and by students at San Andres University in La Paz. University adminis­ trators suspended all activities Jan. 23 in an attempt to end a student sympathy strike. The Catholic bishop of the mining region, Msgr. Bernardo Fey, asserted Jan. 18 that Radio Pio XII had only “informed the people of their rights and duties” as Christians, and that its silencing was “re­ miniscent of past dictatorial regimes.” The bishop of Cochabamba, Msgr. Ar­ mando Gutierrez, charged Jan. 22 that the government was “carrying out the harshest attack on the Bolivian Catholic Church in this century.”

Mining & oil situation termed serious. Executives of the state mining firm Comibol said Dec. 3 that the state and private mining industries were “in a critical phase and in danger of paralysis”

48 because of declines in Bolivian exports and in the international price of tin since mid1975. Mining exports had fallen by 30% in 1975, and were expected to earn Bolivia only $200 million for the year, compared with $300 million in 1974, the government had reported Sept. 7. Mining was Bolivia’s largest industry, employing 20,000 workers in the state sector and 10,000 in private enterprise, and mining exports provided more than half of the govern­ ment’s income. Comibol was virtually bankrupt, the London newsletter Latin America reported Nov. 21. Export controls set by the International Tin Council June 22 had cut Bolivia’s tin sales by 7,500 tons per year, from a total of 30,000 tons a year, Comibol reported Dec. 3. Planning Minister Gen. Juan Lechin Suarez Sept. 11 had blamed the fall in tin prices on the U.S., which sold 40,000 tons of its reserve deposits on the international market between mid-1973 and the end of 1974. Bolivia lost $66,000 per year each time the tin price dropped one cent, ac­ cording to Comibol Dec. 3. There were also problems in the oil in­ dustry, where the situation of the state firm YPFB was described by a manager as “chaotic,” Latin America reported Nov. 21. YPFB said it could not subsidize domestic gasoline supplies for long, leading to speculation that fuel price rises were imminent, according to Latin America. YPFB planned to invest $1.5 billion over the next five years in hydrocarbons projects including an oil pipeline across the Andes mountains to Chile, a pet­ rochemicals complex, two fertilizer plants and a gas pipfeline to Braiil, it was reported June9. The petrochemicals complex would be built at an investment of $640 million under a Bolivian coirfmitment with the Andean Group, it was announced Sept. 5. Bolivia would earn $190 million annually from sales of liquefied gas, plastics and resins to Colombia, Venezuela, Peru, Chile and Ecuador after the complex was completed. YPFB president Col. Guillermo Ji­ menez Gallo said July 31 that Bolivia would quadruple its output by 1980. A


group of Canadian companies headed by Western Decalta Petroleum Ltd. signed an agreement with YPFB to explore for oil in a 2.6 million acre tract 400 miles southeast of La Paz, it was reported Sept. 19. Among other economic developments: Bolivia and the World Bank reached preliminary agreement on a $32 million loan to finance the first stage of the modernization of Bolivia’s railway system, it was reported June 6. The Inter-American Development Bank Nov. 6 approved a $45 million loan to finance construction of the La PazCotapata link of a projected highway be­ tween La Paz and San Borja (Beni De­ partment). Bolivia would receive a $35.7 million credit for development projects from the Andean Group’s Andean Development Corp., it was reported Nov. 21.

Foreign Developments Chile ties renewed. Bolivia resumed dip­ lomatic relations with Chile Feb. 8, nearly 13 years after breaking them over a Chilean decision to divert the waters of the River Lauca, which flowed into Bolivia. An agreement was announced in principle in December. President Hugo Banzer Suarez and Chilean President Augusto Pinochet Ugarte met in the Bolivian border town of Charana and signed a declaration re­ newing the ties and pledging to work to find an outlet for Bolivia to the Pacific Ocean. Banzer had said before the meeting that the outlet issue could best be resolved at a summit meeting of the pres­ idents of Bolivia, Chile and Peru. Chile and Peru had agreed that Chile would obtain Peruvian approval before giving Bolivia any coastal land Chile had seized from Peru during the War of the Pacific in 1879-83. Pinochet said after returning to Chile that Chile was interested in importing Bolivian oil, wheat and cotton, and that Bolivia was expected to import Chilean manufactured goods, according*to the newsletter Latin America Feb. 14.


The Charana accord was criticized by the Bolivian press as insubstantial. The La Paz newspaper El Diario said Feb. 10 that it had “expected more,” and the Roman Catholic newspaper Presencia declared that Bolivia gained “nothing from these friendly declarations and vague pro­ posals.” Banzer asserted Feb. 10 that Bolivia would not accept a coastal enclave in Chilean territory for its outlet to the sea. He said the outlet must be part of a con­ tinuous strip of territory under full Boliv­ ian sovereignty.

Bolivia’s demands for the sea outlet were supported Aug. 5-6 by Venezuelan President Andres Perez, who offered to mediate at a summit meeting of Chilean, Peruvian and Bolivia^ officials. Perez’ offer was rejected by the Chilean government, and the progovernment newspaper El Mercurio called the offer “an interference in the affairs of other countries,” it was reported Aug. 22. Chile confirmed Dec. 20 that it would grant Bolivia the sea outlet in return for some Bolivian territory. The official Chilean newspaper El Cronista said an “agreement in principle” had been negotiated under which Bolivia would get a corridor to the ocean along the border between Chile and Peru. Peru had objected to transfer of the land, which Chile had taken from Peru in the War of the Pacific in the 19th Century. U.S. oil loan. The Bank of America had organized a $35 million loan for the state oil company YPFB, the newsletter Latin America reported Jan. 31. The government had announced Jan. 21 that it would reduce its relatively high oil export prices to “competitive levels.” Bolivia exported only 35,000 barrels of light crude daily, but it charged a high price because of the quality of its oil. The price had been reduced from $16 a barrel to $14.65 per barrel in August 1974. Gulf aide seized, chairman summoned. The government arrested the local representative of Gulf Oil Corp. May 20


and said the U.S. firm would be “criminally prosecuted” for making illegal political contributions to Bolivian officials in the 1960s. Gulfs chairman was summoned to appear in Bolivian court and testify on the payments. The Gulf representative, Carlos Dorado Chopitea, was placed under house arrest and held despite subsequent company assurances that he had “no involvement whatever” in the contributions. Gulf’s chairman, Bob R. Dorsey, was offered “all necessary guarantees” to testify in Bolivia but he faced a jail term if found guilty by the court, according to La Paz District Attorney Rolando Simbron. Dorsey had disclosed May 16, in testimony before a U.S. Senate subcom­ mittee and in a letter to President Hugo Banzer Suarez, that between 1966 and 1969 Gulf had bought a $110,000 heli­ copter for the late Gen. Rene Barrientos Ortuno, then president of Bolivia, and had given $360,000 in contributions to Bar­ rientos’ political party. Some of the money may have gone to government of­ ficials, Dorsey said. The government May 16 asserted it would prosecute any officials who took illegal payments from Gulf. It sent a note to Dorsey May 17 demanding that his firm, “immediately and without major delays,” disclose which officials received the payments. Gulf said it would comply as soon as it completed a full investiga­ tion of the matter. Gulf no longer operated in Bolivia, having been nationalized in 1969 by the government of Gen. Alfredo Ovando Candia, who took power after Barrientos died in a helicopter crash that year. Ovando’s regime had agreed in 1970, after extended negotiations, to pay Gulf $78.6 million for its expropriated assets. Bolivia still owed Gulf $57.2 million, according to official sources. The government had threatened May 7 to default on the remaining payments unless Gulf cleared up confusion over whether Bolivians had been among un­ named foreign politicians who had received $4.2 million worth of Gulf bribes. The bribes were disclosed by Dorsey in se­ cret testimony before the U.S. Securities and Exchanges Commission, reported by the Wall Street Journal May 2.


The newspaper Presencia said Gulf’s vagueness about the recipients of its contributions “could serve to give time to the real culprits to prepare their defense . . . Let it not be said that Gulf still does not know the names of the culprits.” Ex-President Ovando criticized Gulf from his exile home in Madrid, asserting the company had helped bring down his government in 1970 with a campaign to “paralyze foreign investment in the country, creating a climate of insecurity and a lack of confidence within the country and abroad.” Marcelo Quiroga Santa Cruz, who had been Ovando’s mines minister in 1970 and now lived in Mexico, attacked not only Gulf but the current Bolivian government. He said the Gulf payments “morally in­ validate” the current government officials who had also served under Barrientos, in­ cluding President Banzer, who had been Barrientos’ education minister, and Defense Minister Rene Bernal, who had been peasant affairs minister. Quiroga did not mention Ovando, who had been Bar­ rientos’ army commander. (Banzer himself called on the Organiza­ tion of American States May 19 to condemn Gulf for its “sordid activities” in developing countries.) Another former official, ex-interior Minister Antonio Arguedas, asserted at his exile home in Cuba that Bolivia had received illegal payments not only from Gulf but from the U.S. Central In­ telligence Agency, the Washington Post


reported May 17. Arguedas said he had been present at a meeting in 1966 at which the CIA station chief in La Paz had agreed to give Barrientos $600,000 for his presidential campaign that year. The CIA had also made contributions to other right­ ist parties in the elections, asserting it could not “place all our bets on one horse,” according to an unnamed agent quoted by Arguedas. A Bolivian judge ordered Gulf represen­ tative Dorado Chopieta’s release from jail after accepting his lawyers’ arguments that he had no legal responsibility for Gulf’s actions, it was reported May 29. Gulf Chairman Bob R. Dorsey said May 22 that he would not go to Bolivia to answer a summons for his appearance and testify about Gulf’s contributions.

OAS envoy fired. Bolivia’s ambassador to the Organization of American States, Juan Carlos de Loria, was dismissed Jan. 24 for not voting in favor of an OAS reso­ lution condemning the new U.S. Trade Reform Act. De Loria did not attend the meeting at which the resolution was passed. The government said he “knew very well” that Bolivia supported the measure, and should have attended and voted. Diplo­ matic observers said his absence had dis­ pleased Venezuela, which was in a position to grant Bolivia badly needed financial aid.


public opinion will be informed of actions taken by the police to insure public order.” Nevertheless, illegal arrests, disap­ pearances and torture were continuing, according to the French newspaper Le Monde Feb. 1. In Sao Paulo, labor leader Graciano Bruna Fernandes and his wife had been arrested and mistreated in late January by army security officers; printer Jose David Dib had been seized in December 1974; and bookstore owner Jurandi Guimaraes had been held for a month and tortured. In Rio, Communists Raimundo Alves de Souza and Elson Costa had disappeared Jan. 12-15, and Marco Antonio Coelho, a member of the party’s Central Committee, had been ar­ rested Jan. 17, according to Le Monde. Supreme Court Justice Aliomar Baleeiro charged at a legal symposium in Sao Paulo Jan. 29 that illegal arrests, tor­ ture and other human rights abuses were still taking place in Brazil. “If someone disappears, nothing is ever found, not even the ashes of his corpse,” Baleeiro said.

Torture of Prisoners Charged The government was accused in 1975 of torturing and murdering political prisoners among the thousands of dissidents it had arrested. Targets of the widespread round­ ups included Communists, trade union leaders, doctors and lawyers. The accusa­ tions against the government of President Ernesto Geisel were leveled by the Roman Catholic hierarchy, lawyers, and news­ papers. Communists arrested. The government announced Jan. 30 that “numerous” Communists had been arrested in a police raid on a secret printing plant near Rio de Janeiro where they published the illegal newspaper The Worker’s Voice. The government displayed an unusual openness about the arrests. Justice Minister Armando Falcao declared in a television address that the detainees would get fair trials, and the federal police held a news conference Jan. 31 at which they presented evidence against the Com­ munists and showed newsmen the printing plant. Carlos Castello Branco, a leading political columnist for the Rio newspaper Jornal do Brasil, wrote Jan. 31 that “a new phase” may have begun “in which

Censorship eased. The government was easing censorship of the press and arts in accord with President Geisel’s vow to gradually restore Brazilian democracy, the Washington Post reported Jan. 27. In an unprecedented action, the news­ paper Jornal do Brasil recently had 51


printed a paid advertisement announcing the disappearance of a couple believed ar­ rested by political police. (The couple, Wilson Silva, a physicist, and Ana Rosa Kucinski Silva, a chemist, had been seized in April 1974 and tortured but were still alive, it was reported Jan. 17.) Newspapers also were being allowed to report on the meningitis epidemic, which was kept out of the press in 1974, the Post reported. Nevertheless, the government contin­ ued to censor the newspaper Tribuna da Imprensa and the weeklies Veja, Opiniao and O Pasquim. Other publications censored themselves, avoiding issues such as illegal arrests and torture in fear of government retribution. O Estado de Sao Paulo, whose direcl censorship was lifted Jan. 4, ignored such issues in order not to “push too hard” against the government, the Post reported. Editor detained—Claudio Abramo, editor in chief of the newspaper Folha de Sao Paulo, was held briefly by federal police Jan. 29, apparently for questioning about the Worker’s Voice, a Folha spokes­ man reported. More arrests. Many Communists, labor leaders, doctors and journalists were ar­ rested and tortured in February-April, principally in Sao Paulo, according to press reports. Most were charged with trying to reorganize the Communist Party, and many were sentenced to long prison terms for “subversion.” Roman Catholic Church sources said the archbishop of Sao Paulo, Paulo Evaristo Cardinal Arns, had tried to protest the ar­ rests but his articles in the weekly news­ paper of the archdiocese had been cut by federal censors, it was reported April 24. Among those arrested, according to a report March 21, were Essio Rossetti, president of the Sao Paulo textile workers’ union; Antonio Carlos de Carvalho, a journalist in Rio de Janeiro, and Pedro da Silva Pereira Jr., son of an army reserve general who said his son had been tortured for 10 days. The torture charges were discussed in both houses of Congress and reported in the press.

LATIN AMERICA 1975 The opposition Brazilian Democratic Movement (MDB) denounced the treatment of political prisoners and urged the government to provide information about 22 persons who had disappeared and were believed to have been arrested or killed by the political police. The ruling Arena party March 10 voted down an MDB motion in Congress to summon Justice Minister Armando Falcao to testify on the treatment of political prisoners. Falcao had sent a writ­ ten report to Congress the day before asserting that only three of the 22 missing persons were being held. Laerte Vieira, the MDB leader in the Chamber of Deputies, called the report “totally in­ complete.” MDB Deputy Marcos Cunha read a let­ ter to the Chamber April 17 from 23 political prisoners denouncing conditions at the penitentiary on the island Ilha de Itamarca. Thirty-three prisoners on Ilha Grande began a hunger strike May 6 to protest conditions there. Arrests accelerated in September and October as the government moved against civilians and soldiers whom it accused of cooperating with the outlawed Brazilian Communist Party (PCB). Many of the detainees claimed to have been tortured in custody and some were found dead or were reported to have “disappeared” after interrogation. The death of the journalist Vladimir Herzog Oct. 25 caused a furor in Sao Paulo and other cities, where Roman Catholic priests, students, lawyers and opposition legislators joined to protest government repression. The army announced Oct. 26 that Herzog, news director for the Sao Paulo television station TV Cultura, had com­ mitted suicide in a jail cell after writing a confession in which he admitted being a PCB member and linked other journalists to the party. Herzog had reported volun­ tarily to the Department of Internal Op­ erations after learning that he was being sought by security officers, and he was told at the department that other jour­ nalists had implicated him with the PCB. He hanged himself with “a piece of cloth” soon after being sent to a cell to write his confession, according to the army report.


Newspapers in Sao Paulo and legisla­ tors of the opposition Brazilian Demo­ cratic Movement (MDB) demanded Oct. 27 that the government fully explain Herzog’s death and the arrest of 11 other journalists during the previous week. Some 15,000 students at the University of Sao Paulo went on strike to protest Herzog’s death and other repression, and they were joined the next day by most of the school’s professors. Religious authorities also protested Herzog’s death. Jewish leaders allowed him to be buried in the Jewish cemetery Oct. 26, indicating they did not believe he had committed suicide. The Catholic Archbishop of Sao Paulo, Paulo Evaristo Cardinal Arns, paid respects to the body at a funeral chapel Oct. 26 and held a me­ morial mass for Herzog Oct. 31 at which he condemned “those who stain their hands with the blood of their brothers” and called for “solidarity” in a “peaceful but persistent struggle in favor of a generation whose symbols are the chil­ dren, the mother, the wife of Vladimir Herzog.” Arrests had risen sharply in late Sep­ tember and in October in the states of Goias, Parana, Ceara, Rio Grande do Sul, Sao Paulo and Rio de Janeiro, it was reported Oct. 19. Most of the detainees were lawyers, labor union leaders, students and members of the MDB. The party said Oct. 22 that at least 64 persons had been seized in Sao Paulo in the pre­ vious two weeks, including 20 members of the MDB youth wing. The army disclosed Oct. 4 that it had broken up a 63-member Communist cell in the Sao Paulo military police. Two detained officers, Col. Jose de Andrade and Lt. Jose Ferreira de Almeida, had died in custody, the first from a heart at­ tack and the second by suicide, the army reported. Information on the Communist cell allegedly had been provided by Marco Antonio Coelho, an imprisoned former congressman who claimed to have been tortured. The arrests of military police had been rumored for several weeks. Renato Oli­ veira Matos, an imprisoned journalist, told a military judge Sept. 20 that a military police lieutenant, presumably Ferreira de Almeida, had been tortured to

53 death in the cell next to his. Church and legal sources cited by the Miami Herald Sept. 16 said arrests of military police in Sao Paulo had begun as early as July 2. The arrests of civilians were accom­ panied by widespread police brutality, ac­ cording to press reports. A “countless number of accusations of beatings and torture [by] police throughout the coun­ try” was reported by the Washington Post Sept. 5. (In an apparent attempt to mollify ci­ vilian protesters of police brutality, mil­ itary authorities in Brasilia and Goias announced Oct. 19 a “thorough” investi­ gations of torture charges by detained civilians.) Police abuses included a resurgence of murders by the Rio de Janeiro “death squad,” presumed to consist of off-duty policemen. Officials said they had begun an investigation of 654 murders attributed to the squad in 1973-75, it was reported Sept. 28. More than a dozen “death squad” murders were reported by the London Times Aug. 13 in the Rio suburb of Nova Iguacu, where five other squad killings had been reported by Excelsior of Mexico City July 6. Most of the victims were said to be petty criminals. There was also a tightening of press censorship by the government, it was reported Aug. 22. New directives were issued prohibiting publication of pictures of nude couples and childbirth, and of arti­ cles on homosexuality, social problems in Latin America, repression and censor­ ship. Arena senator dismissed. President Geisel July 1 expelled from the Senate a member of the ruling Arena party who was accused of corruption. The Senate, to Geisel’s annoyance, had voted June 29 to allow the senator, Wilson Campos, to remain in office despite strong evidence that he had demanded a $50,000 bribe to obtain a loan from a state-owned bank for an industrialist in Pernambuco. The industrialist, Carlos Alberto Menezes Sa, had produced a tape re­ cording of Campos making the bribe de­ mand, and a detective in Rio de Janeiro had authenticated the tape through “voice-print” tests. Campos had denied asking for the bribe.


Using his authority under Institutional Act No. 5, the 1968 decree which gave the president virtually dictatorial powers, Geisel ordered a 10-year ban on political activities by Campos, Menezes and an officer of the bank. Geisel had used the Act on two earlier occasions, reported May 2. He had dis­ missed three judges for alleged corrup­ tion, and he had replaced the municipal government of Rio Branco, capital of Acre State, after the opposition Brazilian Democratic Movement majority on the municipal council had twice refused to ap­ prove mayors appointed by the state.

Geisel rejects democracy. President Ernesto Geisel declared in a nationwide address Aug. 1 that reports that he sought a return to democracy were “only the re­ sult of imagination, if not intrigue.” His speech was criticized by the opposi­ tion MDB after relaxation of press censorship but an increase in political ar­ rests. Geisel was said to be under pressure to reject any political change, and Brazil’s military leaders reportedly were worried over the possible influence of Portugal’s leftist military government. Geisel declared that while there might be some “liberalization” of Brazil’s political and social system, there would be no return to the democratic system which preceded the 1964 coup. Demands for political amnesty, revision of the national security law, reduction of the president’s powers and expansion of the Congress’ powers were “nostalgia for the past,” Geisel asserted. Geisel warned that “communist in­ filtration” continued in “the mass media, the trade unions, the public services—par­ ticularly schools—as well as the political parties.” Security forces, he added, had “established that acts of sabotage have been committed by agents of subversion.” Geisel denounced critics who charged Brazil’s economic development had benefitted only a fraction of the popu­ lation. He asserted the number of jobs had risen from 23 million to 36 million in 1960-73, while the literacy rate had risen from 60% to 75%, the number of school­


children from 11 million to 30 million, and the number of social security recipients from 13 million to 41 million. Geisel’s speech was denounced Aug. 6 by Ulysses Guimaraes, the MDB chair­ man. The MDB had been harassed by the government for several months. Several dozen members of its youth wing had been arrested for alleged links to the Com­ munist Party, according to a report July 18. Before that, the Sao Paulo political police, DOPS, had accused the MDB’s se­ nior leaders of holding discussions with Communist leaders shortly before the MDB’s victory in the November 1974 legislative elections. Testimony on the MDB’s contacts with the Communists had been provided by Marco Antonio Coelho, an imprisoned former Communist congressman, ac­ cording to a DOPS communique April 26. However, Coelho told a judge in June that the testimony had been extracted under torture, it was reported July 4. Bishops score repression. The Roman Catholic bishops of Sao Paulo State issued a statement Nov. 11 accusing au­ thorities of the torture and murder ac­ tions and proclaiming Nov. 14 as a day of protest fasting. “We are witnessing acts of flagrant dis­ respect to the human person . . . char­ acterized by arbitrary imprisonments, which generally take the form of veritable kidnappings,” by “tortures accompanied even by deaths,” and by “public and pri­ vate threats, even by the authorities,” the bishops declared. The Nov. 14 fast, led by Sao Paulo Archbishop Paulo Evaristo Cardinal Arns, was observed by about two million Catholics, according to press reports. The fast followed other protests against government repression and new reports of political arrests and torture as well as murders by the clandestine “death squads.” Francisco Leite Chaves, a deputy of the opposition Brazilian Democratic Move­ ment (MDB) from Parana State, had denounced the use of the army for repressive purposes Oct. 27, asserting: “Hitler, when he wanted to practice such

BRAZIL ignominious acts as we are witnessing, did not use the army but the SS which were dressed in black so as not to compromise the army.” Following an angry reaction from the army, Leite Chaves made a public apology for his statement, citing “the indispensability of the actions of the armed forces in maintaining order and social peace,” it was reported Nov. 14. Recent incidents of repression included the rearrest Oct. 28 of Manoel Conceicao dos Santos, a farm workers’ leader from Maranhao State who had been arrested and tortured in 1968; the torture of Sao Paulo journalist Luis Paulo Costa, who was freed from prison Oct. 27 with punc­ tured eardrums and spinal injuries; the ar­ rest of 67 alleged members of the Brazilian Communist Party in Parana, announced Nov. 13; and the “death squad” murders of eight persons in Sergipe State, reported by El Nacional of Caracas Nov. 9, and four persons in Rio de Janeiro, reported by Le Monde of Paris Nov. 16. The Sao Paulo newspapermen’s union reported Nov. 7 that the government still held three of the 12 journalists it had ar­ rested in October. Raymond Dix, the newly elected president of the Inter­ American Press Association, issued a statement Nov. 5 denouncing a “new wave of repression” against Brazilian journalists, which he called “a matter of deep concern to freedom-loving people everywhere.” According to the London newsletter Latin America Nov. 7, the federal government felt repression in Sao Paulo, under the leadership of Gen. Ednardo D’Avila, had got out of control. D’Avila had been summoned to Brasilia by Pres­ ident Ernesto Geisel to explain the alleged murder in prison of journalist Vladimir Herzog, whose death had pro­ voked widespread protests among stu­ dents, Catholic priests, opposition leg­ islatorsandnewspapermen, Latin America reported. Document details torture. A document prepared by 35 political prisoners in Sao Paulo and released by a national lawyers’ group accused security forces of torturing to death at least 55 prisoners since 1969, it was reported Dec. 6.

55 The document, circulated to President Ernesto Geisel and other government leaders, cited 16 torture deaths which sig­ natories claimed to have seen or heard. It listed 233 alleged torturers, including an army general and other officers. The tortures described included beat­ ings, electric shocks, sexual abuse, im­ mersion in water, the “ice-box” (a tiny cu­ bicle in which temperatures changed from searing heat to freezing cold) and “Christ’s crown” (a wire placed around the temples of a prisoner and gradually tightened with a screw). Among the signatories were pro­ fessional men, students and trade unionists serving prison terms of four to 82 years for alleged subversion. Meanwhile, the government was con­ ducting a campaign to discredit the Roman Catholic archbishop of Sao Paulo, Paulo Evaristo Cardinal Arns, who had repeatedly condemned torture in Brazil, the London newsletter Latin America reported Dec. 19. The campaign included anonymous let­ ters accusing Arns of sexual misconduct, and circulation of a statement by the hith­ erto unknown Confederation of Catholic Organizations in Brazil denouncing “red fascists” in the church hierarchy, Latin America reported. However, some 3,000 priests including six bishops attended a mass in Sao Paulo Dec. 12 in support of Arns. Police Dec. 12 arrested and deported the French priest Francois Jentel, who had been expelled from Brazil in 1974 after serving a year in prison for allegedly encouraging “subversive activities.” He had been arrested on his return to Brazil Dec. 1. The National Council of Bishops denounced the government’s moves against JeteL Police Dec. 11 released Manoel Con­ ceicao dos Santos, a farm workers’ leader from Maranhao arrested in October.

Other Developments Russell court scores Brazil & others. The second Bertrand Russell Tribunal reconvened in Brussels, Belgium Jan. 1118 to study repression in Brazil and other

56 Latin American countries, including Bo­ livia, Chile and Uruguay. The four nations were accused of permitting foreign domi­ nation of their economies and resorted to systematic repression to remain in power. A Brazilian economist charged Jan. 13 that his country’s so-called “economic miracle” was achieved for the benefit of multinationals and at the expense of the working class. Two Brazilian doctors ac­ cused the military regime of keeping the country in a “catastrophic” state of health.

Coffee & other economic news. Coffee prices soared sharply on the London fu­ tures market July 21 after Brazil sus­ pended coffee exports while it estimated the extent of the frost damage. The government, reporting that 73.5% of the coffee trees had been destroyed, raised the minipium price of coffee exports Aug. 3 from 50c per pound to 80c per pound for August, setting the price at 72c per pound for September and 84c for October. The prices of Brazilian exports of powdered instant and freeze-dried coffee were also raised Aug. 6. (Foreign coffee producers including Colombia, El Salvador and several Af­ rican countries also raised the price of their exports after the Brazilian frost damage, it was reported Aug. 4. In the U.S., General Foods Corp. July 28 in­ creased the wholesale price of its ground coffee by 20c per pound and that of its instant and freeze-dried brands by 3c per ounce.) The government Aug. 7 approved a $75 million emergency plan to help coffee growers plant 100 million new trees. Spe­ cial three-year, interest-free loans would be provided to owners of less than 10,000 trees, and loans with 7%—15% interest would be given to growers with larger plantations. The U.S. Department of Agriculture reported Aug. 21 that the July frosts would not affect Brazil’s 1975-76 coffee crop, but would cut the 1976-77 crop by more than 50%. Meanwhile, the cost of living continued to rise and the government continued to devalue the cruzeiro, the national cur­

LATIN AMERICA 1975 rency. Prices in Rio de Janeiro rose by 3.4% in August, for an annual inflation rate of 29%, it was reported Sept. 11. The government announced small devalua­ tions of the cruzeiro Aug. 5, Aug. 25, Sept. 22, Nov. 11 and Nov. 28, for a total of 13 devaluations in 1975 which reduced the value of the currency by 19.67%. Brazil’s foreign debt continued to rise, with the central bank predicting a record debt of $22.5 billion for the end of 1975, it was reported Nov. 7. The ratio of net foreign debt to exports had reached a critically high level, according to officials. Brazil continued to receive generous loans from foreign sources, notably the Inter-American Development Bank(IDB) and the World Bank. The IDB approved a $40 million loan to finance a Brazilian ag­ ricultural credit program Sept. 18; a $64 million loan for a hydroelectric project September 25, and a $74 million credit for another hydroelectric plant Dec. 15. The World Bank granted Brazil a $60 million loan to raise steel production, it was reported Aug. 1, and it participated in a $150 million steel loan to Brazil with several commercial banks Dec. 15. Alcan Aluminium Ltd. of Canada and Cia. Vale do Rio Doce, a Brazilian iron mining firm, reached agreement in prin­ ciple with other participants to begin construction on a $280 million bauxite project in Brazil, it was reported Dec. 11. The Brazilian company had received a $40 million loan from a consortium of 21 foreign banks, it was reported Aug. 20. Brazilian steel production in JanuaryAugust was 5.4 million tons, well below the output projected by the government at the beginning of 1975, it was reported Oct. 10. Octavio Marcondez Ferraz, president of the state electricity utility Electrobras, estimated the final cost of the Itaipu hydroelectric project, to be completed in 1982 by Brazil and Paraguay on the Pa­ rana River, would be $18.24 billion, 191% more than the total budget for the project set in September by Itaipu Binacional, the company set up to run it, it was reported Dec. 5. The 10 largest foreign companies in Brazil had invested only $98.8 million in the country in the last 10 years while they remitted $774.5 million abroad, according to a statement by Alencar Furtado, pres-

BRAZIL ident of a congressional committee in­ vestigating multinational corporations, reported Nov. 28. Unemployment in the agricultural sector had reached 11.5 million persons, or 30% of the total work force, according to an agrarian labor leader in Ceara State cited by the Latin America Economic Report Nov. 14. A recent government study showed that of 19 million Brazilians receiving a weekly or monthly wage (about half the eco­ nomically active population), 43.3% did not earn more than a single minimum wage, and 13% earned less than half the minimum wage, the London newsletter Latin America reported Oct. 3. The minimum wage bought less than the food required by a family of three, the study noted.

Arms industry approved. The Senate gave final approval June 30 to a bill creating a national arms industry to make Brazil an exporter of weapons. The bill authorized the government to establish a company, to be called Industria de Material Belico do Brasil (IMBEL), that would absorb all existing army equipment factories, coordinate private production of war materiel, oversee public and private investment in the arms industry and import foreign technology. Magazine confiscated. Owners of the Sao Paulo magazine Extra, a political review, notified the Inter-American Press Association (IAPA) Dec. 2 that political police had confiscated all copies of Extra’s last issue. The police gave no reason for the action. The IAPA said Dec. 11 that censorship in Brazil was increasing despite the government’s “promise gradually to reduce restrictions on the press.”

A tomic Energy & Oil Atomic plants planned. The government planned to build 63 atom-powered elec­ trical generating plants by the year 2000,


according to a statement Sept. 9 by Luiz Claudio de Almeida Magalhaes, president of a government-run electricity company. The plan, more ambitious than the nu­ clear energy programs of most European countries, would cost $50 billion at cur­ rent prices, according to the Washington Post Sept. 11. Brazil’s first atomic power station, built with U.S. technology, was nearing com­ pletion near Rio de Janeiro. Eight other plants would be purchased by 1990 from West Germany under an agreement signed in June and denounced by the U.S., which feared Brazil now sought to produce nuclear weapons. Most South American diplomats in Brasilia believed Brazil would build an atomic bomb, for prestige purposes if not actual use, according to the Miami Herald Oct. 19. The Brazilian government denied this.

Brazil, West Germany sign nuclear pact. West Germany signed an agreement June 27 to supply Brazil with a complete nu­ clear industry by 1990. The accord came in the face of strong opposition by the U.S., which argued that the contract would supply Brazil with the fuel technology to produce nuclear explosives. Under the pact, worth at Uast $4 billion, West Germany would sell Brazil eight nuclear reactors which would produce a total of 10,000 kw of electricity, and would deliver a uranium enrichment plant, a fuel fabrication plant and facilities for reprocessing fuel waste products into plutonium. West Germany would also help prospect for and exploit Brazil’s ura­ nium deposits in return for access to the reserves. The agreement was signed in Bonn by West German Foreign Minister HansDietrich Genscher and his Brazilian coun­ terpart, Antonio Azeredo da Silveira. U.S. State Department spokesman Robert Anderson said June 27 that the U.S. “had concerns about aspects of the Brazilian-West German pact that could have a potential for contributing to the spread of nuclear weapons.” Brazil had not signed the Nuclear NonProliferation Treaty; West Germany had signed and ratified it.


As part of the contract, Brazil had agreed to submit to controls by the International Atomic Energy Agency to insure that nuclear fuel material obtained from the German facilities was not diverted for nonpeaceful purposes. U.S. officials had disclosed June 3 that Wash­ ington had been instrumental in winning these controls, saying a special treaty in­ corporating the IAEA safeguards would be signed. The officials, who also admitted the U.S. had sought to dissuade West Germany from making the sale, said Washington had refused to sell nuclear fa­ cilities to Brazil because the Latins in­ sisted on inclusion of plutonium and uranium enrichment plants. These would give the Brazilians the capacity to make nuclear weapons. The controls accepted by Brazil did not extend to future Bra­ zilian-built processing facilities. Brazilian officials vowed that the nu­ clear facilities would be used solely for peaceful purposes. The nation, which lacked oil and coal resources, had de­ pended mainly on hydroelectric power for industrial development. Brazilian Energy Minister Shigeaki Ueki said West Germany would lend Brazil $1.5 billion to develop a nuclear in­ dustry, it was reported July 2. Brazilian-French agreement—France and Brazil July 5 signed a $2.5 million contract under which Brazil would pur­ chase a French experimental nuclear reactor to be used in research for the construction of a new type of fast neutron, or breeder, reactor. Breeder reactors produced more fuel than they consumed.

Foreign oil exploration pacts approved. President Ernesto Geisel announced Oct. 9 that the state oil firm Petrobras would be authorized to sign “risk contracts” with foreign petroleum companies for oil exploration in Brazil and off its shores. The contracts, under which the com­ panies would be paid, in oil, only if they found new deposits, were opposed within

LATIN AMERICA 1975 the cabinet by Industry Minister Severo Gomes, who argued they were unconstitu­ tional, and by Foreign Minister Antonio Azeredo da Silveira. They were also op­ posed by nationalist military officers and civilians. However, Geisel rallied im­ portant supporters to his side, including Gen. Adhemar de Queiroz, a former Pe­ trobras president. Geisel explained that “foreign capital is needed because there are immense areas to explore, beyond the possibilities of the country.” He denied that the contracts would affect Petrobras’ oil monopoly. Brazil produced only 20% of its oil, im­ porting the rest from the Middle East. It imported $2.8 billion worth of oil in 1974, more than half the value of all Latin American oil imports. Brazilian oil production at the end of July was 39.8 million barrels, .3% below the output a year earlier, it was reported Sept. 2. Pe­ trobras announced that the offshore de­ posits at Campos contained no more than 200 million barrels of oil reserves, lower than earlier estimates, it was reported Oct. 3. Petrobras’ profits in January-June had risen to $300 million, 48% above the same period of 1974. Sales had increased by 41% to $3.2 billion, and investments by 132% to $750 million, the government reported Aug. 8. Petrobras received a $100 million revolving credit facility from a consortium of foreign banks led by Libra Bank of London, it was reported Nov. 28. The high cost of oil imports contributed to Brazil’s growing trade deficit, esti­ mated for 1975 at $3.7—$3.8 billion, it was reported Dec. 3. The government an­ nounced a series of “strong” measures Dec. 3 to cut imports by 20% in 1976, in­ cluding instructions to federal agencies to cut imports by 25% and to cut by 20% the oil consumed by official cars. To en­ courage exports, a program was created to provide working capital to companies that increased their foreign sales, ac­ cording to Economy Minister Mario Henrique Simonsen.


A rrests, Expulsions & Other Political Developments

Gen. Ernesto Baeza, chief of the Na­ tional Police, declared in a magazine inter­ view Feb. 19 that the recent rise in “delinquency” in Chile was due to unem­ ployment. “The people need to eat and there is no work,” Baeza said. “Unem­ ployment leads to robbery and all types of antisocial activities.” Prensa Latina of Cuba reported March 4 that 1,200 Chileans had been arrested over the previous weekend, according to National Police sources. The arrests brought to 5,200 the number of persons detained in Chile since mid-February, the news agency reported. Most of the arrests were for suspicion of subversive activities, according to Prensa Latina. The government asserted the police were conducting a “campaign against delinquency” similar to one in the second half of 1974, which, Prensa Latina reported, had involved more than 41,000 detentions. Chilean sources in Buenos Aires, cited by Prensa Latina Feb. 9, said Hernan Carrasco, a former government press official and editor of the magazine Punto Final, had been tortured after his arrest by police intelligence agents in December 1974. Murders in jail charged—The World Federation of Trade Unions, based in Prague, Czechoslovakia, asserted Jan. 29 that David Silberman, former manager of

The Chilean government in 1975 carried out widespread arrests of thousands of persons on charges of subversive activity and “delinquency." As a result of inter­ national pressure, thousands of other dis­ sidents who had taken refuge in foreign embassies in Chile since the 1973 coup that had toppled President Allende were per­ mitted to leave the country. Other op­ ponents of the regime were allowed to take asylum in the embassies to await departure from Chile. Meanwhile, the U.N. assailed Chile for its alleged abuse of human rights, but the Chilean government thwarted the world body in efforts to conduct an investiga­ tion inside Chile. ‘Crime prevention’ sweeps. Police and soldiers arrested more than 2,400 persons Jan. 24-Feb. 22 in alleged crime preven­ tion sweeps in Santiago and other locali­ ties. Authorities announced the arrest of 340 “antisocial elements” Jan. 24. Another 1,400 arrests were announced Feb. 18, in­ cluding 807 on “suspicion” and 103 for curfew violation. A sweep Feb. 21-22 re­ sulted in 675 arrests, 453 on “suspicion,” according to the news agency LATIN.


60 the Chuquicamata copper mine and coun­ sel to the Central Labor Federation (CUT), had been murdered by authorities in a Chilean prison. The London Observer reported Feb. 17 that Miguel Woodward, an AngloChilean Catholic priest, had been tortured to death on a prison ship in Valparaiso harbor, according to Claudio Herrera, a Chilean who had been jailed with Wood­ ward and then exiled to Great Britain.

Regime acts on prisoners, refugees. The government accelerated the expulsion of political prisoners and the granting of safe-conducts for Chilean political refu­ gees in foreign embassies to leave the country. The Santiago government Jan. 8 listed of 200 political prisoners it would release if Mexico were willing to give them asylum. The Mexican government agreed to take some of the prisoners. The list contained only one • important political personality, Laura Allende de Pascal, sister of the late President Salvador Allende. The prisoners on the list were 110 members of the Revolutionary Left Movement (MIR), 30 of the Communist Party, 30 of the Socialist Party, and another 30 who were ascribed no political affiliation but were presumed to be leftist sympathizers. The government claimed Jan. 4 to be holding 2,900 political prisoners as well as 760 persons arrested under the state of siege law in force since the military coup. However, unofficial sources reported there were many more thousands of prisoners. More than 300 persons remained in hiding in foreign embassies in Santiago, waiting to be given safe-conduct passes and to be offered asylum in foreign coun­ tries. More than 30 persons had taken refuge in the Venezuelan embassy during the New Year’s celebrations, according to press reports Jan. 3. They were said to be members of the MIR and the Communist Party. At least 31 prominent prisoners and 133 refugees were exiled Jan. 20-Feb. 13. The Foreign Ministry said Jan. 23 that refu­ gees remaining in foreign embassies in Santiago would be allowed to leave as

LATIN AMERICA 1975 soon as other nations agreed to accept them. A spokesman for the Intergovern­ mental Committee for European Migra­ tion had said Jan. 17 that Chile would release 1,500 political prisoners under the same condition. Foreign Undersecretary Claudio Col­ lados said Jan. 26 that international “pres­ sure” against Chile had “diminished,” and “embassies in Santiago are reporting home about the local situation in a less aggressive way.” He asserted that Chile favored relations with “any country which, even though it may have ideologies different from our own, can provide im­ portant support for international poli­ cies.” The London Times Jan. 24 quoted dip­ lomatic observers as saying the accelerated expulsions were part of an attempt to change the government’s image, in re­ sponse to international protests against human rights abuses in Chile and in prep­ aration for a visit by U.S. Secretary of State Henry Kissinger and the renegotia­ tion of Chile’s foreign debt with the “Paris Club” creditors in March. Forty-six political refugees, many from the Italian embassy, left Santiago for Rome Jan. 20, arriving the next day. Five more refugees from the Italian embassy and 19 from the Colombian embassy left Jan. 23, for Cuba, Rumania and Colom­ bia. Eighteen refugees from the Italian em­ bassy departed for Sweden Jan. 25. They included Humberto Sotomayor, once second in command of the Revolutionary Left Movement (MIR), who entered the embassy in October 1974 after escaping a shootout with police in which MIR secre­ tary general Miguel Enriquez was killed. (Sweden had taken some 1,300 refugees from Chile since the September 1973 mili­ tary coup, including 500 non-Chilean na­ tionals, according to the London Times Jan. 27. The refugees were found jobs after spending three months in special camps to learn Swedish.) Sixty-eight persons took refuge in the Colombian embassy in Santiago Feb. 2, raising the number there to 100. The only new refugee who had been politically prominent before the coup was Oscar Nunez, ex-leader of the Chilean Trade Union Confederation, who was not being


sought by authorities, according to the news agency LATIN Feb. 3. Thirty-nine refugees from the Italian, Colombian and Venezuelan embassies left for various European countries Feb. 4. Six more departed the Colombian em­ bassy Feb. 11, five bound for Bogota and one for Sweden. The government freed 27 prominent political prisoners Feb. 13 and deported them to Venezuela. They included Jaime Toha Gonzalez, former agriculture min­ ister and brother of the late ex-defense minister, Jose Toha Gonzalez; Carlos Jorquera, former press secretary to the late President Salvador Allende; and Anselmo Sule, Carlos Morales Abarzua and Hugo Miranda, all ex-presidents of the Radical Party. The majority of the others were Radical Party members. The government had expelled four other political prisoners earlier. Claudio Huepe, a former deputy from the Chris­ tian Democratic Party, was sent to Uru­ guay Feb. 12 after four months in jail; Angela and Micaela Bachelet, widow and daughter of the late Gen. Alberto Bach­ elet, had been exiled to Australia Jan. 30 after being held for a month. And Manuel Cabieses, former editor of the magazine Punto Final, had been expelled to Cuba, it was reported Jan. 24. The Chilean National Committee to Aid Refugees said Feb. 4 that seven Euro­ pean nations—France, West Germany, Italy, Belgium, the Netherlands, Luxem­ bourg and Spain—had agreed to accept 1,000 Chilean political prisoners. Mexican Foreign Minister Emilio Rabasa an­ nounced Feb. 17 that Mexico would ac­ cept 151 of the 200 prisoners offered it by Chile; the others, he said, had refused to accept exile.

Almeyda, Tapia deported. Ex-Foreign Minister Clodomiro Almeyda, former Education Minister Jorge Tapia and three minor officials of the ousted Popular Unity government were freed from prison Jan. 11 and deported to Rumania. Almeyda said during a stopover in Frankfurt, West Germany Jan. 12 that he would continue to “fight for Chile” in exile, and he disclosed on arriving in


Bucharest that his release had been per­ sonally obtained by Rumanian leader Nicolae Ceausescu. Rumania, unlike most Communist nations, had not broken rela­ tions with Chile after the September 1973 military coup. The others deported were Leopoldo Zuljevic, a former customs superinten­ dent, and Maximo Tacchi and Luis Enrique Munoz, whose former positions were not given. The exiles were forced to leave their relatives behind in Chile. Release of the five prisoners was an­ nounced Jan. 10 by Interior Minister Gen. Raul Benavides, who claimed the move was “categorical proof of the govern­ ment’s generosity and good intentions with respect to the problem of human rights.” Benavides charged that Almeyda had allowed the illegal import of weapons, and Tapia the misuse of Chile’s educa­ tional system. It was reported June 13 that three more leaders of the Popular Unity government were missing in Buenos Aires and presumed arrested by Argentine au­ thorities. They were Manuel Valenzuela, former president of the Bank of Chile; Eduardo Trabucco, former manager of the Central Bank; and Agustin Munoz, former lawyer for the trade federation CUT.)

MIR urged to end resistance. Four jailed members of the Revolutionary Left Movement (MIR) said in a radio and tele­ vision broadcast Feb. 19 and at a press conference Feb. 21 that the MIR had failed in trying to organize armed re­ sistance to the government, and that its remaining members should “end their hopeless sacrifice.” The MIR’s central committee replied in a communique to the press Feb. 24 that the four had been “tried and sentenced to death” by the MIR for treason, informing on MIR members, and “consciously and actively collaborating” with the military regime. The MIR prisoners, whose public state­ ments were arranged by the government, were Jose Hernan Carrasco, Hector Gonzalez, Cristian Maillol and Hum­ berto Menanteaux. They said their views on the futility of MIR resistance were


shared by 30 other MIR leaders under ar­ rest. Asked by reporters whether they had been tortured, the four leftists replied that they were prisoners of war and could not expect “different treatment.” “We do not criticize this,” they said, adding: “The problem of human rights in Chile is exag­ gerated abroad.” They said they did not know whether they would be freed in ex­ change for making these statements. The prisoners reported that 13 major MIR leaders had been killed by au­ thorities, 35 arrested, seven expelled from the country and 23 given asylum in foreign embassies, according to the Spanish news agency EFE Feb. 24. The MIR commu­ nique Feb. 24 acknowledged these figures but asserted 1,000 MIR members had been killed, 2,000 arrested and 200 ex­ pelled. A MIR communique reported by the Associated Press Jan. 16 said the lack of unity among political parties opposed to the military regime had made it im­ possible to organize a “resistance front.” “How many thousands of lives would be saved, how many thousands of arrests and tortures would be avoided, how much misery and suffering would be alleviated if all these political forces were to unite and give one great impulse to the fight?” the communique asked. Authorities said one MIR militant was killed and another captured Feb. 19 in a shootout with police in a Santiago res­ idential neighborhood. Police had re­ ported finding a MIR arsenal in south­ ern Santiago Jan. 16, confiscating 12 machine-guns, several rocket launchers, ammunition and explosives. Twelve army officials, including two lieutenant colonels, and one civilian lawyer were sentenced Jan. 8 to prison terms ranging from six months to five years, most on charges of aiding the MIR. Eleven persons including students, pro­ fessionals and a professor were arrested Jan. 11 in Curico, south of Santiago, on charges of violating the internal security law. A document signed by 80 priests and read at church services in Valparaiso Jan. 12 praised priests who defended political prisoners, and asserted that “the defense of human rights is an integral part of the


gospel.” The document was seen as a rebuff to Archbishop Emilio Tagle Cova­ rrubias, who had published a declaration supporting the military dictatorship and thanking President Augusto Pinochet Ugarte for “freeing Chile from Marxism, which was carrying us to chaos and destruction.” The government reported June 16 that MIR guerrillas were active in the northern city of Antofagasta and the southern province of Talca, and were responsible for the recent murder of an army captain in Talca. Officials an­ nounced June 25 that 25 “left-wing ex­ tremists” had been arrested in Talca and had allegedly admitted having been trained by Cuban revolutionaries in camps established in Argentina by the People’s Revolutionary Army, the Argentine Marxist insurgent group.

Defense minister killed. Defense Minister Gen. Oscar Bonilla died with six other persons March 3 when a helicopter in which they were flying crashed near Curico, south of Santiago. Gen. Herman Brady was sworn in as the new defense minister March 10. Bonilla, the most senior army officer next to w President Augusto Pinochet Ugarte, had served as interior minister from the military coup in September 1973 until July 1974, when he was transferred to the Defense Ministry. As interior minister he was credited with easing repression after the beginning of 1974. The Vatican newspaper L’Osservatore Romano praised him for his defense of human rights March 4. Bonilla had been in disfavor with other military leaders since November 1974 and had spent little time on the job, according to the newsletter Latin America March 14. The government claimed he was suffering from a back ailment, but rumors circulated that he was under house arrest for opposing government repression and maintaining contact with leaders of the Christian Democratic Party, notably ex­ Sen. Renan Fuentealba, who was expelled from Chile in November 1974. However, there was no serious speculation that Bonilla had died due to sabotage.

CHILE Bonilla’s death caused a reorganization of the army leadership. Brady resigned as chief of the national defense staff to be­ come defense minister, and he was re­ placed by Gen. Sergio Arellano Stark, commander of the 2nd Division, in Santiago Province, the army’s most im­ portant division. Gen. Hector Bravo Munoz, the army chief of staff, was re­ tired prematurely and named ambassador to South Vietnam and Thailand, being re­ placed in his army post by Gen. Gustavo Alvarez Aguila. The reorganization strengthened Pi­ nochet’s personal power, enabling him to send away a possible rival—Bravo Munoz—and to split the 2nd Division command into two separate posts, the newsletter Latin America reported March 14. Arellano Stark was promoted from brigadier to division general and allowed to retain control over all troops in the city of Santiago. His old command post, and control over the troops inside Santiago Province but outside the capital, went to Gen. Julio Polloni Perez.

U.N. rights inquiry barred. President Augusto Pinochet Ugarte July 4 unex­ pectedly canceled an imminent visit to Chile by a panel of the United Nations Human Rights Commission investigating reports of torture and other human rights abuses by the military government. The six-nation panel, scheduled to ar­ rive in Chile July 10, had been assembling in Lima, Peru following a 10-day visit to the U.S. to hear testimony from Chilean exiles and U.S. citizens. The Chilean government declared July 15 that it “re­ jected” any future report by the panel as “immoral” because the panel had done its work exclusively outside Chile. Cancellation of the panel’s visit was denounced by the Geneva-based Interna­ tional Commission of Jurists (ICJ) and by U.S. officials. The ICJ sent a telegram to Pinochet July 5 asserting it must “inevitably” conclude that “the Chilean government was not in a position to face an objective investigation.” U.S. Deputy Secretary of State Robert Ingersoll sharply criticized the cancellation in con­ versations July 9 and 11 with his Chilean counterpart, Enrique Valdez.


The cancellation angered U.S. officials because the U.S. had supported tabling of a report on human rights abuse in Chile at the General Assembly of the Organization of American States in May on grounds that Chile would allow a full investigation by the U.N. panel, according to an un­ named State Department official. The cancellation was also criticized July 7 by U.S. Rep. Donald Fraser (D, Minn.), chairman of a subcommittee on interna­ tional organizations of the House of Representatives’ Foreign Affairs Com­ mittee. Fraser called the cancellation a “deeply deplorable and regressive” de­ cision, and said it could have an effect on Chile’s chances of receiving U.S. aid in the future. Pinochet gave no reason for the can­ cellation. However, his government claimed July 8 that it had discovered a plot, allegedly led by the Soviet Union, to unleash “a guerrilla struggle” in Chile upon the panel’s arrival. A letter making the claim was distributed at the U.N. by Chile’s ambassador, Rear Adm. Ismael Huerta. The cancellation followed continued reports of political arrests, torture and other abuse of human rights in Chile. In a related move, the International Labor Organization charged in a report May 29 that the Chilean government had tortured to death or executed labor lead­ ers for their trade union activities. The panel, headed by Jose Luis Bustamante y Rivero, former president of Peru, had visited Chile at the end of 1974. Chile walked out of the ILO’s 60th Interna­ tional Labor Conference in Geneva June 17 after the conference’s committee on resolutions gave priority to a resolution condemning human rights abuse in Chile and recommending that the military regime free detained union leaders, end torture of political prisoners and abolish special political courts and military tri­ bunals. The conference passed the resolu­ tion June 24 by a vote of 236-0 with 106 abstentions. The government withdrew the press credentials of Washington Post corre­ spondent Joanne Omang June 19 for reporting “false information” about Chile. Omang had filed dispatches May


14-19 reporting evidence that torture of political prisoners continued and ques­ tioning a claim by President Pinochet that some torturers had been imprisoned. Omang reported that Pinochet had given her the name of one imprisoned tor­ turer in an interview May 12, but she later discovered that the prisoner, a former army lieutenant, had been jailed for killing a civilian in an automobile accident. Other persons alleged by the Justice Ministry to have been imprisoned for torture had also been jailed for different crimes, Omang reported. U.N. scores rights abuse. The United Nations General Assembly demanded Dec. 9 that the military government re­ store human rights and protect funda­ mental freedoms in Chile. In a resolution passed 95-11 with 23 abstentions, the Assembly cited “the insti­ tutionalized use of torture” and incidents of “cruelty, inhuman or degrading treatment, arbitrary punishment, arrests without foundation, detentions and exiles” which it said were common in Chile. It asked the government to disclose the whereabouts of citizens who had disap­ peared and to release all prisoners not convicted of criminal offenses cited under international law. President Augusto Pinochet angrily denounced the resolution Dec. 12, calling it “false, unjust, artificial and calum­ nious.” He charged the attack against Chile had been led by “the Soviet Union and its satellite countries, whose impe­ rialism has stained and still stains with blood the most diverse zones of the planet,” and aided by the “moral cowardice and the ignorance” of other U.N. members. The U.S., Great Britain and France were among the nations supporting the resolution, while Spain and 10 Latin American countries voted against it. The U.S., which normally backed the Chilean regime, was angry with Pinochet for bar­ ring the panel of the U.N. Human Rights Commission from Chile in July and for backing a U.N. resolution equating Zionism with racism, it was reported. The U.S. and 87 other countries Nov. 10 had supported a resolution by the

LATIN AMERICA 1975 General Assembly’s social, cultural and humanitarian committee denouncing human rights abuse in Chile. Pinochet had given U.S. Ambassador David Popper a formal note protesting the vote Nov. 13. Representatives of Colombia, Ecuador and Jordan also received protests for sup­ porting the resolution. President Pinochet shifts cabinet. President Augusto Pinochet Ugarte re­ vised his Cabinet April 14 to deal more effectively with the growing economic crisis. Finance Minister Jorge Cauas was re­ appointed and given the informal title of “superminister,” with control over the economic policies of 10 other ministries— Economy, Agriculture, Mines, Public Works, Transport, Housing, Health, La­ bor, the Office of National Planning (Odeplan) and the state Development Corp. (Corfo). He gained broad authority over hiring and promotion in those min­ istries, and he was charged with devising an “economic recovery program” within 10 days. Besides Cauas, five other civilians were named to the Cabinet, compared with a total of three civilians in the previous Cabinet. Raul Saez was confirmed as eco­ nomic coordination minister, charged with representing Chilean interests before foreign governments, banking and credit institutions and international organiza­ tions. Sergio de Castro, an economic ad­ viser to the military junta, replaced Fernando Leniz as economy minister. The other Cabinet ministers were five army officers and two officers each from the navy, the air force and the national police. The last three services each gave up a Cabinet post to accommodate the new civilian ministers. The new Cabinet: Interior—Gen. Raul Benavides; foreign—Vice Adm. Patricio Carvajal; finance—Jorge Cauas; economy— Sergio de Castro; mines—Gen. Agustin Toro Davila; labor—Gen. Nicanor Diaz Estrada; justice—Miguel Schweitzer; housing—Carlos Graniftb; public works— Hugo Leon; argiculture—Gen. Tucapel Vallejos; health—Gen. Francisco Herrera; education—Rear Adm. Hugo Castro; defense—Gen. Herman Brady; land & colonization—Gen. Mario Mackay; economic coordination—Raul Saez; Cabinet secretary general— Gen. Hernan Bejares; Corfo—Francisco Soza; Odeplan—Roberto Kelly.


Chile refugees occupy U.N. office. Ten Chilean refugees occupied the Buenos Aires office of the United Nations High Commissioner for Refugees Oct. 8-11, holding several staff members hostage until the Argentine government agreed to transport them to Algeria. The Chilean refugees scored their poor living conditions and inability to find work, for which they held the U.N. office responsible. They initially asked to go to Sweden or another “democratic coun­ try,” but agreed to go to Algeria after Sweden, Denmark and the Netherlands refused to take them. Their departure was arranged by John Kelly, an aide dis­ patched to Buenos Aires by Sadruddin Aga Khan, the U.N. High Commissioner. There were thousands of Chilean refugees in Argentina, many of whom were unable to find even poorly paid work and were dependent on the U.N. for housing and support.

The Economy Poverty, unemployment high. Govern­ ment statistics indicated that 21% of Chile’s population suffered from “ex­ treme poverty,” and more than 10% of the work force in greater Santiago was unemployed, according to the Jan. 13 edition of U.S. News & World Report. Among major economic problems facing the military government, the magazine cited the current low price of copper on the world market (half of the price in mid-1974), the high price of ma­ chinery and spare parts needed by Chilean factories, and the high price of food and oil imports. The magazine noted that despite these problems, Chile was the 10th largest buyer of military weaponry from the U.S. in 1974. Its assessment was similar to one pre­ pared in November 1974 by the World Bank, which said the Chilean economy was in poorer condition than before the 1973 military coup, and recommended that the government spend less money on armaments. The bank’s report was cited by the newsletter Latin America Jan. 3.

65 The government announced that the 1974 inflation rate was 375.9%, down from the 1973 rate of 508%, it was reported Jan. 8. However, independent economic observers said the rate was considerably higher. The price of milk rose by 50% Jan. 8, telephone rates by 11.5% and road tolls 600%-1,000%. The price of bread, flour, rice, oil and other essential goods had risen at the end of December, and the prices of gasoline and transportation fares had increased 50%-100% at the beginning of January, according to Jan. 8 reports. Finance Minister Jorge Cauas and Eco­ nomic Coordination Minister Raul Saez warned Jan. 9 that Chileans would have to make more economic sacrifices in 1975, due to the energy crisis and the low price of copper. Chile would lose some $800 million in revenue during the year because of the copper price, they said. New plan. Finance Minister Cauas an­ nounced an “economic recovery program” in a nationwide address April 24. The pro­ gram—an intensification of existing aus­ terity measures rather than a change in government policy—included a 15%—25% reduction in government spending, a 10% increase in income taxes, a 10% tax on luxury goods, strict punishment for tax evaders, an enlarged public works pro­ gram to combat unemployment, con­ tinued quarterly wage increases to keep up with inflation, and regular devaluations of the escudo to keep it in a realistic re­ lation to the U.S. dollar. Cauas warned that prices would con­ tinue to climb in May and June, but would begin to turn around during the second half of 1975. He blamed Chile’s troubles partly on foreign economic conditions “that are beyond our control,” but he also warned Chilean industrialists against aim­ ing for quick and easy profits. The government pledged May 3 to or­ der a 70% wage increase for all workers in June, to compensate for losses in pur­ chasing power in February, March and April. The Finance Ministry May 6 or­ dered all public services to reduce their expenditures in foreign currency by 25% and their spending in national currency by


15%. The move reportedly would save $772 million. The economic situation continued to deteriorate in April, with inflation reach­ ing 21.2% for the month, following 61% inflation for the first quarter of 1975, ac­ cording to the Andean Times’ Latin America Economic Report May 2. Unem­ ployment was officially put at 12%, but it was probably double that figure, the Re­ port noted. The government devalued the escudo April 7, 13 and 25, for a total of eight devaluations since Jan. 1. The continuing crisis drew criticism of the government from a variety of sectors, including the El Mercurio newspaper chain and the Industrial Development So­ ciety (Sofofa), the nation’s leading man­ agement group. A private Sofofa docu­ ment reported by Excelsior of Mexico City April 7 said the economic situation might reach a state of chaos in 1975 unless the international price of copper increased considerably. Sofofa said the production of consumer goods had decreased by 5.1% in 1974, and could be expected to decrease further in 1975. Consumer goods represented 44.9% of Chile’s industrial production, the docu­ ment noted. Petroleum production had declined by 12% in 1974, Sofofa added, and liquid gas production had fallen by 45%. Public investment was practically para­ lyzed, the document continued, with a 67% decline in public works since the 1973 military coup. This naturally affected the nation’s construction industry, Sofofa noted. Real wages had fallen below their average 1973 level, and they would fall further because of the government’s anti­ inflation program, the document con­ tinued. Unemployment increased at an ac­ celerating pace, spurred by dismissals of workers from state industries such as the National Electricity Co. (Endesa), which recently had fired 2,000 employes. Some 1,000 employes of the national airline LAN-Chile were also due for dismissal, Sofofa added. The only bright spot noted in the docu­ ment was an increase in agricultural pro­ duction, due to a 100,000-hectare increase in land under cultivation.


Among other economic developments: France agreed May 7 to join the U.S. and several other members of the “Paris Club” of creditor nations and renegotiate Chile’s foreign debt payments, the Wash­ ington Post reported May 8. The shift in French policy followed an informal twoday meeting of Club members in Paris. Those willing to deal with Chile together held obligations on more than half of the payments which Chile hoped to stretch out. Chilean and Venezuelan central banks increased their reciprocal credit agreement from $2.4 million to $20 million, accord­ ing to the Andean Times’ Latin America Economic Report May 2. The credit line would help Chile purchase Venezuelan oil. The Chilean embassy in Bonn charged April 3 that the West German government had refused to deliver $20 million in de­ velopment aid it had promised Chile be­ fore the 1973 military coup. West German Research and Technology Minister Hans Matthoefer created a controversy by charging April 4 and again April 7 that Chile’s military junta was a “band of assassins.”

New ■ currency adopted, devalued. The government adopted a new national cur­ rency Sept. 29 and devalued it by 4.48% Oct. 1, as the cost of living and the unem­ ployment rate continued to rise and in­ dustrial production continued to fall. The new currency, the peso, was worth 1,000 units of the old currency, the es­ cudo. The peso was initially pegged at 6.4 to the U.S. dollar and then reduced to 6.7 to the dollar. The escudo had been de­ valued 19 times in 1975; the last devalua­ tion was decreed Sept. 22. The consumer price index rose by 8.9% in August, for a total increase of 221.2% since January, it was reported Sept. 2. The government expressed satisfaction that the CPI rises for July (9.3%) and August were lower than those of May (16%) and June (19.8%); but Orlando Saenz, a leading economist and critic of the government, said the difference was due principally to the collapse, bank­ ruptcy or simple paralysis of many indus­ tries, it was reported Sept. 12.


According to a study by the Industrial Development Society (Sofofa), reported July 29, industrial production in Chile had fallen by 15% in January-April. The wood and cork industry suffered the worst de­ cline, 42.5%, while production in the food and textile industries fell by 17.5% and 12.9%, respectively. Production of nonfer­ rous metals rose by 0.6%, while produc­ tion of leather goods and electronic equip­ ment increased by 7.6% and 44.9%, respectively. Oil production had fallen by 12.5% in the first quarter of 1975, to a level that covered less than 30% of Chile’s domestic need. Lacking resources to conduct na­ tionwide exploration, the government ended the state’s oil monopoly July 14 and opened most of the country to “service contracts” for exploration and ex­ ploitation by foreign petroleum com­ panies. The contracts would last 35 years, with the first five allowed for exploration. The oil found would be the state’s property, but the finders would pump it and receive a percentage of the value of the crude produced. The crude would be refined by the state company ENAP. Unemployment continued to rise, with the government reporting rates of 14.8% in the greater Santiago area and 22% in the industrial sector, it was reported Sept. 9. Unofficial sources put the rate as high as 50% in the poorest areas of the capital and in rural areas elsewhere in Chile. Among those who were employed, real wages continued to decline. The govern­ ment allowed wage increases of 70% June 1 and 24% Sept. 1, but these lagged well behind the cost-of-living increase. (Real wages had fallen steadily since the Sep­ tember 1973 military coup. By September 1974, costs had risen by 2,220% while the wages of low-income state employes had increased by 1,114% and those of lowsalaried private employes by 1,280%, it was reported June 20.) The government announced new aus­ terity measures June 5 including a freeze on hiring in the public sector until Dec. 31 ; a requirement that all new public works projects be approved by the finance ministry; new investment controls, and creation of a monetary council within the Central Bank to tighten controls on emission, foreign credits, foreign trade, foreign exchange and other operations.


The government accelerated the trans­ fer of state enterprises to the private sec­ tor, it was reported Aug. 25. Among state properties recently put up for sale were three banks, a bus line, the nation’s largest crystal factory and several agrarian concerns. By the end of 1975 the government would have sold its majority interest in 11 domestic banks and minority interest in five others, it was reported Oct. 3. The government announced Aug. 18 that it would allow three foreign automo­ bile firms—General Motors of the U.S., Peugeot-Renault of France and FiatConcord of Argentina—to manufacture autos and spare parts for the Chilean domestic and export markets. Volks­ wagen of Brazil and Nissan of Japan were barred from the country. The three fa­ vored companies were expected to invest $100 million in Chile in the next few years, according to government officials. The West German firm Metalgesellschaft would invest $38 million in a joint venture with a Chilean company to exploit zinc and lead deposits near Aysen, in southern Chile, it was reported July 18. Chile would sell Brazil 260,000 tons of copper in 1976-80, it was announced Sept. 16. (The average copper price on the London Metal Exchange was almost eight cents a pound lower than assumed in cal­ culating the government’s current budget, causing strains on the fiscal balance, it was reported July 11.) The 1975 wheat harvest was 49% larger than the 1974 harvest, it was reported July 4. The U.S. gave Chile an ad­ ditional $6.1 million credit, following an earlier credit of $57 million, to cover an expected wheat deficit of 200,000 tons. Other crops showing an increase in 1975 were rice (up 113%) and beets (up 59%). The Inter-American Development Bank loaned Chile $35.5 million June 19 to expand its telecommunications system, and another $40 million Aug. 1 to improve Santiago’s water supply and sewage system. Great Britain told Chile that it would not observe an agreement reached by Chile and several of its creditors in Paris in May which rescheduled payment of Chile’s foreign debt, it was reported Oct. 17. The British foreign ministry demanded

68 that Chile pay the full $35 million it owed Britain in 1975, and it urged the military government to “stop arresting and exe­ cuting political opponents without trial.” (Under the Paris agreement, Chile would pay 30% of the sums outstanding in 1975 in separate 10% payments in 1976, 1977 and 1978, and it would pay the remaining 70% in 14 semiannual pay­ ments over the following seven years. Great Britain was not represented at the meeting which yielded the agreement.)

Price rise reaches 280%. Prices in Chile rose by 280.4% in January-October, with an 8.4% increase in the last month, the government reported Nov. 11. The rise for the 12 months ending in October had been 344.4%, according to official figures cited by the Latin America Economic Report Nov. 14. The price of paper and newsprint rose 580% in January-November, while the cost of newspapers increased 300%, it was reported Dec. 12. The newsprint rise was set by the company Papeles y Cartones, which had a monopoly in Chile, in antici­ pation of a high inflation rate for 1975. The government announced a new “mini-devaluation” of the peso Dec. 17, the seventh devaluation since the new cur­ rency replaced the old escudo Sept. 29. 2. Orlando Saenz, an economist and critic of the government, said the fall in steel production and rise in steel stock levels would cost the government $50 million$80 million, according to the Times. Finance Minister Jorge Cauas said government investment in state industries in 1976 would be cut by 40%, while spending would increase in social services, housing, education and health, it was reported Dec. 5. Cauas had said Oct. 24 that Chile would repay Great Britain in 1976 only 10% of its maturing debt, in accord with an agreement reached by Chile and its “Paris Club” creditors at a meeting boycotted by Britain. Industrial production fell by 23.6% in January-August, according to figures of the Industrial Development Society (Sofofa), reported Oct. 31. However, production rose in September by 5%, the Financial Times of London reported Dec.


OPIC settles ITT’s Chile claim. The Overseas Private Investment Corp. (OPIC), a U.S. government agency which insured private investors against expro­ priation, announced Jan. 7 that a set­ tlement had been reached with Interna­ tional Telephone & Telegraph Corp. (ITT) on its claim stemming from Chile’s nationalization of ITT’s Chile Telephone Co. OPIC said it had bought $35 million in Chilean government notes from ITT and guaranteed payment of $59 million more in notes issued to ITT by CORFO, the Chilean development agency.

OPIC found liable for Anaconda claim. An arbitration panel ruled July 17 that the Overseas Private Investment Corp, was liable to pay claims submitted by Anaconda Co. for losses related to Chile’s expropriation of two copper mines in 1971. Anaconda had filed claims totaling about $154 million with OPIC, but pay­ ment would be determined in further arbi­ tration. In a separate agreement with Chile in 1974, Anaconda had won a $253 million settlement of its claims.

U.S. Role in Chilean Affairs An investigation by the U.S. Senate Select Committee on intelligence in 1975 strongly linked the Central Intelligence Agency with interference in the internal affairs of Chile.

Gen. Schneider death plot. The Senate panel received evidence that U.S. officials had supplied arms to and otherwise en­ couraged Chilean dissidents, who plotted the kidnapping of Gen. Rene Schneider, commander-in-chief of the Chilean army. Schneider, a constitutionalist, opposed military intervention in Chilean politics. U.S. officials, aware of the planned kid­ napping of Schneider, did not desire or encouragehis death in 1970, the report said Schneider apparently opened fire on his


kidnappers and was fatally wounded when they shot back. In a Sept. 15, 1970 White House meeting attended by President Nixon, CIA Director Richard Helms, Attorney General John N. Mitchell and National Security Council Director Henry A. Kiss­ inger, Nixon stated that the Marxist regime of Salvador Allende—who had won a plurality in a presidential election 11 days before—would be unacceptable to the U.S. Nixon then instructed the CIA to work actively to see that Allende did not take office. The CIA would have $10 million or more at its disposal, Nixon told Helms. After making 21 contacts with key police and military officials in Chile during the period Oct. 5-Oct. 20, 1970 and assuring U.S. support for a coup against Allende, the CIA singled out Schneider for removal in preparation for the coup. Following two unsuccessful kidnap at­ tempts by Chilean officers using CIA-sup­ plied arms, conspirators intercepted Schneider’s car Oct. 22, 1970 and mortally wounded him during an ensuing gunfight. The conspirators involved were not those using CIA weapons.

Text of Senate committee report on Schneider: The issue here is not whether the objectives of the CIA were contrary to those of the Administration. It is clear that President Nixon desired to prevent Al­ lende from assuming office, even if that required fomenting and supporting a coup in Chile. Nor did White House officials suggest that tactics employed (including as a first step kidnapping General Schneider) would : ave been unacceptable as a matter of principle. Rather, the issue posed is whether White House officials were consulted, and thus given an op­ portunity to weigh such matters as risk and likelihood of success, and to apply policy-making judgments to particular tactics. The record indicates that up to October 15 they were; after October 15 there is some doubt: The standards applied within the CIA itself suggest a view that action which the committee believes called for top-level policy discussion and decision was thought of as permissible, without any further consul­ tation, on the basis of the initial instruction to prevent Allende from assuming power. Machine guns were sent to Chile and delivered to military figures there on the authority of middle level CIA officers without consultation even with the CIA officer in charge of the program. We find no suggestion of bad faith in the action of the middle level officers, but their failure to consult necessarily establishes that there was no ad­ vance permission from outside the CIA for the passage of machine guns. And it also suggests an un­ duly lax attitude within the CIA toward consultation with superiors. Further, this case demonstrates the


problems inherent in giving an agency a “blank check” to engage in covert operations without speci­ fying which actions are permissible and which are not, and without adequately supervising and monitoring these activities.

Nixon agreed to release Chile data. Former President Richard M. Nixon had agreed to give the Senate Select Commit­ tee on Intelligence access to his papers and tape recordings concerning Central Intelli­ gence Agency attempts to block the elec­ tion of Salvador Allende as president of Chile in 1970, the White House had said Sept. 4. The Senate committee in early August had subpoenaed documents relating to Chile and to domestic intelligence-gather­ ing after lawyers for President Ford in­ sisted they could not produce the records without Nixon’s consent. Sen. Frank Church (D, Ida.), the com­ mittee’s chairman, said he was satisfied with the arrangement, although Nixon’s attorneys would be in charge of deciding which tape recordings and documents were covered by the subpoenas. The New York Times reported Sept. 5 that the Ford Administration’s decision to cooperate with the committee had been also forced by secret testimony before the committee Aug. 12 by Secretary of State Henry A. Kissinger. Kissinger had indi­ cated in his testimony that minutes of the meetings of the National Security Coun­ cil’s “40 Committee” on matters involving the Nixon Administration’s effort to effect a military takeover of Chile in 1970 might be germane to' the information the sena­ tors were seeking. The secretary of state said he had no objections to the senators looking at the minutes, the Times re­ ported. The result of Kissinger’s statement was to undercut the White House’s position that a search of the former president’s papers would be an intrusion that would undermine the concept of executive priviledge, the Times reported. Moreover, the White House had said repeatedly that it would turn over the minutes of the “40 Committee’s” meetings only where there was evidence of true abuse by the CIA or other agencies. (Records of the “40 Com­ mittee,” the National Security Council panel that oversaw U.S. covert intelligence

70 activities, were considered presidential papers.)

Former CIA head testifies. Former CIA director Richard Helms told the Senate Foreign Relations Committee Jan. 22 that he had not told the panel the truth in 1973 when questioned about his agency’s in­ volvement in U.S. efforts to bring down the leftist government of the late Chilean President Salvador Allende. Helms’ testimony to the committee con­ cerned testimony he gave at the time of 1973 confirmation hearings on his appoint­ ment as ambassador to Iran. Asked by Sen. Stuart Symington (D, Mo.) if the CIA had tried to overthrow the Allende government or if the agency had passed any money to the regime’s opponents, Helms had re­ sponded, “No, sir.” However, Helms told the committee Jan. 22 there was “no doubt” in 1970 that former President Nixon wanted the Allende government overthrown. Helms, whose secret testimony was made public Feb. 9, said the Nixon Administration sought ways to overthrow Allende during the time between Allende’s election Sept. 4, 1974 and the ratification of the results by the Chilean Congress Oct. 24, 1970. A “very secret probe . .. just to see if there were any forces to oppose Allende’s ad­ vent as president . .. quickly established there were not... and no further effort was made along these lines,” Helms testified. He had erred in his 1973 testimony, Helms said, and should have asked to speak off the record or sought another forum, since the U.S. did not want to create a diplo­ matic incident.

Regarding the $8 million covertly funneled by the CIA to opposition groups in Chile between 1970 and 1973, Helms stated that it was his understanding at the time that the money had gone not to op­ position political parties but to “civic groups, supporting newspapers, radios, and so forth....” “I cannot understand how anyone could interpret [the CIA effort in Chile] as an attempt to overthrow the government or believe that they stood a chance of doing so.”


CIA ‘dirty tricks’ scored. U.S. Rep. Michael Harrington (D, Mass.) assailed the covert activities of the CIA in Chile. His statement was submitted to the House Speaker June 5 and published in the Congressional Record. It read as follows: Mr. HARRINGTON. Mr. Speaker, I recently noticed with a mixture of curi­ osity and amusement the retirement of David A. Phillips from the Central In­ telligence Agency. Mr. Phillips was the CIA’s chief spy for Latin America during the past 2 years and was running its Latin American operations at the time of Allende’s overthrow in Chile. Having failed by his own admission at legitimate theater, he joined the CIA which allowed him to play a variety of roles; foreign service officer, business­ man, et cetera. Mr. Phillips has now tak­ en on a new role—defender of the CIA— and on May 10 once again mounted the stage—this time for his first press con­ ference. In that press conference and later in an article published by the New York Times, Mr. Phillips attempted to selec­ tively deny CIA involvement lii the overthrow of Allende by asserting that, first, Mr. Colby did not use the word “de­ stabilize”, second, did not encourage the coup plotters, and third, did not fund the truckers’ strike which—according to Phillips;—led to Allende’s overthrow. Mr. Phillips thus desires his audiences to al­ low him the opportunity of selectively defending the Agency by broadly deny­ ing allegations levied against it while re­ fusing to answer specifics on the basis of national security prohibitions. In both cases he attempts to shift the debate away from an interconnected and quite complicated series of actions by the U.S. Government and the CIA de­ signed to “destabilize” the Chilean Gov­ ernment, to what he considers the casual variable in the Allende overthrow—the truckers strike. While the truckers strike may have been the straw that broke the camel’s back, the actions taken by the United States with the help of CIA were much more subtle and substantive than Mr. Phillips would lead us to believe. The assumption of Salvador Allende Gossens, an avowed Marxist, to the Presidency of Chile presented a profound policy dilemma for President Nixon and Secretary of State Henry Kissinger. Past practices of the United States to rid


itself of “undesirable” governments in the Western Hemisphere were not ap­ plicable to Chile. A military operation a-la Bay of Pigs or a Dominican-style intervention were not operable contin­ gencies where Chile was concerned. Similarly, a military coup could not be easily or quickly promulgated in Chile where the military bad a long history of abstinence from politics. Chile had for years stood out as the bright spot for democratic development in Latin America. Civil-military rela­ tions in Chile were a particular area for optimism, for they gave every indication that the proper balance between civilian control and institutional autonomy had been developed. The Chilean military, with two brief exceptions, had stead­ fastly refused to become involved in poli­ ticos, and U.S. policymakers knew the military would not intervene unless it was demanded overwhelmingly by the Chilean middle class, and our policy was subsequently designed to insure that eventuality. The fact that the Nixon administration wanted Allende over­ thrown and that it would not be easy, is substantiated by Mr. Helms’ testimony before the Senate Foreign Relations Committee on the 22d of January, 1975. I know that the Nixon administration wanted It (the Allende government) over­ thrown but there was no way to do It that anybody knew of and any probes that were made In Chile to ascertain whether there was any force there that was likely to bring this about produced no evidence that there was any such force. The agency therefore, never tried.

Elizabeth Farnsworth in her article for Foreign Policy magazine identifies the "force” the CIA had in mind. Quot­ ing an ITT memo from W. R. Merriam to John McCone, Merriam’s contact dis­ closes the CIA approach to the Chilean military “in an attempt to have them lead some sort of uprising—no success to date.” It should be noted here that the goal of overthrowing Allende was not disavowed on principle but simply reflects the inability of the Agency to devise a means to that end. The means, however, were subse­ quently found. Simply stated, they in­ volved massive financial subport to the opposition, an economic blockade of the Allende Government, while simultane­ ously providing continuous support to


the Chilean military. The economic blockade and the massive funding of op­ position elements are the operative vari­ ables in this case not the truckers’ strike, for they assured the alienation of the middle class from the Allende Government and their subsequent de­ mand on the military to intervene. Specifically, the Forty Committee or its prior equivalent authorized the ex­ penditure of approximately $11 million between 1962 and 1973 designed to pre­ vent Mr. Allende’s election, and, when that failed, to destabilize his govern­ ment. A breakdown of this $11 million would include: $3 million in the 1964 elections, $550,000 in 1969 to opposition individuals, $350,000 authorized in 1970 to bribe the Chilean Congress, $5 mil­ lion from 1971 to 1973/and an addi­ tional $1.5 million for the 1973 munic­ ipal elections. In 1973 an additional $50,000 to fund the truckers strike was indeed turned down by the Forty Com­ mittee and another $1 million which had been authorized proved unnecessary be­ cause of the successful coup in Septem­ ber. Once again I would like to note that $350,000 authorized to bribe the Chilean Congress was not disavowed on prin­ ciple but was simply deemed “unwork­ able.” Simultaneously, the United States un­ dertook an economic blockade designed to prevent the Allende Government from minimally satisfying the consumer de­ mands of the middle class and to event­ ually bankrupt Allende’s Government. Loans and credits from the International Monetary Fund, the World Bank, the Inter-American Development Bank, and private American banks were either cut back to a fraction of their previous levels or stopped completely. To argue that these decisions were based on the finan­ cial credit-worthiness of the Chilean Government while these same sources continued loans and credits to such fi­ nancial basket-cases as Bangledesh strains credulity.

As previously pointed out, U.S. mili­ tary aid not only continued but was actually increased to double the level provided them in the 4 years prior to Allende’s rule. In addition, Ms. Farns­ worth deals another blow to the credit­ worthiness argument by noting that within 8 days after, the coup the IDB

72 had provided Chile with a loan of $65 million and within 1 year the interna­ tional lending institutions had provided a total of $468.8 million with private banks providing another $250 million in


credits. Ms. Farnsworth maintains that this phenomenal increase in Chile’s credit-worthiness represents “phase two of the U.S. counterinsurgency program in Chile.’’


Guerrilla Groups Fought

11, calling it a “a maneuver to divert na­ tional attention from the union problems and the injustices suffered by the working class.”

Guerrilla activity had plagued Colombia in 1974 and persisted through 1975. In response to insurgent attacks plus student and labor unrest, the government declared a state ofsiege.

Guerrilla arsenal reported found. Police intelligence agents reported finding a huge supply of arms, ammunition and explo­ sives Jan. 11 in an apartment in downtown Bogota, near the National University. A woman was arrested in the raid. Authorities said the arsenal, enough to equip a battalion and “blow up a city,” would have been sent to guerrillas of the leftist National Liberation Army (ELN), who operated in Colombia’s northeastern mountains. Medical supplies were also found in the apartment, including medicine to combat tropical diseases, ac­ cording to police. Announcement of the discovery fol­ lowed Labor Minister de Crovo’s charge Jan. 10 that Communist labor leaders were plotting to overthrow the govern­ ment, but authorities did not link the arsenal and the alleged plot. The government had announced in late 1974 that it was negotiating the surrender of 200 ELN guerrillas in exchange for respect for their lives, proper medical treatment, fair trials and a possible general amnesty. However, the talks ap­ parently failed and ELN leader Fabio

Bank workers strike. About 30% of the nation’s bank employes struck Jan. 17 and 20 to support workers at the Livestock Bank who had struck a week earlier to demand higher wages and cost of living adjustments. The government declared the stoppages illegal and sus­ pended the legal status of the bank em­ ployes’ two unions. More than 100 unions recently had de­ manded wage increases of up to 50%, threatening to strike if their demands were not met. The unions represented more than 100,000 workers in banks, rail­ ways, post offices, government agencies and private enterprise. Labor Minister Maria Elena de Crovo had charged Jan. 5 that the wave of labor unrest was fomented by “foreigners,” and she asserted Jan. 10 that the Communistled Colombian Workers’ Syndical Con­ federation (CSTC) was organizing strikes as part of a plot to overthrow the govern­ ment. The CSTC rejected the charge Jan. 73


Vasquez Castano declared in a message to the press that his group would continue to fight the government, according to El Nacional of Caracas Jan. 5. A second Communist guerrilla group, the Colombian Revolutionary Armed Forces, charged in a communique Jan. 4 that the government had resorted to “psychological warfare” against insurgent movements in its appeal for surrender. The group said it would continue its fight unless the government gave free land to peasants, general wage increases to workers and housing to the homeless. The guerrillas also demanded university reform and the nationalization of natural resources exploited by foreign corpora­ tions. State of siege imposed. President Al­ fonso Lopez Michelsen declared a nation­ wide state of siege June 26 to combat a wave of kidnappings, guerrilla attacks and student and labor unrest. Lopez asserted in a radio and television address that the action was necessary to fight what he called “mafias” that were committing various crimes throughout the country. The siege suspended individual liberties and established military trials for crimes ranging from kidnapping to lar­ ceny. A siege had been imposed June 13 in three Colombian departments—Anti­ oquia, Valle and Atlantico—after student riots in each of their capitals in which a total of 10 persons were wounded and more than 100 arrested. The students rioted to support fellow students at the National University in Bo­ gota, who had gone on strike May 31 to pressure the government to allow the uni­ versity to administer the San Juan de Dios hospital in the capital. The government had agreed earlier to transfer the hospital to the university, but it revoked the agree­ ment after interns and residents affiliated with the university occupied the hospital, occasioning the arrest of the dean of the school’s medical faculty and about 350 interns, residents and students. University rector Luis Carlos Perez, an outspoken leftist, supported the occupa­ tion, and he in turn was supported by several hundred residents and interns in

LATIN AMERICA 1975 17 hospitals across the country. The crisis deepened when Lopez Michelsen dis­ missed Perez June 3 and named Hernan Vieco, dean of the fine arts faculty, to succeed him June 14. Vieco rejected the rectorship June 18 after the university’s other deans and the striking student body refused to sup­ port him, demanding the right to elect the next rector. Following further stu­ dent unrest, including a riot in Medellin (Antioquia) June 19, the issue was re­ solved June 22 when the govenment de­ cided to study the transfer of the hospital and to retain Perez as rector for another month, until the end of the year’s first semester of study. (Before the hospital conflict, students had rioted in Medellin May 15, to protest a rise in tuition payments at local uni­ versities, and in Bogota April 18, to mark the first anniversary of the killing of two students by police. Some 500 persons were arrested after the Bogota riot, according to the French newspaper Le Monde April 22. In other unrest, three persons were killed June 13 in La Dorada [Caldas Department] during riots following the arrest of 51 peasants who, the government charged, had illegally occupied private lands.) The student unrest coincided with a strike by cement workers, begun May 5, to demand a 50% wage increase. The gov­ ernment, which said the strike had idled 100,000 construction workers, named a mediation board to settle the strike, but the strike leaders—members of the leftist Colombian Workers Syndical Confedera­ tion—rejected mediation June 17. During the same period there were a number of other strikes, including one by 250,000 teachers and another by 13,000 members of the Caja Agraria, which pro­ vided banking services to small town­ ships, both reported by the newsletter Latin America May 23. Adding to the student and labor unrest, there were a number of attacks by left­ wing guerrillas in isolated areas, and a wave of kidnappings by presumed com­ mon criminals. Eighty members of the ELN June 10 occupied the town of Arenal, on the northern coast, robbing residents and making them listen to anti-government


harangues. About 30 ELN guerrillas am­ bushed a military patrol in Morales (Bolivar Dept.) June 25, and three soldiers and three insurgents were killed in the clash. Some 20 members of the pro-Soviet Colombian Revolutionary Armed Forces (FARC) assaulted the town of Mutata (Antioquia Dept.) June 20, killing two local officials and one policeman and rob­ bing the Caja Agraria. Two months ear­ lier, on April 10, 200 FARC guerrillas had staged a spectacular attack on Puerto Rico (Caqueta Department), sacking local stores, killing two policemen and lectur­ ing a majority of the 25,000 residents. A majority of the kidnapping victims were reported ransomed by relatives. One abductee, Ivan Villegas of Barranquilla, was found dead June 18, apparently killed by his captors after his family made no ransom offer. During the unrest there was also a brief military crisis which was not fully ex­ plained by the government, according to most observers. President Lopez fired the army commander, Gen. Alvaro Valencia Tovar, May 28, ostensibly because Valen­ cia had supported two other officers removed by Lopez for complaining pub­ licly about their transfer to different posts. Many observers considered Valen­ cia’s offense insufficient for dismissal, and some press sources reported rumors that some officers had plotted against the government early in May and that Valen­ cia was disliked by the national defense minister, Gen. Abraham Varon Valencia. Observers generally linked the nation­ wide unrest to the high inflation and un­ employment rates. The private Federation for Development reported April 29 that in the major cities unemployment had reached 14%, not counting underem­ ployed workers who were effectively job­ less. Although the government predicted the 1975 inflation rate would fall below 1974’s 28%, the National Association of Industrialists declared April 29 that it might actually reach 40%. President Lopez defended the govern­ ment by asserting many of the factors causing the economic crisis were beyond its control. In a speeech to a Colombian Workers Union Congress in Cali April 28 he said imported inflation and the con­


traction of the world market were harm­ ing Colombian exports, and speculators among local producers and manufacturers had driven up domestic prices. As for the wave of social unrest, he said the ques­ tion was whether the reforms he had pro­ posed in his election campaign could be carried out without abandoning his “ex­ periment in liberty.” (Lopez was simultaneously under at­ tack from the right, which distrusted the increased freedom given to leftists, par­ ticularly in the press, and from the ex­ treme left, which argued the president’s reforms were not deep or rapid enough, the newsletter Latin America noted May 2. Foreign Minister Indalecio Lievano charged April 21, on the first anni­ versary of Lopez’ election, that unnamed leftist and rightist subversives were plot­ ting against the government.) Top military officer killed. Guerrillas of the National Liberation Army (ELN) assassinated the inspector general of the armed forces, Gen. Ramon Rincon Quinones, in Bogota Sept. 8. The leftist insurgents said Sept. 10 that they had killed Rincon because he “persecuted, tortured and killed defense­ less peasants” in 1971-74 when he com­ manded the 5th Army Brigade in Bucaramanga. The brigade was in charge of antiguerrilla operations in Santander Department, the ELN’s rural base. Several thousand policemen and sol­ diers began an intense search for guer­ rillas in several cities immediately after the assassination. The army said Sept. 10 that it had captured five ELN members, including Claudio Leon Mantilla, accused of planning the ELN’s unsuccessful at­ tempt in 1971 to assassinate Gen. Alvaro Valencia Tovar, then army commander. The ELN recently had coordinated its activities with the Colombian Revolu­ tionary Armed Forces (FARC), the other major guerrilla group, with which it nor­ mally had political differences (the ELN was Castroite and the FARC, pro-Soviet). The two groups assaulted rural hamlets, stealing money, medicine, food and clothing and executing peasants who cooperated with the army. The guerrillas also kidnapped wealthy ranchers and held them for large ransoms.


The army claimed to have killed or cap­ tured a number of ELN and FARC guer­ rillas in clashes in rural areas in June-Sep­ tember. Among those arrested were Martin Villa, head of the FARC’s “fourth front” in Santander, and his lieutenant Segundo Ayala, both reported captured June 30. The army also claimed to have destroyed the urban network of the People’s Liberation Army (EPL), a small Maoist group which had been reor­ ganizing since the army killed or arrested most of its members in 1973. The army claimed Aug. 6 that it had arrested 35 EPL members and guerrilla contacts in several cities and rural areas, and had killed EPL founder Pedro Leon Arboleda. The court-martial of 28 alleged EPL members began in Medellin Oct. 8. (Justice Minister Manuel Hoyos Arango disclosed Sept. 17 that 509 persons had received courts-martial since the June 26 state of siege. Some 5,000 had been arrested in the first days of the siege, according to the French newspaper Le Monde July 1. The eight members of a government commission designing a new penal code for Colombia resigned to protest the courts-martial and the state of siege, it was reported Sept. 17.) In some urban areas the antiguerrilla sweep amounted to a campaign of terror, according to observers cited by the London newsletter Latin America Aug. 8. The use of torture in the interrogation of suspects was instrumental in breaking up the EPL network, the newsletter added Aug. 15. Some 50 leftist labor unions, peasant groups and cultural organizations protested what they called an “inten­ sification of repression” in a statement issued in Bogota Oct. 11. The government reaffirmed the state of siege Aug. 3 and decreed a set of security measures Aug. 6 which provided prison terms of 15 days to two months for persons who disrupted public order, held unauthorized demonstrations, blocked public traffic, wrote slogans against the government or the state of siege, or refused to cooperate with authorities. President Alfonso Lopez Michelsen said in an interview with the New York Times Sept. 18 that his government would combat leftist guerrillas not only with se­ curity sweeps but with continued promo­ tion of agrarian reform through land dis­


tribution and formation of peasant cooperatives. A 1971 agricultural census showed 4.3% of Colombia’s landowners held 67.5% of the land, while 71.3% held 7.2% in parcels of under 25 acres each, half of them considered too small or too poor to support a family. Other attacks. Among other terrorist acts, the FARC killed 11 people in a raid on a town in Boyaca Department July 28. The army said the victims were civilians accompanying a police inspector to investigate a murder in the emerald-pro­ ducing region, but other reports suggested the 11 were members of an army counter­ guerrilla group, according to the newslet­ ter Latin America Aug. 8. Three FARC members were reported killed by police near Chirigodo (Antioquia Department) Aug. 1. Donald Cooper, a vice president of the U.S.-owned Sears Roebuck department store chain, was kidnapped by unknown persons in Bogota Aug. 5. Arturo Giron, son of a wealthy rancher, was kidnapped in Monterrey (Bolivar Department) Aug. 19 when the ELN raided the town, killing a peasant. Two rich landowners in Cali and a textile industrialst in Medellin were abducted Sept. 11. Soldiers, in eastern Colombia killed two abductors of rancher Jose Ignacio Paez, who was ransomed earlier, it was reported Aug. 19. Police in Bogota killed an abductor in freeing Edmundo Garzon, a businessman being held for a $50,000 ransom, it was reported Aug. 20. Presumed members of the FARC at­ tacked the hamlet of Carepa near Chigorodo Aug. 31, killing eight peasants they accused of being army informers. Defense Minister Gen. Abraham Varon Valencia said Sept. 8 that FARC and ELN guerrillas had killed 20 peasants in the previous few days in separate attacks in eastern and northern Colombia. ELN members killed three peasants in Santander and one in Boyaca Sept. 8, ac­ cording to army sources.

Radio broadcasts curbed. The govern­ ment limited the freedom of radio broadcasters Sept. 29 under pressure from military leaders, who were angered

COLOMBIA by reports in the leftist press of unrest in the armed forces and corruption among leading officers. A decree was issued prohibiting broadcasts which attacked Colombia’s laws, institutions or foreign policy, which impugned the honor of citizens, which in­ sulted authorities, which contained “false or tendentious reports” or which “incited in any way disobedience of the law or disturbance of public order.” The statute also forbade broadcasting of “offensive humor or words with double meaning,” reports of crimes against “the family or sexual freedom and honor,” and state­ ments by spiritualists, sorcerers or other “unqualified professionals.” Defense Minister Gen. Abraham Varon Valencia announced Sept. 29 that the cabinet and the security council were also studying measures to end “the abuses of certain organs of information which, protected by the freedom of the press, seek to . . . sow chaos in our country.” Worried leaders of journalists’ unions requested an “urgent meeting” with Pres­ ident Lopez Michelsen Oct. 1 to discuss the planned legislation. Varon Valencia and other military leaders reportedly sought to silence the magazine Alternativa, published by the novelist Gabriel Garcia Marquez, and the leftist newspaper El Bogotano. Both publications had printed reports of cor­ ruption by Varon Valencia, torture of political and other prisoners, and serious dissension within the armed forces following the removal in May of the army commander, Gen. Alvaro Valencia Tovar, and his close associates. El Bogotano had printed a communique Sept. 16 from a presumed right-wing or­ ganization called Colombian Anticom­ munist Action which vowed to kill mem­ bers of “the seditious groups of the international left.” It later printed a com­ munique, sent to the press Sept. 19 by an alleged group of 189 military officers who claimed loyalty to Valencia Tovar and pledged to overthrow the government in order to achieve “the moral, social and economic reconstruction of the country.” The alleged rebels, who called them­ selves the Military Brigade for National Liberation and Reconstruction, de­ nounced “politicians whose power lies in

77 the most expensive system of political and administrative corruption.” They de­ nounced the “humiliating” dismissal of Valencia Tovar and called for a “purge” in the armed forces. (The communique charged that mili­ tary officers—not leftist guerrillas, as widely reported—had assassinated the army’s inspector general, Gen. Ramon Rincon Quinones, Sept. 8 to “protect the secret of obscure negotiations.” Au­ thorities reported Oct. 21 that Rincon had been killed by common criminals hired by the Castroite National Liberation Army, and the assassins had been captured.) Commanders of the major military regiments repudiated the alleged commu­ nique Sept. 23 and reaffirmed their loyalty to Varon Valencia.

The Economy Economy grew 6% in 1974. Finance Minister Rodrigo Botero announced at the end of 1974 that the nation’s economic growth rate for the year had been 6%, 1 % below the 1973 rate, the London newslet­ ter Latin America reported Jan. 10. Botero called it a satisfactory rate considering worldwide economic difficul­ ties. Agricultural production was 5.6% higher in 1974 than the previous year, compared with a 1973 growth rate of 4.7%. However, the industrial growth rate was only 7.2% for 1974, compared with 9.8% the previous year. Industry was working at only about 60% of capacity, according to Latin America. Botero said prices had risen by 25% in 1974, but unofficial sources said the in­ crease was much higher, particularly for basic necessities. Retail sales had dropped by 30% during the Christmas 1974 period, and in the agricultural sector, sales of cot­ ton, rice and other crops had fallen disas­ trously, causing serious debt problems to farmers, Latin America reported.

State coal firm plan. A state coal cor­ poration was planned to assume policymaking, search for and exploitation of

78 Colombian coal, according to the Latin America Economic Report May 2. Co­ lombia was believed to have the largest coal deposits in Latin America, with esti­ mates of potential reserves varying from 4 billion tons to 40 billion tons, but coal mining was presently limited to smallscale operations of a relatively low techni­ cal level, and production was just above two million tons per year, the Report noted.

International credits granted. The twelve member nations of the Consul­ tative Group for Colombia, meeting in Paris under the sponsorship of the World Bank, granted Colombia $2.6 billion in de­ velopment credits. Finance Minister Rodrigo Botero announced June 24. The total was $400 million more than Colombia had asked, Botero asserted. The creditor nations had been encouraged by his claim that new oil discoveries in Meta Department would make Colombia self-sufficient in petroleum products within three years, he noted. (The Meta finds, made by Chevron Oil Co. of the U.S., would yield a maximum of 60 million barrels of crude but would not resolve Colombia’s gasoline shortage, according to technicians of the state oil firm Ecopetrol, quoted by the Bogota newspaper La Republica June 24. Only 10% of the petroleum was refinable into gasoline, the newspaper reported. (Before the discoveries, Colombia’s oil production had fallen to about 160,000 barrels per day, 5,200 barrels less than the nation’s installed refining capacity, forcing it to import high-priced refined products. Four U.S. firms—Gulf Oil Corp., Continental Oil Co., Superior Oil Co. and Sun Oil Co.—had closed their local operations April 16, claiming they had lost $20 million in unsuccessful ex­ plorations and charging the government’s price regulations made operations in Colombia unprofitable. In February 1974 the government had fixed the price of crude oil from new oilfields at $4 per bar­ rel.) The Paris loan represented an increase of more than 100% in Colombia’s foreign debt. In 1974 the cost of servicing the debt had reached about $279 million, according


to the Andean Times’ Latin America Eco­ nomic Report April 25. The government had signed an agreement May 19 to borrow $100 million from a consortium of 30 foreign banks headed by Irving Trust Co. of New York. In another foreign loan, the mayor of Medellin (Antioquia Dept.) announced Feb. 27 that Saudi Arabia would extend the city $100 million to expand its elec­ trical power system. The credits contrasted with a decline in new foreign investments and in foreign purchase of Colombian products. The Na­ tional Trade Federation reported that new foreign investments in Colombia had fallen from $111 million in 1970 to $24 million in 1974, accordinfa to the Latin America Economic Report April 18. Colombian exports in the first quarter of 1975 fell $100 million below the same pe­ riod of 1974, with sharp declines in textiles, coffee and timber, according to the Report May 2.

Other foreign economic developments. Colombia signed a trade protocol with the Soviet Union, the Report noted April 11, by which Colombian companies received credit facilities to import Russian machinery-and equipment at 5% interest over 10 years. Colombia sought to buy Soviet transport, electrical and communi­ cations equipment, while the U.S.S.R. was interested in Colombian textiles, coffee and meat, according to the Report. It was reported March 14 that Colombia took over the foreign and domestic mar­ keting of sugar following scandals involv­ ing the smuggling of sugar out of the country. Colombia joined the Caribbean Devel­ opment, Bank, it was reported March 13.

Lopez Visits U.S. Lopez meets Ford & Kissinger. President Alfonso Lopez Michelsen visited the U.S. Sept. 24-30 for talks with government and business leaders.

COLOMBIA He stopped first in Washington, D.C., where he conferred with President Ford and Secretary of State Henry Kissinger Sept. 25-26, and then traveled to New York, where he and his finance minister, Rodrigo Botero, met with bankers and other businessmen. Lopez discussed a number of issues with Ford and Kissinger including eco­ nomic cooperation, joint action against the drug traffic and the current negotia­ tions between the U.S. and Panama for a new treaty to govern the Panama Canal and Zone. He offered to mediate in the ne­ gotiations and he gave Ford a message from Brig. Gen. Omar Torrijos, the Pana­ manian strongman, who had conferred with Lopez in Colombia Sept. 22. Lopez and Ford announced at the end of their talks that Colombia would give up all U.S. economic aid beginning in 1976, although it would continue to receive U.S. military aid. Lopez noted that Colombia’s “export earnings are sufficient for our balance of payments requirements” and that the U.S. economic assistance “can be more useful to needier countries.” Lopez added that Colombia would continue to rely on development loans from the World Bank, the Inter-American De­ velopment Bank, the Organization of American States and the United Nations, all of which relied on U.S. financing. Lopez sharply criticized U.S. policy toward Latin America Sept. 25 in a lengthy dinner toast to top U.S. officials and their guests. “Neither the ‘big stick,’ nor the ‘good neighbor,’ nor the ‘low profile,’ nor ‘benign neglect’ satisfy us be­ cause of their one-sided connotation,” he said. “What is required is a relationship between the U.S. and Latin America jointly formulated by both parties ac­ cording to their needs and aspirations.” In New York, Lopez and Botero told bankers that Colombia’s decision to take 51% ownership of all foreign banks in the

79 country was not negotiable. They said Colombia was not interested in direct foreign investment, but it sought “foreign companies interested in obtaining man­ agement and service contracts with Co­ lombian industries because we are most eager to acquire technology and expertise from abroad,” according to a report Oct. 4. They added that Colombia would continue to observe Article 24 of the Andean Pact, which required the six members of the Andean Group to elim­ inate foreign control over much of their domestic industry. Lopez’ visit to the U.S. had been clouded by an angry statement he released Sept. 12 blaming the U.S. for Colombia’s growing role in the international narcotics traffic. Lopez chided the U.S. for its inability to control “its own mafias,” asserting: “Colombia is a victim of its privileged geographical position, which allows U.S. citizens, with U.S. capital and airplanes registered in the U.S. ... to turn us into a platform for the drug traffic.” Justice Minister Samuel Hoyos Arango added Sept. 14 that transnational cor­ porations, presumably based in the U.S., were behind the narcotics trade, which he called “the brightest business in the world.” (As many as 80 U.S. citizens had been jailed in Colombia for varying terms in 1975 for allegedly possessing or selling drugs, it was reported July 25. In the fiscal year that ended June 30 the U.S. gave Colombia $450,000 in aid to fight the nar­ cotics traffic. (A recent government study showed Colombian students used drugs more than their counterparts in the U.S. or Western Europe, it was reported Aug. 15. More than 43% of Colombia’s students regularly took barbiturates, marijuana, hallucinogenic mushrooms, LSD or cocaine, the study reported.)


U.S. Plot Against Cuba Charged; Other U.S.-Cuban Developments The U.S. Senate Select Committee on Intelligence Nov. 20 made public a report charging that U.S. government officials had ordered the assassination of Cuban Premier Fidel Castro and other foreign leaders. Earlier in 1975 a U.S. government report had revealed details of an investigation into alleged U.S. and Cuban conspiracies against each other. Despite these charges, efforts were made to improve Washington-Havana relations. The U.S. eased its trade embargo against Cuba: Sen. George S. McGovern went to Havana on an official visit, and Cuba re­ turned a ransom extorted from a U.S. air­ line for a plane hijacked to Havana, in 1972. The attempted rapprochement suffered a setback toward the end of the year, how­ ever, when the Ford Administration de­ nounced Cuba’s military intrusion in the war in A ngola.

Committee details plot. In March 1960, the U.S. Senate committee report said, Central Intelligence Agency officials had begun scheming against Cuban Premier Castro. Among the suggested schemes: impregnating his cigars with a disorienting 81

agent before a speech and dusting his boots with a substance that would make his beard fall out. Between 1960 and 1965, the CIA insti­ gated at least eight separate plots against Castro, but none was successful. A box of the Cuban leader’s favorite cigars contaminated with botulism toxin was de­ livered by the CIA to an unidentified person in Cuba in February 1961, but there was apparently no attempt to pass them on to Castro. Robert Maheu, a former Federal Bu­ reau of Investigation agent and later an aide to millionaire industrialist Howard R. Hughes, was contacted in August 1960 by Col. Sheffield Edwards, director of the CIA office of security, who had proposed that a member of the crime syndicate that formerly ran gambling operations in Cuba be used to kill Castro. Maheu in turn contacted racketeer John Roselli, who was told by Maheu that “high government officials” wanted to eliminate Castro. Accepting the proposal, Roselli travelled to Miami, where he recruited exiled Cubans for the job and also met with CIA agents, who supplied poisoned pills, money and electronic gear for the assassination. A Cuban working in Castro’s favorite restaurant was to administer the poison when he received the word. However, the signal did not come and the waiter returned the pills and money.

82 The poisoning plan was reactivated in April 1962 by CIA agent William Harvey, who turned the poisoned pills and $5,000 worth of arms and radio equipment over to a Cuban contact. (No evidence that an attempt on Castro’s life occurred was un­ covered, however.) In early 1963, “Task Force W,” a covert CIA group assigned to covert operations in Cuba, studied and rejected a plan to place an exploding seashell in an area in which Castro was known to skin dive. In January 1963, a skin diving suit contaminated with a poisonous fungus was prepared as a gift to Castro from James Donovan, U.S. negotiator for the release of Cuban prisoners. This plan failed because Donovan decided to give Castro an uncontaminated suit. An unidentified highly placed Cuban leader met with Desmond Fitzgerald, chief of the CIA special affairs staff, in August 1963 and offered to kill Castro with a high powered rifle. Fitzgerald later told in-house CIA investigators that he had rejected the offer. In a meeting in Paris November 22, 1963, the day President Kennedy was assassinated, Fitzgerald offered a Cuban agent a poison ball point pen with a hypodermic needle too small to be felt. The agent rejected the device as amateur­ ish. From 1963 until early 1965, the CIA ar­ ranged for the delivery of arms and explo­ sives for use against Castro. (The com­ mittee’s report did not contain specifics on these attempts.)

CIA plot to kill Castro described. L. Fletcher Prouty, a retired Air Force colonel who once served in the Defense Department’s Office of Special Opera­ tions, said April 27 that in “late 1959 or 1960” he had handled a Central Intelli­ gence Agency request for a small, spe­ cially equipped Air Force plane to fly a two-man assassination team into Cuba to kill Castro. The plane was an L-28 Heliocourier. The men, both Cuban exiles, were “equipped with a high-powered rifle and telescopic sights” and “knew how to get to a building in Havana which overlooked


a building where Castro passed daily,” Prouty said. The plane, an L-28 “Heliocourier,” returned safely to Eglin Air Force Base in Florida, he said, but the “Cuban exiles as far as 1 know were picked up between where they were left off and town.” Prouty explained that he had come for­ ward now only because of criticism Rich­ ard Helms, former CIA head, had directed at CBS-TV newsman Daniel Schorr, who had reported that President Ford was worried that investigations of the agency would uncover assassination plots against foreign leaders. Helms, who had just emerged from over three hours of testi­ mony before the Rockefeller Commission April 26, angrily said, “1 don’t know of any foreign leader that was ever assassi­ nated by the CIA.” Prouty said he was upset because he was “positive” that Helms knew about the mission to kill Castro. At the time of the mission, Prouty said, Helms was in almost total control of clandestine CIA operations against Cuba. At a June 24 committee hearing, John Roselli, reputedly an aide to Sam Gian­ cana, a Chicago crime syndicate boss, had testified in closed session. The committee also had planned to question Giancana, but he Was shot to death in his Oak Park, 111. home June 20. Giancana had been tied to CIA assassination plots against Castro. According to Sen. Frank Church (D, Ida.), the committee’s chairman, who spoke to reporters afterward, Roselli’s testimony had “filled in, in much greater detail [the plot] and did not depart from what has been published in the press.” The published reports Church referred to said that Robert Maheu, a former Federal Bureau of Investigation agent and later a key aide to billionaire industrialist Howard R. Hughes, recruited Giancana and Roselli on behalf of the CIA to direct an assassination plot against Castro. The racketeers, who established a base of operations in Miami Beach, were asked by the CIA in late 1960 to arrange the poisoning of the Cuban premier, his younger brother, Raul Castro, and Ernesto Che Guevara, the late Argentine revolutionary leader. The plot was subse­


quently aborted, the reports said, because the assassin inside Cuba entrusted with the mission was never able to get close enough to the Cuban leaders to poison their food as planned. The purpose of the killings was to create a leadership vacuum that would make Cuba ripe for counter­ revolution, the reports indicated. John A. McCone, director of the CIA 19611965, also shed light on CIA plots against Castro. Speaking to newsmen after giving secret testimony to the Senate select committee June 6, McCone confirmed that the CIA had planned and undertaken steps to assassinate Castro. McCone, who claimed not to have been told of the attempts on Castro’s life even after he became head of the agency, said all of the schemes were “aborted” and that the principal effort was stopped soon after the failed Bay of Pigs invasion in April 1961. He had become aware of the CIA’s efforts after reviewing agency files in the previous few months, McCone said. McCone said the chain of command for the assassination plots against Castro was murky “because the people involved are dead,” including Presidents Eisenhower and Kennedy, former Attorney General Robert F. Kennedy, former CIA Director Allen Dulles and former Secretaries of State John Foster Dulles and Christian Herter. Rockefeller panel reports on CIA. A U.S. Presidential commission investigating il­ legal activities by the CIA, including an assassination plot against Castro, com­ pleted its probe May 12 and issued a final report made public June 10. The report of the commission, chaired by Vice President Nelson A. Rockefeller, made no mention of the alleged conspiracies against Castro or his reported involvement in the 1963 assassination of President Kennedy. The vice chairman of the commission, L. Douglas Dillon, had said May 12 that he had “no knowledge” that Kennedy had been killed in retaliation for plots against Castro. This re-examination of the Kennedy assassination had been prompted by charges by Dick Gregory, the comedian and activist, that a film of the assassi­ nation clearly showed Kennedy being shot

83 from the front and not from behind as the Warren Commission had found. The evidence indicated that the assassination was a CIA plot, Gregory said. A news photograph, taken shortly after the kill­ ing, purportedly showed Dallas police holding men resembling convicted Water­ gate burglars E. Howard Hunt Jr. and Frank Sturgis, both of whom were CIA employes at the time. (A Federal Bureau of Investigation [FBI] spokesman said May 11 that the Rockefeller Commission had requested that a photographic expert from the agency study the photograph.) Other conspiracy theorists suggested that Oswald had acted as an agent for the Soviet Union. However, CBS News re­ ported May 9 that Lt. Col. Yuri I. Nosenko of the Soviet secret police, the KGB, who defected to the U.S. 10 weeks after the assassination, told the CIA that the KGB had considered Lee Harvey Oswald mentally unstable and possibly a U.S. agent. Another theory was based on Oswald’s visit to Havana only a few months before the assassination. According to propo­ nents of the theory, Oswald acted on orders from Cuban Premier Castro, who was retaliating against attempts by the CIA to assassinate him. Former President Lyndon B. Johnson was said to have believed Castro was connected with the assassination. In her syndicated newspaper column April 24, Marianne Means related a conversation she had with Johnson about a year before his death in 1973. Johnson told her in confidence, Means wrote, that he thought Oswald had acted alone but was under either “the influence or the orders” of Castro. Lee Janos, a former aide to John­ son, also wrote that Johnson had specu­ lated shortly before his death “that Dallas had been in retaliation for the thwarted attempt” to kill Castro, it was reported April 28. However, Castro May 7 called the the­ ory untrue, and said it would have been “irresponsible” for Cuba to have in­ volved itself in the Kennedy slaying. Kennedy scores Rockefeller ‘innuendos’. Sen. Edward M. Kennedy (D, Mass.) June 16 criticized Vice President Nelson A.


Rockefeller for implying that John F. Kennedy and Robert F. Kennedy might have been involved in CIA assassination plots against Cuban Premier Castro. Rockefeller June 15 had suggested that the late president and his brother might have been aware of CIA plots to kill foreign leaders. Stating that the evidence with regard to assassinations was incon­ clusive, the vice president added, “I think it’s fair to say that no major undertakings by the CIA were done without either the knowledge and/or the approval of the White House.” Given Rockefeller’s “failure to fulfill his duty on the issue,” Kennedy said, “I hope he’ll have the decency to maintain his silence . . . Such comments come with especially bad grace from the Vice Pres­ ident whose own CIA commission avoided the question of assassination and passed the buck to Congress.”

Kissinger hints U.S. policy change. Sec­ retary of State Henry Kissinger said March 1 that the U.S. was “prepared to move in a new direction” in its policy toward Cuba, and that he would consult with Latin American leaders on ways to end Cuba’s hemispheric isolation during a scheduled visit to the region in April. Kissinger’s remarks, made at a Civic Club luncheon in Houston, were in­ terpreted in the U.S. press as an overture to the government of Premier Fidel Castro. Kissinger said the U.S. would “consider changes in its bilateral relations with Cuba” if the Organization of American States lifted its diplomatic and com­ mercial embargo of the island, pre­ sumably at its General Assembly in May. However, he asserted the U.S. decision would be “heavily influenced by the external policies of the Cuban govern­ ment,” particularly its “military rela­ tionships with countries outside the hemisphere.” “Fundamental change cannot come,” Kissinger said, “unless Cuba demon­ strates a readiness to assume the mutuality of obligation and regard upon which a new relationship must be founded.”


“We see no virtue in perpetual antago­ nism between the United States and Cuba,” he declared. “We have taken some symbolic steps to indicate that we are prepared to move in a new direction if Cuba will.” These steps presumably included government approval Feb. 14 of a sale of office furniture to Cuba by the Canadian subsidiary of Litton Industries, Inc. and the easing of travel curbs on Cuban diplo­ mats at the United Nations in New York. Lifting of the travel restrictions had been suggested to the Ford Adminis­ tration earlier by Sens. Jacob Javits (R, N.Y.) and Claiborne Pell (D, R.I.), who visited Cuba in 1974, and by Sen. Edward Kennedy (D, Mass.) who declared Feb. 9 that the U.S. policy of isolating Cuba in the Western Hemisphere had been a failure. Kennedy introduced a bill in the Senate March 4 to end the U.S. embargo on trade with Cuba as well as punitive measures against third countries and ship­ ping companies that dealt with the island. Javits and Pell introduced a resolution asking President Ford to consider taking steps to improve relations with Cuba and to report to the Senate by June on what he had accomplished. Two other senators had urged a change in the Administration’s policy before Kis­ singer’s Houston address. Sen. John J. Sparkman (D, Ala.), chairman of the Senate Foreign Relations Committee, said in a statement in the Congressional Record that “our policy of isolating Cuba has been a failure, and it is time to re­ examine that policy with a view toward ending the futile economic boycott and re­ storing normal relations,” it was reported Feb. 3. Sen. Gale McGee, (D, Wyo.), chairman of the Senate Subcommittee on Western Hemisphere Affairs, said “this isolationist policy is a luxury we cannot afford, especially at a time when our relations with the rest of the hemisphere are subjected to serious problems over economic matters,” it was reported Feb. 8. McGovern visits; Castro asks improved ties. U.S. Senator George McGovern (D, S.D.) visited Cuba May 5-8 at the in­


vitation of Premier Fidel Castro. During the visit Castro publicly called for improved relations between Havana and Washington. At a press conference late May 7, be­ tween extended talks with McGovern, Castro asked the U.S. to end its com­ mercial embargo of Cuba. He vigorously denied reports that Cuba had participated in the assassination of President John F. Kennedy in 1963, and he accused the U.S. Central Intelligence Agency of making several attempts on his own life. Castro asked the U.S. to lift restric­ tions on sales of medicine and food to Cuba to show its willingness to resolve its longstanding disputes with Havana. These included U.S. demands that Cuba return $2 million brought in from the U.S. on a hijacked airplane in 1972, and that Cuba release nine American political prisoners. McGovern, who called for an end to the embargo, said May 8 that Castro had agreed to consider granting both U.S. de­ mands and, as a symbolic gesture, to allow the parents of Luis Tiant, a Cubanborn pitcher for the Boston Red Sox base­ ball team, to travel to the U.S. to see their son play before he ended his major league career. McGovern added that Castro was “very much interested” in his suggestion that U.S. and Cuban baseball and basket­ ball teams play each other as a gesture to ease relations between the two countries. In the U.S., officials said May 8 that the Ford Administration welcomed Castro’s apparent overture, but that it would not make any major unilateral moves until the Organization of American States lifted its sanctions against Cuba. Ron Nessen, President Ford’s press secretary, noted that Castro “seems to have accepted what the U.S. refers to as the mutuality of obli­ gation. Any change in status would in­ volve the mutuality of obligations.” A U.S. State Department official, Robert Funseth, said the Ford Adminis­ tration had “made it clear to Cuba that we are prepared to improve our rela­ tions.” Another State official said the U.S. would like to see further gestures by Castro such as the reuniting of Cuban families currently split between the two countries. At the May 7 press conference Castro indicated that the resignation of President Richard M. Nixon and the end of U.S. in-

85 volv'ement in Vietnam might help restore good relations between Havana and Washington. He said Nixon had “a per­ sonal hostility to Cuba and many counter­ revolutionary friends,” but Ford did not. As for Vietnam, Castro said Cuba’s strong opposition to U.S. policy there made it “very difficult” to improve bi­ lateral relations. Regarding the Kennedy assassination, Castro said Cuban involvement would have been “absurd, irresponsible, crazy and a very dangerous measure.” He asserted that although Kennedy had ap­ proved the abortive Bay of Pigs invasion against Cuba, the late president was “an intelligent man who had begun to under­ stand the errors of his policies, and perhaps Kennedy would have made some steps toward improving relations with Cuba.” Turning to the CIA, Castro said it was “not news to us” that the agency reportedly had tried to kill him and other Cuban officials after they took power in 1959. He said his security men “for many years” had uncovered plots against his government by persons allegedly trained by the CIA, and in some cases supplied with weapons from the U.S. naval base at Guantanamo in eastern Cuba. Castro met with McGovern for an hour late May 6, after McGovern dined with Cuba’s top foreign policy officials, Raul Roa and Carlos Rafael Rodriguez, and he spent nearly eight hours with the U.S. senator the next day, personally chauffeuring him on a tour of a state dairy farm, a “new town” and a rum factory outside Havana. McGovern said May 7 that he and Castro agreed the end of the U.S. em­ bargo against Cuba was “inevitable.” He noted that the embargo had been “very difficult” for Cuba, but had failed to fully isolate the island from its hemispheric neighbors. McGovern praised Cuba’s educational system May 6, and he said May 8, sum­ marizing his impressions of the island, that “the people are healthy, the morale is high, and Mr. Castro obviously has achieved a warm relationship of confidence with his people.” Upon his return to Washington May 9, McGovern said the next move in easing U.S.-Cuban relations was up to the Ford


Administration. He asked the adminis­ tration May 13 to begin sending food and medicine to Cuba as a first step toward lifting the trade embargo against the is­ land. (Another U.S. Senator, Charles Percy, [R, Ill.] called May 6 for an end to the embargo. He said the U.S. should act in­ dependently of the Organization of American States.) McGovern’s visit to Cuba followed several other developments which presaged an improvement in bilateral relations. Among them: U.S. State Department official Kempton B. Jenkins told the Mexican newspaper Excelsior April 21 that Cuba had stopped exporting subversion, had freed the majority of its political prisoners and had abolished forced labor camps, and that its relations with the Soviet Union were more technical than military. Consequently, Jenkins said, “Cuba is not a threat to the United States.” A law professor and three law students from Havana University were allowed to enter the U.S. April 21 to attend an international moot court competition in Washington. They were the first Cubans in many years to be admitted to the U.S. for a private professional meeting, ac­ cording to the Washington Post. It was reported April 22 that a few days earlier Cuba had released four U.S. citizens serving prison terms for marijuana smuggling. The terms were not yet completed. U.S. Representative Jonathan Bingham (D, N.Y.) introduced a bill in the House of Representatives April 24 to end the trade embargo of Cuba. The bill matched one introduced in the Senate earlier by Senator Edward M. Kennedy (D, Mass.). The Washington-based Association of American Chambers of Commerce in Latin America May 4 asked the Ford Administration to end the prohibition on trade with Cuba by U.S.-based firms in Latin America.

Castro offers data on CIA death plots. Cuban Premier Fidel Castro, in a report turned over to the Senate Select Commit­ tee on Intelligence July 30, charged that he and other Cuban leaders had been the


target of at least 24 Central Intelligence Agency assassination attempts between 1960 and 1971. The allegations were set down in an 86page report delivered to Sen. George S. McGovern (D, S.D.) by the Cuban government. McGovern, who had visited Cuba in May, made public a summary of the charges and submitted the full report, along with accompanying photographs, to the Senate committee. He had no way of assessing the charges, McGovern said, but felt they warranted further investi­ gation. Listing 24 separate plots against Castro, the report repeatedly linked the CIA to the aborted assassination at­ tempts. Some of the plots were attributed without elaboration to groups “with CIA connections,” while other efforts were said to involve “CIA agents.” On several occasions, the report said, anti-Castro groups used the U.S. Naval base at Guan­ tanamo in eastern Cuba as a haven and supply point for weapons to be used.

U.S. eases trade embargo. The U.S. re­ laxed its commercial embargo against Cuba Aug. 21, announcing that it would allow foreign subsidiaries of U.S. firms to sell goods to the island and that it would stop penalizing other nations that traded with Cuba. The State Department and White House emphasized that the action was only a response to the July 29 decision of the Organization of American States to lift its sanctions against Cuba, and not a conciliatory gesture aimed at improving relations with the government of Premier Fidel Castro. Castro called the action “a positive gesture,” but he said Cuba would not ne­ gotiate a resumption of full relations with Washington until the trade embargo were lifted entirely. He described the embargo as a “dagger” aimed at Cuba’s heart. The changes in U.S. policy, as an­ nounced by the State Department, were the following: ■ Licenses would immediately be granted to permit “transactions between U.S. subsidiaries and Cuba for trade in foreign-made goods when those subsid­ iaries are operating in countries where

CUBA local law or policy favors trade with Cuba.” (Trading licenses would still be re­ quired, subject to U.S. regulations on exporting strategic goods, technology and U.S.-made components.) ■ Nations whose ships and aircraft car­ ried goods to or from Cuba would no longer be “penalized by loss of U.S. bi­ lateral assistance.” ■ The Ford Administration would modify regulations that prevented re­ fueling in the U.S. by foreign merchant vessels engaged in trade with Cuba. ■ The Administration would ask Con­ gress to change legislation prohibiting na­ tions that traded with Cuba from receiving U.S. food aid under Public Law 480. White House spokesman Ron Nessen minimized the importance of the policy changes, asserting they did not “really re­ late to bilateral relations with Cuba.” Nessen said any further moves toward im­ proving relations with Havana would “really depend on Cuba’s attitude,” in­ cluding its policy toward claims by Wash­ ington on U.S. property and assets na­ tionalized by the Cuban government. State Department spokesman Robert Funseth noted several other issues sep­ arating the U.S. from Cuba, including “family visits in both directions; American citizens who are prisoners in Cuban jails; . . . Cuban’s attitude on Puerto Rico [Cuba favored Puerto Rican independence], and whether Cuba is pre­ pared to follow a clear practice of nonin­ tervention everywhere in the hemisphere.” Funseth admitted that “there certainly has been a reduction in Cuban interven­ tion” in Latin America since 1961, when the U.S. imposed the embargo. In Havana, Castro asserted the em­ bargo had cost Cuba more than the com­ pensation demanded by the U.S. for its nationalized property. Lifting of the em­ bargo, he said, would be “a minimum con­ dition of equality and dignity which will make it possible” for Havana and Wash­ ington to discuss their conflicts fairly. Regarding claims in some U.S. sectors that Cuba still “exported revolution” to Latin America, Castro said: “The revo­ lution cannot be exported. . . What we should talk about is the attempt by the

87 U.S. to export counterrevolution” to Cuba, Chile, the Dominican Republic and other Latin American nations. In the U.S., relaxation of the embargo was praised by Senators George Mc­ Govern (D, S.D.) and Jacob Javits (R, N.Y.), and criticized by Senator Jake Garn (R, Utah) and Rep. Jonathan Bingham (D, N.Y.). Garn accused the Ford Administration of acting with “no apparent regard for Senate opinion.” Bingham, who favored lifting the embargo entirely, charged that the relaxation “leaves the U.S. in an even more ridicu­ lous posture than before. Goods manufac­ tured abroad under American auspices can now be sold to Cuba, but goods produced by American workers still can­ not.” McGovern, who called the relaxation an “historic” action, had disclosed Aug. 15 that during his conversations with Premier Castro in Havana, Cuba May 5-8 Castro admitted having erred in seeking a showdown with President John F. Ken­ nedy in 1962 during the Cuban missile crisis. Castro reportedly said: “I was fu­ rious when [Soviet Premier Nikita Khrushchev] compromised [with Ken­ nedy]. But Khrushchev was older and wiser. I realize in retrospect that he reached the proper settlement. . . If my position had prevailed, there might have been a terrible war. I was wrong.” Castro also disclosed that Kennedy later had intended to work out a reconcil­ iation with Cuba, the New York Times reported Aug. 23. Castro said he received a message from Kennedy to that effect from a French newsman on the day Ken­ nedy was assassinated in 1963.

U.S. hijack ransom returned. U.S. Senator John J. Sparkman (D, Ala.) an­ nounced Aug. 11 that Cuba had returned to the U.S. airline Southern Airways nearly $2 million extorted from the airline by three U.S. hijackers who landed in Havana in 1972. Sparkman, chairman of the Senate Foreign Relations Committee, called the action “very solid evidence that the Cuban government is genuinely interested in pursuing a policy of improved relations


with the United Slates.” He asked the Ford Administration to respond by im­ mediately lifting restrictions on the sale of food and medicine to Cuba, and by eventually ending the U.S. trade embargo against the island. Cuba had attempted to return the money to Southern Airways in 1972 in a check drawn on the Cuban government’s account with Chase Manhattan Bank in New York, but the account had been frozen by the U.S. government in 1961 in retaliation for the expropriation of U.S. property in Cuba. The new payment was drawn on a Cuban account with the Royal Bank of Canada. The payment was apparently made in response to a personal plea to Cuban Pre­ mier Fidel Castro by Sparkman, who described himself as an old friend of Southern Airways president Frank Hulse. Castro first announced his intention to make the payment in a letter to Sparkman May 30 and a subsequent let­ ter to Senator George McGovern (D, S.D.) which McGovern released June 16. McGovern said in a speech reported July 4 that Castro had “made a number of important gestures” toward improving relations with the U.S. and that there was no longer any “excuse to postpone the Cuban detente.” He dismissed claims by some Ford Administration officials that the Cuban government was an “exporter of revolution,” asserting: “After Vietnam, Chile and other [U.S. Central Intelligence Agency] outrages, our righteousness about exported violence must sound hollow and hypocritical—especially to a country which was invaded at the Bay of Pigs and whose leader has been the target of American assassination attempts.” Rep. Jonathan Bingham (D, N.Y.) charged July 23 that the State Depart­ ment apparently sought to prolong U.S.Cuban problems indefinitely by opposing a bill Bingham had introduced in the House to end the trade embargo against the island. William D. Rogers, assistant secretary of state for inter-American affairs, had testified against the bill June 11 at a hearing by two subcommittees of the House International Relations Commit­ tee. Rogers warned that Congressional action regarding the embargo would

LATIN AMERICA 1975 “take away an important element of executive discretion” in the matter and “further complicate the task of putting relations with Cuba on a solid and mutually satisfactory basis.” Rogers said that “the legacy of over a decade of antagonism and diversion of trade relations elsewhere, together with the complex question of Cuba’s attitude toward and respect for private enterprise and private property, as reflected in the vexed issue of compensation for claims, will restrain any great expansion of business” between the U.S. and Cuba. However, Rogers admitted that Cuba’s economy was steadily expanding and that the State Department had received re­ quests from more than 100 firms for in­ formation about prospects for trade with Cuba. President Ford had said in an interview with the French magazine L’Express June 14 that there were no prospects for a change in U.S.-Cuban relations in 1975 “because there has been no apparent change in the attitude of Premier Fidel Castro.” Ford apparently referred to allegedly continued Cuban support for Latin American leftist guerrilla move­ ments. (Cuban Deputy Premier Carlos Rafael Rodriguez had asserted in London recently that Cuba supported only Latin American governments that were pro­ gressive or had progressive elements, and not leftist insurgent movements, the Washington Post reported May 31. He denied that his government backed insur­ gents in Chile, Uruguay or Paraguay, asserting: “The objective conditions for armed struggle exist in many places in Latin America, but the subjective condi­ tions are not there yet.” Rodriguez said Cuba would seek normal relations with the U.S. once the U.S. trade embargo were lifted, the Post reported.)

Among other U.S.-Cuba developments: The U.S. Defense Department warned in its annual report that Cuba, aided by the Soviet Union, was successfully ex­ ploiting anti-U.S. sentiment in several Latin American nations, the Miami Herald reported Feb. 22. The report added that Latin America was a crucial area in U.S. foreign policy, where “hostile


foreign influence” could “endanger the se­ curity of the United States.” The U.S. had approved a record 814 re­ quests in 1974 by citizens seeking to travel to Cuba, it was reported Feb. 2. Cuba Feb. 12 freed three U.S. citizens arrested in 1971 on drug smuggling charges. Their prison terms had expired.

OAS Lifts Cuba Sanctions U.S. joins majority action. The U.S. joined 15 Latin American countries July 29 in voting to lift the diplomatic and commercial sanctions imposed against Cuba by the Organization of American States. A resolution passed at a meeting of OAS foreign ministers in San Jose, Costa Rica, allowed signatories of the Inter­ American Treaty of Reciprocal As­ sistance (Rio Treaty), under which the sanctions were invoked, to “normalize or conduct” relations with Cuba “at the level and in the form that each state deems advisable.” The sanctions, imposed in 1964, were already being ignored by seven of the treaty’s 21 signatories. Costa Rican Foreign Minister Gonzalo Facio, a major opponent of the sanctions for the past three years, said after the vote that “more countries will establish rela­ tions with Cuba.” However, it was doubtful that the U.S. would renew ties with the island in the near future, ac­ cording to press reports. William Mailliard, chief U.S. delegate to the San Jose meeting, would say only that there might soon be “conversations that might lead to some kind of normalization” be­ tween Havana and Washington. There was also no indication that Cuba might seek readmission to the OAS. Premier Fidel Castro had denounced both the OAS and the Rio Treaty at a press conference in Havana June 20, calling the latter a “shameful alliance between the shark and the sardines” under which the U.S. hoped to keep Latin America dis­ armed to allow multinational corpora­ tions to continue to “exploit” the con­ tinent. Voting to lift the sanctions, in addition to the U.S., were Argentina, Bolivia,


Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Panama, Peru, the Dominican Republic, Trinidad & Tobago, and Vene­ zuela. Three nations—Chile, Paraguay and Uruguay—voted against the reso­ lution, and two—Brazil and Nicaragua— abstained. Guatemala switched from abstention to a favorable vote in a gesture of “solidarity” with the majority. The action on Cuba had been preceded by the OAS’ General Assembly approval May 17 of a Mexican proposal to review the sanctions. The Assembly had opened its meeting in Washington May 8 and concluded May 19. The proposal, approved 14-4 with five abstentions, scheduled a meeting for July in Costa Rica to reform the article in the Inter-American Treaty of Reciprocal Assistance which required a two-thirds majority vote to lift the Cuba sanctions. Although the U.S. abstained on the vote for the Costa Rica meeting, Mexican Foreign Minister Emilio Rabasa said he was certain Washington would eventully vote to lift the sanctions. Voting for the Mexican proposal were Colombia, Costa Rica, Peru, Argentina, Ecuador, Haiti, Honduras, Jamaica, Pan­ ama, the Dominican Republic, Trinidad & Tobago, Venezuela and Grenada (Gre­ nada became the 24th active member of the OAS May 8). Voting against it were Chile, Nicaragua, Paraguay and Uruguay, and abstaining with the U.S. were Brazil, Bolivia, El Salvador and Guatemala. The delegation from Barbados, which already enjoyed relations with Cuba, was absent during the vote.

Other Foreign Developments U.S.S.R., Cuba criticized on Angola. President Ford spoke out strongly at his news conference Dec. 20 against Soviet and Cuban involvement in the Angola civil war. It was “harmful” for any foreign power “to try to dominate that country,” Ford said. Soviet activity in Angola, he asserted, “certainly does not help the con­ tinuation of detente.”

90 “I want to get it on record as forcefully as I can,” Ford continued, “to say the action of the Cuban government in an effort to get Puerto Rico free and clear of the United States” as well as Cuba’s in­ volvement in Angola “erodes any chance for improvement of relations” with the U.S. In a statement released Dec. 19, Ford had deplored the Senate’s vote to cut off funds for U.S. covert military support of two of Angola’s warring factions. “The issue in Angola is not, never has been and never will be a question of the use of U.S. forces,” the President stressed. “The sole issue is the provision of modest amounts of assistance to op­ pose military intervention by two extra­ continental powers, namely the Soviet Union and Cuba.” Troops reported in foreign countries. The magazine U.S. News & World Report said Nov. 30 that Cuba had sent more than 5,000 regular troops to 10 countries for use “as a revolutionary force against the interests of the United States and China, and for the Soviet intelligence network.” The countries were Angola, Syria, South Yemen, Congo Republic, Tanzania, Equatorial Guinea, Guinea, Somalia, Guinea-Bissau and Sierra Leone, ac­ cording to U.S. intelligence sources cited by the magazine. A later report from the U.S. State Department said there were 5,000 Cuban soldiers in Angola alone. U.S. officials quoted by the Miami Herald Nov. 26 had said there were about 400 Cuban military advisers in the Congo Republic and 200-300 advisers each in Malawi, Mozambique, Guinea, Cameroon and Gabon. The Cubans’ duties included training African soldiers in guerrilla war­ fare tactics and the use of mortars and re­ coilless rifles, the sources reported. Cuba’s intervention in Angola on the side of the Soviet-backed Popular Move­ ment for the Liberation of Angola (MPLA) had further strained Havana’s relations with the U.S., which was sup­ porting the MPLA’s opponents, the Na­ tional Front for the Liberation of Angola and the National Union for the Total In­


dependence of Angola. President Ford said that because of Cuba’s support for the MPLA and for the Puerto Rican inde­ pendence movement, “there is no chance for a quick resumption of relations” be­ tween Havana and Washington, it was reported Dec. 11. . Premier Fidel Castro paid tribute Dec. 18 to Cuban soldiers fighting in Angola and other nations, asserting “the history of the world revolutionary movement will recall this example of selflessness and heroism.” The Cuban army had “shed its blood more than once in other countries threatened by imperialist aggression,” Castro declared. Castro asserted Dec. 22 that Cuba would continue to aid the MPLA and the Puerto Rican independence movement, even at the cost of continued hostility from the U.S. He accused the U.S. of plotting with “racist South Africa” to take over Angola in order to exploit its “riches in minerals and oil.” A representative of the MPLA thanked Cuba and the Soviet Union Dec. 21 for their “concrete acts” of assistance, which had enabled the movement to “face French and American tanks and cannon used by South African expansionists to in­ vade Angola.” The delegate, Lucio Lara, addressed the First Congress of the Cuban Communist Party in Havana. In a related development, the govern­ ment of Barbados asked Cuba Dec. 18 to stop using the West Indies island’s airport at Bridgetown as a refueling stop for air­ craft carrying Cuban soldiers to Angola. Barbados acted after receiving complaints from the U.S. Barbados, the easternmost island in the Caribbean, lay some 2,000 miles from Cuba and about 4,000 miles from the African coast.

Diplomatic contacts expanded. Cuba resumed diplomatic relations with West Germany Jan. 16 and established ties with Iran Feb. 10. The West German ties had been broken by Bonn in 1963 to protest Cuban recognition of East Germany. Colombian Foreign Minister Indalecio Lievano disclosed Feb. 21 that Colombia and Cuba had begun negotiations for a resumption of full diplomatic relations,

CUBA through the mediation of the Swiss government, which represented Colom­ bian interests in Havana. Alberto Galeano, director of Colombia’s Foreign Trade Institute, said Feb. 28 that negotia­ tors were discussing the sale to Cuba of automobiles manufactured in Colombia by multinational corporations. In another move, Cuba and Colombia agreed March 6 to resume full diplomatic relations, which were broken off by Colombia in 1961. Colombian Foreign Minister Indalecio Lievano said the resumption was another step toward “dis­ mantling the Cold War in Latin Amer­ ica.” The next day Cuba released six Colom­ bian sailors who had been imprisoned in Cuba 10 months earlier when the British ship on which they worked was captured “violating Cuban territorial waters.” In other foreign developments: Cuba and Spain exchanged ambassa­ dors April II. Since the early 1960s the two nations had carried out relations on the charge d’affaires level although the ties were officially on the ambassadorial level. Blas Roca, a top official in the Cuban Communist Party, said May 12 that Cuban exiles who had not participated in activities against the Castro government would still be considered Cuban citizens. Castro had said earlier that all Cuban exiles were “no longer Cuban,” according to press reports.

Domestic Developments Constitution draft discussed. Cubans April 28 began discussing the draft of a new constitution that would establish a governing national assembly elected by all citizens over the age of 16. The final draft of the charter was approved at a Com­ munist Party Congress in December. The draft was published by the official newspaper Granma April 10. It was drawn up by a commission headed by Blas Roca, a member of the Central Com­ mittee of the Cuban Communist Party, who presided over the first public dis­ cussion of the draft at a steel mill in Havana.

91 Following public discussion, the draft would be reviewed in December by the first congress of the Communist Party, which was announced by the Politburo April 16. The draft declared that Cuba was a socialist state of laborers, peasants and other manual and intellectual workers, with maximum power exercised by the people through popular assemblies and with the Communist Party designated as “the superior force in the society,’’ ac­ cording to the Cuban news agency Prensa Latina. The “supreme organ of the state” would be the National Assembly of the People’s Power, elected every five years by all citizens over the age of 16. The assem­ bly’s powers would include election of a Council of State composed of a president, a first vice president, five vice presidents and 24 other members. The council presi­ dent would be the chief of state and head of the Cuban government. The assembly sessions would be public, unless this was agreed to harm the na­ tional interest, and assembly members would be unsalaried. Legislation could be proposed by the state labor union and other mass organizations, and by citizens who obtained 10,000 signatures for their proposals. The draft guaranteed “the freedom and inviolability of the individual,” and free­ dom of speech and the press “as they con­ form to the goals of socialist society." It also endorsed religious freedom so long as “faith or beliefs do not oppose the revo­ lution, education or the defense of the fatherland.” Free education and health care were also guaranteed. The draft reaffirmed Cuba's repudiation as “illegal and void” of all treaties, agree­ ments or concessions undertaken “under conditions or inequality" or violating or diminishing the state's "sovereignty over any part of the nation’s territory.” It offered asylum in Cuba to persons who were persecuted for fighting for “the democratic rights of the majorities, for na­ tional liberation, against imperialism, fascism, colonialism and neocolonialism.” It also offered asylum to persons who fought for an end to racial discrimination or for the rights of “workers, peasants and students.”

92 Cubans had also held public discussions on a new Family Code, enacted March 8, which guaranteed full equality between men and women and established the right of women to participate fully in the na­ tion’s political, cultural and economic life. The code eliminated legal distinctions between legitimate and illegitimate chil­ dren, and declared that a marriage could be dissolved if a court found it to have “lost its meaning for the couple, their children and society.” (The divorce rate in the metropolitan district of Havana had risen to 48 % in 1972, the newsletter Latin America re­ ported July 18. Officials expected the rate to decline once the equality of women and the importance of their work role be­ came socially accepted, the newsletter reported.)

Communist Party Congress held. The First Congress of the Cuban Communist Party was held in Havana Dec. 17-22, with more than 3,000 Cuban delegates and representatives of 82 foreign Communist parties attending. The Congress heard a 10-hour “report to the nation” from Premier Fidel Castro, the party’s first secretary, and it approved the final draft of Cuba’s new constitution and the guidelines of the island’s first fiveyear economic plan. The constitution would be submitted to a referendum Feb­ ruary 15, 1976, and the five-year plan would be approved by the projected Na­ tional Assembly of People’s Power at the end of 1976. Foreign delegates attending the congress included Mikhail Suslov, leading Soviet ideologist; Gen. Vo Nguyen Giap, defense minister of North Vietnam; Janos Kadar, first secretary of the Hungarian Communist Party; Todor Zhivkov, first secretary of the Bulgarian Communist Party; Georges Marchais, leader of the French party, and Alvaro Cunhal of the Portuguese party. The congress was opened Dec. 17 by Armed Forces Minister Raul Castro, who introduced his brother, Premier Fidel Castro. In a speech which consumed that day’s session and stretched into the Dec. 18 session, Premier Castro detailed the history of the Cuban revolution since 1959 and denounced the U.S., notably its


Central Intelligence Agency, which had conspired in several attempts to assassinate him. Castro cited a number of “errors” by the revolution’s leaders, including the set­ ting of unrealistically high goals for the sugar harvest in 1970, the complete na­ tionalization of trade in 1967, and the tendency of the Communist Party to dominate public administration in 1965— 70. The revolution would not have suc­ ceeded, Castro noted, without the aid of the Soviet Union against the U.S.’ “ag­ gressive and unscrupulous imperialism.” Castro said the CIA had “organized dozens of attempts against the lives of the leaders of the Cuban revolution,” contracting “leading members of the Mafia” in some plots. He praised as a “positive step” the publication of a report on the assassination plots by an investi­ gative panel of the U.S. Senate. Castro outlined the five-year economic plan, which would concentrate on in­ dustrial development rather than agri­ cultural expansion and would introduce profitability as a standard for judging state-owned businesses. “The profit criteria will tell us which is the most technologically backward fac­ tory, the most expensive, the industry in which we must make investments first, the one in which we have to substitute first a new industry,” Castro said. But “the fundamental object is not profits as in capitalism but the satisfaction of the spiritual and material needs of the people,” he added. Some of the profits would remain in the hands of the workers’ cooperative at each enterprise for use in “resolving social problems and providing prizes for the most distinguished workers,” Castro continued. Each business would also have “a determined autonomy in the use and the management of the resources ... to sell or rent idle material, undertake marginal production by their own decision and so on, without affecting the principal production plan,” he declared. The five-year plan would concentrate on achieving an annual 6% growth rate in goods, not counting services, Castro said. Sugar production was scheduled to grow by 30%-40%, from the present 5.5 million tons to more than 8 million tons by 1980.

Dominican Republic

Political Unrest, Guerrilla Incursions

Jan. 8 that 206 persons had disappeared in the Dominican Republic in 1974, the ma­ jority of them victims of political violence. Many young men who had supposedly disappeared had actually been arrested by police, the newspaper said.

The Dominican Republic was beset in 1975 by widespread unrest, which took the form of student strikes, violent labor demon­ strations and guerrilla raids, some of which were said to have originatedfrom Cuba.

Students, police clash. One person was killed, dozens were injured and hundreds arrested in March and April as police clashed with students who protested school budget cuts, repression and the murder of a prominent left-wing journalist. Further student unrest erupted in June. The disorders began March 2, when police arrested 20 students demonstrating against cuts in state funds budgeted for the Autonomous University of Santo Domingo (UASD). The school’s rector, Hugo Tolentino, had charged earlier that the government was diverting to other agencies tax revenues that were supposed to go to the university. High school students in the capital joined the protests March 4, and dem­ onstrations were reported in other parts of the country. The protests continued through March 9, with police arresting a total of about 500 students, some 60 of whom were tried on public disorder charges and sentenced to 15-30 days in jail plus $15 fines. The demonstrations resumed with in­ creased violence March 18, one day after

Alleged subversives seized. Police Chief Gen. Rafael Guzman Acosta announced Jan. 18 that 40 persons had been arrested in connection with two bank robberies destined to finance the purchase of arms for subversive activities. The detainees included Luis Suarez, a state agency director with Cabinet rank, and students, teachers and workers at the Autonomous University of Santo Do­ mingo (UASD). The bank robberies, allegedly directed by Guillermo Rubirosa Fermin, a fugitive extremist, had netted $220,000, less than half of it recovered by authorities. The robberies had been com­ mitted at the end of 1974 but had not been reported before Guzman’s announcement. (UASD students held a number of vio­ lent demonstrations in January and early February to demand more state funds for the university, it was reported Feb. 7.) *74 disappearances cited. The Santo Domingo newspaper La Noticia reported 93

94 unknown gunmen assassinated Orlando Martinez, director of the moderately leftist magazine Ahora and political columnist for its associated daily news­ paper, El Nacional of Santo Domingo. Students protesting the murder threw rocks at policemen, who responded with tear gas. The government condemned the assassination, appointing a police com­ mission to investigate it and offering a $50,000 reward for information leading to the capture of the culprits. However, au­ thorities concentrated their investigation on opposition political parties, ignoring the possibility that Martinez was killed by right-wing terrorists. (Martinez had received several death threats from an organization calling itself the Anticommunist Alliance, which ap­ parently opposed his defense of the government’s mild agrarian reform measures and his attacks on repression, corruption in both pro- and antigovern­ ment parties, and the activities of foreign corporations in the Dominican Republic, the London newsletter Latin America reported April 11. The Dominican Com­ munist Party claimed Martinez as a member since 1963, according to the Cuban weekly Granma Semanal March 30.) Noting that Martinez recently had criticized the opposition Dominican Liberation Party (PLD), authorities ar­ rested several PLD leaders and sum­ moned ex-President Juan Bosch, the party’s founder, for questioning. Bosch demurred in a public letter to President Joaquin Balaguer March 23; Balaguer ac­ cepted his refusal March 24, but the government continued to hold five PLD leaders March 25. Jose Francisco Pena Gomez, leader of the opposition Dominican Revolutionary Party (PRD), refused to appear for questioning March 24. Three newspapers—El Nacional, El Sol and La Noticia—struck March 22 to protest Martinez’ assassination and de­ mand punishment of the culprits. However, El Nacional later said it de­ manded the punishment “with little faith, because we are used to, and indeed we know by heart, the results of inquiries into similar cases,” the newsletter Latin


America reported April 11. El Nacional referred to the 1973 murder of another prominent newsman, Gregorio Garcia Castro. A police lieutenant and two army privates had been acquitted in the case. Student demonstrations resumed in Santo Domingo April 4, on the third an­ niversary of the killing of a UASD student by police. One high school student died of apparent tear gas asphyxiation, another was wounded by gunfire, and 50 others were injured as police clashed with students at Juan Pablo Duarte high school. Police arrested 139 demonstra­ tors. The government suspended classes in most high schools in the capital after the April 4 clashes. Most schools in the inte­ rior were closed April 8 when students there struck in sympathy with Santo Domingo students. Schools throughout the country stayed closed until April 15, when some 65% of the students returned to classes under government assurances that there would be no more trouble. Classes were suspended again April 2429, to break what the government called a leftist plot to create disorder and murder prominent persons. The plot, reported April 21 by the national police chief, Gen. Rafael Guzman Acosta, was allegedly to have been carried out April 24, the 10th anniversary of the outbreak of the Dominican civil war, and April 28, the an­ niversary of the subsequent invasion of the country by U.S. Marines. Despite the suspension of classes and the institution of severe security measures, there were demonstrations and street clashes in Santo Domingo, ac­ cording to a Havana radio broadcast April 25. Many persons were reported ar­ rested during the protests and in separate raids by police and soldiers. More than 12 students and policemen were hurt and over 100 students were ar­ rested as student demonstrators clashed with police June 17, 19 and 20 at the Autonomous University of Santo Do­ mingo. The students demanded increased gov­ ernment aid to the university, which was on the verge of closing because of a lack of funds, according to students and pro­ fessors cited by the Miami Herald June


22. University Rector Hugo Tolentino met with President Balaguer June 19, but they were unable to reach agreement on the issue. The same day students and police had their worst confrontation, with police helicopters dropping smoke and tear gas grenades on the campus. Opposition, labor leaders seized. Sol­ diers and policemen arrested several hun­ dred members of labor unions and opposi­ tion political parties in June, in raids os­ tensibly connected with a search for three leftist guerrillas who had allegedly infil­ trated the country from Cuba. At least 16 detainees were held on charges of fomenting rebellion against the government, including Francisco Antonio Santos, secretary of the General Labor Confederation, and Julio de Pena Valdez, a leader of the extreme leftist Dominican Popular Movement, it was reported June 12. Other detainees reportedly were re­ leased. The arrests began June 5, with more than 250 persons reported jailed by June 7. The army and police issued a joint com­ munique June 7 charging that three Dominican guerrillas had entered the country “from Cuba” June 2 to prepare a terrorist campaign against the govern­ ment. The three were identified as Claudio Caamano, Toribio Pena Jaquez and Manfredo Casado, all well-known leftists. The alleged guerrilla landing was im­ mediately ridiculed by major opposition leaders, including ex-President Juan Bosch of the Dominican Liberation Party, who charged the government had fabricated the guerrilla story to justify increased “repres­ sion” against Dominicans. However, troop reinforcements were sent June 8 into the area of the alleged infiltration, near San Jose de Ocoa, west of Santo Domingo. Security measures were intensified in Santo Domingo June 16, and an undeter­ mined number of persons were arrested in the capital June 27 as police and troops virtually occupied several districts down­ town. The army reported June 20 it had seized three Puerto Rican Socialists June 2 after they allegedly delivered the leftist guer­ rillas to the Dominican coast in a boat. The three held a press conference June 23


and admitted they had acted on orders from Puerto Rican Socialist leader Juan Mari Bras, but added they had not known their passengers’ identities or plans. Mari Bras immediately denied their allegation. The Puerto Ricans later denied having transported the guerrillas, telling a judge June 27 that the Dominican armed forces had “pressured” them into making false confessions. They told their lawyers June 27 they had been tortured. Of the guerrillas the Puerto Ricans al­ legedly transported, Claudio Caamano was a relative of the late Col. Francisco Caamano, who had led an unsuccessful guerrilla campaign in the Dominican mountains in 1973. Both Claudio Caamano and another of the alleged in­ filtrators, Toribio Pena Jaquez, partici­ pated in the campaign but managed to escape after troops killed Francisco Caamano and their other companions. Manfredo Casado, the third alleged in­ filtrator, had taken political asylum in the Mexican embassy in Santo Domingo in September 1973 and had been granted safe-conduct to France after he kidnapped and threatened to kill the son of the Mexi­ can ambassador. Claudio Caamano and Toribio Pena Jaquez were captured in the mountains of San Cristobal Oct. 1, the government said. A companion, Manfredo Casado, was killed together with three unidentified insurgents Oct. 9 in a gun battle with police outside Santo Domingo, police reported. Caamano and Pena Jaquez told reporters Oct. 11 that they and Casado had been transported to the Dominican Republic by three Puerto Rican So­ cialists—Angel Gandia, Raul Garcia and Johnny Sampson. The Puerto Ricans, ar­ rested in June, had been sentenced to 30 years’ hard labor July 31, but President Joaquin Balaguer pardoned them Nov. 17 in what was described as a Christmas gesture. Two more terrorists, alleged members of a group called Los Trinitarios, were killed in a gun battle with police in Santo Domingo Nov. 4, police reported. A po­ liceman also died in the incident. Four other Trinitarios were reported arrested Nov. 6, but the leader of the group, the Communist Guillermo Rubirosa Fermin,

96 escaped. The Trinitarios had robbed more than $200,000 from a bank and a tax collector.

Military & Political Shifts Military chiefs quit. The armed forces minister and the commanders of the three military branches resigned May 10 in ap­ parent opposition to President Joaquin Balaguer’s designation of a new national police chief. The military leaders—Adm. Ramon Emilio Jimenez, armed forces minister; Gen. Enrique Perez y Perez, army com­ mander; Cmdr. Manuel Logrono Contin, navy commander, and Gen. Salvador Lluberes Montas, air force commander— told Balaguer they were “not in agreement with decisions taken recently.” News­ papers and political observers said they objected principally to the appointment May 8 of Gen. Neit Nivar Seijas as police chief. Nivar Seijas, a popular former police chief who was loyal to Balaguer, was a personal, though not political, rival of Gen. Perez y Perez and Lluberes Montas, according to the newsletter Latin America May 16. Balaguer reappointed him police chief, according to some reports, to stem the growing power of the military com­ manders. The crisis caused by the appoint­ ment was the worst faced by Balaguer in his nine years in office, according to ob­ servers. Balaguer moved swiftly May 10, accept­ ing the commanders’ resignations, im­ mediately naming new navy and air force chiefs, and naming himself as temporary armed forces minister. The next day the nation’s 17 leading generals and 40 majors in the three armed forces issued a com­ munique giving Balaguer their full sup­ port, and the police leadership, which was reshuffled by Nivar Seijas the same day, issued a similar statement. The new commanders named May 10 were navy Cmdr. Manuel Rivera Caminero and air force Col. Renato Malagon Montesano. Balaguer replaced the other two military chiefs May 12, naming Brig. Gen. Orlando Alvarez Sanchez army com­


mander and Gen. Juan Beauchamps Javier armed forces minister. In a final move to resolve the conflict June 3, Balaguer named two of the re­ signed military leaders to cabinet posts. Gen. Perez y Perez was named interior minister, replacing Fernando Amiama Tio, who became labor minister, and Cmdr. Jimenez was appointed foreign minister, replacing Victor Gomez Berges, who became minister without portfolio. The interior minister had nominal control over the police, but in practice Perez y Perez would have little influence over Nivar Seijas, the newsletter Latin America noted June 6.

Reformist party leaders replaced. Several leaders of President Joaquin Balaguer’s Reformist Party were replaced under suspicion of opposing a bid by Balaguer for a fourth presidential term in 1978, the London newsletter Latin Amer­ ica reported Nov. 28. Those dismissed included Minister Without Portfolio Porfirio Rojas Nina, who also lost his cabinet post, and Fi­ nance Minister Fernando Alvarez Bogaert. Alvarez had been questioned by the attorney general about $6 million he had allegedly diverted from the state sugar council in 1974 and used in Balaguer’s reelection campaign that year, it was reported Nov. 21. After the ques­ tioning he refused to resign from the cabinet. (Six Catholic bishops denounced what they called “inexpressible levels” of cor­ ruption in all sectors of Dominican so­ ciety, in a pastoral letter reported Dec. 21.)

Economic & Labor Developments Record *74 exports. Dominican exports totaled a record $651 million in 1974, 44% higher than in 1973, it was reported Feb. 6. Sugar was the major revenue producer, accounting for $323.3 million. Construction strike. More than 20,000 construction workers began a nationwide


strike Feb. 17 for higher wages. They sus­ pended the stoppage for 15 days Feb. 22, after the government declared it illegal and, according to union sources, arrested several union leaders. The workers’ demands had been ap­ proved by the National Salaries Commit­ tee in 1972 but blocked by the Labor Ministry, according to the news agency LATIN Feb. 19. Cesar Estrella Sadhala, the committee’s former president, said the wage demands were in accord with the workers’ needs, LATIN reported. (It was said that Estrella had been removed from office because he favored the workers, the news agency reported.) The official wage scales for construc­ tion workers dated from 1962, the news­ letter Latin America reported March 7. Since that year the cost of living had risen by 56%, according to the Central Bank, or by 65%, according to the workers’ union. Urban transport was so expensive that many workers slept on the job in uncom­ pleted buildings, according to the newslet­ ter. In other labor disputes cited by Latin America, workers in cigar factories were demanding full payment of legally es­ tablished piecework rates (the companies were paying $10 per 1,000 instead of the proper $13); workers on state-owned cot­ ton plantations were striking for payment of 16 weeks’ back wages, and hospital workers were demanding compliance with a wage settlement made with the govern­ ment in 1973. Silver, gold mine opens. Production began at the Cotui silver and gold mine in Pueblo Viejo, from which the government hoped to export 720,000 ounces of silver and 240,000 ounces of gold in 1975, ac­ cording to the Andean Times’ Latin America Economic Report May 2. When the processing plant was fully operative the Dominican Republic expected to be­


come the third leading gold producer in the Western Hemisphere, after the U.S. and Canada, according to the Report.

Austerity program set. President Joaquin Balaguer announced an economic austerity program June 18 to combat what he called a “state of national emergency” caused by the adverse effect of high prices for petroleum imports. The program’s measures included the elimination of luxury imports; restrictions on imports of essential consumer articles that could be produced domestically; steps to lower the price of agricultural goods; restrictions on gasoline consumption; sus­ pension of public works that were not ab­ solutely necessary; a freeze on the wages of public servants; and a 10% reduction in state contributions to all entities except hospitals and health agencies. Among other economic developments; The armed forces took control of all public hospitals July 4 to head off a planned strike by medical personnel which the government termed illegal. A prolonged drought had caused great financial losses in the agriculture and live­ stock sectors and an acute water shortage in Santo Domingo, it was reported June 3. Sugar production in 1975 would fall 200,000 tons below the original prediction of 1.4 million tons, according to the Sugar Institute. The Inter-American Development Bank May 22 approved a $35.5 million loan to help expand and modernize the port of Haina, just west of Santo Domingo. Gulf & Western Industries Inc. of the U.S. had become the largest landowner, the biggest independent employer, the most important single taxpayer and the most profitable foreign investor in the Do­ minican Republic in the past 10 years, the New York Times reported June 24.


Rightist Coup Crushed Military chief heads revolt. Troops loyal to President Guillermo Rodriguez Lara Sept. 1 crushed a revolt led by the armed forces chief of staff, Gen Raul Gonzalez Alvear, and supported by conservative civilian politicans. Gonzalez Alvear led an estimated 300 soldiers and paratroopers in a 12-hour siege and occupation of the presidential palace in Quito, from which Gen. Rod­ riguez Lara escaped to rally a major­ ity of the armed forces against the re­ bellion. Twenty-two persons were reported killed and about 100 were wounded in the fighting between the two sides. During the revolt Gonzalez Alvear issued a statement charging Rodriguez Lara’s government was “characterized by its incompetence and inconsistency, pro­ moting insubstantial policies to the det­ riment of the people” and committing “in­ numerable errors of an economic, social and administrative nature,” notably in pe­ troleum policy. The statement pledged to return Ecuador to civilian constitutional rule within two years. A statement sup­ porting the rebellion was issued by a spokesman for the Civic Junta, a coalition of six conservative political parties which 99

had called Aug. 29 for election of a civilian government. The government ordered mass arrests of opposition politicians Sept. 2, effec­ tively disbanding the Civic Junta. The coalition’s leader, Jose Joaquin Silva, went into hiding, according to a report that day. Gilberto Contreras, a leader of the party supporting ex-President Jose Maria Velasco Ibarra, took asylum in the Venezuelan embassy in Quito. Velasco had supported the abortive coup attempt from exile in Argentina. Gen. Gonzalez Alvear sought asylum in the residence of the Chilean ambassador Sept. 1 along with an aide, Maj. Roberto Varas. The two reportedly flew to Chile Sept. 5. Several other army officers and civilians reportedly took asylum in the Colombian and Paraguayan embassies. Thirty-four armed forces officers were forced into retirement Sept. 6, including Gonzalez Alvear and two other generals involved in the rebellion, Alejandro Solis and Juan Araujo, both arrested Sept. 1. The cabinet and the armed forces com­ manders resigned Sept. 3 to allow Rod­ riguez Lara to form a new government in the wake of the rebellion. The rebellion had been preceded by considerable discontent, particularly among middle- and upper-income groups, over economic problems including an esti­ mated 28% inflation rate and high unem­


ployment. Conservative critics of the government were particularly unhappy over the regime’s nationalist oil policies, which had led U.S. oil companies in Ecuador to cut production drastically, and its recent decision to impose a 60% tax on industrial raw materials, farm ma­ chinery and luxury goods. The tax was an attempt to stem a growing trade deficit. Production by the Texaco-Gulf consor­ tium in January-June had dropped by 50% from the same period of 1974, it was an­ nounced Aug. 6. Production had reat­ tained capacity levels of 210,000 barrels per day after the government lowered oil prices July 9, but Texaco-Gulf demanded additional concessions to increase ex­ ploration and exploitation and boost the nation’s sagging monetary reserves. The bureaucratic payroll and military budget had increased by 56% over 1974, receiving first priority despite an absence of new programs or of a real military threat to Ecuador, it was reported Sept. 8. The government’s agrarian reform pro­ gram was virtually at a standstill, with only 14% of all land designated for new ownership by the agrarian reform in­ stitute having changed hands, according to a report Sept. 5. Reformist and left-wing critics had joined the conservative attack on the government’s policies, according to a report Aug. 8. Asaad Bucaram, the former mayor of Guayaquil and pres­ idential candidate, had held a rally in Guayaquil during a recent visit by Rodriguez Lara and had called for a ci­ vilian government to institute social and economic reforms. Another politician, Abdon Calderon Munoz of the Alfarista Radical Front, had denounced the govern­ ment for the declining purchasing power of the national currency, the fall in oil in­ come and the low level of wages. A number of civilian political leaders were arrested following the coup attempt, it was reported Sept. 12. They included Abdon Calderon Munoz, president of the Alfarista Radical Front; Jose Vicente Ortuno of ex-President Arosemena’s Rev­ olutionary Nationalist Movement, and Carlos Cornejo of the Velasquista Party, which supported the exiled ex­ President Jose Maria Velasco Ibarra. Two other Velasquistas, Jose Joaquin

LATIN AMERICA 1975 Silva and Universo Zambrano, took asylum in the Paraguayan embassy in Quito. The Velasquistas, the Concentration of the Popular Forces (CFP) and the So­ cialist Party all called Sept. 10 for direct elections as soon as possible to choose a civilian government. The Velasquistas asserted the military regime had “caused the most anguishing national economic crisis despite being the only government in our history to have counted with” a full treasury. CFP leader Asaad Bucaram said Ecuador “suffers more misery and hunger today than when the armed forces took power in 1972.” Bucaram was arrested Sept. 10 and sentenced Sept. 15 to four days in jail for insulting the government. Rebel leaders exiled—Nine leaders of the rebellion were exiled to Panama Oct. 12 after the government mishandled and then canceled their court-martial. The court-martial of 27 alleged leaders of the coup attempt had begun Oct. 5 with a tribunal of senior officers normally at­ tached to Ecuadorean embassies abroad. The defendants immediately protested the court’s refusal to let them hire civilian lawyers, and their appointed military de­ fenders—four retired generals—resigned to protest the composition of the tribunal, determined according to a presidential decree issued after the coup attempt. The protests were taken up by the opposition papers and by the Civic Junta, causing the government to suspend the trial Oct. 7. Nine of the defendants and two of their appointed defenders were exiled to Pan­ ama Oct. 12 and the other 18 defendants were set free. The exiled defenders were accused by the government of “promoting anti-government activities.” The acknowledged director of the coup attempt, Gen. Raul Gonzalez Alvear, had been allowed to take asylum with Chilean authorities in Quito. He flew to Chile Sept. 6.

Cabinet & military command shuffled. President Rodriguez revised the cabinet and the military leadership Sept. 8 in the wake of the coup.



Rodríguez named seven new cabinet ministers, reappointed five other ministers and named new commanders of the army and navy. Gen. Ruben Dario Ayala, com­ mander of the El Oro Province garrison which was instrumental in putting down the rebellion, was named government (in­ terior) minister, replacing Gen. Guillermo Marco Duran, who became army com­ mander. Col. Luis Leoro was confirmed as air force commander, and Rear Adm. Luis Salazar Landaeta was named navy chief. (However, Salazar was later ap­ parently replaced; Rear Adm. Alfredo Poveda Burbano, the old navy com­ mander, was reappointed navy chief and head of the joint chiefs of staff, according to the newsletter Latin America Sept. 19.) The new cabinet ministers, in addition to Government Minister Ayala, were Gen. Carlos Aguirre, foreign affairs; Gen. (ret.) Andres Arrata, defense; Col. Francisco Aguirre, labor; Jaime Morillo, finance; Col. Jaime Duenas, natural resources, and Gen. Bolivar Lopez, government sec­ retary general. (A previous cabinet and military re­ vision had been carried out in May. Edu­ cation Minister Guillermo Duran was shifted to government (interior) minister, replacing Rear Adm. Alfredo Poveda Burbano, who was named navy com­ mander, it was reported May 30. The outgoing navy chief, Adm. Sergio Vasquez Pacheco, was elevated to chairman of the joint chiefs of staff, ac­ cording to a report May 23, Duran was replaced by Gen. Gustavo Vasconez, the former army staff chief.) Duran was known for hardline views on order and discipline, according to the newsletter Latin America June 6. As education minister he had sent police into the universities on several occasions, once provoking a strike by the National Education Union to demand his removal. He was replaced in the education post by Gen. Gustavo Vasconez, the former army staff chief, it was reported May 30.

cal leanings, the newsletter Latin America reported May 16. Among sponsors of the drive were the right-wing former President Camilo Ponce and the progressive ex-President Carlos Arosemena, according to the report. Ponce said in a television broadcast June 13 that a plebiscite on a return to democracy was in order following the “enormous accumulation of failures, of frustrations” by the three-year military government. The traditional Conservative Party had declared its formal opposition to the regime at a national convention held secretly outside Quito after the govern­ ment banned it, the Associated Press reported April 28. Party leader Julio Cesar Trujillo told convention delegates the opposition was necessary in light of “the failure of the dictatorship and the danger posed by the growing class of armed men and technocrats.” Trujillo was arrested May 1 and banished May 2 to a military post in Ecuador’s eastern jungle. Government Minister Rear Adm. Alfredo Poveda Burbano asserted that “in the company of troops [Trujillo] can understand and learn for himself his sacrifices and his patriotic duty, and find the respect he deserves.” The Academic Council of the Pontifical Catholic University of Ecuador charged May 7 that Trujillo’s detention in an army camp was a violation of human rights. (Socialist leader Gonzalo Oleas Zambrano, banished to the jungle in 1973, had died in March, it was reported May 7.) The arrest of two lawyers, German Alarcon Jaramillo and Enrique Gallegos, had been announced April 24. The govern­ ment accused them of distributing leaflets—a principal expression of the anti-government movement — which al­ leged several newspapermen were on the government payroll. A warrant was issued for the arrest of Julio Prado Vallejo, a newspaper columnist who had allegedly slandered the government, but Prado eluded authorities.

Coup attempt preceded by unrest. The Civic Junta had been formed earlier in May in a drive to promote a return to constitutional rule. Its members included civilians of liberal and conservative politi­

Colombia expels opposition leaders. Thirty exiled Ecuadorean opposition lead­ ers were ordered expelled from Colombia Dec. 15 for “conspiring against the gov­ ernment of a friendly country [Ecuador].”


The exiles, most of them members of the Civic Junta, a coalition of conservative parties, had planned a summit meeting in Bogota Dec. 16 to organize the overthrow of the government of Gen. Guillermo Rodriguez Lara. They included ex-President Carlos Arosemena, leader of the Revolutionary Nationalist Movement; ex­ Defense Minister Jorge Acosta Velasco, nephew of former President Jose Maria Velasco Ibarra; and retired Gen. Raul Gonzalez Alvear, leader of the abortive September coup. Arosemena and Acosta flew to Panama Dec. 17, and Gonzalez re­ turned to Chile. The expulsions were denounced Dec. 16 by Velasco Ibarra, who was to have flown to Colombia for the meeting but remained at his residence in Argentina. Velasco accused Colombia of defending an “immoral dictatorship” which had “es­ tablished a regime of permanent tyranny” in Ecuador. The opposition leaders had planned to organize a march to Quito from the Colombian-Ecuadorean frontier to over­ throw Rodriguez Lara and replace him as president with retired Gen. Leonidas Plaza, according to opposition sources cited by the Venezuelan newspaper El Nacional Dec. 17. A communique released by the Civic Junta Dec. 28 said most of the exiled leaders had returned secretly to Ecuador after leaving Colombia. Ecuador doubled its frontier guard Dec. 16 and arrested a number of opposition leaders in Quito including Rodrigo Suarez Morales, deputy director of the Conserva­ tive Party, and retired Maj. Cesar Paredes, a participant in the September coup at­ tempt. Authorities also sought Conserva­ tive leader Julio Cesar Trujillo, who had returned to Ecuador from exile earlier in the month, it was reported Dec. 17. In response to the Civic Junta’s conspir­ acy and pressure from political groups in­ side Ecuador and from the Catholic Church, President Rodriguez Lara had announced Dec. 6 that the armed forces would return the country to civilian rule under a plan to be revealed in February 1976. Rodriguez gave no details, but the Quito newspaper El Tiempo reported Dec. 29 that the plan called for a plebiscite on a new constitution, elections in 1977 and installation of a new government in 1978.

LATIN AMERICA 1975 An amnesty for political prisoners re­ portedly would be declared in February 1976, and three political parties—one each for the center, the right and the left —would be allowed to run in the elections provided they registered at least 250,000 members, El Tiempo reported. Reelection of a president would be forbidden, former presidents could not run forelection again, and candidates must be born of Ecua­ dorean parents. The last two restrictions would elim­ inate from contention ex-presidents Arose­ mena and Velasco Ibarra, and former Guayaquil Mayor Asaad Bucaram, leader of the Concentration of Popular Forces, who was born of foreign parents. Rodriguez Lara’s offer to restore ci­ vilian government was rejected by Civic Junta leaders Dec. 13. The Conservative Party Dec. 16 renewed its demand that Rodriguez hand power to a provisional military-civilian government. Rodriguez made his offer only hours after a bomb exploded at the government palace, causing damage but no injuries. Three more bombs exploded Dec. 16 at the homes of Jorge Fernandez, president of the National Planning Commission; Andres Cordoba, an adviser to Rodriguez, and Pedro Vera, director of the leftist weekly Mundo. The archbishop of Guayaquil, Most Rev. Bernardino Echeverria, had called Nov. 23 for a return to “the full exercise of our liberties” and had bitterly attacked Marxism, to which government policies were linked by Rodriguez’ conservative opponents. Pablo Cardinal Munoz ap­ pealed the same day for “national recon­ ciliation.”

Economy & Labor Inflation hits 30%. The inflation rate had risen to 30% in the major cities, the newsletter Latin America reported Jan. 17. The government tended to blame the agrarian sector, where production rose by only .7% in 1973, against the 5% projected in the official development plan. The



regime spent an estimated $1 billion in 1974 on rural projects and increased credits to farmers, but its agrarian reform did not favor income redistribution or reorganization of the productive struc­ ture, the newsletter said. An official study showed the share of wage-earners in the national income fell from 53% to 46% in 1960-73, while 7% of the population received more than 50% of the income, according to the newsletter. The government spent most of its massive oil revenues on food imports and arms purchases, Latin America reported.

oil companies for not making acceptable bids for an oil and gas exploration contract in the Gulf of Guayaquil, it was reported Jan. 17. Only one multina­ tional— Northwest Pipeline Corp.—had made such a bid. The Texaco-Gulf con­ sortium, the largest foreign oil producer in Ecuador, had refused to reinvest more than the legally required minimum in its operations in the eastern jungle, the report said. The government admitted Jan. 6 that it was coordinating its oil policy with Vene­ zuela’s.

General strike held. Ecuador was par­ tially paralyzed Nov. 13 by a general strike called by the three major labor federations and backed by the indepen­ dent teachers’ and transport workers’ unions. The strike, called to support demands for a minimum monthly salary of $120, was denounced by the government as a subversive plot. The armed forces were placed on alert Nov. 12, and two alleged leaders of the strike movement—ex­ President Carlos Arosemena and Con­ servative Party leader Julio Cesar Tru­ jillo—were deported to Bolivia. The armed forces commanders issued a statement Nov. 16 reaffirming their “confidence” in President Gen. Guillermo Rodriguez Lara and denying what they called “the wave of rumors” that Rodriguez would resign in the wake of the strike.

Oil price cut. The government cut the price of certain petroleum exports July 9 by reducing the income tax charged to oilproducing companies. The tax cut, retroactive to July 1, was ordered to help increase petroleum production and government revenues. It applied only to oil exported to the Carib­ bean and the west coast of Central and North America, and not to Chile and Peru, which would take 50% of Ecuador’s oil exports in 1975. Natural Resources Minister Adm. Luis Salazar said the oil price would be reduced by 43c a barrel from the old price of $10.84 per barrel. The tax rate was cut from 58.5% to 53.1 %, and the royalty rate was maintained at 16.67%. The government had been under considerable pressure to reduce the tax from the Texaco-Gulf consortium, the largest oil producer in Ecuador. TexacoGulf had considerably reduced production in recent months, claiming the govern­ ment’s large take of oil income made production only marginally profitable. The government had charged in return that the U.S.-based consortium was at­ tacking Ecuador as the weakest link in the Organization of Petroleum Exporting Countries (OPEC), and that it was “strangling [the] country’s fiscal pro­ grams,” the New York Times reported Feb.19. Oil production had fallen to 165,000 barrels a day from a potential of 210,000 barrels per day, according to the Wall Street Journal July 10. As a result Ecuador had become the first OPEC nation to show trade and budget deficits and plummeting foreign reserves.

Oil tax raised. The government in­ creased the income tax on foreign oil com­ panies, raising its share of petroleum production from $9.91 per barrel to $10.12 per barrel, it was reported Jan. 17. The move implemented a recent decision by the Organization of Petroleum Ex­ porting Countries. The state oil firm CEPE had decided earlier to sell 50% of its 1975 production to Chile and Peru, solving its short-term marketing problems, it was reported Jan. 10. CEPE also would begin importing Peruvian natural gas. Among related developments: CEPE’s manager, Col. Raul Vargas, had denounced the major multinational


Exports for the first 10 weeks of 1975 had earned $163.8 million, 20% below the same period of 1974, while imports had al­ most doubled to $181.9 million, according to the Andean Times’ Latin America Eco­ nomic Report May 23. Officials predicted a budget deficit of at least $28 million in 1975, the New York Times reported Feb. 19. The government restricted commercial credits June 4 and banned automobile im­ ports for three months to combat the growing trade deficit.

U.S. Tuna Boats Seized Territorial intrusion charged. Naval offi­ cials seized seven U.S. tuna trawlers in January for fishing without licenses in Ecuador’s 200-mile territorial waters. The vessels were released in March. Four of the ships were seized Jan. 26, a fifth was taken Jan. 28, and another two were reported captured Jan. 31. The seizures angered officials in San Diego, Calif., where the boats were based. Rep. Lionel Van Deerlin (D, Calif.), who represented a portion of the city in Congress, called for an end to U.S. military aid to Ecuador Jan. 29. Mayor Pete Wilson asked President Ford Feb. 5 to cut off all aid to Ecuador. One Ecuadorean newspaper reported that the crew of one seized vessel said it had been authorized by the U.S. govern­ ment to fish in Ecuadorean waters, ac­ cording to the London newsletter Latin America Feb. 7.

LATIN AMERICA 1975 Etiel Rodriguez, Ecuador’s fishing undersecretary, asserted Jan. 29 that Ecuador would continue to “defend its natural resources and the ichthyological wealth in its 200-mile territorial waters.” The seven trawlers were fined a total of $1.7 million and were forced to buy back their confiscated tuna, catches for $1 mil­ lion. The incident led to more U.S. govern­ ment and labor protests. Seven senators sponsored a resolution, reported March 7, asking economic sanctions against Ecuador, and the International Long­ shoremen’s and Warehousemen’s Union, based on the west coast, called a boycott on shipments to and from Ecuador Feb. 20. The Ford Administration took no direct action against Ecuador, however, but instead sent a high-level State Depart­ ment group to Quito to discuss the boat seizure controversy. The group’s visit was reported by the Associated Press March 7. Of the seven seized boats, two were in­ eligible for Ecuadorean licenses because they were too big, and the other five refused to buy the licenses on grounds that the U.S. did not recognize 200-mile territorial waters. Press sources noted that since the licenses cost thousands of dollars and the U.S. government reim­ bursed the boat owners for any fines, it was cheaper not to buy them, and the U.S. government was said to have en­ couraged the boat owners to defy the 200mile limit. However, now that Ecuador was ap­ plying tougher sanctions against the tuna boats, the U.S. was no longer encouraging the boat owners’ defiance, and was seeking a solution to the issue with Ecuadorean officials, according to press reports.


President Lopez Ousted in Banana Bribe Scandal

Melgar succeeds Lopez. The Armed Forces Superior Council dismissed Gen. Oswaldo Lopez Arellano as president of Honduras April 22, after Lopez refused to cooperate fully with a government panel investigat­ ing reports that he accepted a $1.25 million bribe from the nation’s leading banana producer, United Brands Co. of the U.S. The Council announced in a radio broadcast that Lopez had been suc­ ceeded by CoL Juan Alberto Melgar Castro, the armed forces commander. The Council said the new government would enact major reforms but would also main­ tain Honduras’ traditional support for Central American economic integration. The coup against Lopez was bloodless, according to press reports. The capital city of Tegucigalpa was reported calm April 22, with all activities proceeding normally. Lopez was reported at his home, but not under arrest. The day before the coup, the committee investigating the bribe reports had an­ nounced publicly that Lopez had refused it permission to examine his foreign bank accounts, creating “an obstacle to the committee’s work.”

Six of the committee’s seven members departed for the U.S. April 22 to question officials of United Brands and the SEC. One committee member, Jorge Arturo Reina, rector of the National University, said April 23 that the committee had re­ ceived evidence of the alleged bribe pay­ ment but not enough information to im­ plicate Lopez Arellano. (A spokesman for the Armed Forces Superior Council told the New York Times April 23 that if Lopez were implicated di­ rectly, he would “have to face trial and punishment which could perhaps involve confiscation of some of his property.” Lopez was said to have a fortune worth $25 million in various businesses in Hon­ duras.) In its radio broadcast April 22, the Council pledged to restructure the govern­ ment; to enact a national development program, keeping Lopez Arellano’s con­ troversial agrarian reform measures; to provide incentives and guarantees for foreign investment as long as it respected “the rights and honor” of Honduras; to reject “divisive, anarchist or destructive” ideas; to return “the rule of law,” but only after creating the “politico-economic and social conditions that favor the es­ tablishment of such a regime”; to give full support to the banana bribe investi­ gation; and to continue negotiations to resolve Honduras’ border dispute with El Salvador.


106 A spokesman for the Council told the New York Times April 24 that the new government would “prepare the country for true democracy.” However, he said the Council would not “hand the country back to the traditional conservative parties that exploit the poor and illiterate. We’ll stay in office as long as necessary, perhaps five or 10 years.” Col. Melgar Castro announced a new Cabinet April 23, retaining only the de­ fense, health and telecommunications ministers from Lopez’ regime. Melgar named only three military officers to Cabinet posts: Col. Mario Carcamo Chin­ chilla as defense minister, Col. Alfonso Flores Guerra as interior minister and Capt. Armando San Martin as economy minister. Apart from Lt. Col. Mario Maldonado Munoz, who was confirmed as director of the National Agrarian In­ stitute, none of the young lieutenant colonels who controlled the Armed Forces Superior Council took a major post in the government. The banana bribe scandal had shaken Honduras since it was first reported. Labor unions in the northern banana producing area called April 10 for the nationalization of the local subsidiaries of United Brands and the other U.S. banana firm, Standard Fruit. The Federation of Honduran Uni­ versity Students called April 11 for a re­ imposition of the $1 tax on each box of exported bananas—the tax which United Brands allegedly bribed Lopez Arellano to reduce—and the traditional National and Liberal Parties called April 17 for Lopez’ resignation. Economy Minister Abraham Bennaton asserted April 12 that the bribe allega­ tion was unjust and proved that officials who acted in defense of national inter­ ests were exposed to “slander and re­ prisals.” He warned that if the allega­ tion were not contested, “no one in the future will dare struggle against the transnational companies whose power ex­ tends to the information media, thus mak­ ing them capable of distorting facts and events.” Bennaton resigned when Lopez Arellano was replaced April 22. The Armed Forces Council April 24 named Col. Policarpo Paz Garcia to re­ place Melgar as military commander in chief.


The shift considerably reduced Melgar’s power, although officials said it was made to allow him more time for the presidency. Meanwhile, officials continued to stress that the ouster of President Oswaldo Lo­ pez Arellano did not mean a change of government and was not related to the banana bribe scandal .in which Lopez had been unofficially implicated. Foreign Min­ ister Virgilio Galvez asserted April 24 that the regime, despite the removal of Lopez and the naming of a new Cabinet, was “the same one that took office Dec. 4, 1972,” the day Lopez led a military coup against Honduras’ last civilian govern­ ment. The new Cabinet reflected the political divisions within Honduras and the armed forces, with civilian and military ministers of varying political views, the newsletter Latin America reported May 2. However, leaders of the Superior Council empha­ sized their own progressive views, with one spokesman telling the radio station La Voz de Honduras that democratic elec­ tions would not be called until “80% or 90% of the people are literate and enjoy better living standards,” according to the newsletter. Latin America noted that the Superior Council had imposed four advisers on Melgar: Cesar Batres, a former foreign minister; Vicente Williams Agasse, a se­ nior member of the Christian Democratic Party; Guillermo Buese, head of the Cen­ tral Bank; and Jose Jorge Solorzano, an army colonel. At least one prominent civilian, Marco Virgilio Carias, vice rector of the Na­ tional University, complained that the government remained too conservative and tied to foreign economic interests. Carias told the Mexican newspaper Excel­ sior April 27 that the foreign investment being encouraged by the new government was inimical to Honduran interests, and he noted that Cesar Batres, one of the new presidential advisers, was a former lawyer for Standard Fruit & Steamship Co., one of the U.S. banana producers with which Honduras had been in conflict in 1974 over the government’s tax on banana ex­ ports. Events leading to Lopez’ downfall. Lopez’ alleged link to the banana bribe

HONDURAS scandal had begun to emerge in early April with the admission by United Brands of the reputed payoff and a U.S. government investigation of the case. The president had been dealt a political blow earlier, March 31, when the Armed Forces Superior Council removed him as armed forces commander. He was replaced by Melgar Castro. President Lopez had launched a number of nationalist reforms, notably the agra­ rian reform law published in January, which angered the opposition National and Liberal Parties as well as the three leading conservative organizations—the National Federation of Farmers and Stockbreeders, the Honduran Council of Private Enterprise and the National Asso­ ciation of Industrialists, according to the London newsletter Latin America April 11. Within the army Lopez had been op­ posed by a number of officers including Col. Melgar Castro, whom he had dis­ missed as interior minister in February and removed to the northern military command in San Pedro Sula, Latin Amer­ ica reported. Melgar’s political orienta­ tion was unclear. Latin America and the French news agency Agence France-Presse linked him to conservative opponents of Lopez Arellano. Observers quoted by AFP April 3 saw his appointment as army commander as a move by conserva­ tiveofficers to forestall reforms backed by Lopez Arellano and younger army offi­ cers. Nevertheless, the Armed Forces Supe­ rior Council pledged its support to Lopez Arellano as president April 1, and Col. Mario Maldonado Munoz, director of the National Agrarian Institute, asserted “the development policies and social and eco­ nomic reforms undertaken will be deep­ ened with the new changes inside the armed forces,’’ Latin America reported April 11. Among the major military changes ac­ companying Lopez Arellano’s removal were the appointment of Col. Cesar Elvir Sierra as army chief of staff; Col. Omar Antonio Zelaya as head of the joint chiefs of staff; Col. Mario Carcamo Chinchilla as defense minister; Col. Domingo Alvarez as air force commander; Col. Jose Serra Hernandez as interior minister, and Col.

107 Francisco Ruiz Andrade as commander of the San Pedro Sula military zone, Latin America reported. The number of military zones, increased to seven by Lopez Arellano in February, reverted to five. Lopez’ February reorga­ nization of the zones was declared a fail­ ure. Latin America reported that it was the reorganization—undertaken to curb illegal land occupations—that had sparked the movement to remove Lopez from his military command. Lopez Arellano denied the report April 9 and his Cabinet appointed a seven-man committee to investigate the bribe charge. The committee was comprised of the army staff chief, Col. Elvir Sierra; the Supreme Court president; the rector of the National University; the attorney general; the arch­ bishop of Tegucigalpa; the president of the Honduran Council of Private Enter­ prise, and the secretary general of the Honduran Workers’ Confederation. The first press report that Lopez was involved in the scandal came from the Wall Street Journal April 9. It said that he was the suspected recipient of the $ 1.25 million payment by United Brands to “an official” of Honduras in exchange for a reduction in the government's tax on bananas exported by the company’s local subsidiary, the Tela Railroad Co. The investigating committee began daily closed hearings April 9 and imposed a foreign travel ban on all officials con­ nected with the negotiations with United Brands in 1974 which resulted in a reduc­ tion of the banana tax. The committee reportedly received key evidence from Enrique Lopez Balboa and Houston Lacombe, two United Brands executives who “collaborated fully” in interrogations April 10—11. A committee spokesman said Lopez Arellano would be called for testimony and the committee would also travel to the U.S. to question United Brands officials, representatives of the U.S. Securities and Exchange Com­ mission and members of the U.S. Senate’s Subcommittee on Multinational Corpora­ tions. The banana bribe scandal surfaced at a time of great economic difficulties in Hon­ duras. Following the devastation by Hurri­ cane Fifi in September 1974, which caused $450 million-$600 million in damage and

108 destroyed 70% of United Brands’ banana plantations, the government had under­ taken a massive reconstruction effort based almost entirely on foreign subsidies and loans. Banana exports, which accounted for 39% of Honduras’ $242 million in exports in 1973, were expected to account for only 9% of an estimated $192 million in exports in 1975, according to a projection cited by the Journal. Both United Brands and Standard Fruit, the other major banana producer in Honduras, said it would be too expensive to rehabilitate much of their storm-damaged acreage. Thousands of workers had lost their jobs because of the hurricane, adding to Honduras’ estimated 15% unemployment rate. The Honduran economy was heavily dependent on the U.S., which supplied 44% of Honduras’ imports in 1973 and absorbed about half of its exports, the Journal reported. Honduras had received some $260 million in U.S. development aid since 1946.

United Brands admits bribe. United Brands had admitted to the Wall St. Jour­ nal April 8 its payment of the $1.25 mil­ lion bribe. It was simultaneously reported that the U.S. Securities & Exchange Com­ mission (SEC) had launched an investiga­ tion. Formal charges were filed by the SEC April 9. The company was accused of issuing false reports to conceal $2 million in foreign payoffs. In addition to the Honduran bribe, the SEC also cited “cash payments approximating $750,000 to officials of a foreign government in Europe in connection with securing fa­ vorable business opportunities” between 1970 and the present. Sources close to the probe identified President Lopez and Italian officials as recipients of the bribe. According to the Journal, the SEC began a routine investigation of the com­ pany after United Brands’ chairman and chief executive officer, Eli M. Black, jumped to his death from the company’s Manhattan headquarters Feb. 3. An SEC investigation was opened customarily after the unusual death of any company’s chief executive, an SEC spokesman said.

LATIN AMERICA 1975 The agency’s probe intensified, the Journal reported April 10, when United Brands’ lawyers notified the SEC and the State Department in February of pay­ ment of the Honduran bribe. However, company officials feared that disclosure of the payoff would jeopardize its dealings in Honduras and asked the SEC not to re­ veal details of the payment. Lawyers for the company also asked the State Depart­ ment to support its request for con­ fidential treatment from the SEC in its investigation, but the request was re­ jected, the State Department said. According to the Journal, United Brands feared that Honduras would expropriate the firm’s 28,000 acres in ba­ nana production there if word of the payoff were revealed. These fears were alluded to in United Brands’ April 8 state­ ment to the Journal. Disclosure of the $1.25 million bribe could result in “a ma­ terial reduction in future earnings and a loss of substantial corporate assets, which, in turn, could affect the continuity of op­ erations of the company,” the statement said. In its statement, United Brands also admitted that Black had authorized the Honduran payment, which the company said was made through the company’s foreign subsidiaries and was not ac­ curately identified on its books and records. ' According to the SEC, the money was deposited in the Swiss bank accounts of “designated [Honduran] government officials.” Under the initial understanding with the unnamed Honduran official, the company stated, an additional $1.25 million bribe was to have been paid in the spring of 1975, but United Brands’ board of direc­ tors decided not to make the second payment. United Brands also announced that a special committee would be appointed to investigate and report the circumstances of the Honduran payment, as well as “certain other payments” estimated at $750,000 “in countries outside the West­ ern Hemisphere.” The SEC complaint, which was filed with U.S. District Court in New York, asked the court to enjoin United Brands from further violations of securities laws. The agency also asked the court to ap­ point a special master who could give the


SEC and the company’s shareholders a report “detailing all corporate funds which may have been used for improper payments to government officials, foreign or domestic, or for other improper pur­ poses.” United Brands’ Honduran bribe was directed at securing a reduction in that country’s export tax of 50c a 40-pound box on bananas. Honduras had imposed the export levy in April 1974 after several Central and South American countries joined in an effort to win higher fruit prices early in 1974 when prices were severely depressed because of an oversup­ ply of the fruit. In an action marking the beginning of a “banana war,” the producers decided to impose a $l-a-box export tax to offset their soaring fuel costs. (However, Ecuador, the world’s largest banana producer, refused to enact the levy and other countries subsequently reduced their tax ceilings.) Banana-exporting firms quickly pro­ tested the new tax and retaliated against the producing countries. United Brands undertook negotiations with Honduras, Panama and Costa Rica to win a reduc­ tion in the levy. In August, 1974, it was announced that the Honduran tax would be lowered to 25c a box with yearly in­ creases beginning in 1974 depending in part on the banana market at the time. The reduction represented a savings of $7.5 million to United Brands during 1974, when the company exported an esti­ mated 30 million boxes of bananas from Honduras. (The Honduran levy then was 30c per box. Panama’s tax was 35c a box and Costa Rica’s 25c.) United Brands filed a report with the SEC in September 1974 on its successful attempts to win a reduction in the Hon­ duran tax. United Brands’ failure to men­ tion the bribe in the report was the basis of the SEC complaint that the company had filed false and misleading statements on the tax issue with the agency. Shortly after the Honduran negotia­ tions were completed, Hurricane Fifi swept through Central America, de­ molishing 70% of United Brands’ planta­ tions in Honduras and resulting in a $20 million loss of crops and facilities.


Bennaton called bribe recipient. The Honduran probe commission charged May 15 that former Economy Minister Abraham Bennaton was the recipient of the United Brands bribe. Bennaton was immediately indicted for tax fraud, accepting a bribe and offending the nation’s dignity. He was imprisoned May 27 and released on $825 bail June 4. A court acquitted him of the tax fraud charge June 26. Preliminary criminal charges were also filed against United Brands’ Honduran subsidiary, Tela Railroad Co., and Tela’s general manager, Houston Lacombe, was forbidden to leave the country, it was reported May 19. The government panel’s report on the bribe, read in a nationwide broadcast by Jorge Arturo Reina, rector of the Na­ tional University, charged Bennaton had received the payment in September 1974 at a meeting in Zurich, Switzerland with John Taylor, a United Brands senior vice president. The panel was unable to determine whether ex-President Oswaldo Lopez Arellano was involved in the bribe because Lopez refused the panel permission to examine his Swiss bank account. However, Reina said Lopez had refused a bribe of “several hundred thousand” dollars offered him in July 1974 by Taylor and Eli Black, United Brands’ late chairman. Both Bennaton and Lopez continued to deny any role in the bribe payment. Ben­ naton said May 15 that the money could have been transferred to his bank account without his permission. Lopez told newsmen May 20 that he considered himself “clean,” and that “Bennaton is also not implicated because he had no power over the banana export tax.”

U.S. banana concessions canceled. The government Aug. 15 canceled the local concessions of two U.S. banana firms. United Brands and Standard Fruit, ac­ cusing the companies of committing “im­ moral actions detrimental to the national interests.” President Juan Alberto Melgar Castro cited as “immoral actions” the admitted bribery of a top Honduran official by


United Brands, and a “boycott of national production” by Standard Fruit. The two firms had controlled the Honduran ba­ nana industry, which provided about 40% of the nation’s foreign exchange and em­ ployed more than 35,000 workers. Melgar said the government’s action was not a “nationalization or expropria­ tion,” but a removal of the “unjustified” privileges heretofore enjoyed by the com­ panies, including tax breaks. He said the government would establish a national ba­ nana corporation to place the industry in Honduran hands and would purchase railway lines and other facilities from the U.S. firms. In the U.S., an official of Castle & Cooke, Inc., which owned Standard Fruit, said the company understood that Melgar “very much wants the banana companies to continue operations [in Honduras] be­ cause he is very well aware of the vital contribution that the banana industry makes to the economy of that country,” it was reported Aug. 17. Cancellation of the concessions con­ formed with recommendations issued July 9 by a government commission estab­ lished 45 days before in the wake of the United Brands bribe scandal. In addi­ tion to the cancellation, the commission recommended that the government na­ tionalize United Brands and Standard Fruit and that it seek monetary com­ pensation for the “enormous damage” done to Honduras by the bribe scandal. In a related development, Attorney General Serapio Hernandez Castellanos asserted United Brands and Standard Fruit owed Honduras $200 million from back income taxes and tax exemptions since 1912, and for the use of land, water, telephone, telegraph and postal services in the country, it was reported Aug. 22.

Other Developments Soldiers, peasants clash. Four peasants and one soldier were reported killed June 25 in a clash in Olancho Department, where the army cracked down on protests by peasants demanding that the govern­ ment accelerate its agrarian reform


program and release several dozen peasants arrested in earlier protests. The clash took place outside head­ quarters of the National Peasants Union (UNC) in Juticalpa, the department capital, where an estimated 12,000 pro­ testers had arrived on a march to Tegucigalpa, the nation’s capital, to dra­ matize their demands. UNC leaders pledged to continue the march, but the government pledged to halt it. Two persons were wounded in the clash and dozens were arrested, including 36 Roman Catholic priests and nuns who supported the UNC, according to the Washington Post June 28. The 36 were later freed, but a U.S. priest and two South American seminarians were held, the Post reported. (The archdiocese of Tegucigalpa criti­ cized the government for the Juticalpa in­ cident June 30, and it charged July 7 that the army had assaulted UNC head­ quarters to precipitate the clash.) The army June 26 arrested UNC leader Pedro Mendoza and four of his aides, and it occupied the Tegucigalpa headquarters of the Honduran General Labor Federa­ tion (CGT), which supported UNC’s de­ mands along with the Honduran National Peasants Association (Anach). Anach was the nation’s largest peasants’ organiza­ tion, claiming more than 100,000 mem­ bers, and UNC, run by Christian Democrats, was next with more than 50,000. More than 100,000 UNC and Anach members had occupied the northern city of San Pedro Sula June 13 and blocked major highways and bridges in different parts of the country to demand land from the government and secure the release of 136 UNC members arrested after a series of land occupations throughout the country May 19-23. The peasants retreated at the end of the day but promised more disruptive action if the government ignored their demands. Anach leader Juan Ramon Triminio was assassinated June 12, and another peasant leader, Esteban Rodríguez, was reported murdered June 14. UNC charged June 14 that large landowners op­ posed to agrarian reform had hired bands of assassins to attack the peasant leader­ ship.

HONDURAS The government, meanwhile, pledged to carry out land reform but demanded an end to land occupations and other peasant protests. It sent lawyers of the National Agrarian Institute to rural localities to speed the release of arrested peasant leaders, who were kept in jail at the re­ quest of powerful local landowners, ac­ cording to the lewsletter Latin America June 20. The government’s reform program at­ tempted to widen land distribution and increase agricultural productivity without moving against the U.S. banana com­ panies that were the major source of government income, according to the Fi­ nancial Times of London May 22. The program sought to reduce large landholdings and increase peasant hold­ ings by expropriating the uncultivated land of large landowners—excluding the banana companies—and setting limits on the size of cultivated, irrigated holdings. Compensation for expropriated assets was planned, and landowners were given a grace period to double their area of culti­ vation. The program would distribute 1.3 million acres to 120,000 families within five years, providing credits, machinery, fertilizers, basic services and technical guidance to new landowners at an invest­ ment of $75 million, according to an official quoted by the Times. The Inter­ American Development Bank had pro­ vided $31.2 million in loans to help finance the program. The Financial Times noted that 667 families, or .3% of the Honduran popu­ lation, owned 27.4% of the cultivable land, while 74.5% of the people owned only 12.4% of the land. In addition, small hold­ ings were overcultivated and large hold­ ings only partially cultivated, causing low productivity in both cases. Peasants with tiny plots made up 40% of the population and earned about $30 per year, the Fi­ nancial Times noted, and more than 90% of all Hondurans under the age of five suffered from malnutrition.

Olancho murder report. A special mili­ tary commission investigating the Olancho

111 Department slayings accused the Na­ tional Federation of Farmers & Cattle Ranchers of participating in the killings, it was reported July 23. Two army officers, a rancher and the owner of a lumber mill were blamed for the deaths. The military commission had begun its investigation July 18 after the bishop of San Pedro Sula, Most Rev. Jaime Brufau, issued a statement asserting the Olancho murders were committed by “die-hard forces opposed to the postponed social reforms in the countryside.” Brufau refer­ red to the government’s mild agrarian reform program, which had been enacted but not implemented. (The government July 6 had proclaimed its “firm decision” to carry out the program “despite the great pressures coming from certain in­ terests anxious to keep social justice from reaching the countryside.”) A statement denouncing government repression of priests, nuns and church em­ ployes in Olancho had been issued July 12 by the archbishop of Tegucigalpa, Most Rev. Hector Enrique Santos, and several other church officials. The statement charged that priests and nuns had been ar­ rested and moved from Juticalpa to Tegucigalpa, where the foreigners among them had been deported and the Hon­ durans had been placed in the custody of Archbishop Santos under threat of expul­ sion if they tried to leave the city. The bishop of Olancho, Most Rev. Nicholas d’Antonio, charged Aug. 1 that opponents of land reform in the depart­ ment had “put a $10,000 price on my head” because of his support for the reform program. In related developments: The government announced the res­ ignations July 2 of Fernando Montes, natural resources minister, and Vicente Williams, staff adviser to President Juan Alberto Melgar Castro. Montes and Williams were important members of the Christian Democratic Party, which had been criticized by the government recently for its support of the National Peasants Union (UNC). The peasant group and the General Labor Federation (CGT), which supported demands by peasants for an accelerated agrarian reform program, had been virtually dissolved by the govern­

112 ment following the arrest of their top leaders June 25-26, it was reported July 2. Unidentified terrorists July 1 dy­ namited an airplane landing strip in Juticalpa and a bridge at Guayabillas out­ side the city. Army purge. The Armed Forces Supe­ rior Council ordered the retirement of 29 senior military officers June 13, including Col. Andres Ramirez Ortega, the army

LATIN AMERICA 1975 staff chief, and two former cabinet officers, but not ex-President Oswaldo Lopez Arellano, who was the only army general. The retired officers were described in press reports as politically conservative. The Superior Council, which reportedly set national policy through President Col. Juan Alberto Melgar Castro, was said to be dominated by reformist lieutenant colonels.


Violence & Unrest Communist's death protested. The ap­ parent murder of an imprisoned Com­ munist in Mexico City Jan. 5 was protested by members of most political parties, including the ruling PRI. Mayor Octavio Senties ordered an investigation of the case and President Luis Echeverria named a personal observer to the probe, it was reported Jan. 19. The victim, Hilario Moreno Aguirre, was a retired teacher and Communist Party member. He was arrested Dec. 29, 1974 along with his daughter, Elia, and Eusebio Martinez, another Communist. Police said he hanged himself in his cell Jan.5. After Moreno’s death, police charged he and Martinez had been falsifying passports for leftist subversives in Guate­ mala, Honduras and El Salvador as part of a plot against the governments of those countries. However, officials in Guate­ mala and El Salvador denied knowing about the alleged plots, it was reported Jan. 19. Martinez was later freed for lack of evidence, it was reported Feb. 7. Three doctors conducted an autopsy on Moreno. They said at a press conference Jan. 7 that he had died from strangulation and that his body showed signs of massive cerebral hemorrhaging. They added that 113

the rope with which he was strangled was not strong enough to support his body, presumably ruling out a hanging, ac­ cording to the Spanish news agency EFE. The Communist Party accused the police of killing Moreno. In a statement Jan. 12, the party said his death was “part of a systematic strangling of the freedoms of the Mexican people.” Jose Revueltas, a leftist writer who had been jailed for several years on political charges, said the death was “one of the many murders committed by police agents in jail, some of which I have witnessed.” Other groups blaming the police for Moreno’s death were the Mexican Workers Party, the Popular Socialist Party and the Teachers Revolutionary Movement, and the rightist National Action Party. Rafael Galvain, a labor leader and PRI member, warned that “the popular unity around President Echeverria will deteriorate seriously if this case of assassination—because it was assassination—is not cleared up,” it was reported Jan.19.

Terrorist bombings. Five persons were killed and at least 19 were seriously in­ jured Jan. 27 when terrorists set off three bombs in San Luis Potosi. Five bombs exploded that day in Mexico City and another four in Oaxaca, but no casualties were reported there.

114 Authorities blamed the bombings on the People’s Union, an extreme leftist group. Officials said Feb. 4 that eight members of the group had been arrested but seven remained at large. Four university students and one professor were arrested in San Luis Potosi for alleged connections to the bombers, ac­ cording to local authorities Jan. 29. Before the Feb. 4 announcement, au­ thorities had blamed the explosions on the September 23rd Communist League, whose leaflets had been found at the Oa­ xaca bombing sites. Police said a labor union leader and a plant guard had been killed trying to stop outsiders from dis­ tributing League leaflets at the General Electric plant near Mexico City, it was reported Jan. 31. In another terrorist development, sol­ diers fought a gun battle Jan. 16 with a group of followers of Lucio Cabanas, the slain guerrilla leader, whom they sur­ prised at a house in suburban Acapulco, authorities reported. Two soldiers and three guerrillas reportedly were killed in the action, and several insurgents were captured. Officials Jan. 28 confirmed the arrest of Antonio Hernandez Fernandez, a high school teacher associated with Guerrero University, for alleged connections with Cabanas. Hernandez reportedly admitted he had met with Cabanas in February 1974, but denied taking part in any ter­ rorist actions.

Guerrero government removed. The Per­ manent Commission of Congress voted unanimously Jan. 31 to remove the three branches of the Guerrero State govern­ ment because of a fraud scandal involving Gov. Israel Nogueda Otero. Nogueda was ordered arrested, but he vanished before police could reach him. Former Deputy Eusebio Mendoza was jailed in connection with the fraud, and numerous officials were placed under investigation. The interim Guerrero State attorney general, Ramiro Gonzalez Casales, ordered the 61 plainclothes policemen in Acapulco disarmed and confined to quarters for three days, “for the safety of the population,” it was reported Feb. 6.

LATIN AMERICA 1975 After the confinement, 44 of the po­ licemen were fired. Gonzalez said Aca­ pulco’s policemen were “of the worst kind,” presumably confirming reports that they collaborated with criminals who bribed them. According to official reports, the Guer­ rero fraud began in August 1974 when the federal housing agency Infornavit de­ manded a large stretch of land near the Acapulco airport. The land was owned by 137 peasants, who appointed a mediator to deal with Infornavit through the state government. Infornavit agreed to pay $2.3 million for the land, but by the time the money reached the peasants all but $100,000 had been embezzled. Federal agents were said to have found $280,000 of the missing money in Nogueda’s bank account. Another $560,000 reportedly were appropriated by Eusebio Mendoza “for his services” in the land deal, according to a federal prosecutor. Rosalio Wences Reza, rector of Guer­ rero University, said Jan. 31 that other governors had embezzled more money than Nogueda, and that his removal would be a political act unless all state and federal officials were investigated and prosecuted for corruption. The absence of Nogueda, a member of the hardline faction of the ruling Revolu­ tionary Institutional Party (PRI), might help President Luis Echeverria secure the PRI presidential nomination for a moderate in 1976, the London newsletter Latin America said Feb. 7. The Permanent Commission April 29 re­ moved three branches of the Hidalgo State government. Governor Otoniel Miranda and his predecessor, Manuel Sanchez Vite, had been accused by peasants and workers of promoting corruption and various forms of political repression in­ cluding kidnapping and torture. Both men vanished after the congressional action, it was reported May 9. Peasants killed in rural clashes. Thirteen peasants were killed in Sonora and Veracruz States in October in clashes with landlords and policemen over land the peasants claimed under Mexico’s agrarian reform law. Seven of the deaths occurred Oct. 23 when members of the Sonora judicial

MEXICO police invaded a ranch near the town of Guaymas to evict some 400 peasants who had occupied the ranch two days earlier, claiming the land was part of an unlaw­ fully large estate. Eyewitnesses said some of the peasants were shot in the back after surrendering, according to the Mexico City newspaper Excelsior Oct. 24. The killings provoked protests Oct. 24 from leaders of peasant and labor organi­ zations and opposition political parties. President Luis Echeverria ordered a full investigation of the incident and he in­ structed Agrarian Reform Minister Felix Barra Garcia to resolve all land disputes in Sonora by the end of 1976. The Sonora legislature Oct. 25 forced the resignation of Governor Carlos Biebrich, who had said the day before that the peasants may have initiated the shooting at Guaymas but who had also fired the ju­ dicial-police chief, Lt. Col. Francisco Arellano. A preliminary investigation was begun into charges by peasants that Arellano had organized and par­ ticipated in the killings. The Washington Post reported Nov. 14 that Arellano had been jailed, but the London newsletter Latin America said Nov. 28 that he had fled Sonora. Press reports noted that the Guaymas ranch was officially owned by a child, Erik Martin Dengel, presumably to enable a relative to circumvent the law establishing a 247-acre limit on private property. Such arrangements were widespread in the rich agrarian states of Sonora and Sinaloa, ac­ cording to Latin America Nov. 28. Six more peasants were killed in Tlapacoyan, Veracruz State Oct. 30 when some 200 landowners and hired gunmen evicted 80 peasants from land assigned to them by a presidential resolution Sept. 16. The invaders destroyed the peasants’ make-shift homes after the shootout. Following the Guaymas and Tlapacoyan killings, land invasions by peasants continued in Sonora and also oc­ curred in the states of Colima, Sinaloa, Tamaulipas, Chihuahua and Morelos, it was reported Nov. 14. Landowners in Sonora and Sinaloa threatened to stop growing crops unless the government guaranteed their holdings against peasant occupations, it was reported Dec. 4. Land invasions and rural violence in Mexico were caused by the “failure” of

115 the government’s agrarian reform pro­ gram, according to Rodolfo Stavenhagen, a leading Mexican social scientist quoted in the Venezuelan newspaper El Nacional Nov. 12. The agrarian reform ministry and other agencies responsible for enforcing the program “have been transformed into an organism of political control and have spread corruption,” Stavenhagen declared. Although the government had given expropriated land to many peasants since the Mexican Revolution of 1910, the peasants lacked the necessary credit, ferti­ lizers, machinery and marketing outlets to make their farming successful, the New York Times noted Dec. 1. Government expenditures of $1.5 billion in 1975 alone had “failed to improve conditions noticeably,” according to the Times. Four million of Mexico’s 25 million peasants were still without land, while 5 million farmers could “barely feed their families from their tiny plots,” the Times reported. “Underemployment, malnu­ trition and illiteracy are chronic among the peasants, while corruption and repression constantly weaken their ability to organize economically or politically.” Independent peasant leaders were either “tempted by bribes to join the government” or “jailed or mysteriously killed,” the Times article said. “The killing of peasants is a routine event,” said a political observer quoted by the paper.

Policemen assassinated. Two policemen were killed and a third was wounded in an ambush in Cuernavaca by presumed guer­ rillas of the September 23rd Communist League, it was reported Dec. 1. The League was held responsible for the murders of 17 policemen and eight ci­ vilians since April 25, when alleged mem­ bers of its Red Brigade killed eight po­ licemen and three civilians while stealing about $16,000 from a bank in Mexico City. Two of the robbers had been cap­ tured and had confessed belonging to the Brigade, according to the chief of police. The League had absorbed about a dozen small guerrilla groups, increasing its membership to some 600 militants, ac­ cording to “intelligence sources” cited by the Miami Herald May 12. Among the in­ corporated groups were the Zapata


Urban Front, the People’s Revolutionary Armed Forces, the Salvador Allende Urban Guerrilla Commandos and the People’s Liberation Party, the Herald reported. The League was held responsible for the murders of three policemen and three ci­ vilian inspectors Aug. 12, two policemen Aug. 20 and a policeman and two naval guards Aug. 23. The killings, all in Mexico City, were carried out to secure weapons and publicity for the guerrillas, according to press reports. Four League members, including the League’s leaders in Jalisco and Nuevo Leon States, had been reported arrested June 10. An alleged League founder, Miguel Dominguez Ramirez, fell to his death while trying to escape over a prison wall in Mexico City, according to prison officials quoted in the Miami Herald Oct. 12.

Political Developments Patrimony minister quits. Horacio Flores de la Pena, minister of national patrimony, resigned Jan. 3 after four years in office. He was replaced by Francisco Javier Alejo, who had been serving as finance undersecretary. There was no explanation for the change, apart from Flores’ assertion that he was making way for “younger and more motivated people” in his ministry. Finance Minister Jose Lopez Portillo denied reports that President Luis Eche­ verria Alvarez had been pressured by the private sector to dismiss Flores, a self­ described “leftist militant” who had fought corruption and worked for greater state control of the economy. Flores praised Alejo as “an old friend and distinguished disciple.” Alejo was re­ placed as finance undersecretary by Carlos Tello Macias.

Foreign news services emphasized that Flores was a major opponent of Mexican membership in the Organization of Petro­ leum Exporting Countries (OPEC). However, Alejo asserted Jan. 5 that Mexico should not join OPEC although it should often consult with the cartel.


Echeverria points to future policy bases. In his annual state of the union address Sept. 1, President Luis Echeverria cited a number of principles upon which he ex­ pected the next government adminis­ tration to base its policies. The principles, although not binding, were considered important to the se­ lection of the presidential candidate of the ruling Revolutionary Institutional Party (PRI), who was expected to win easily in the 1976 election. The nominee would be selected by Echeverria after consultation with leaders of the PRI, the labor move­ ment, the business community and other influential sectors. Echeverria said the next government should continue the current development policies; modify the concentration of wealth to allow the development of a modern capitalist system; replace unfet­ tered free enterprise with a moderately directed economy; promote joint ventures between the state and private investors, and resolve any conflicts involving foreign capital by means that were satisfactory to both the government and the transna­ tional corporations. Referring to his administration, Eche­ verria said: “Six years are not enough to resolve many of our problems, both old and new, nor will they be resolved for many years to come. But with the same conviction, I would assert that the founda­ tions have been established for future administrations to develop along demo­ cratic and popular lines.” Business leaders aligned in the newly formed Business Coordinating Council had given Echeverria a document, reported in the press May 13, urging that the next administration reduce state inter­ vention in the economy and allow busi­ nessmen greater freedom. “In a demo­ cratic regime economic activity corre­ sponds fundamentally to private indi­ viduals, who should be responsible for the creation of wealth,” the document stated. “The economy should not be subject to central authoritarian planning.” Leftist groups seek electoral reforms. Four small leftist groups—the Mexican Communist Party, the Mexican Workers Party, the Socialist. Action and Unity Movement and the Socialist Organization


Movement announced April 22 that they would join together to try to reform the Mexican electoral law and to oppose the PR I candidate in the 1976 election. The law barred legal recognition to any party that could not show it had at least 60,000 members. None of the four parties was legally recognized. The formation of another leftist group, the Socialist Workers Party, was an­ nounced May 1. The party's organizers denounced “imperialism, the great mo­ nopolistic bourgeoisie and their politi­ cians," who were allegedly trying to prevent “revolutionary development” in Mexico. PRI picks Lopez Portillo. The ruling Revolutionary Institutional Party (PRI) gave its presidential nomination to Fi­ nance Minister Jose Lopez Portillo Sept. 22. The nomination was a virtual as­ surance of victory in the July 1976 elec­ tion. Lopez’ selection was a surprise. Pres­ ident Luis Echeverria, who actually chose the candidate, was thought to have fa­ vored Interior Minister Mario Moya Pa­ lencia or Minister of the Presidency Hugo Cervantes del Rio, who campaigned harder for the nomination. Lopez, though a close friend of Echeverria, was thought to have made too many enemies in the business sector and the middle classes through his support for higher taxes, energy prices, government spending and foreign borrowing. Outgoing PRI president Jesus Reyes Heroics said Lopez would continue Eche­ verria’s “revolutionary policies,” which included gaining greater economic inde­ pendence from the U.S., nationalizing private businesses and increasing taxes on the rich and middle classes to finance rural projects. Lopez, a reputed political moderate, said his government would be “populist” in domestic affairs and “Third Worldist” in foreign relations. The PRI issued a “basic plan” Sept. 22 for Lopez Portillo’s six-year adminis­ tration, which would begin in December 1976. The plan did not call for any basic structural changes, appealing instead for an 8% economic growth rate, a full em­ ployment policy, national economic inde­ pendence, respect for individual rights and


ideological pluralism, and integrated political, social, economic and cultural de­ velopment, among other goals. After his nomination, Lopez selected Labor Minister Porfirio Munoz Ledo to be the new PRI president and Agrarian Reform Minister Augusto Gomez Villanueva to be the party’s secretary general, replacing Reyes Heroles and Miguel Angel Berberena, who resigned to let the candidate select his political team. Both Munoz Ledo and Gomez Villanueva had aspired to the PRI nomination. Reyes Heroles would become director of the social security institute, replacing Carlos Galvez Betancourt, another as­ pirant to the nomination, who would be­ come labor minister, according to the newspaper Excelsior of Mexico City Sept. 24. Senator Enrique Olivares Santana would become agrarian reform minister. Mario Ramon Beteta, a deputy in the Finance Ministry, was named to succeeed Lopez as finance minister after Lopez re­ signed to campaign for the presidency, it was reported Oct. 3. In another appointment, Hugo Cer­ vantes del Rio became head of the PRI in Mexico City, leaving his post as minister of the presidency, from which he had cam­ paigned for the PRI nomination, it was reported Oct. 28.

Economic Developments Mining investment set. The government planned to invest more than $1.6 billion in mining in 1975, emphasizing gold and silver production, according to National Patrimony Undersecretary Jorge Leipen Jan.7. Old gold mines in Mexico and Mi­ choacan States would be reopened, and a number of silver extracting plants would go into operation, including one in Nuevo Leon State, Leipen said. Silver production was expected to rise from 38 million to 54 million ounces during the year, enough to regain world leadership for Mexico in the industry, he added. Mexico currently ranked third in silver production, behind the U.S. and Canada.


Foreign loans obtained. Mexico ob­ tained $530 million in foreign loans in May in separate agreements with the World Bank, the Inter-American De­ velopment Bank (IDB) and other lenders.

The largest loans, totaling $310 million, were obtained May 22 from the World Bank’s International Bank for Recon­ struction and Development. They would help finance agriculture and livestock de­ velopment programs, including irrigation and the purchase of fertilizers and insec­ ticides. Mexico signed an agreement May 16 to borrow $200 million at 1^2% interest from 66 banks led by First National City Corp., Morgan Guaranty Trust Co. and Chase Manhattan Bank of the U.S. The next day it obtained two loans worth $20 million from the IDB to help finance in­ dustrial development programs. In another loan reported July 9, the British government’s Export Credits Guarantee Department guaranteed a $46.2 million credit to help finance the purchase of British capital equipment by the Mexican steel group Altos Hornos de Mexico. Mexico’s total external debt amounted to $8 billion, it was reported June 20. Nacional Financier, the government agency in charge of negotiating foreign loans, signed credit agreements totaling $300 million in London with a group of banks including Manufacturers Hanover Trust and London Multinational Bank, it was reported Oct. 17. The Inter-American Development Bank Oct. 30 approved two loans worth $40 million for rural development pro­ gramsin 15 Mexican regions.

Record *74 trade gap. The nation’s foreign trade deficit reached a record $2.8 billion in 1974, it was reported Jan. 26. Two-thirds of Mexico’s trade was with the U.S., which had had a $3.85 billion trade surplus with Mexico over the past five years. Three-quarters of Mexico’s $15 billion foreign debt was with U.S. private banks and U.S.-influenced international institutions such as the World Bank and the Inter-American Development Bank.


In addition, 80% of all foreign investments in Mexico came from the U.S.

Trade gap grows. Mexico’s trade deficit for January-June increased by 19.7% compared with the same period of 1974, according to preliminary figures reported by the Bank of Mexico and cited by the Latin America Economic Report (LAER) Nov. 28. The growth in the trade gap was partly attributable to the recession in the U.S. economy, to which Mexico’s economy was closely tied, and to world economic difficulties, LAER noted. Their impact on Mexico was serious because the nation’s development was externally financed. Mexico’s exports in the first half of 1975 had risen by 4% while imports had increased by 12%. In addition, earnings from tourism had declined and the burden of long- and short-term debt payments had grown. The total number of tourists visiting Mexico had decreased by 5.8%, with gross receipts falling by 10% and the net by 21.8%, according to LAER. This was caused by the decrease of the spending power of U.S. consumers as well as the in­ crease in Mexican prices, which made other tourist spots more attractive. Amortization of current loans amounted to $316.4 million, while interest payments rose to $394.9 million. To­ gether, the two figures equaled almost half of the value of Mexico’s exports in January-June, $1.424 billion, up from a proportion of 41.7% in 1974. The adminis­ tration of President Luis Echeverria had borrowed more heavily than any previous Mexican regime, despite its vow to make the economy more independent, LAER noted. Despite the growth in the trade gap, Mexican exports in the second quarter of 1975 increased by 17% over the first quarter, LAER reported. Crude petro­ leum was the leading export, accounting for $134 million in export income in January-June, or 66% of all exports from the mining and extractive industries sector. Other exports registering major increases included mechanical and elec­

MEXICO trical machinery and parts, tomatoes, cocoa, shrimp, sugar and cotton, LAER reported Oct. 31.

Foreign economic cooperation. Among developments involving foreign cooperation: The steel firm Altos Hornos de Mexico arranged an $84 million loan on the Eu­ ropean market to finance its $200 million expansion program, it was reported Jan. 10. Another steel company, Fundidora Monterrey S.A., received a $105 million loan from an international group headed by Bank of America, according to the Wall Street Journal Feb. 14. Mexico and Costa Rica had agreed to establish a Caribbean multinational ship­ ping corporation in which all regional states could participate, it was reported Feb. 7. The sponsors said it would cut re­ gional shipping costs by 40%. Volkswagen was doubling production capacity at its plant in Puebla, expecting to sell most of the increased output in the U.S., it was reported Feb. 7. The firm’s sales in Mexico had increased by 26% in 1974. Mexico signed 11 economic coopera­ tion agreements with Rumania following a visit to Mexico by Rumanian President Nicolae Ceausescu, it was reported June 20. The most important pacts concerned the supply of Rumanian oil-drilling equip­ ment to the oilfields in Chiapas and Ta­ basco States. There were also agreements on petrochemicals, mining and atomic energy, among other fields. Foreign Minister Emilio Rabasa July 15 signed an agreement for commercial cooperation between Mexico and the Eu­ ropean Economic Community. The pact, the first between the EEC and a Latin American nation, was partly designed to reduce Mexico's dependence on the U.S. Mexico also signed a broad agreement for economic, scientific and technological cooperation with Comecon, the Com­ munist economic alliance, it was reported Aug. 14. New oil finds. The state oil company Pemex announced the discovery of “im­ portant” new offshore oil deposits in the Gulf of Campeche, off the state of Cam­ peche in southeastern Mexico, it was reported Aug. 13.

119 Pemex gave few details of the find, but said the Campeche deposits justified im­ mediate commercial exploitation. The dis­ covery of new oilfields in the Cotaxtla region of Veracruz State had been an­ nounced with similar reticence March 18. Oilfields discovered in Chiapas and Ta­ basco States in 1974 had produced a total of 100 million barrels of crude in the last 12 months, amounting to more than 40% of national petroleum production, it was reported Aug. 4. Mexico’s crude oil ex­ ports averaged 89,000 barrels per day, ac­ cording to a report June 6. Pemex estimated Mexico’s total proven and probable petroleum reserves at more than 20 billion barrels, it was reported June 6. In 1974 the reserves had been esti­ mated at only 341 million barrels. Mexico’s gross national product in­ creased by 5.5%-6% in 1974, with petro­ leum production reaching 664,600 barrels per day. Oil output was expected to in­ crease further in 1975 with the opening of 30 new wells in Chiapas State, according to Patrimony Ministry Francisco Javier Alejo Jan. 16. Anuar Karam, an official of the state oil monopoly Pemex, said Jan. 29 that production would have to rise to 1.5 million barrels per day by 1980 to meet domestic demand for fuel and pe­ trochemical products. Pemex had raised $50 million by placing 15-year bonds with the Prudential In­ surance Co. of America, it was reported Jan. 10. It signed oil export contracts for 1975 with the U.S. firms Exxon Corp., Mobil Oil Corp., Atlantic Richfield Co. and Phillips Petroleum Co., and the Shell International Petroleum Co., according to a report Feb. 3. Mexico increased the price of its oil ex­ ports by 10% Oct. 1 in accord with the price rise decided by the Organization of Petroleum Exporting Countries, to which Mexico did not belong. The state oil company Pemex signed a $380 million loan agreement in London Nov. 4 with a consortium of 55 banks in­ cluding Bank of America, Citicorp, Morgan Guaranty Trust, Chase Manhat­ tan Bank and Bank of Canada. Pemex said it was the largest single loan ever granted to a Latin American company. Pemex announced Dec. I that it had found oil and gas deposits with potential


reserves of five billion barrels in a 39,000 square mile area in the states of Zaca­ tecas, Aguascalientes, Guanajuato, San Luis de Potosi, Queretaro and Coahuila. New plants go up in Tampico & Vera­ cruz. The world’s largest ferromanganese plant was under construction at Tampico on the Gulf of Mexico, with production scheduled to begin in 1975 and to reach 100,000 tons per year at the end of 1976, it was reported May 23. Copper projects involving investments of $500 million were under way in Sonora State and scheduled for completion in 1978, with a produc­ tion capacity of 145,000 tons per year, ac­ cording to the same report. A $224 million newsprint manufac­ turing plant would be built in Veracruz State, it was reported Dec. 12. The plant would produce 220,000 tons of newsprint annually from bagasse, the crushed res­ idue of sugar cane, ending Mexico’s im­ ports of foreign newsprint, the Vera­ cruz government announced.

’76 minimum wage raised. The govern­ ment boosted minimum wages by an average of almost 21%, effective Jan. 1, 1976, it was announced Dec. 27. The top minimum wage would be the equivalent of $7.98 per day in Northern Baja California, while the lowest level would be $2.78 a day in the Mixteca region of Oaxaca.

Foreign Developments Jews in tourism protest. Jews in the U.S. and Canada cancelled thousands of vacation reservations in Mexico to pro­ test its vote Nov. 10 in favor of a United Nations resolution equating Zionism and racism. Mexico tried to reassure leaders of 10 major Jewish organizations that it did not consider Zionism a form of racism despite the vote, but it voted again Dec. 15 in favor of two U.N. resolutions which de­ nounced Zionism. The leaders, including Rabbi Arthur Herzog of the American Jewish Congress, said Dec. 16 that they would continue to support the tourist boycott, which had caused an estimated


30,000 room cancellations in Mexican hotels. President Luis Echeverria had met with the leaders in Mexico City. Dec. 12, while his foreign minister, Emilio Rabasa, was in Israel reassuring the Israeli government about the U.N. vote. Seymour Graubard, national chairman of the Anti-Defamation League of the B’nai B’rith of the U.S., said after the meeting that he was “en­ tirely satisfied” with Echeverria’s reas­ surances, .but Lawrence Peirez, a mem­ ber of the board of governors of the B’nai B’rith, said the organizations represented at the meeting would wait to see how Mexico voted in the U.N. General Assembly Dec. 15 before deciding whether to recommend lifting of the boycott. In the Assembly Mexico voted in favor of a resolution endorsing the declaration of principles of the International Wom­ en’s Year Conference held in Mexico City in June, which called for action against co­ lonialism, racial discrimination and Zionism. Mexico also voted for another resolution implying endorsement of the declaration. Foreign Minister Rabasa resigned Dec. 29 and was replaced by Alfonso Garcia Robles, Mexico’s ambassador to the U.N. Rabasa’s resignation was believed con­ nected with a remark he had made on his return from his mission in Israel. He had said that “misunderstandings” between Mexico and Israel had been “forgotten, pardoned and buried.” A top government official quoted by the New York Times Dec. 30 said it was “an error for Mr. Rabasa to have used the word ‘pardon.’” Samuel del Villar, a columnist for Excelsior, the leading Mexican newspaper, said Rabasas’s con­ duct had served to “degrade our foreign policy to the lowest levels in our history,” the Times reported.

Abuse of U.S. prisoners charged. The seven members of the U.S. House of Representatives’ Subcommittee on Inter­ national Political and Military Affairs sent a letter to Secretary of State Henry Kissinger charging that U.S. citizens were mistreated in Mexican jails and de­ manding that the State Department move to correct the situation, it was reported Nov. 2.

MEXICO The subcommittee, chaired by Rep. Dante Fascell (D, Fla.), said there was “apparent indifference” in Mexico to the rights of jailed Americans, most of whom were held for illegally transporting nar­ cotics. There were some 550 U.S. citizens in Mexican jails, many of whom claimed to have been tortured, forced to pay exor­ bitant sums of money to prison guards and lawyers, subjected to long delays be­ fore sentencing, and denied access to U.S. consular officials. In an apparent reply to the subcommit­ tee, the State Department declared that the treatment of U.S. prisoners in Mexico was improving, it was reported Nov. 18. However, the U.S. consul general in Mexico City, Frederick Smith Jr., said in a newspaper interview Nov. 18 that “Americans arrested here are caught in the Mexican system of justice. We can’t change that system.” Jailed Americans claimed that upon ar­ rest they had been tortured with electric cattle prods until they signed confessions in Spanish, a language many of them did not understand, the Miami Herald reported Nov. 19. American women were attacked sexually by Mexican women in prison, the Herald added. Families of U.S. prisoners paid thousands of dollars to Mexican lawyers without obtaining their relatives’ release. Most of the U.S. prisoners had been ar­ rested under a Mexican crackdown on the drug traffic, encouraged by the U.S. However, the prisoners were generally amateur transporters of marijuana and cocaine, not leaders of the heroin trade, which most concerned the U.S., ac­ cording to press reports. Mexico had replaced Europe as the major source of heroin smuggled into the U.S., according to a report by the U.S. Drug Enforcement Administration (DEA) released Oct. 27 by Senator Charles Percy (R, Ill.). During the first six months of 1975, 90% of the samples of confiscated heroin in 13 U.S. cities was Mexican-processed, up from 40% in 1972, the DEA reported. The heroin was called “Mexican brown” because of its im­ purities. Percy said the DEA report confirmed the severing of the “French connection” route by which heroin reached the U.S. from Marseilles, France. However, it was

121 “more difficult” to control the influx of heroin from Mexico, Percy added. (Gun smuggling into Mexico was also on the rise, according to a DEA official in Texas quoted by the Washington Post Oct. 28. U.S. guns were purchased by leftist guerrillas and by narcotics smug­ glers to fight the Mexican army, the official noted.) The United States State Department denied Dec. 16 that Secretary of State Henry Kissinger had sent a letter to Foreign Minister Rabasa protesting alleged mistreatment of U.S. citizens in Mexican jails. The letter had been reported Dec. 15 by the Associated Press, which cited U.S. officials as its source. In a related development, the Mexican Supreme Court ruled Dec. 8 that airline passengers stopping in Mexico without going through immigration could not be charged with importing narcotics into the country. Many of the U.S. prisoners had been arrested at the Mexico City interna­ tional airport for carrying drugs from other Latin American countries enroute to the U.S. The ruling was denounced by Mexican Attorney General Pedro Ojeda Paullada, an advocate of severe penalties for drug offenders.

Echeverria on world tour. President Luis Echeverria Alvarez visited 14 nations in theCaribbean, Africa, Asia and the Mid­ dle East July 8 Aug. 22, in what his aides called a search for new markets for Mexican products. He signed agreements for economic, scientific and technological cooperation with the host countries and urged them to join with other underdeveloped nations to create a new world economic order. The countries on Echeverria’s tour were Gu­ yana, Senegal, Algeria, Iran, India, Sri Lanka, Tanzania, Kuwait, Jordan, Saudi Arabia, Egypt, Israel, Trinidad & Tobago and Cuba. The tour, which cost an estimated $20 million, was widely criticized in Mexico. There were charges that Echeverria was ignoring serious domestic problems and campaigning abroad for possible election as the next United Nations secretary

122 general. Echeverria denied the first charge upon his return to Mexico City, asserting he could help resolve domestic problems through “trade, joint investments and ex­ change of technology.” Echeverria was said to want the U.N. job, which would become available in December 1976, when Secretary General Kurt Waldheim would give up the post and Echeverria would end his term as president. The tour ended in Cuba, where Eche­ verria was welcomed Aug. 17 by an esti­ mated 500,000 citizens who cheered him in the streets of Havana. Echeverria ex­ changed praise with Premier Fidel Castro and asserted the Cuban revolution pro­ vided “unquestionable evidence that our time is one of social change, that our era is one of reaffirmation of the Third World, and that our task is to build a more just and humane society.” Mexico had main­ tained relations with the Castro govern­ ment since its inception and had led the successful effort in July to lift the sanc­ tions imposed against the island by the Organization of American States (OAS).

Women’s parley held in Mexico. A world conference of women, sponsored by the U.N. as part of its International Women’s Year, met in Mexico City June 19—July 2 and adopted a 10-year plan to promote equality between men and women and increase participation by women in national development. The plan was approved unanimously on the last day of the conference, which was attended by some 1,300 delegates from 133 governments, 31 intergovernmental and 113 nongovernmental agencies, and seven liberation movements. A parallel, unofficial conference called the Tribune, financed by a number of sources including the Ford Foundation and the Norwegian government, drew an estimated 5,000 par­ ticipants, most of them feminists from the U.S. and Mexico. Delegates to the U.N. conference also approved, by a vote of 89-2 with 19 abstentions, a document called the Decla­ ration of Mexico which denounced Zion­ ism, imperialism, colonialism and racism as obstacles to women’s progress and called for a new world economic order to benefit the poorer nations. The U.S. and Israel cast the negative votes.

LATIN AMERICA 1975 The 10-year plan concentrated on improvement of the condition of women in developing countries—who accounted for 70% of the world’s women—asserting equality of the sexes was impossible without general economic development. It stressed ways to improve women’s health, nutrition, housing and literacy, and ways to relieve the drudgery of most women’s daily lives. The document also called for the end of stereotyped sex roles, recognition of women in three roles—as wives, mothers and workers—eoualitv between men and women under the law, and equal access to managerial and professional jobs. Regarding the family, the plan de­ manded the abolition of child marriages, and asked that unmarried mothers receive “full-fledged” status as mothers and that illegitimate children have the same rights and obligations as legitimate children. In one of its more controversial para­ graphs, the document upheld the right of individuals and couples “freely and responsibly to determine the number and spacing of their children and to have the information and the means to do so.” This right was “basic to the attainment of any real equality between the sexes, and without its achievement women are disad­ vantaged in their attempts to benefit from other reforms,” the plan said. The Vatican delegation had opposed in­ clusion of the paragraph, and the U.S. delegation had proposed that the docu­ ment state: “Women should be granted complete freedom by government to exercise their basic human rights to control their fertility.” Delegates from Latin America had opposed the word “control” as suggesting imperialist domi­ nation of their continent through im­ ported birth control methods. The plan made no mention of abortion, which was supported by the more radical feminists, mostly outside the official delegations at the Tribune. The U.N. conference divided early into opposing groups from developing and in­ dustrial countries, with the developing countries seeking to emphasize economic development and the industrial countries focusing on practical guidelines to end dis­ crimination against women. However, most delegates called the conference a

MEXICO successful one; Patricia Hutar, head of the U.S. delegation, said July 2 that it had been “very historic.” Among delegates who disagreed was Françoise Giroud, French secretary of state for the status of women, who asserted July 3 that the conference had been a “total failure.” “It was all gro­ tesque, screaming and rather painful,” she said, adding that delegates had made the conference’s debates “a real ideological battleground.” Giroud and other delegates from in­ dustrial nations had complained of the repeated introduction of political issues by some delegates. More than half the dele­ gates had left the conference hall June 24 to protest a nonpolitical address by Leah Rabin, wife of Israeli Premier Yitzhak Rabin. U.S. sovereignty over the Panama Canal was denounced June 28 in a speech by Berta Torrijos de Arosemena, sister of Panamanian strongman Gen. Omar Tor­ rijos, and human rights abuses by the Chilean military government were at­ tacked June 30 by Hortensia Bussi de Allende, widow of Chilean President Salvador Allende Gossens. Other controversies were caused by the important positions held by men at the conference, despite the overwhelming ma­ jority of women delegates. Pedro Ojeda Paullada, Mexico’s attorney general, headed the Mexican delegation and conse­ quently was elected president of the conference June 19, to the chagrin of leading feminists including Betty Friedan, the U.S. author, who called his election “an insult to all women.” The official U.S. address June 20 would have been given by a man, Daniel Parker, who co-chaired the U.S. delegation, had it not been for protests by angry women delegates who succeeded in naming Mrs. Hutar the official speaker. The first two speeches to the conference were delivered by men—Mexican Pres­ ident Luis Echeverria Alvarez, who said women could not achieve equality without a “transformation of the world economic order,” and U.N. Secretary General Kurt Waldheim, who called equality between men and women “a vital necessity” in a


world struggling against poverty and igno­ rance. The third speaker was a woman, Helvi Sipila of Finland, secretary general of the conference and of International Women’s Year. She stressed the need for rich and poor women to unite, asserting she saw no “conflict between the pre­ vailing conditions in developing and in­ dustrialized countries as regards the real aspirations of women for social justice and a better life.” (U.N. officials at the conference admit­ ted that the U.N. itself discriminated against women in hiring, it was reported June 24. Of the 35 highest U.N. officials only Sipila was a woman, and of the top 300, only 8 were women. Of the total pro­ fessional staff of 2,374 only 21.7% were women, while 70% of the secretaries and clerks were women.) At the Tribune, meanwhile, the debate on women’s issues was more spirited and varied, according to press reports. There was considerable interchange between the Tribune and. the U.N. conference, with daily briefings at the Tribune for delegates to the U.N. meeting, private meetings with the delegates, and circulation of a daily newspaper put out by the Tribune. The newspaper was sharply critical of the U.N. conference, noting that the dele­ gates from poor countries were generally members of those countries’ wealthy elites, and that women delegates from many nations, notably Communist ones, often consulted with men on their delega­ tions before speaking. Foreign fishing curbed. Foreign Min­ ister Rabasa said Aug. 5 that Mexico was establishing “an exclusive economic zone” extending 200 miles from its coast­ line. Mexico thus claimed exclusive au­ thority over fishing in the rich Gulf of California, which was about 100 miles wide on the average and was bounded on one side by the Mexican peninsula of Baja California and on the other by the states of Sinaloa and Sonora. Vessels from the U.S., Japan, the Soviet Union and Great Britain normally fished in the area along with Mexican boats.


U.S. & Panama Dispute Control of Canal The U.S. and Panama held inconclusive negotiations in 1975 on the renewal of the 1903 treaty governing the Panama Canal and Zone. The talks were deadlocked largely over Panamanian demands for greater control of the operations of the waterway, for reduction of the American military bases in the area and for a shorter duration of a renegotiated pact than the period proposed by the U.S. U.S. envoy & Panama aide meet. U.S. Ambassador at Large Ellsworth Bunker met with Panamanian Foreign Minister Juan Antonio Tack for two weeks on Contadora Island off the Panamanian coast, returning to the U.S. Jan. 25.

ters still remain to be discussed.” One of these was the duration of the new treaty, which the U.S. sought to fix at 50 years and Panama at 19, according to the New York Times Jan. 31. Bunker earlier had indicated the U.S. would accept a 30-year treaty, the Times reported. According to the position paper, quoted by the Miami Herald July 16, the U.S. sought a 50-year treaty, with 30 additional years if it built a new canal in Panama, while Panama wanted the treaty to end no later than the year 2000. Panama also sought “progressive elimination of the United States military bases” in the Canal Zone, while the U.S. wanted to retain the bases, although accepting Panamanian participation in the canal’s protection and defense.

Within Panama, opposition to the ne­ gotiations was expressed Jan. 26 by 111 businessmen and professionals, who com­ plained in a newspaper advertisement that the Panamanian people were not being consulted on the new treaty. The signa­ tories said they were “worried that the grave economic and fiscal situation, com­ plicated by the inflation and recession facing the country, which affects the poorer classes above all, might be used as an excuse [by the government] to reach a treaty that would ignore the struggles of

Tack said Feb. 6 that a compromise had been reached regarding U.S. military bases in the Canal Zone, which Panama had wanted to eliminate. “There is no international entity, no group of countries nor any individual country, either at the world or regional level, that could force the United States” to dismantle the bases, Tack admitted. Tack noted that “some important mat­


126 the past and compromise national dignity now and in the future.”

U.S. congressional position on pact. Thirty-seven U.S. senators opposed ne­ gotiation of a new treaty between the U.S. and Panama that would give Panama sovereignty over the Panama Canal and Zone, it was reported March 4. The legislators, led by Strom Thur­ mond (R, S.C.) and John McClellan (D, Ark.), sponsored a Senate resolution calling for “retention of undiluted United States sovereignty over the Canal Zone.” Their votes would suffice to defeat a new treaty negotiated by the Ford Adminis­ tration, but an Administration spokesman minimized the significance of the reso­ lution, according to the New York Times. (Sources close to the U.S. negotiating team believed only 20 senators were committed opponents of a new treaty, and undecided senators were the key to ob­ taining the two-thirds majority required for Senate ratification, the Miami Herald reported Feb. 7.) Rep. Daniel J. Flood (D, Pa.), a leader of Congressional opposition to a new treaty, argued that the Canal Zone was “the jugular of hemispheric defense,” and that ceding it to Panama, which had a his­ tory of political instability, could result in a Soviet takeover of the area, the Herald reported. The House of Representatives voted June 26 to cut off funds used by the State Department to negotiate a new treaty governing the Panama Canal and Zone. The House reversed its position Oct. 7. The vote drew a strong response from Secretary of State Henry Kissinger, who warned July 15 that failure to draft a new treaty might result in an armed conflict in Panama that would “unify all of Latin America against the United States.” Kis­ singer sent a letter to six Congressional leaders asserting that Congressional restrictions on “presidential negotiation” constituted “an inversion of the constitu­ tional process,” it was reported July 18. The funding cut-off, passed by a vote of 246-164, was an amendment to an appro­ priations bill for the State, Justice and Commerce Departments, which the House passed on to the Senate for


consideration. The amendment was in­ troduced by Rep. Marion G. (Gene) Snyder (R, Ky.), who declared U.S. sovereignty over the Canal Zone was “as legitimate as possession” of New York City and Alaska. With the amendment the House joined the Senate in expressing strong opposition to a transfer to Panama of sovereignty over the Canal Zone. In view of the Congressional opposition, the White House now hoped the treaty ne­ gotiations would drag on beyond the 1976 elections, averting a confrontation be­ tween President Ford and legislators over the canal issue, the Miami Herald reported July 4. Nevertheless, Kissinger sent a letter July 4 to Brig. Gen. Omar Torrijos, Panama’s military strongman, asserting the U.S. was “still engaged in the search for a final and just solution to [the canal] problem and the establishment of a new and more modern relationship between our two countries.” The House funding cut-off caused student protests in Panama. Torrijos and his treaty negotiators met July 9 with some 300 student leaders and showed them a position paper titled, “Current Situation of the Negotiations,” which out­ lined the positions of both countries on the principal points of the proposed treaty. Release of the document presumably violated the confidentiality of the negotia­ tions, but a communique released by the Panamanian foreign ministry July 9 asserted the U.S. had already revealed details of the negotiations to congressmen and to U.S. military and civilian residents of the Canal Zone. Regarding an expansion of the canal’s capacity, the U.S. sought “an open op­ tion, without any commitment on its part, to decide unilaterally if it (a) constructs a sea-level canal on the present route, (b) constructs a sea-level canal on Route 10 [Chorrera-Palmas Bellas], or (c) con­ structs a third set of locks,” the document said. “In this case,” it noted, “the United States wants to continue its control of defense until 2065.” Panama was willing to allow only five years from the enactment of a new treaty to agreement on a sea-level canal. Torrijos July 9 denounced U.S. de­


mands for long-term control of the canal’s defense, asserting the canal was essentially indefensible against sabotage and noting that the only two acts of sabotage in the canal’s history were com­ mitted by U.S. citizens, not Panamanians. “The military bases of the United States are not really for the defense of the canal,” Torrijos said; they were for repressive purposes, and they posed “a direct and constant threat against the people of Panama,” he asserted. The House of Representatives dropped its opposition to a new Panama Canal treaty Oct. 7, approving instead a “sense of the Congress” resolution that required any new agreement between the U.S. and Panama to “protect the vital interests of the United States in the Canal Zone and in the operation, maintenance, property and defense of the Panama Canal.” The resolution, attached to an appro­ priations bill for the State, Justice and Commerce Departments, was a com­ promise worked out by a House-Senate conference committee after the House passed an amendment to the bill which would have cut off funds for the treaty ne­ gotiations. The Senate passed the reso­ lution Oct. 8 and sent the bill to President Ford for signature. U.S. for permanent military role. Secretary Kissinger said Sept. 16 that “the U.S. must maintain the right uni­ laterally, to defend the Panama Canal for an indefinite future, or for a long future.” He made the statement in a speech to the Southern Governors’ Conference in Florida. This drew a protest Sept. 17 from Panamanian Foreign Minister Juan Antonio Tack, who said that if Kissinger had stated the true U.S. position, “then we simply have to think about stopping the negotiations.” Tack had begun 10 days of talks with the chief U.S. negotiator, Ellsworth Bunker, Sept. 8. Kissinger’s statement apparently con­ tradicted the basic principles for the ne­ gotiations, established in 1974, which stipulated that a definite date would be set for the transfer to Panama of sovereignty over the Canal Zone. However, aides of Kissinger denied the contradiction and


asserted Kissinger’s words had been “misinterpreted.” In another protest against Kissinger’s statement, Brig. Gen. Omar Torrijos, the Panamanian strongman, ordered Tack Sept. 18 to report to the nation on the current state of the negotiations, violating the U.S.’ desire for secrecy in the talks. Tack reported Sept. 20 that the latest U.S. proposals, presumably delivered by Bunker 12 days earlier, accepted Panama’s desire for a 25-year limit on the new treaty, but sought a 50-year period during which the U.S. would continue to defend the canal. “Furthermore,” Tack reported, “the U.S. insists that after 50 years, it will have the right to continue defending the canal for an indefinite time, which is tan­ tamount to perpetuity.” Panama had “emphatically rejected this proposal,” he asserted, calling instead for an end to U.S. military presence in the Canal Zone by the year 2000. The U.S. and Panama had agreed on a joint defense of the canal during the du­ ration of the treaty, Tack noted, although the U.S. insisted on maintaining its 14 military bases in the area while Panama would accept only three. The U.S. and Panama agreed on a number of other points including a phaseout of U.S. administration of the Canal Zone. In other protests against Kissinger’s statement and against U.S. presence in the Canal Zone, an estimated 600-800 students in Panama City stoned the U.S. embassy Sept. 23, breaking windows and provoking a strong protest from embassy officials, who noted that the National Guard had moved slowly to disperse the rioters. Panama apologized to the em­ bassy the same day. At the United Nations General Assembly Oct. 3, Panamanian repre­ sentative Carlos Ozores denounced U.S. policy toward Panama as a set of “co­ lonial practices carried out in the heart of the [American] continent.” Presidents back Panama canal claim. The presidents of Venezuela, Colombia and Costa Rica and the military ruler of Panama signed a joint declaration March 24 supporting Panama’s claim to full


sovereignty over the Panama Canal Zone. The document, called the Declaration of Panama, was signed at the end of three days of talks in Panama by Presidents Carlos Andres Perez of Venezuela, Alfonso Lopez Michelsen of Colombia and Daniel Oduber of Costa Rica, and Brig. Gen. Omar Torrijos of Panama. In both the declaration and in letters to President Ford and all Latin American heads of state, the four leaders expressed their “deep concern over the slow progress of the negotiations between Panama and the United States for a new Panama pledged in the document that once a new treaty was signed, no taxes, duties or tolls would be charged for transit through the canal by Colombian or Costa Rican nationals, goods, mail or military equipment and personnel. Colombia declared that after the new treaty was signed it would renounce the Thomson-Urrutia Treaty of 1914, under which the U.S. gave Colombia certain transit rights in the Canal Zone. Colombia, Costa Rica and Panama also agreed to give “special priority” to development programs in their border areas to “accelerate their economic de­ velopment and improve the living stan­ dards and welfare of their peoples.” Gen. Torrijos had warned at a press conference March 23 that Panama had reached “the limit of its patience” with U.S. control of the Canal Zone. He declared that Panama would not accept a new treaty under which U.S. troops remained in the Canal Zone or the U.S. kept an enclave on Panamanian soil. “Either the colonial situation disappears or it doesn’t,” he asserted. Justifying the award of preferential treatment in the Canal Zone to countries that shared borders with Panama, Tor­ rijos said: “Since the canal is a strategic objective, our neighbors will not be exempt from the rain of radioactivity on the day [our enemies] send us a little nu­ clear present.”

Panama’s Foreign Ministry March 25 released a 22-point addendum to the Dec­ laration of Panama which called, among other things, for a meeting of Latin


American heads of state in 1975 to consider “the need to define and coor­ dinate a common strategy for political and economic development.” The addendum stressed the important role that Latin American multinational corporations could, play in “rescuing Latin America’s natural resources” and promoting regional economic integration.

U.S. envoy reports on negotiations. Ambassador Ellsworth Bunker reported on the status of U.S.-Panamanian negotia­ tions on a new canal treaty in a speech in Los Angeles Dec. 2. Text of Bunker’s address: I am here today to discuss with you the Panama Canal negotiations. It Is a controversial subject that has evoked emotion and opposition. But my travels In the United States, the letters I get from concerned citizens, the articles I read In the press, and my many consultations with Congressmen have con­ vinced me that much of this opposition stems from a number of false Impressions about the basis for our presence In the Canal Zone. Because of this, I would like today to talk about the background of the problem we flace and comment on some of the myths surrounding the canal treaty and negotia­ tions. And I want to talk about the political Realities which make It desirable, in my judgment, to bring the negotiations to an early and satisfactory conclusion. By speaking to you today I am departing from a practice I have long followed. Previously, while serving as a negotiator, I have avoided making public statements. I am here today because this negotiation Is unique. No effort to improve our policy concerning the canal can succeed without the full under­ standing and support of the Congress and the American people. Our presence in the canal has a constitu­ ency among the American people—but our negotiations to solve our problem there do not. So, if we are to gain support, we must find It through candid and reasonable public discussion. THE EVOLUTION OF THE PROBLEM

Our story begins 72 years ago. In 1903 the newly-independent Republic of Panama granted to the United States In the Hay-Bunau-Varilla Treaty—a strip of land 10 miles wide and 50 miles long for the construction, maintenance, operation ana

PANAMA protection of a canal between the Atlantic and Pacific. The treaty also gave the United States— In perpetuity—the right to act within that strip of land as “if It were the sovereign.” It was quickly and widely acknowledged that the treaty favored the United States. When Secretary of State John Hay sub­ mitted the treaty to the Senate for ratifica­ tion he said: “We shall have a treaty very satisfactory, vastly advantageous to the U.S., and, we must confess, not so advantageous to Pan­ ama.” For many years Panama has considered the treaty to be heavily weighted In our favor. As a result, the level of Panama’s consent to our presence has steadily declined. And by Panama, I mean not simply the government, but the Panamanian people. The Panamanians point out: First, that the existence of the Canal Zone impedes Panama’s development. The Canal Zone cuts across the heartland of Panama’s territory, dividing the nation in two. The existence of the Zone curbs the nat­ ural growth of Panama’s urban areas. It holds, unused, large areas of land vital to Panama’s development. It controls all the major deep-water port facilities serving Panama. And It prevents Panamanians from com­ peting with American commercial enterprises In the Zone. And for the rights we enjoy on Panamanian territory, we pay Panama only $2.3 million a year. Second, that the Canal Zone Infringes on Panama’s nationhood. Panama says the privileges exercised by the United States deprive their country of dig­ nity and, Indeed, of full Independence. Within the Canal Zone the United States operates a full-fledged government without reference to the Government of Panama, which Is Its host. It maintains a police -force, courts, and Jails to enforce United States laws, not only upon Americans, but upon Panamanian citi­ zens as well. And, the Panamanians point out, the treaty says the United States can do all these things forever. Panamanian frustration over this situation has increased steadily over the years. In January 1964, demonstrations and riots took place which cost the lives of 21 Pana­ manians and 3 Americans. Diplomatic relations were broken. As part of the settlement we reached with Panama then, President Johnson, after con­ sultation with Presidents Truman and Eisen­ hower, committed the United States to nego­ tiate a new treaty. In our negotiations we are attempting to

129 lay the foundations for a new—a more mod­ ern-relationship which will enlist Pana­ manian cooperation and better protect our Interests. Unless we succeed, I believe that Panama's consent to our presence will continue to de­ cline—and at an ever more rapid rate. Some form of conflict in Panama would Beem virtually certain—and It would be the kind of conflict which would be costly for all concerned. Now some have held that the mere men­ tion by United States officials of the possi­ bility of violence over the canal will help to assure that such violence occurs. I am aware of that concern, but I believe the situation demands candor. It would be irresponsible to fail to point out to the American people the possible, Indeed the likely, consequences of Inaction. It Is my firm belief that failure to con­ clude a reasonable treaty can only work to damage the Interests we seek to protect. As we contemplate this situation we should understand that the canal’s physical char­ acteristics make it vulnerable. The canal is a narrow channel fifty miles long. It operates by the gravity flow of water and depends for its efficient operation on an integrated system of locks, dams and other vital facilities. At best, It Is susceptible to Interruption. And Interruptions would mean not only reduced service to world shipping but lower revenues. But the most enduring costs of confronta­ tion over the canal would not be commercial. Our Latin American neighbors see In our handling of the Panama negotiations a test of our political intentions In the hemisphere. Moreover, the importance of the canal, and our contribution to It, are recognized throughout the world. It Is a measure of our standing and the respect In which we are held that people everywhere—Including, I am sure, your­ selves—expect the United States to be able to work out an arrangement with Panama that will guarantee the continued operation of the canal In the service of the world community. Were we to fall—particularly in light of the opportunity created by the negotia­ tions—we would In a sense be betraying America’s wider, long-term Interests. The plain fact of the matter Is that geog­ raphy, history and the economic and politi­ cal Imperatives of our time compel the United States and Panama to a Joint venture In the Panama Canal. We must learn to comport ourselves as partners and friends, Preserving what is essential to each; Protecting and making more efficient an Important International line of communica­ tion; And, I suggest, creating an example for

130 the world of a small nation and a large one working peacefully and profitably together In sum, we are negotiating because we sec a new treaty arrangement as the most prac­ tical means of protecting our interests. If we try to maintain the status quo we will face mounting hostility in both Panama and Latin America—and possible loss of the very Interest we want to preserve. But a new arrangement based on partner­ ship promises a greater assurance of safe­ guarding that Interest—a canal that is open, safe, efficient, and neutral. The real choice before us is not between the existing treaty and a new one but rather between a new treaty and what will happen if we should fall to achieve a new treaty. These, then, are some of the political realities we face In Panama. MYTH AND REALITY: THE VIEW FROM THE UNITED STATES

We must face political realities here at home as well. We know that a treaty must receive the advice and consent of two-thirds of the Sen­ ate of the United States. And we expect that both Houses of Con­ gress will be asked to approve implementing legislation. There is opposition in Congress to a new treaty; it reflects to a considerable degree the sentiments of many citizens. Our job Is to make sure that the public and Congress have the facts they need if they are going to make wise decisions about the canal. Unfortunately, the basis for our presence in the Zone Is widely misunderstood. Indeed, a number qf myths have been built up over the years—about Panama’s Inten­ tions and capabilities, about the need for perpetuity, and—most Important—about ownership and sovereignty. We need to replace these myths with an accurate understanding of the facts. First, there Is the matter of Panama’s in­ tentions and capabilities—and the sugges­ tion that a new treaty will somehow lead to the canal’s closure and loss. The fact is that Panama’s Interest in keep­ ing the canal open is far greater than ours. Panama derives more Income from the canal than from any other single revenue­ producing source. Even so, some argue, canal operations would suffer because Panamanians lack the technical aptitude and the Inclination to manage the operation of the canal. The fact is that Panamanians already comprise over three-fourths of the employ­ ees of the canal enterprise. No one who has been to Panama and seen its increasingly diversified economy can per­ suasively argue that the Panamanians would not be able to keep the canal operating ef­ fectively and efficiently. These considerations indicate that

LATIN AMERICA 1975 Panama’s participation in the canal can pro­ vide'it with a greater incentive to help keep the canal open and operating efficiently. In fact, the most likely avenue to the canal’s closure and loss would be to main­ tain the status quo. Second, there Is the notion that the canal cannot be adequately secured unless the United States rights there are guaranteed In perpetuity—as stipulated In the 1903 Treaty. I can say this: to adhere to the concept of perpetuity In today’s world is not only un­ realistic but dangerous. Our reliance on the exercise of rights in perpetuity has become a source of persistent tension in Panama. And clearly, an International relationship of this nature negotiated more than seventy years ago cannot be expected to last forever without adjustment. Indeed, a relationship of this kind which does not provide for the possibility of periodic mutual revisions and adjustment is bound to jeopardize the very interest that perpetuity was designed to protect. Third and finally, there are two miscon­ ceptions that are often discussed together: ownership and sovereignty. Some Americans assert that we own the canal; that we bought and paid for it, just like Alaska or Louisiana. If we give it away, they say, won’t Alaska or Louisiana be next? Others assert that we have sovereignty over the Canal Zone. They say that sovereignty is essential to our needs—that loss of United States sov­ ereignty would Impair our control of the canal and our ability to defend it. I recognize that these thoughts have a basic appeal to a people justly proud of one of our country’s great accomplishments. The construction of the canal was an American achievement where others had failed. It was every bit as great an achievement for its era as sending Americans to the moon is for ours. It is an historic success that will always be held to America’s credit. But let us look at the truth about owner­ ship and sovereignty. The United States does not own the Pan­ ama Canal Zone. Contrary to the belief of many Americans, the United States did not purchase the Canal Zone for $10 million in 1903. Rathet, the money we gave Panama then was in return for the rights which Panama granted us by the treaty. We bought Louisiana; we bought Alaska. In Panama we bought not territory, but rights. Sovereignty is perhaps the major issue raised by opponents of a new treaty. It is clear that under law we do not have sovereignty in Panama. The Treaty of 1903 did not confer sover-

PANAMA "ignty, but speaks of rights the United States would exercise as “If It were the sovereign.” From as early as 1905, United States offi­ cials have acknowledged repeatedly that Panama retains at least titular sovereignty over the Zone. The 1936 Treaty with Panama actually re­ fers to the Zone as “territory of the Republic of Panama under the jurisdiction of the United States.” Thus, our presence in the Zone is based on treaty rights, not on sovereignty. It is time to stop debating these historical and legal questions. It is time to look to the future, and to find the best means for assuring that our country’s real interests in the canal will be protected. What are our real interests? We want a canal that is open to all the world’s shipping—a canal that remains neu­ tral and unaffected by International dis­ putes. We want a canal that operates efficiently, profitably, and at rates fair to the world’s shippers. We want a canal that is as secure as possi­ ble from sabotage or military threat. And we want full and fair treatment for our citizens who have so ably served In the Canal Zone. The negotiations we are now conducting with Panama for a new treaty will ensure that all these interests of our country are protected. Let me now talk a bit about where we arc­ in the negotiations. During the past two years, the negotla tions have proceeded step by step through three stages. Stage 1 ended in early 1974 when Secretary of State Kissinger went to Panama to ini­ tial with the Panamian Foreign Minister a set of eight "Principles.” Since then, we have used these principles as guidelines in working out the details of a new treaty. The best characterization of these princi­ ples came from the Chief of Government of Panama. He said they constitute a “Philosophy of Understanding.” Their essence is that: Panama will grant the United States the rights, facilities and lands necessary to continue operating and defending the canal: while The United States will return to Panama jurisdiction over its territory: and arrange for the participation by Panama, over time, in the canal’s operation and defense. It has also been agreed in the “Principles” That the next treaty shall not be In per­ petuity but rather for a fixed period;


That Panama will get a more equitable share of the benefits resulting from the use of Its geographic location. Stage 2 involved the identification of the major issues under each of the eight principles. Agreement on the major Issues, concurred in by the Department of Defense, provided the basis for substantive discussions. Stage 3 began with our meetings in Pan­ ama in June of 1974 and continues. For over 16 months now we have been dis­ cussing the substantive issues involved— again, with the helpful support of the De­ partment of Defense. Indeed, our most senior military officials regard the partnership we are attempting to form as the most practical means of preserv­ ing what is militarily Important to our country respecting the Panama Canal. We have reached agreement in principle with the Panamians on three major Issues: Jurisdiction: Jurisdiction over the Zone area will pass to Panama In a transitional fashion. The United States will retain the right to use those areas necessary for the opera­ tion, maintenance and defense of the canal. Canal Operation: During the treaty’s life­ time the United States will have the primary responsibility for the operation of the canal. There will be a growing participation of Panamanian nationals at all levels in dayto-day operations in preparation for Pan­ ama’s assumption of responsibility canal operation at the treaty’s termination. The Panamanian negotiators understand that there are a great many positions for which training will be required over a long period of time, and that the only sensible course is for Panamanian participation to begin in a modest way and grow gradually. Canal Defense : Panama recognizes the im­ portance of the canal for our security. As a result, the United States will have primary responsibility for the defense of the canal during the life of the treaty. Panama will grant the United States “use righits” for defending the waterway; and Panama will participate in canal defense in accordance with its capabilities. Several other issues remain to be resolved. They concern : The amount of economic benefits to Pan­ ama; The right of the United States to expand the canal should we wish to do so; The size and location of the land and water areas we will need for canal opera­ tion and defense; A mutually acceptable formula for the canal’s neutrality and nondiscrimlnatory op­ eration of the canal after the treaty’s ter­ mination; and Finally, the duration of the new treaty. That the parties will provide for any ex­ Quite obviously, we still have much to do pansion of canal capacity in Panama that to resolve these Issues. Although we have no fixed timetables, we may eventually be needed; and

132 are proceeding with all deliberate speed. We are doing so with the full support of the Department of Defense. While I cannot predict when completion of a draft treaty will be possible, I am per­ suaded that a new treaty which satisfies our basic interests is attainable. Though a great deal of hard -negotiating will be required to complete a satisfactory agreement, we are confident that our ef­ forts will produce a treaty which will be judged on its merits and will be approved by the people of both countries. The stakes are large. They involve not only the legitimate in­ terests of both the United States and Pan­ ama and the future contribution of this im­ portant waterway to the world community.

Other Panama Canal developments. A U.S. Defense Department report disclosed in the zone April 25 accused the Panama Canal Co., the U.S. government agency which administered the canal, of racism and exploitation of Panamanian workers. According to the report, a third of the 10,000 Panamanian laborers working for the company were in the bot­ tom four of 12 job rankings, while only 1.3% of the 3,600 U.S. laborers were so ranked. In administrative positions, 76.6% of the Panamanian employes were in the last four of 13 classifications, com­ pared to 9.8% of the U.S. employes. Few women or blacks occupied high positions in the company, the report said.

A Panama government official told the London Times May 10 that the chief use of the U.S. bases in the Canal Zone was as training centers. “It was here that hundreds of soldiers were trained to fight in the Vietnamese war because of the simi­ larity in jungle terrain, and it is here that Latin American soldiers are trained in counterinsurgency,” he noted. “It is as if our country were being used as a center for operations to overthrow liberation movements in the Third World.” The number of vessels using the Pan­ ama Canal declined from about 40 to 38 per day, and the canal’s toll revenues were $3.2 million less than expected for the fiscal year ending June 30, according to the Financial Times of London July 3. The decline in the number of vessels using the


canal was attributed to the reopening of the Suez Canal June 5. Officials thought the Panama Canal could lose between 600-800 ships a year to Suez, representing a loss of $10 million-$12 million annually, the Times reported.

Other Developments New copper deposit found. A large cop­ per deposit was found in central Panama by explorers from Cobre Panama S.A., a subsidiary of a Japanese consortium led by Mitsui Mining & Smelting Ltd., it was reported Jan. 22. The deposit was at Petaquilla, midway between Panama City and Cerro Colo­ rado, another large copper field. Prelim­ inary studies showed Petaquilla had a potential of 300 million tons of ore with a copper content of .65%, according to a spokesman for Cobre Panama. The government selected Texasgulf, Inc. of the U.S. for preliminary negotia­ tions to exploit the deposit, it was re­ ported July 14. First option for the exploitation contract had belonged to the Canadian firm Canadian Javelin Ltd., which dis­ covered the deposit, but the company and the government had broken off negotia­ tions in March after failing to agree on the length of the proposed pact. The govern­ ment subsequently took over the Cerro Colorado property, pledging to repay Ca­ nadian Javelin the $25 million it spent in exploration plus an additional indemnity still to be negotiated, it was reported March 21. The negotiations with Texasgulf in­ volved a joint private-government project valued at about $800 million, the Journal reported July 14. It was understood that the government planned to retain 85% equity interest in the project, with Texasgulf managing the development and owning 15%, according to the Journal.

Other economic developments. Among developments reported: The government Jan. 1 took over 30,000 acres of uncultivated land from


Chiriqui Land Co., the Panamanian sub­ sidiary of United Brands Co. of the U.S. It was the first step in the transfer of Chiriqui’s assets to the government, which would be completed in three to four years and would give the government full con­ trol over the banana industry. The export tax on bananas had been reduced from $1 a box to 35c at the end of 1974, to make Panama’s bananas competitive with Ecuador’s. The government Jan. 13 announced the adoption of several measures to fight inflation and stimulate production. They included a 4% reduction of the interest rate on loans to the agriculture and livestock sector and a 3% reduction on loans in the industrial sector; tax incen­ tives for the reinvestment of earnings to foster production and create jobs; fiscal incentives for non-traditional exports, and measures to control credit sales of goods and services and to protect consumers. Planning Minister Nicolas Ardito Bar­ letta announced Jan. 14 that the govern­ ment budget for 1975 would be $367 million, 15% higher than in 1974. He also announced a $405 million public works budget for the year. The government, bowing to public protests, eliminated a 5% tax on lottery winnings imposed early in January, it was reported Jan. 16. Sales of lottery tickets reportedly had declined by at least 5% since the tax was imposed. The govern­ ment increased the lottery vendors’ com­ mission from 6% to 7% after abolishing the tax. The government and Texaco Inc. of the U.S. signed an agreement March 7 granting Texaco a 1,6-million-acre con­ cession for offshore oil exploration in the Mosquito Gulf, off Panama’s Caribbean coast. If oil were found, Texaco would de­ velop the wells and the government would receive a share of production dependent on the volume available.

The government planned to build an oil pipeline parallel to the Panama Canal to carry oil from Ecuador, Peru and Bolivia across the isthmus of Panama for trans­ portation to the U.S. and the Caribbean, it was reported March 23. The pipeline would cost about $100 million and have a

133 capacity to carry one million barrels per day. A total of 10 new banks would open shortly in Panama, four with a general license (authorizing them to undertake all types of banking transaction in Panama) and six with a more restrictive interna­ tional license, according to the Andean Times’ Latin America Economic Report May 16. Two of the banks with general licenses were Bankers Trust Co. of the U.S. and the Royal Bank of Canada. The government had lifted a two-month ban on commercial shrimp fishing, im­ posed earlier because of depleted shrimp stocks in Panamanian waters, it was reported July 7. The government recently had borrowed $24 million from the World Bank to modernize the shrimp fleet and provide better port facilities for the Panamanian tuna industry.

Broadcast self-censorship imposed. The government and justice ministry in­ structed radio and television stations May 30 to consult “competent authorities” be­ fore broadcasting reports on public services, education and student affairs, and negotiations with the U.S. for a new Panama Canal treaty. The directive followed an attack on the Panama City radio station Radio Impacto by a pro-government student federation that the station had criticized for assaulting a rival student group. It also followed the government’s frustration of a new attempt by conservatives to publish an opposition newspaper.

The paper, called La Opinion Publica, was to have begun publication March 7. However, government officials March 6 raided the printing office which was to have produced the paper and confiscated all the editorial material for the first issue. One of the raiders said the confiscation was for “administrative reasons,” and another said it was a response to an article in the Miami Herald March 6 which said La Opinion Publica was expected “to test the government’s assertion that there is freedom of the press” in Panama. Tomas Herrera, who would have been

134 the paper’s director, said April 26 that the government had taken away the printers’ license after the raid. One of La Opinion Publica’s publishers


would have been the journalist Ramon Ji­ menez, who was arrested briefly in 1974 as the government banned Quiubo, another newspaper he had tried to initiate.


Violence & Political Unrest Peru was shaken by violence and political unrest throughout most of 1975 despite social and economic reforms instituted by the government. The discontent led to the overthrow of President Juan Velasco Alvarado Aug. 29. The new government pledged to eliminate the corruption of the previous regime.

Food minister named; other appoint­ ments. Gen. Rafael Hoyos Rubio was named Peru's first food minister Jan. 2 and charged with increasing agricultural production while implementing price con­ trols. Agricultural output had risen by only 1.2% in 1974, compared with 2.4% in 1973. Vice Adm. Guillermo Faura became the new navy minister Jan. 2. Other government and military changes, reported by the newsletter Latin America Jan. 10, included the appointments of Gen. Dante Poggi Moran as labor minister, Gen. Pedro Sala Orosco as head of the social mobilization agency SINAMOS, Gen. Rudecindo Zavaleta Rivera as chief of the national intelligence service, and Gen. Oscar Vargas Prieto as chairman of the joint chiefs of stall'. Sala Orosco was expected to moderate

SINAMOS’ approach to non-government labor unions, having been a conciliatory labor minister and presided over lengthy negotiations between the government and powerful leftist unions in the mining and manufacturing industries, it was reported. A bomb exploded outside Faura’s home Jan. 2, a few hours before he was sworn in as navy minister. The explosion caused some property damage but no casualties. It was the second attack on a high government official in a month. Prime Minister Edgardo Mercado Jarrin, the target of a ma­ chinegun attack in December 1974, asserted terrorism in Peru was un­ justifiable because the government was working “for the good of the majority” and “more fairly distributing wealth.”

Strike, riots crushed. Dozens of persons were killed and more than 1,000 were ar­ rested in Lima Feb. 5-6 as the army crushed a strike by policemen and sub­ sequent rioting by angry civilians. It was considered the worst crisis faced by the six-year military government. Most of the city’s 7,000 civil guards, or paramilitary police, had struck Feb. 3 for higher wages and benefits, reorganization of the police, and dismissal of Gen. Enrique Ibanez, head of the president’s military household, who had allegedly hit 135

136 a police officer in an argument in Decem­ ber 1974. The police demanded an immediate in­ crease of $46 a month on a wage scale of $131-168 a month. The government of­ fered $9.20 a month over two years. The police rejected the offer, noting that army wages had been raised by twice that amount in January, and the cost of living had risen by an estimated 20% in 1974. Army tanks and troop carriers moved into downtown Lima early Feb. 5 and sur­ rounded a police barracks occupied by some 2,000 guardsmen and serving as strike headquarters. The French news agency Agence France-Presse reported the troops opened fire after they were fired on by the snipers inside the barracks. How­ ever, the New York Times said the sol­ diers initiated the fire after giving the policemen 10 minutes to evacuate the building. The troops took over the building after a half-hour battle in which an undisclosed number of persons were killed. The gov­ ernment-controlled press was forbidden to report the action, but news of it spread through the city, bringing opponents of the regime, notably university students, into the streets. Thousands of demonstrators went on a looting and burning spree later Feb. 5, setting fire to newspaper offices, hotels and the army officers club, overturning and burning cars and buses, and sacking and vandalizing stores and offices. The rampage lasted for more than four hours, until tanks and troops were sent through the city to disperse the rioters. During the disturbance the government declared a nationwide state of emergency, suspended constitutional guarantees and set a night curfew. The next day was de­ clared a holiday to keep citizens at home. Scattered looting, vandalism, arrests and casualties were reported in Lima Feb. 6, but the city gradually returned to nor­ mal.

It was unclear whether the strike and unrest spread to other cities. There were foreign press reports of police strikes in Piura, Trujillo and Arequipa, but these were unconfirmed. Police sources quoted by the London Times Feb. 10 said fighting


between soldiers and police in Arequipa had left about 300 dead. Because of restrictions imposed on the local press, the number of casualties in Lima was not known until Feb. 10, when the government reported that 86 persons had been killed and 162 wounded. An­ other 1,012 persons were arrested, accord­ ing to officials. (United Press International reported Feb. 8 that military judges had begun hearing charges against 1,300 per­ sons.) The government had claimed initially that there were no fatalities and only six wounded during the unrest, and it had harassed foreign newsmen who reported otherwise. The Reuters news agency in Lima was ordered closed Feb. 7 and two of its reporters, Patrick Buckley and An­ drew Tarnowski, were deported to Argen­ tina. Two French journalists, Andre Blodet and Nicole Bonnet, were held briefly Feb. 6. The government and the local press claimed the police strike was aimed at overthrowing the regime (the police had said they had only economic grievances) and the strike and rioting were organized by members of the opposition APRA party and the U.S. Central Intelligence Agency. The charges were denied by APRA and by the U.S. State Department Feb. 8. (U.S. Ambassador Robert Dean had re­ cently returned to Peru after a two-month absence in apparent reaction to charges in local newspapers that he was a CIA of­ ficial, the Miami Herald reported Feb. 1.) Press sources noted that the govern­ ment’s popularity had waned considerably because of the nationalization of Lima’s major newspapers and the sharp rise in the cost of living in 1974. The police strike was preceded by stoppages among factory workers, public employes and miners in various parts of the country. The government did not raise police wages after crushing the strike, but it re­ placed the Civil Guard commander ac­ cording to the strikers’ wishes. The new commander, Gen. Gaston Zapata de la Flor, took office Feb. 6. Government studies political movement. A committee of Cabinet ministers and


other military leaders was appointed Feb. 18 to study formation of a political move­ ment to increase public support for the government and participation in its pro­ grams. The panel was named in the wake of the Feb. 5-6 violence in Lima. The committee was comprised of Gen. Jorge Fernandez Maldonado, mines and energy minister; Gen. Pedro Richter Prada, interior minister; Gen. Javier Tantalean Vanini, fisheries minister; Rear Adm. Alberto Jimenez de Lucio, industry and tourism minister; retired Lt. Gen. Pedro Sala Orosco, chief of the govern­ ment social mobilization agency Sinamos; and Gen. Jose Graham Hurtado, chief adviser to President Juan Velasco Al­ varado. In planning the new movement, the government tacitly acknowledged the failure of SINAMOS to mobilize public sup­ port for its programs. With its manipu­ lation of puppet organizations and its hostility to independent labor unions and political groups, SINAMOS had often seemed to be no more than an arm of the government’s security apparatus, ac­ cording to the London newsletter Latin America Feb. 28.

Earlier, leftist civilians had formed two new organizations to support the govern­ ment in the wake of the Lima riots. A group led by directors of Lima’s govern­ ment-controlled newspapers had an­ nounced formation of the Movement of the Peruvian Revolution Feb. 11, inviting citizens to work together for “a social democracy of full participation, incom­ patible with the old partisan system or with any system of single-party power or bureaucratic monopoly.” The day before, representatives of 27 labor unions had founded the Regional Committee of Popular Coordination, which they called the “best guarantee” against efforts by “imperialism and domestic reactionaries” to manipulate Peruvian problems and di­ vide the people.

'Bases of revolution' defined—The government defined its political orientation and goals Feb. 25 in a

137 document titled, “Ideological Bases of the Peruvian Revolution.” The declaration, issued after a Cabinet meeting led by President Velasco, asserted: “The Peruvian revolution is an autonomous process designed to transform the country’s political, social and economic system and to reverse our condition as an underdeveloped, capitalist and oligarchic society subject to the in­ terests of imperialism, with the goal of constructing a social democracy in which all Peruvians can fulfill themselves through full participation in the exercise of social power within a truly sovereign national community.” The revolution was “nationalist and in­ dependent,” and based doctrinally not on capitalism or communism but on “revolu­ tionary humanism,” the document said. It was committed to the “undeniable defense” of Peru’s national resources, and to the “integration and autonomous re­ gional development” of Latin America. The revolution backed “the struggle of peoples against all forms of imperialism, colonialism and international subordi­ nation,” and proposed “a new concept of international relations and cooperation to construct an effective community of free and sovereign nations, based on equality,” according to the document.

The government’s “revolutionary hu­ manism” was based on “the legacy of non-dogmatic, non-totalitarian socialist thought.” This ideology, the document said, held that labor is the original source of wealth; that within a pluralist economy, the means of production should be pri­ marily owned by the people; that state ownership played an important role in the economy, and that “socially generated” goods should benefit their producers and all society. The revolution also envisioned freedom from “all forms of arbitrariness and im­ position” for all Peruvians; the formu­ lation of decisions by the “social base” with as little intermediary action by the government as possible; and use of “the creative abilities of all persons and groups, affirming their autonomy and social re­ sponsibility to adopt their own decisions,” according to the document.


State of emergency extended. The government extended the state of emergency and suspension of guarantees for another 30 days March 6. A night curfew imposed in Lima Feb. 5 had been lifted Feb. 24. (The nationwide state of emergency was lifted May 8.) Government officials estimated that more than 100 persons were killed in Lima during the disturbances, according to press reports Feb. 8. Other sources said the death toll rose to 500 counting distur­ bances in other cities, the Miami Herald reported Feb. 9. Hundreds of persons were wounded in Lima, and 1,000-2,000 were arrested, according to varying press reports. Fifty-six policemen and about 1,000 civilians would be tried for their roles in the strike and rioting, the Cuban news agency Prensa Latina reported Feb. 18. The disturbances caused damages worth more than $22 million, according to the Lima newspaper La Cronica Feb. 12, or nearly $50 million, according to foreign press reports. Police and soldiers retrieved more than $5 million worth of stolen goods in raids on homes and apart­ ments, it was reported Feb. 9. The govern­ ment announced Feb. 12 that it would grant tax benefits and loans to victims of the rioting and looting. Meanwhile, the government and its press continued to blame the disturbances on the opposition left-of-center APRA party, on local “oligarchs” and on the U.S. Central Intelligence Agency. Presi­ dent Velasco implicated the CIA and APRA leader Victor Raul Haya de la Torre in a nationwide address Feb. 17, al­ though he did not name either directly. Complicity was denied by the U.S. State Department (on behalf of the CIA) Feb. 18 and by Haya de la Torre Feb. 24. The newsletter Latin America reported Feb. 28 that there seemed “little doubt” that APRA “shock troops” were active in the Lima rioting under the direction of Armando Villanueva, the party’s former secretary general and leader of hardline opposition to the government.

Caretas closed, Zileri exiled. Caretas, the last independent news magazine in Peru, was closed by the government


March 20 for allegedly distorting the truth in a recent article about a govern­ ment-run hospital in Lima. Caretas’ co-publisher, Enrique Zileri Gibson, was arrested March 20 and ex­ pelled to Argentina the next day. He and his mother, Doris Gibson de Zileri, the other co-publisher, had been indicted for treason March 4 by a military court in Lima, reportedly in connection with a Caretas article which disclosed the sched­ uled retirement dates for all generals in the Peruvian army. Zileri was arrested at a luncheon in Lima celebrating the release from prison of Jeannette Gamarra, a young Caretas reporter who had been held without trial since Feb. 5, when she was arrested while covering the civil disturbances which fol­ lowed the crushing of the Lima police­ men’s strike. The March 12 issue of Caretas had car­ ried an article by Mario Vargas Llosa, Peru’s leading novelist, who called the economic demands of the striking police­ men reasonable and blamed the Lima riots on “the progressive deterioration of liberties” in Peru. Vargas Llosa said the strike and riots were not counterrevolutionary as the government claimed. He asserted the rioters were protesting, among other things, the expropriation of Lima’s major newspapers in 1974, which turned the papers into “something that constitutes a true insult to the intelligence of Peru­ vians.”

(Vargas Llosa had said March 2 that despite his criticism of the expropriation, he firmly supported the social and eco­ nomic revolution undertaken by the mili­ tary regime. Since taking power in 1968, he noted, the government had enacted a far-reaching agrarian reform and a foreign policy that opposed imperialism and sup­ ported other underdeveloped nations. “For the first time [in Peruvian history],” he said, “we can talk indisputably of a government policy that, whatever its er­ rors, gives first consideration to the in­ terests of the majority.”) The government had confiscated the Caretas issue released Feb. 12, despite the magazine’s compliance with an official re­


quest to omit a special report on the Lima riots. Caretas’ distribution chief was arrested the same day. Meanwhile, the expropriated news­ papers continued to criticize foreign press coverage of the Lima disturbances and of the government’s policy toward the press. La Prensa of Lima charged in an editorial Feb. 12 that the foreign news agencies in Peru had shown their “capitalist” and “counterrevolutionary” orientation in their coverage of the riots. The paper added that the Peruvian press was not controlled by the government, as the agencies claimed, but by the Peruvian people. (The Zurich-based International Press Institute had asserted in a resolution re­ ported Jan. 21 that it was “totally uncon­ vinced that the expropriation of Peru’s main newspapers and the transference of their control to community guilds will permit the continuance of press freedom. The guilds and their newspapers will only be able to express themselves freely so long as their views are in step with govern­ ment policy.”) SIN AMOS ‘reorganized.’ Gen. Jose Graham Hurtado, chief adviser to Pres­ ident Velasco, announced that the state social mobilization agency S1NAMOS was “in reorganization” because it had failed to understand the full meaning of the Peruvian revolution, the newsletter Latin America reported May 9. The purging and restructuring of Sinamos was an essential preliminary to formation of the Movement of the Peruvian Revolution, the political organi­ zation under study by a committee of cabinet ministers including Graham, ac­ cording to Latin America. Graham had said earlier that the movement’s guiding principle would be the “participation of grass-roots organizations” in the revo­ lution, which had been S1NAMOS’ task to organize, the newsletter reported. Economic developments. Based on figures for the first half of the Peruvian fishing season in March-May, the state fishing concern Pescaperu hoped for a 6-million-


ton anchovy catch in 1975, more than half the normal catch before stocks were de­ pleted by a mysterious Pacific current change in 1972-73, according to the Andean Times’ Latin America Economic Report June 20. Anchovy stocks were slowly building up again, and there were indications the efficiency of operations had increased markedly since the government took over the fishing industry in mid-1973, the Times reported. The conversion rate of fish to fishmeal was considerably higher than when the industry was in private hands, according to the Times. Substantial fishmeal sales had been made in recent weeks to Eastern Eu­ ropean countries, including 37,000 tons to Poland and 100,000 tons to East Ger­ many, the Times reported June 13. Sales prices were in the region of$210-$240 per ton. Peruvian exports for the first quarter of 1975 totaled $428.3 million, with mineral exports leading ($166.6 million) followed by sugar ($153 million) and fishmeal and fish oil ($40 million), according to the Times June 13. Peruvian exports had to­ taled $1.6 billion in 1974, and were ex­ pected to come close to $2 billion in 1975. The state mining firm Minoperu signed a contract with the Belgian company Sin­ dical Beige d’Entreprises a Etranger S.A. for construction of an electrolytic zinc plant at Cajamarquilla, east of Lima, with an initial capacity of 170,000 tons per year, it was reported May 27. Minoperu would also invest $24.2 million to buy capital goods and services for use in re­ lated works. The Andean Development Corp., an agency of the six-nation Andean Group, approved a $17.4 million loan to finance the first stage of a phosphate project in Bayovar, it was reported May 23. The government June 30 decreed economic measures to try to control inflation and make Peru more attractive to foreign creditors. The package included an 18% raise in the basic wage in Lima; price increases of up to 50% for basic consumer items, and a new coinage system to combat a shortage caused by the high value of the metals in


coins compared with the coins’ actual monetary value. In a major change of policy, the regime dropped its subsidies of imported food to free public funds for investment in de­ velopment projects, and it raised the price of locally produced food to stimulate agri­ cultural production. The food subsidies and low controlled prices had expanded the demand for increasingly expensive food imports and discouraged local producers. Gasoline prices were raised by more than 50%, and there were 10%—25% in­ creases in the price of most basic food products, cigarettes, newspapers, bus fares and building materials. The economic measures were decreed amid a series of strikes for higher wages by mineworkers and by university, postal, railroad and municipal employes. Postal workers in Lima struck June 19 July 4, finally accepting a government wage offer. Workers at the state’s Central Railroad struck July 3, and two days later 15,000 workers at Centromin-Peru, the state copper mine, declared their support for a strike by miners in Yauricocha, then in its 25th day. Arequipa, Peru’s second largest city, was virtually paralyzed July 17 18 by a general strike called by the 45,000member Arequipa Department Workers Federation, which was affiliated with the Communist-controlled General Con­ federation of Peruvian Workers. The government declared a state of emergency July 18 in Arequipa and the neighboring departments of Moquegua, Tacna and Puno, and it arrested several strike leaders. The June 30 economic package was de­ vised by Gen. Francisco Morales Ber­ mudez, the prime minister, war minister and army commander, who had recently cemented his position as first in line to succeed President Juan Velasco Alvarado, according to press reports. Following the tenure of Gen. Guillermo Marco del Pont as economy minister in 1974, Morales Bermudez had restored economic or­ thodoxy to the government with his own protege, Gen. Amilcar Vargas, as the new economy minister. The Peruvian and U.S. governments


signed an agreement resolving a long­ standing dispute over flight scheduling for the state airline AeroPeru and Braniff International Airways of the U.S., it was reported July 8. Each airline would be allowed 15 flights per week between the two countries, and an additional 10 flights per week with stops in each country en route to other countries. President Juan Velasco Alvarado an­ nounced July 31 that Peru’s agricultural cooperatives and other associations of farmers and peasants would be trans­ ferred to the social property sector, which the government planned to make the predominant sector of the economy. Agrarian cooperatives would now belong to all workers in social property enter­ prises throughout the country, rather than to the members of each cooperative, and the profits would be distributed on a nationwide basis among social property workers, it was reported Aug. 1. The government passed its longawaited Forestry and Wildlife Law, which gave the state exclusive control of all eco­ nomic activities in the Amazon jungle region, it was reported July 7. All forest areas were declared public property to be administered by the Agriculture Ministry. Vice Admiral Faura loses navy of­ fice. The radical navy minister, Vice Adm. Guillermo Faura, was forced out of office by his more conservative colleagues June 26 after making a “political” speech at a celebration June 24 marking the sixth an­ niversary of the agrarian reform program. Faura was replaced by Vice Adm. Augusto Galvez, who was also identified as a radical. (In another cabinet change June 26, Rear Adm. Isaias Paredes was named housing minister.)

Press curbs. The government issued or­ ders July 2 to hand over Lima’s nation­ alized newspapers to “organized sectors of the population.” Under the rules, various interest groups and organizations would control the papers, but the government would appoint the editors and business managers directly for another year. Conservatives in the cabinet, including


Fisheries Minister Gen. Javier Tantalean Vanini, Interior Minister Gen. Pedro Richter Prada and Labor Minister Gen. Dante Poggi, had concentrated on re­ moving the incumbent editors and business managers, along with prominent staff journalists, it had been reported. Communists and their supporters, par­ ticularly in the newspaper Expreso, were the conservatives’ prime target. Velasco was not defending them, according to the newsletter. The government announced creation of a state news agency to “obtain, process and distribute all types of information in Peru and foreign countries,” it was reported June 13. It subsequently barred foreigners from working for the state-controlled information media, ostensibly to prevent the hiring of “counterrevolu­ tionaries,” it was reported July 4. (In another press development June 20, the Inter-American Press Association sent a telegram to President Velasco protesting the arrest of two former journalists of the newspaper La Prensa, Diego Garcia and Julio Diez.) President Velasco had banned the magazine Marka and ordered the expul­ sion of nine Marka editors. The regime’s action, taken in a decree issued Aug. 5, exiled 19 other political critics, including opposition politicians, student leaders and labor union officials. The measure was not fully carried out—only the nine Marka editors and three members of the opposition APRA party were exiled—but it was widely protested. The newspaper Expreso denounced the decree Aug. 7, and teachers, miners, peasants and students struck in protest Aug. 28. Student demonstrations in Lima late Aug. 28 were broken up by policemen using tear gas. Velasco was overthrown by the armed forces the next day. The Aug. 5 decree charged that the Aug. 1 edition of Marka had sought to damage relations between Peru and Chile by making “unacceptable statements against the Chilean government and its main leaders, irresponsibly using offensive words.” The article had described Peru’s poor treatment of refugees from Chile’s right-wing military government, ac­


cording to the London Times Aug. 8. Marka also had denounced an increasing number of arrests and had defended small left-wing journals in trouble with the government, according to a report Aug. 15. The decree ordered the expulsion of the nine Marka editors and of 19 other Peruvians who had allegedly “gone to various places in the country for the pur­ pose of encouraging occupation of lands, lay-offs, strikes and other violent deeds designed to disrupt public order and create situations of insecurity and unrest among the working class.” Among those ordered expelled were APRA leaders Armando Villanueva del Campo, Luis Negreiros Criado and Carlos Enrique Ferreyros, and leaders of the leftist Peruvian Peasant Federation (CCP), The Federation of Peruvian Mine and Metal Workers (FTMMP), and the teachers’ union SUTEP. In its denunciation of the expulsions Aug. 7, Expreso asserted that “the health of the revolution and the nation could be threatened by these events.” Expreso said Marka was not “counterrevolutionary,” as the government claimed, having made its criticism of the regime from “a revolu­ tionary perspective.” Maoists prosecuted. The government in­ stituted court-martial proceedings against 12 alleged members of Vanguardia Revolucionaria, a Maoist guerrilla group, on charges of committing a number of terrorist acts over the previous months, it was reported July 4. The defendants were arrested following an attack in April on the Lima water com­ pany, according to Latin America. The in­ terior ministry charged June 18 that Van­ guardia had set off a bomb in Lima and led the occupation of a farm estate outside the capital during which some 300 armed peasants clashed with police. One peasant was killed in the clash and five others were wounded.

Velasco overthrown. President Juan Velasco Alvarado was deposed by his military commanders Aug. 29 and re­ placed by Gen. Francisco Morales Ber­


mudez, the premier, war minister and army chief. Morales, described as less authori­ tarian than Velasco, was sworn in as president Aug. 30. He named new military commanders that day and a new cabinet Sept. 1, and he began relaxing government repression Sept. 2. A decree issued Sept. 2 allowed the return to Peru of political exiles and the resumption of publication by magazines banned under Velasco’s rule. The president’s replacement was an­ nounced Aug. 29 in a communique from the commanders of Peru’s five army regions. The navy and air force added their support for the coup later that day. The army communique asserted that the “revolutionary process” begun with the 1968 military coup would continue under Morales, but without “the per­ sonalisms and deviations that our process has been suffering because of persons who were wrong and did not value the true revolutionary feeling of all Peruvians.” An official of the War Ministry, Jose Villalobos, said Aug. 29 that Velasco’s poor health had also played a part in his ouster. His leg had been amputated in 1973 as a result of an aneurism, and he had suffered several mild strokes since then, according to press reports. The coup against Velasco was blood­ less, and Lima and other cities were reported calm. Velasco issued a statement after his ouster expressing satisfaction with his own presidency and urging Peruvians to support the new government. No action was taken against him by the new regime, according to press reports. Morales vowed not to change the “revo­ lutionary process” by “a single milli­ meter,” and he described his govern­ ment as “libertarian, humanist, socialist and Christian.” His Sept. 2 decree allowing the return of political exiles asserted that all Peruvians would be per­ mitted to “participate in the formation of a new society,” and that “attitudes and criticisms” could be expressed with “total freedom, respecting, however, the prin­ ciple of authority and without trying to distort, curb or frustrate the revolu­ tionary process.” After taking the oath of office Aug. 30,


Morales named Gen. Oscar Vargas Prieto as premier, war minister and army chief; Gen. Cesar Podesta as air force chief and air force minister, and Vice Adm. Jorge Parodi as navy chief and navy minister. He named a new cabinet Sept. 1, in­ cluding, for the first time since 1968, a ci­ vilian official—Luis Barua Castaneda, a banker and economist who became economy and finance minister. Among the new cabinet officials were Gen. Luis Vera, who replaced Gen. Jorge Fernandez Maldonado as mines and energy minister; Adm. Francisco Mariategui, who succeeded Gen. Javier Tantalean Vanini as fisheries minister; Gen. Gaston Ibanez, who replaced Adm. Alberto Jimenez de Lucio as industry minister, and Gen. Cesar Campos, who succeeded Gen. Pedro Richter Prada as interior minister. Morales was held in high regard by members of the international banking community, who were impressed by his performance as Peru’s economy and finance minister in 1969-73. During that period Peru’s monetary reserves had risen from $60 million to $500 million, and the country had attracted more foreign in­ vestments then ever before. Morales’ chief adviser then was Luis Barua Castaneda, now economy and finance minister in his cabinet. Velasco associates arrested. More than a dozen military and civilian associates of ex-President Juan Velasco Alvarado were arrested Oct. 29-Nov. 6 as the new president, Gen. Francisco Morales Ber­ mudez, began a campaign against alleged administrative corruption throughout the country. The arrests, coupled with the removal of several high government and military officials, were seen by observers as an at­ tempt by Morales to eliminate Velasco’s ■influence in Peru. Velasco told United Press International Oct. 29 that he was under house arrest and was being denied visitors. It was unclear whether the government and military changes marked a political shift to the left or right. Morales had pledged Sept. 5 to “deepen” the radical

PERU reforms instituted by Velasco, giving more attention to “social property,” public participation and constructive criticism in a “second phase” of the Peruvian revolution. Among those arrested were ex­ Fisheries Minister Gen. Javier Tantalean Vanini, reported detained Oct. 30, and ex­ Agriculture Minister Gen. Enrique Val­ dez Angulo, ordered detained Nov. 6. Tantalean, one of the most radical Peruvian generals, had been close to Velasco during his last months in power. Valdez had been questioned by a Lima judge about alleged fraud in the National Agriculture and Livestock Services Co. (EPSA) and had given what the judge re­ garded as equivocal answers. Other detainees, according to the Spanish news agency EFE Oct. 31, were Enrique Leon Velarde, a prominent financier and former government director of the interior ministry; Oscar Urteaga, former president of the Lima welfare office; Carlos Dongo, former president of the Mining Bank; Tomas Dasso, former vice president of the Central Mortgage Bank, and Guillermo Boza, former mayor of Ancon. Arrest warrants were also issued for several persons who fled the country, in­ cluding Augusto Zimmerman, Velasco’s former press secretary, who travelled to the U.S., it was reported Nov. 15, and Luis Gonzalez Posada, Velasco’s brotherin-law, who took asylum in the Mexican embassy Nov. 3 and flew to Mexico Nov. 4. The anti-corruption drive had begun Sept. 21 with the dismissal of some 150 labor ministry employes throughout the country for “professional and moral in­ competence.” Labor Minister Gen. Dante Poggi Moran was shifted to the aviation ministry Oct. 20 after 10,000 workers at Centromin, the nation’s largest mining complex, struck Oct. 13-18 and obtained economic benefits which the company claimed would cost it an additional $19.6 million per year. Gen. Luis Galindo was named the new labor minister. Health Minister Gen. Fernando Miro Quesada was also replaced Oct. 20, by Gen. Jorge Tamayo. Both Poggi and Miro were air force officers. The air force’s commander and its chief of staff were also


replaced, giving Morales secure control of that service, according to a report Nov. 1. Morales also forced the early retire­ ment Oct. 30 of Gen. Leonidas Rod­ ríguez, head of the government infor­ mation office and commander of the Lima military region, and Gen. Jose Graham Hurtado, chief of the president’s advisory board. Rodriguez and Graham were considered among the more radical generals. Their removal made Gen. Jorge Fernandez Maldonado, the army chief of staff, first in line to succeed Gen. Oscar Vargas Prieto, the premier, war minister and army commander, who would retire at the end of January 1976. Vargas in turn was first in line to succeed Morales as president. The arrests and government and mil­ itary changes followed labor and student unrest in different parts of Peru. In ad­ dition to the Centromin strike, there were strikes by the populations of the towns of Lamas, Tarapoto and Saraposa to protest the poor condition of roads and other fa­ cilities, it was reported Oct. 19. Primary and secondary school students held demonstrations in Lima Oct. 22-24 to protest poor facilities. Police broke up their protest Oct. 24 and the government accused the radical teachers’ union SUTEP of organizing the protest and other “counterrevolutionary” actions. Meanwhile, the government eased restrictions on the press—although it clamped down on reports of the November arrests—and allowed the return of many political exiles. The banned news weeklies Marka and Oiga resumed publication, it was reported Oct. 4, but the biweekly Caretas refused to reappear until the situation of its exiled editor, Enrique Zileri Gibson, was clarified, it was reported Sept. 11. A number of Troskyite leaders, including Hugh Blanco, returned to Peru, it was reported Sept. 19. Francisco Belaunde, brother of ex-President Fernando Be­ launde, also returned, it was reported Sept. 27. The political relaxation earned the government the support of two major opposition parties, Belaunde’s Popular Action and the Apra Party of Victor Raul Haya de la Torre. Haya de la Torre an­ nounced Apra’s “responsible support” for

144 the government Sept. 19, asserting the government’s guiding principles had been espoused by Apra for several decades.

Foreign Financial Developments I PC compensation deplored. The government criticized the U.S. for paying $22 million to International Petroleum Corp. (1PC), a subsidiary of Exxon Corp., from funds provided by Peru in 1974 for the compensation of expropriated U.S. firms. In a protest note to the U.S. embassy reported Jan. 2, Peru noted that the agreement under which it had turned over $76 million in compensation funds had specifically barred payments to IPC. The U.S. argued that the agreement allowed it to disburse the funds as it saw fit. Executives of oil companies which had participated in the negotiations leading to the agreement were disturbed by the de­ cision to compensate IPC, according to the newsletter Latin America Jan. 10. In a related development reported Jan. 14, H. J. Heinz Co. said it had received another $1.6 million in compensation for a Peruvian subsidiary that was nationalized in 1973. The firm already had received $6 million in compensation.

International financing approved. The Consultative Group for Peru, meeting in Paris April 17-18 under the auspices of the World Bank, agreed to raise $3.5 billion to finance Peruvian development projects in 1975-77 in a number of fields including petroleum and petrochemicals, mining, steel, cement, heavy engineering and irrigation. The group, composed of Peru’s creditor nations (the U.S., Japan, Canada, Spain and members of the European Economic Community) and intergovernmental lending agencies (the Inter-American De­ velopment Bank, the International Mon­ etary Fund and the United Nations De­ velopment Program), agreed to finance exports of capital goods to Peru and provide some funds for local expenditure. As a result Peru could service its existing debt to the group with the foreign ex­


change it would have spent on these im­ ports, gaining a breathing space until its current copper and petroleum projects bore fruit, it was reported May 2. However, the search for oil in Peru’s jungle region was going badly, the Wall Street Journal reported July 14. British Petroleum Co. Ltd. of Great Britain and Atlantic Richfield Co. of the U.S. had de­ cided to end their Peruvian operations after drilling only dry wells, and several other concerns were considering similar action, according to the Journal. Twentynine foreign firms were drilling in Peru along with the state company Petroperu. Current known reserves guaranteed domestic self-sufficiency in oil but not enough petroleum for exports.

U.S. mining firm seized. The govern­ ment announced July 24 that it was na­ tionalizing Marcona Mining Co., which operated Peru’s only iron ore mining com­ plex. Mines Minister Gen. Jorge Fernandez Maldonado charged that Marcona, which was largely owned by Cyprus Mines Corp, and Utah International Inc. of the U.S., had caused “serious damage to our country by actions typical of the immoral conduct that the great multinational con­ sortiums Traditionally exercise.” The small Peruvian subsidiary of Gulf Oil Corp, of the U.S. had been nationalized for “immoral conduct” in May. Fernandez’ charge was heatedly denied by Joseph Klein, a top official of Cyprus Mines, who asserted Marcona had “al­ ways conducted [itself] legally in Peru,” the Wall Street Journal reported July 28. Fernandez also alleged that Marcona had violated contracts with the govern­ ment, fallen into debt with state agencies and wasted ore lodes through negligent extraction procedures. He said auditors would determine how much compensation Marcona would be paid for its assets. The nationalization followed growing agitation by miners, caused principally by a government attempt to dominate the miners’ Communist trade union, the London Times reported July 26. The struggle had gained importance when all the main newspapers in Lima, with the ex­ ception of the most conservative, Ultima Hora, defended the miners and denounced

PERU the government’s attempt to control them, according to the Times. Marcona had been negotiating the sale of its assets to the government when it was nationalized, the Wall Street Journal reported Aug. 5. Cyprus Mines estimated its investment in Marcona at $14 million, and Utah International put its own invest­ ment at $19 million.

Copper project financed. Southern Peru Copper Corp, announced Jan. 5 that it had completed financing of its $620 million Cuajone open-pit mining project by concluding loan agreements worth $404 million. The company added that it had entered into partnership with the Dutch firm Billiton N.V., a mining subsidiary of Shell Petroleum N.V., to operate the Cuajone mine beginning late in 1976. Loan capital for the mine would come from four sources: a consortium of 29 U.S., European and Japanese Banks, led by Chase Manhattan Bank of New York; suppliers of equipment and material in the U.S., Great Britain and Brazil; copper buyers in Great Britain and Japan; and the International Finance Corp., an agency of the World Bank. The Cuajone project, in addition to opening up the copper mine, included construction or expansion of processing facilities and of rail, road and pipeline links to existing installations; and con­ struction of new housing, hospitals, schools and civic and recreational fa­ cilities for 10,000 persons. Southern Peru said the mine would start with an annual capacity of 170,000 short tons of blister copper. It would be one of the largest copper mines in the world. Southern Peru was owned 51.5% by American Smelting & Refining Co., 22.25% by Cerro Corp., 16% by Phelps Dodge Corp, and 10.25% by Newmont Mining Corp., all U.S. firms.

Other Developments U.S. journalist expelled. The govern­ ment July 23 deported Edith Lederer,

145 Lima bureau chief of the Associated Press, for filing a story “with the de­ liberate purpose of damaging friendly relations between Peru and Chile.”

Lederer had covered war games by the Peruvian air force July 20, reporting more than 60 bombing runs on decoy fishing boats. She quoted some observers as in­ terpreting the maneuvers as a warning to Chile that Peru was “ready and not afraid of a replay of the 1879-84 War of the Pacific” between the two countries. Relations between Chile and Peru were strained over ideological differences— Chile’s government was rightist and Peru’s, leftist—and over efforts by Bolivia to obtain a corridor to the Pacific Ocean through land taken from Peru by Chile in the War of the Pacific. Peru was reported worried by Chile’s recent rapprochement with Bolivia, which also had a right-wing government.

In an apparent attempt to mollify Chile and Bolivia, Peruvian President Juan Velasco Alvarado previously had made a speech denouncing communism and pro­ posing a three-party solution to Bolivia’s search for an outlet to the sea. Velasco urged followers of the “noncommunist, noncapitalist Peruvian revolution of the armed forces” to join in fighting com­ munist infiltration.

Meanwhile, the U.S. had placed sharp restrictions in recent months on military aid to Peru, following a ban imposed by Congress on arms aid to Chile to protest human rights abuse by Chile’s military junta, the Miami Herald reported Aug. 1. The U.S. sought to prevent a power im­ balance between the two Latin American nations, according to Herald sources. French ties resumed. The government resumed ambassadorial relations with France Aug. 7, two years after breaking them off" to protest French nuclear tests in the Pacific Ocean. A Peruvian spokesman noted that France no longer carried out nuclear tests aboveground.


Political Unrest; Government Curbs Press

arrested on unspecified December 1974.

The Uruguayan press was a major target of the government in its efforts to suppress disclosure of its harsh military rule. Some newspapers were banned or suspended.

Newsman held; torture reported. Guillermo Israel, Uruguayan correspon­ dent for the East German news agency ADN, was arrested Jan. 14 and held for 40 days on charges of undertaking “clan­ destine activities” as a member of the outlawed Uruguayan Communist Party. His release was reported by the Miami Herald Feb. 28. The French newspaper Le Monde said Jan. 19 that Israel had reportedly been tortured in prison. Israel was expelled from Uruguay May 2.

Communist leader deported. Com­ munist Party leader Rodney Arismendi was released from prison Jan. 4 and deported to an unidentified European country, according to relatives. He had been held since May 1974. Arismendi’s release followed the freeing in November 1974 of retired Gen. Liber Seregni, leader of the Broad Front coalition, to which the Communists had belonged. The Communists and all other Marxist parties were permanently outlawed Jan. 1 by President Juan Maria Bordaberry, who proclaimed a “new institutionality” with the “invaluable support” of the armed forces, which ruled Uruguay through him. In a related development Jan. 3, Bor­ daberry ordered the expulsion from Uruguay of Carlos Reverditto, ex-dean of the architecture faculty at the University of the Republic, for “antinational activity.” Reverditto and his wife had been



Among other press developments: The Roman Catholic magazine In­ formaciones was closed for a month Jan. 29 for “asserting that the security forces in Uruguay persecute or repress religious or generally philosophical ideas.”' The magazine’s Dec. 14, 1974 issue had car­ ried juxtaposed photographs of a police raid and a field of flowers, with the cap­ tion, “Persecution does not stifle the faith, but makes it grow.” The San Jose newspaper Aqui Esta was closed for 10 editions Jan. 10 for printing an editorial which, according to a govern­ ment decree paraphrased by the news agency LATIN, was “harmful to the insti­ 147


tutionalization process under way in the country.” Zufriategui freed. Retired Col. Carlos Zufriategui, a leader of the left-wing Broad Front coalition, was released from prison after being held since July 1973, it was reported Feb. 21. Workers, students seized. More than 2,000 Uruguayan workers and students were arrested in Uruguay and Argentina in April in a successful attempt by the government to head off protests planned for May 1 by the outlawed General Labor Confederation (CNT). Uruguayan police and soldiers crossed into Entre Rios Province, Argentina, April 24 and arrested about 1,800 Uru­ guayan workers at the Salto Grande hydroelectric project, which was being built jointly by Argentina and Uruguay. Argentine labor leaders protested the ar­ rests and the remaining workers at Salto Grande held a protest strike April 26-28. More than 100 youths had been ar­ rested in Montevideo April 22, according to relatives quoted in press reports, and more than 400 others were detained in Uruguay by the end of the month, ac­ cording to the French newspaper Le Monde April 30. The government had charged April 9 that the CNT planned to provoke distur­ bances in Uruguay’s public schools. Military and police authorities said they had documentary proof of the plot, ob­ tained in a raid March 21 on headquarters of the National Federation of High School Teachers, at which three former CNT leaders were arrested. The government banned the federation April 15 and confiscated its funds and properties. In other arrest incidents, 53 alleged members of the leftist March 26th Move­ ment were reported seized May 7; ex­ Senator Enrique Erro of the left-wing Broad Front coalition was arrested at his exile home in Buenos Aires, Argentina, according to Le Monde April 18; several leaders of the Uruguayan Railroad Workers Union were seized in a police raid March 11, according to the Cuban newspaper Granma March 30; and


Horacio Bazzano, secretary general of the Uruguayan Student Federation, was reported detained March 4. Communist Party leader Jaime Perez was sentenced in military court to 18 months in jail for allegedly attacking the morale of the armed forces, according to the Cuban press agency Prensa Latina Feb. 27. The arrest campaign was accompanied by new government attacks on the local and foreign press. Tomas Israel, son of Guillermo Israel, correspondent for the East German news agency ADN, was reported arrested March 4. In another case, Carlos Borche, former director of the Uruguayan Press Association, was ar­ rested April 5 for publicly referring to the lack of press freedom in Uruguay at the funeral of a fellow journalist. He was reported freed June 19. The government April 8 banned the weekly magazine 9 de Febrero, which reflected reformist military thinking, for allegedly receiving funds from foreign (presumably leftist) organizations. The magazine’s editor, Luis Michelini, had been freed the week before after spending 40 days in prison on related charges. The Roman Catholic magazine Visperas was closed by the government April 30 for allegedly posing “an unequivocal threat to public peace” by publishing “direct attacks on our state of law.” The auxiliary bishop of Montevideo, Msgr. Andres Rubio, denied the magazine was subversive. (Rubio told the Mexican newspaper Ex­ celsior June 3 that the government re­ garded the Roman Catholic Church’s pas­ toral activities with “fear and suspicion,” and that police “actively watched” the church, read its printed materials, raided various parishes and homes of clerics, and even arrested certain priests.) El Dia, a Montevideo newspaper owned by members of a faction of President Bordaberry’s Colorado Party, was suspended by the government for 24 hours May 7 after it published an editorial noting “the similarities of all totalitarian solutions, whatever their guiding symbols; the fasces, the swastika or the hammer and sickle.”

Bordaberry, military chiefs clash. A dispute over agrarian policy in May


caused a clash between President Juan Maria Bordaberry and his military com­ manders. The conflict began May 19, when Bor­ daberry dismissed Eduardo Peile, pres­ ident of the National Meat Institute (INAC), after Peile ordered slaughter­ houses to give priority to slaughtering cat­ tle from small and medium-sized ranches, which sought relief amid the nation’s rapid economic decline. Peile’s directive was opposed by large landowners, who controlled Uruguay’s cattle industry. Bordaberry, a wealthy rancher himself, said in firing Peile that Peile had acted without presidential per­ mission and that his directive limited free trade. Seeking to keep his position, Peile ap­ pealed to supporters in the armed forces, including Gen. Gregorio Alvarez, the reformist commander of the army’s 4th Division. Most of the top military leaders asked Bordaberry May 20 to reinstate Peile, but the president refused. The military chiefs sent Bordaberry an ultimatum to reinstate Peile May 21, and they imposed strict press censorship, for­ bidding local publications to report the conflict and confiscating Argentine and Brazilian newspapers that referred to it. Still, Bordaberry continued to resist, reportedly saying May 22 that he was pre­ pared to “resign for the good of the country.” The military leaders widened their de­ mands May 23, insisting that Peile’s di­ rective to the slaughterhouses be carried out and that Bordaberry make other changes in agrarian policy. A compromise was reached the next day, allowing Bor­ daberry to name a new INAC president, Jose Maria Rocca, but naming Peile to INAC’s board of directors. Peile’s order to the slaughterhouses was put into effect June 10. The controversy continued briefly May 25, when Walter Pages, a prominent landowner and president of the Uru­ guayan Rural Federation, made a public speech and published a lengthy state­ ment commenting on the clash between Bordaberry and the military leaders and severely criticizing the government’s agrarian and economic policies. Pages was arrested along with Eduardo Corso, a


newsman in Rocha Department where Pages made his speech. They were re­ leased May 29. In his speech Pages asserted that Uruguay’s agriculture and livestock sector was suffering “one of the greatest crises of its history.” He blamed the crisis on “the inefficiency of certain public services, the excess of bureaucracy and the steadily increasing cost of security services in the national budget.” Pages cited the nation’s spiraling inflation rate, its annual trade deficit of more than $100 million, its public debt of more than $789 million, the loss of buying power of workers’ wages, and other signs of national economic deterioration. He said the government must treat agrarian producers more favorably, awarding them benefits that now went exclusively to in­ dustrialists.

Economic Developments Government enacts reforms. The Economic and Social Council Feb. 7 approved a package of economic measures including wage and price increases and a further devaluation of the peso. Economy Minister Alejandro Vegh Villegas, who proposed the measures, said at a press conference Feb. 17 that Uruguay faced economic difficulties in the future, “par­ ticularly” in 1975. The peso was devalued by 6% in relation to the dollar. Wages of workers in the private sector were raised by 15% retroactive to Feb. 1, and wages in the public sector by the same amount as of March 1. Prices were increased for various consumer articles and services, in­ cluding water, electricity, fuel, meat, milk, sugar and liquor. Imports of capital goods were freed to stimulate industry, and a study of the critical situation in the livestock sector was planned. (Several organizations of livestock pro­ ducers asked the government Feb. 23 to declare an emergency in a large area on the northern and central coast, where they said conditions were “catastrophic” due to droughts, livestock overpopulation and

150 the fall in livestock prices. The producers requested special credit lines and a mora­ torium on debt repayment, among other aid.) The government devalued the peso March 3 and 20 and April 2 and 9. The last and largest devaluation, by 10.41 % April 9, was part of a government package of economic measures which in­ cluded tax exemption for imports, wage increases of about $12 a month and price increases including a 17% hike for fuel prices and a 10% rise in the cost of public utility services. The price increases were expected to cancel out the wage raises. The cost of living rose by more than 10% in January and February, following a 100% inflation rate in 1974, according to a report March 21. Between 1962 and the end of February 1975 the Uruguayan consumer price index had risen from a base of 100 to 31,222.6, according to figures released March 30 by a statistics institute at the University of the Republic. Meanwhile, the government continued to implement an orthodox economic policy devised by Economy Minister Alejandro Vegh Villegas with the backing of the International Monetary Fund, which May 9 made available to Uruguay 17.25 million Special Drawing Rights. The SDRs were to help the government hold down the balance of payments deficit, control inflation and lay the basis for long­ term growth, the IMF said. According to the Andean Times’ Latin America Economic Report March 21, the government’s policy was not succeeding because the private sector was unable to increase investment to a point where it began to fill the void created by reducing the public sector. The high unemployment rate had caused a massive exodus of the population to neighboring countries and a consequent restriction of the internal market, to the chagrin of local in­ dustrialists. The government decreed severe restric­ tions on power consumption April 25 to


keep foreign fuel purchases down during the approaching winter. The restrictions included a ban on use of household elec­ trical appliances each day between 6 and 11 p.m. Foreign economic developments. The government completed negotiations for oil exploration contracts on the con­ tinental shelf by four U.S. oil com­ panies—Exxon, Gulf, Texaco and Chevron, it was reported Feb. 21. Each firm paid $200,000 for access to technical studies prepared for the government by a French company. The Inter-American Development Bank May 1 approved a $14.4 million loan to help the government expand cement production at Paysandu. The bank had ex­ tended a $28.4 million loan Feb. 28 to help improve Uruguay’s telecommunications network. After several years of interruption Brazil agreed to resume wheat purchases from Uruguay, signing a pact to buy 50,000 metric tons for $3 million, it was reported March 10.

Other Developments Technology meeting canceled. The government Jan. 31 canceled an inter­ American conference on science and technology, scheduled to begin in Mon­ tevideo Feb. 3, because the U.S. decided not to send a delegation. The Foreign Ministry issued a commu­ nique which denounced the U.S. absence, noting that the conference had been ar­ ranged under Secretary of State Henry Kissinger’s avowed “new dialogue” with Latin America. Thirteen Latin nations had planned to attend the meeting and several delegations had arrived in Montevideo by the time it was canceled.


Oil Developments Since Venezuela is one of the world's biggest producer of petroleum, oil was Venezuela's largest source of revenue and dominated Venezuela's economic news in ¡975. Among the major developments dur­ ing the year was the nationalization of the country's oil industry. Oil nationalization bill passed. Congress gave final approval Aug. 21 to the govern­ ment’s bill to nationalize the oil industry. The measure was signed into law Aug. 29 by President Carlos Andres Perez and his Cabinet. The bill, passed by the Chamber of Deputies July 28 and by the Senate Aug. 18, was pushed through Congress by the president’s Democratic Action Party (AD). It required foreign oil firms to give up their concessions Dec. 31 and for a new state company, Petróleos Venezolanos (Petro­ ven) to take control of the industry Jan. 1, 1976. Although the bill was approved by all political factions, six of the eight opposi­ tion parties in Congress had bitterly op­ posed its fifth article, which allowed Petroven to undertake joint projects with private firms in certain areas of the na­


tionalized industry, including supply of technology, transportation of oil, foreign marketing and management. Ex-President Rafael Caldera, a senator and leader of the opposition Social Christian Party (Copei), denounced the fifth article in the Senate Aug. 5, asserting the foreign (mostly U.S.) firms that Pe­ troven might sign contracts with “have never supported any increase in our sovereignty and, far from being good partners, they have always placed obstacles in our path.” President Perez had argued July 5 that the fifth article would enable him to “con­ ciliate the interests of those who possess technology but need our oil and those of the country that possesses oil but not the advanced technology.” He noted that un­ der the article, mixed enterprises could be undertaken only in the national interest and only with the approval of both houses of Congress. (At the moment AD held majorities in both the Senate and the Chamber.) The bill provided for compensation to the nationalized companies not to exceed the net book value of their assets, which the government put at $1.16 billion but the companies estimated at $5 billion. If the companies rejected the government’s com­ pensation offer, they would be expro­ priated. Perez said July 5 that in practice Pe­

152 troven would supervise and control the operations of the nationalized companies, “conserving their structure and organiza­ tion as much as possible.” (Venezuelans would be named to the companies’ top management positions, but other foreign employes presumably would be allowed to keep their jobs, according to press reports.) Petroven, to have an initial operating budget of $470 million, would be directed by a nine-member council initially ap­ pointed by Perez for a six-month term and subsequently elected by the state company’s membership. The government expressed confidence that the transfer of ownership would pro­ ceed smoothly, but doubts were voiced by members of the opposition, the oil in­ dustry, private enterprise and the press. Marcel Padron, a columnist for the con­ servative newspaper El Universal, asked in an article reported July 16: “Who will pay everyone? Who will be the executives? What will happen to the workers’ loans? ... How will the new state enterprise [Petro­ ven] be protected from the political con­ tamination that has happened to all the others?” Other critics asserted the government lacked legal instruments to perform all the complex tasks heretofore handled by the foreign oil firms and to consolidate the score of foreign companies into one coherent operation. “There simply hasn’t been enough basic carpentry done. They have underestimated the complexity of running the [industry],” said one oil executive quoted by the Washington Post July 16. Despite their misgivings, the foreign companies—including Exxon Corp, and Gulf Oil Corp, of the U.S. and Royal Dutch/Shell of Great Britain and the Netherlands—were cooperating with the nationalization project and reportedly holding talks with the government on fu­ ture participation in the industry. In signing the bill Aug. 29, Presi­ dent Perez had said that with the na­ tionalization, Venezuela would “assume the most demanding responsibilities on the path toward the liberation of Latin America.” He asserted that “a new international economic order has been proclaimed,” and lamented that “the in­


dustrialized countries . . . are experiencing a crisis of misunderstanding that prevents them from accepting the fact that the ex­ ploited countries are assuming the active defense of their own interests and making their own decisions.” The oil nationalization bill was a re­ vised version of a draft prepared by a government-appointed commission in 1974. It came in for immediate opposition party criticism when the government sub­ mitted the measure to Congress March 11. The fifth article, which permitted the gov­ ernment to negotiate “agreements of as­ sociation” with private companies to ex­ port Venezuelan oil, came in for particular attack.

The left-wing People’s Electoral Move­ ment (MEP) charged the article allowed the formation of “mixed enterprises” in the nationalized industry. Copei asserted the entire industry “should be left in the hands of the state.” President Carlos Andres Perez de­ fended the bill in an address to Congress March 12, on the first anniversary of his accession to office. He said the contro­ versial article had been added to “open all possible options for the success of the government’s efforts in this most difficult task which has irreversible consequences for the nation’s destiny.” Perez called for “the broadest con­ sensus if not unanimity” in adopting the bill. In an apparent reference to the bill’s critics, he said: “At this hour of its destiny Venezuela cannot afford sterile extremisms which, rather than encourage great decisions, can submerge us in unnecessary contradictions and dangers.” Perez stressed that nationalization of the oil industry was not a hostile act against any foreign power. “We extend our hand to the United States and Europe to express our support if they wish to build a world of cooperation,” he said. “Our international policy is and will be one of irreproachable dignity.”

Turning to the enormous wealth Vene­ zuela was accumulating because of high petroleum prices, Perez pledged austerity in the government’s management of the



oil funds and he urged Venezuelans to avoid waste.

Venezuelan officials in 1970, it was re­ ported Nov. 4.

Oil firms accept compensation offers. Most of the foreign oil companies in Vene­ zuela agreed Oct. 28 to accept govern­ ment offers totaling more than $1 billion in compensation for their nationalized assets.

Pre-nationalization developments. The government made several changes in its oil policy in January and early February, raising taxes on foreign companies and reducing posted prices, freight premiums and daily production. Mines Minister Valentin Hernandez an­ nounced Jan. 21 that the tax rate on the 19 foreign oil companies operating in Vene­ zuela would rise from the current 63.5% to an effective 70%, retroactive to Jan. 1. At the same time, posted prices for crude and refined oil were cut by an average 84c a barrel, to $13.61 a barrel, and freight premiums attached to all oil exports were reduced by 77c a barrel. The reforms were aimed at complying with a December 1974 resolution of the Organization of Petroleum Exporting Countries to increase the fiscal revenues of oil producing nations, and at narrowing the wide gap between the artificial posted price and actual market prices, according to the New York Times Jan. 22. Sources in Caracas said the tax in­ crease would raise government oil reve­ nues by 38c a barrel, the Wall Street Journal reported Jan. 22. Government oil technicians said the oil reforms should not mean increased prices for consumers in industrial nations.

The largest of the offers, $512 million, went to Exxon Corp, for its wholly-owned subsidiary, Creole Petroleum Corp. Other major offers were accepted by Shell International Petroleum Co. and Gulf Oil Corp., whose subsidiaries, along with Creole, produced 83% of Venezuela’s daily oil output. More than 30 other firms also accepted compensation offers, ac­ cording to government officials. The compensation payments would be made partly in cash at the end of 1975, when the companies turned over their operations to Petroven, the new state cor­ poration, and partly in interest-bearing bonds amortizable over several years. The payment for Creole was decided in negotiations between the government and Exxon that also determined the terms under which Exxon would continue to provide technical aid to Petroven, ac­ cording to a report Oct. 12. Creole was awarded $476 million by the Venezuelan government under an agree­ ment announced by a company spokes­ man Nov. 12.

The agreement was signed in Caracas by Creole’s president, Robert Dolph, and the Venezuelan attorney general, Eduardo Ramirez Lopez. The $476 million was the most compensation awarded to a foreign oil company in Venezuela, but it was below the $512 million quoted for Creole in earlier press reports. Two other U.S. firms, El Paso Vene­ zuelan Oil Co. and Occidental Petroleum Corp., would have their compensation de­ termined by the Venezuelan Supreme Court. El Paso rejected the government’s compensation offer as too low, according to a report Nov. 7, while Occidental received no offer because of allegations in the U.S. that the company had bribed

The government announced Feb. 5 it would cut daily oil production by 200,000 barrels within a week, to about 2.6 million barrels daily. However, government oil revenues would not be decreased, officials said. Based on an annual production of 2.6 million barrels a day, Venezuela’s proven reserves of conventional oil would the­ oretically last for 20 years, the Journal of Commerce reported Feb. 6. Hernandez had said Jan. 20 that the nation’s reserves had risen by 4.8 billion barrels in 1974, to a total of 18.6 billion barrels. The major foreign oil producer, Creole Petroleum Corp., a subsidiary of Exxon Corp, of the U.S., had announced Jan. 8 it would invest $114 million in its operations in 1975, a $14 million increase over 1974 expenditures. Creole President Robert Dolph said the company had undertaken

154 the spending program, despite the im­ pending nationalization of Venezuela’s oil industry, because “we have an obligation to maintain production at an adequate level.” Creole was confident that in the long run it could “buy more oil from Venezuela if the production level is high,” Dolph asserted. Exxon Corp, disclosed June 23 that it had assumed complete ownership of Creole, buying the 4.6% of Creole shares held by an estimated 20,000 25,000 private shareholders. Exxon said it acted to facilitate Creole's nationalization. Cia. Shell de Venezeuela, the local sub­ sidiary of Shell International Petroleum Co., had announced earlier that it would invest $50 million in the country in 1975, it was reported Jan. 9. British Petroleum would build a $100 million plant in eastern Venezuela to ex­ tract protein from petroleum in a joint venture with the government and several privately owned animal feed concerns, it was reported Jan. 14. Construction would begin in mid-1975, with completion fore­ seen in 1977-78. Mines Minister Hernandez announced Jan. 10, after meeting in Caracas with Ca­ nadian Energy Minister Donald Mac­ donald, that Venezuela would guarantee oil supplies to Canada. Canada bought 70% of its fuel from Venezuela, rep­ resenting 30% of Venezuela’s oil exports, according to the French news agency Agence France-Presse. Venezuela would sell Peru 40,000 bar­ rels of crude daily in 1975—76 under a long-term financing agreement, according to reports in the newsletter Latin America March 14 and the newspaper El Nacional of Caracas March 15. Venezuela would purchase half of the oil from Ecuador and resell it to Peru, which could not afford to pay cash for the oil as Ecuador required. Venezuela was also negotiating con­ tracts to supply Japan and West Germany with oil to offset excessive dependence on the U.S. market, according to the Andean Times’ Latin America Economic Report March 14. The U.S. had begun reducing imports of residuals, which Venezuela supplied to refineries in the eastern U.S. The Shah of Iran visited Venezuela May


5-9 for talks with President Perez on the policies of the Organization of Petroleum Exporting Countries (OPEC), to which Venezuela and Iran belonged. The two leaders denied that OPEC sought to de­ stroy the industrialized countries—the Shah said May 6 that it sought to create “a new world economic order, based on reason, justice and mutual cooperation” —and they signed an agreement to form a joint company to ship oil exports. The government planned to invest $5.8 billion in the petroleum industry in the next five years, notably in developing the Orinoco tar belt in eastern Venezuela, it was reported Aug. 25. The national Association of Public Accountants charged July 23 that U.S. oil companies in Venezuela had “secretly ex­ tracted” $1.1 billion worth of petroleum outside their legal concessions, and they therefore owed the government that sum. Foreign oil executives admitted their firms had produced some oil from underground areas outside their concessions, asserting oil “migrated” underground, but they questioned how the accountants could reach the precise $1.1 billion figure, which was roughly equivalent to the net book value of the foreign companies' assets as estimated by the government. Venezuela was using three approaches to help poor neighboring countries to buy oil at OPEC's increased prices, it was reported Sept. 15. One system involved selling the countries oil for 50% cash and treating the balance owed as a long-term loan. A second approach consisted of reimbursing other oil exporters for fuel they shipped to energy-short nations, and a third involved aid to regional de­ velopment banks, direct loans and invest­ ments, funds for scholarships and other forms of financial support. The assistance programs benefitted Venezuela because the nation could not absorb its huge oil earnings without spurring inflation at home, according to political and eco­ nomic analysts. Venezuela planned to establish a mer­ cantile bank in London as part of a program to invest its petrodollars in both national development programs and foreign loans and credits, it was reported Oct. 15. The British mercantile bank N.M. Rothschild & Sons was advising the

VENEZUELA Venezuelan government on investment policy. President Carlos Andres Perez received a note from President Ford of the U.S. criticizing Venezuela’s oil policy and asking Perez to use his influence at forth­ coming OPEC meetings to forestall sharp oil-price increases, it was reported Sept. 23. Perez replied “in a firm tone” that Venezuela maintained “solidarity” with all OPEC decisions, according to the newspaper El Nacional of Caracas.

Venezuelan oil production continued to fall, reaching an average level of 2.4 million barrels per day, down by 19.6% from January-November of 1974, the mines ministry reported Dec. 1. The fi­ nance ministry had reported Nov. 10 that Venezuela’s oil income would be about $7.6 billion in 1975, and would fall to $5.7 billion in 1976, based on a projected average output of 2 million-2.2 million barrels per day, 90% of which would be exported. Rafael Tudela, a federal deputy of the opposition Copei party and president of the oil exporting firm Hideca, charged in a published interview Nov. 11 that oil production was being steadily reduced not to conserve petroleum reserves, as the government claimed, but because Vene­ zuela could not sell enough oil on world markets. The government earlier had cut the ex­ port price of low-sulphur fuel oil from $10.50 per barrel to $9.55 per barrel in a drive to reduce stocks, it was reported Nov. 14. This type of oil made up 16.4% of Venezuela’s refined product exports.

Other Economic Developments Iron industry nationalized. The govern­ ment formally took over the iron mining industry Jan. 1, agreeing to pay $101.3 million in compensation to the U.S. firms that previously had controlled it. President Carlos Andres Perez said Venezuela would continue to export ore to the U.S. and Europe in the next few years, and expected to earn $230 million in iron sales in 1975. “We will sell our iron ore at

155 the highest prices on the world market,” he asserted, “and if necessary we will barter it for finished and semifinished products required at home.” (The government ordered a 68c in­ crease in the export price of a metric ton of iron ore Jan. 2. The new price was $14.49 a ton, according to the Associated Press.) Under a negotiated agreement, the government would pay U.S. Steel Corp. $83.7 million for its local subsidiary, Ori­ noco Mining Co., and it would pay Bethlehem Steel Corp. $17.6 million for its Iron Mines Co. The U.S. firms would remain in Venezuela through 1975 under contracts to advise the new state manage­ ment and provide technological aid. Under separate contracts, Venezuela would supply 11 million tons of iron ore annually to U.S. Steel through 1981, and 3.3 million tons a year to Bethlehem through 1979. Sales contracts to Eu­ ropean nations would remain unchanged through 1975, but would be renegotiated thereafter. The government said that by 1977 it hoped to be exporting less iron ore and more finished and semifinished products.

President announces agriculture plan. President Carlos Andres Perez had an­ nounced a series of measures to boost agricultural production Oct. 6, including a raise in prices for producers and an order to commercial banks to place 20% of their investment funds in the agrarian sector. The higher prices were for maize, sorghum, peanuts, sunflower seeds and sesame seeds. The government would also lift its wheat import subsidy in 1976, Perez announced. Venezuela would obtain 400,000 tons each of wheat, sorghum and maize from Argentina in 1976 in exchange for 100,000 tons of coal and a similar amount of iron, it was reported Dec. 10. IDB fund opened. Venezuela signed an agreement Feb. 27 opening a $500 million trust fund in the Inter-American De­ velopment Bank (IDB) to provide loans to the bank’s least developed members. The bank would pay Venezuela 8% in­ terest on the fund and lend at the same

156 rate. Venezuelan Finance Minister Hector Hurtado, who attended the signing cere­ mony at IDB headquarters in Wash­ ington, D.C., said Venezuela would lend the bank another $100 million at low interest rates, called concession terms. Venezuela would not exercise a veto on the use of either fund, Hurtado said. (The U.S., which maintained a special fund in the bank at no interest, exercised a veto over projects for which it was used.) Hurtado noted that Venezuela also had contributed $540 million to the World Bank, $540 million to the International Monetary Fund’s oil facility program and $100 million to the U.N. Emergency Fund. Venezuela would contribute an ad­ ditional $375 million in Special Drawing Rights to the IMF oil program in 1975, according to a Venezuelan Central Bank official March 13. The program helped IMF members finance deficits in their balance of payments caused by the high price of petroleum imports. Venezuela’s international loans were ar­ ranged by the Venezuelan Investment Fund, established in 1974 to channel into foreign investment oil money that could not be used for domestic development projects. Most of the fund was kept in short-term deposits with U.S. banks, ac­ cording to the Wall Street Journal Feb. 24.

Steel & rail expansion plans set. The FIV planned to raise as much as $2 bil­ lion from Eurocurrency markets in the next few years to finance major industrial schemes, including an expansion of steel production, establishment of an aluminum smelter and creation of a railway system, the Financial Times of London reported Oct. 1. The FIV’s new mercantile bank in London would play a major role in the fundraising. Venezuela expected to produce 15 mil­ lion tons of steel annually by 1985, ac­ cording to a statement Sept. 25 by Argenis Gamboa, president of the Venezuelan Guayana Corp. By that year the nation would stop exporting iron, using all its ore to produce and export steel, Gamboa said. The government would invest more than 27 billion in the next four years in the eastern Guayana region, where its iron


and steel industries were located, and where it planned hydroelectric and alu­ minum manufacturing projects, it was reported Sept. 13. The government Nov. 18 announced its National Railroad Plan, under which 782 miles of railways would be built at an in­ vestment of $928 million. The railways, to be built by foreign companies under con­ tract to the government, would facilitate vital freight transportation for industrial and agricultural expansion. Inflation put at 12.5%. The cost of living in Venezuela had risen by an estimated 12.5% in the past 12 months, according to a major private financial bulletin cited by the newspaper El Nacional of Caracas Dec. 3. Figures released by the Central Bank Nov. 29 had shown an 11.2% rise in the cost of living in January-October, with a 17.5% increase for food, drinks and to­ bacco, a 16.3% rise for clothing and shoes, and a 5.2% increase for household goods. Venezuela’s inflation was the lowest among oil-exporting nations and one of the lowest in Latin America, according to the International Monetary Fund (IMF) Oct. 6. In September Venezuela’s monetary re­ serves had fallen for the first time since 1973,'to $8.66 billion, the IMF reported Nov. 4. The fall was ascribed to a decrease in oil income due to production cuts. [See above] At the end of August Venezuela’s reserves had reached a record $8.81 bil­ lion, compared with reserves of $9.17 billion for all other Latin American coun­ tries together, the IMF reported Oct. 6. The government’s budget for 1976, re­ ported Sept. 19, totaled $7.71 billion, down from $9.19 billion in 1975. The budget cuts would be borne mostly by the Venezuelan Investment Fund (FIV), created to channel oil revenues into foreign investment and to finance the imported component of the government’s am­ bitious industrial development program. Another victim of the budget cuts was the government’s program to send stu­ dents abroad for technical training, which would not be able to accept new applicants in 1976, it was reported Nov. 19. (The government’s budget deficit for January-October had been $268 million,


with income of $8.21 billion and expendi­ tures of $8.48 billion, the Central Bank reported Dec. 3.)

Iron mine workers stage strike. A fourday strike by workers at the recently na­ tionalized iron mines ended Jan. 24 after President Carlos Andres Perez threatened to close the mines and assured miners that the government would maintain the social benefits they obtained from their former U.S. employers. The strike reportedly cost the industry several million dollars in production.

Other Developments Guerrilla jailbreak. Twenty-three political prisoners, including several major left-wing guerrilla leaders, tunneled their way out of the San Carlos military jail in Caracas Jan. 18. The government refused to identify the escapees, but press reports said they in­ cluded leaders of the National Liberation Armed Forces (FALN), the Red Flag and Zero Point, the three major guerrilla bands. Among them were Carlos Betancourt and Gabriel Puerta of the Red Flag and Francisco Prada of the FALN, according to the Mexican newspaper Ex­ celsior Jan. 20. The government declared a state of emergency for all security forces, began automobile checks at state and national borders, and asked foreign governments to arrest the escapees if they turned up in nations with which Venezuela had rela­ tions. Authorities began large-scale raids and arrests, with 500 raids and 100 arrests reported by Jan. 20. Leaders of leftist parties denounced the government measures as excessive and illegal. Jose Vincente Rangel, leader of the Movement to Socialism, charged Jan. 27 the government was covering up arrests of numerous persons, including Argelia Melet de Bravo, wife of Douglas Bravo, Venezuela’s most famous guerrilla leader. (Relatives of Mrs. Bravo reported her ar­ rest Jan. 24; the government confirmed it Jan. 27.) Jesus Paz Galarraga, head of the

157 Popular Electoral Movement (MEP), alleged Feb. 5 that government authorities were harassing MEP student leaders under the pretext of hunting the escaped guerrillas. A nationwide search for Douglas Bravo was begun after he was reported back in the country and possibly linked to the jail­ break Jan.27. In a related development Feb. 5, Paul del Rio Canales (Maximo Canales), a former FALN leader, was released from the San Carlos prison after completing a three-year sentence for “using false identification papers.”

Cabinet revised. President Carlos Andres Perez announced a massive Cabinet shuffle Jan. 23 in an apparent effort to strengthen his reformist domestic and foreign policies. Ten of the 19 Cabinet posts shifted hands. In what were interpreted as the most important changes, Foreign Minister Efrain Schacht traded portfolios with Ramon Escovar Salom, secretary general of the presidency; and Interior Minister Luis Pinerua Ordaz exchanged posts with Octavio Lepage, secretary general of the ruling Democratic Action Party. Schacht, a champion of renewed rela­ tions with Cuba, had been severely criticized for failing to secure the lifting of the Organization of American States’ sanctions against Havana at the OAS meeting in Ecuador in November 1974. Escovar would continue the high price policy for Venezuela’s oil and other resources in world markets, according to government spokesmen. Pinerua Ordaz resigned to begin laying the groundwork for a presidential cam­ paign in the 1978 elections, according to most press reports. The newsletter Latin America noted Jan. 31 that his resignation might be connected with the escape from prison Jan. 18 of 23 left-wing guerrilla leaders. Among the other Cabinet changes, Jose Ignacio Casal became development minister, replacing Constantino Quero Morales, who was named head of the Venezuelan Investment Fund; Leopoldo


Sucre became communications minister, replacing Armando Sanchez, who was named justice minister; Carmelo Contreras, governor of Zulia State, be­ came agriculture minister; Antonio Parara Leon was named health minister, and Guido Grosscors, information minister. U.S. envoy stirs protests. The nomi­ nation of Harry W. Shlaudeman to be the new U.S. ambassador to Venezuela was denounced by sectors of most political parties, including the rank and file of the ruling Democratic Action Party. The nomination was announced in the U.S. Jan. 3. It had become known in Caracas in December 1974, stirring protests over Shlaudeman’s alleged links with the U.S. Central Intelligence Agency and the overthrow of Chilean President Salvador Allende. The Venezuelan gov­ ernment had said it would accept Shlaude­ man despite the protests, asserting good­ will between Washington and Caracas was more important than the reputation of an ambassador. Shlaudeman was formally


nominated Jan. 16 and confirmed March 11. Shlaudeman, currently a deputy assis­ tant secretary of state for inter-American affairs, had served in the Dominican Re­ public in 1962-63 and again in 1965, after U.S. Marines landed there, and had been deputy chief of mission in Chile in 196973, leaving shortly before Allende’s ouster and death. In June 1974 he denied before a U.S. Congressional committee that the U.S. was in any way connected with the Chilean military coup; it was subsequently revealed that the CIA had illegally in­ tervened in Chilean affairs in an effort to subvert Allende’s government. [See 1974, p. 762F1] Because of his presence in Chile before the coup, Shlaudeman was accused by Latin American leftists of being con­ nected with the CIA and the coup. In Washington, he was denounced by Rep. Michael J. Harrington (D, Mass.) as a “major participant in the systematic de­ ception of Congress regarding U.S. policy toward Chile” under Allende, it was reported Jan. 5.

Other Areas

COSTA RICA Banana tax raised. A government decree effective May 1 raised the tax on banana exports from 25c to $1 per 40pound box, the Associated Press reported April 30. The decree said 45c of each tax dollar would go to the government and the other 55c to subsidize independent banana growers. Costa Rica expressed hope that Honduras would also raise its tax in line with policies adopted by the Union of Ba­ nana Exporting Countries (UPEB), to which both nations belonged. Costa Rica was the world’s second leading banana ex­ porter, behind Ecuador, which refused to impose a tax or join UPEB. United Brands’ local subsidiary, the Costa Rican Banana Co., had filed a $3 million suit against the government early in April, charging the export levy violated a government guarantee not to tax the company until its current contract with the government expired in 1988, the Miami Herald reported April 4. United Brands had paid the tax under protest since it was imposed in 1974. Costa Rica had supplied 16% of United Brands’ ba­ nana exports in 1974.

court for the first time, for recovery of funds he allegedly obtained through fraud, the Wall Street Journal reported March 28. The suit was filed by International Con­ trols Corp. (ICC), which Vesco had con­ trolled until early in 1973, when he fled the U.S. to escape prosecution. ICC sought to collect nearly $2.2 million, plus 6% in­ terest from March 1, 1973, which a federal district judge in New York had ordered Vesco to pay in July 1974. The ICC suit did not involve the more than $224 million which Vesco was alleged to have “looted” from mutual funds managed by ICC’s Investors Overseas Servics Ltd., according to charges by the U.S. Securities and Exchange Com­ mission.

Vesco had escaped extradition to the U.S. through the protection of influential Costa Rican politicians, notably ex-President Jose Figueres. Figueres said in an interview March 9 that he and Vesco, whom he described as “persecuted by other forces in the world,” were “jointly involved in many businesses” in Costa Rica. A Columbia Broadcasting System tele­ vision news program in the U.S. Jan. 24 reported that Vesco had invested $60

Vesco sued. Fugitive U.S. financier Robert Vesco was sued in Costa Rican 159

160 million in Costa Rica, in return for which he received numerous privileges, including exemption from customs checks. The program said Vesco lived in a $500,000 residence with 37 guards, and had his own airplane landing strip. Venezuela and Mexico had pressured the government to expel Vesco because his presence in Costa Rica created a poor image of Latin America, CBS reported. Within Costa Rica, intellectuals, busi­ nessmen, and politicians of both the ruling and opposition parties had also demanded Vesco’s expulsion, asserting Vesco was causing the “moral erosion” of Costa Rican society and was interfering in local politics, the New York Times reported Feb. 16.

“In a small country, Vesco’s economic power translates into political power,” said Rodolfo Solano, a leader of the ruling National Liberation Movement. “In the future, he may . . . [help] elect deputies or even a president.” Some businessmen believed Vesco’s presence damaged Costa Rica’s reputation abroad, the Times reported. “Every time I see my foreign bankers, I have to explain what Vesco is up to,” said Arnoldo Rodríguez, a wealthy in­ dustrialist. “Eventually, he’s going to affect my company’s growth.” Costa Rican politicians also com­ plained about special privileges granted to retired U.S. citizens living in Costa Rica on fixed incomes, the Times reported Feb. 23. Among the privileges were tax breaks which some American residents abused by importing and then reselling U.S. auto­ mobiles and other normally taxed prod­ ucts. Other American residents were specu­ lating in real estate, causing land prices to rise “tenfold in five years” and even causing a decline in agricultural pro­ duction, according to Alfonso Carro Zunica, president of Congress. A newspaper campaign against foreign ownership of land had led the government to propose a law to control speculation and restrict ownership, the Times reported. The government also increased supervision of retired American residents, expelling three who were working as real

LATIN AMERICA 1975 estate agents while enjoying retirement privileges.

EL SALVADOR Troops kill students. Twelve students were reported killed July 30 when soldiers fired on demonstrators at the National University in San Salvador. The demoristrators, estimated to number 3,000, were protesting military repression of earlier protests in San Salvador and the western city of Santa Ana against holding of the finals of the “Miss Universe” contest in San Salvador July 19. The government had invested $1 million in the contest to promote El Salvador as a tourist attraction. Student sources claimed that in ad­ dition to the 12 demonstrators killed, 20 were wounded and 40 arrested. However, the government, which called the demon­ strations part of a “Communist con­ spiracy,” said one student had been killed, five wounded and 24 arrested. President Arturo Molina announced the release of 13 detainees July 31 and the other 11 Aug. 4. A group of students, workers, peasants and Roman Catholic priests occupied the metropolitan cathedral in San Salvador Aug. 1-5, demanding the release of im­ prisoned demonstrators, dismissal of Defense Minister Carlos Humberto Romero and the army leaders responsible for the July 30 killings, and payment of compensation to the families of the dead students and to relatives of peasants allegedly killed by troops in 1974 in the rural villages of La Cayetana and Las Tres Calles. The government rejected the demands. (According to a report Feb. 28, soldiers had killed more than 50 peasants in La Cayetana in November 1974 in a drive against peasants demanding a stronger government agrarian reform program. The nation’s Roman Catholic bishops had denounced the alleged massacre as “a symptom of a society in moral de­ cadence” and the opposition political parties had tried unsuccessfully to raise

OTHER AREAS the matter in Congress, where the govern­ ment party held a majority.) The student protests were part of a growing wave of unrest in El Salvador, ac­ cording to press reports. Two small urban guerrilla movements had emerged re­ cently, one of which—the People’s Revo­ lutionary Army (ERP)—had kidnapped the wealthy industrialist Francisco Sola June 30 and collected a $2 million ransom for his release July 7. Pamphlets dis­ tributed by the abductors July 8 called the ransom a “war tax for the Salvadorean revolution.” (The ERP had announced earlier that it had executed the well-known Communist writer Roque Dalton Garcia for alleged treachery to the guerrilla unit, it was reported June 6.) The second insurgent group, which called itself the Workers’ Revolutionary Organization, claimed responsibility for a bomb explosion July 19 at the Salvado­ rean Tourist Institute in San Salvador. Several explosions at the National University in San Salvador had been reported June 6. In addition to the terrorist attacks, there had been several strikes organized by the Communist-influenced labor move­ ment against inflation and harassment of union leaders, it was reported Aug. 6. Fifty-eight percent of El Salvador’s population earned the equivalent of $9.60 per month, according to the Aug. 6 report. In the countryside, dominated by huge coffee, sugar and cotton farms, 7% of the population owned 81.3% of the land. Rebel raid. Four security officers were killed and a dozen persons wounded Dec. 15 in separate attacks by leftist guerrillas on a ranch in the north and on the Na­ tional Supply Institute building in San Salvador. The guerrillas were presumed members of the People’s Revolutionary Army. The attacks coincided with the govern­ ment’s announcement that congressional and municipal elections would be held March 14, 1976. The National Opposition Union, composed of the Christian Demo­ cratic Party, the Revolutionary National Movement and the Nationalist Demo­


cratic Union, had applied for registration with the Central Elections Council Nov. 13. $30 million loan. The Inter-American Development Bank had approved a $30 million loan to help finance improvement and expansion of the water supply system in San Salvador, it was reported March 14.

U.S. grain payoff reported. Kansas Grain Co., Inc. of the U.S. paid $15,500 to two Salvadorean officials in May to ob­ tain their approval of a corn shipment to El Salvador, according to a sworn state­ ment by the grain firm’s president Joseph L. Tucker, reported Aug. 1. The money was allegedly extorted by the officials, identified in the statement as Carlos Alfredo Montalvo, assistant com­ mercial manager of El Salvador’s Supply Regulation Institute, and his aide, Filander Antonio Molina. Tucker said he made the payment as “a proper business judgment” considering his company’s “extremely precarious position, having obligated itself to purchase a large quantity of corn to satisfy its obligation to [El Salvador].” An official of El Salvador’s embassy to the U.S. said the Salvadorean attorney general had begun an investigation of the case, according to the Aug. 1 report. Sugar refinery planned. The British firm Fletcher and Stewart had been awarded a $25 million contract to supply and con­ struct a sugar processing and refining complex with a daily capacity of 320 tons of raw sugar, it was reported Aug. 8. The factory would be completed by 1977.

GUATEMALA Communists executed. An unspecified number of leaders of the Guatemalan Labor Party (PGT), the underground Communist movement, were arrested, tortured and killed by authorities in December 1974, the London newsletter Latin America reported Jan. 24.

162 The death of Huberto Alvarado, the party’s secretary general, the only victim identified by Latin America, had been reported earlier. He was reportedly seized and executed after slipping into Guate­ mala from exile in Mexico. The killing was protested Jan. 6 by the Central Commit­ tee of the Cuban Communist Party. It was the third time in less than 10 years that the government had captured and killed the PGT’s leadership, Latin America reported. Two policemen were executed by firing squad April 16 for the murder of a female student and attempted murder of her boy­ friend. They were the first persons pub­ licly executed since 1971, according to press reports. Some 20 members of a right-wing paramilitary group killed seven persons in the town of San Francisco de Coatepeque, near the Mexican border, according to La Prensa of Mexico City Jan. 12.

Opposition leader replaced. Carlos Sagastume Perez, secretary general of the Revolutionary Party (PR), resigned under fire March 5. He was replaced by Rafael Tellez, who declared March 13 that the PR would assume a center-left position in opposition to the government and would open a dialogue with the opposition Chris­ tian Democratic Party (DCG). Tellez said the PR was now “open to all revolutionary ideas.” He said the party’s secretary general would no longer be a dictator, but would “keep in close touch” with the rank and file. Guatemala’s ruling National Liberation Movement charged April 5 that leftist ex­ tremists planned to assassinate DCG Deputy Danilo Barillas and attribute the murder to the government in a maneuver to foment “unrest and chaos.” Barillas had caused a controversy by publishing a book which argued that the army should seize power and carry out structural reforms. The DCG leadership rejected Barillas’ position.

Politicians killed. Bernal Hernandez Castellon, congressional leader of the government’s National Liberation Move­


ment, was assassinated by unidentified youths in Guatemala City Dec. 12. A bodyguard and the driver of Hernandez’ car were also killed in the attack. Hernandez, a former leftist guerrilla turned antiguerrilla fighter, had headed the personal guard of Carlos Arana Osorio when Arana was president of Gua­ temala in 1970-74. No insurgent group immediately claimed responsibility for his assassination. An opposition politician, Christian Democratic leader Axel Mijangos, was kidnapped and shot to death outside the capital Dec. 26. In other terrorism, a bomb exploded Nov. 12 in the National Agrarian Trans­ formation Institute building in Gua­ temala City, causing serious property damage but no casualties. The bomb was apparently set off by the leftist Rebel Armed Forces to protest the govern­ ment’s agrarian reform policy, which, the rebels said, only benefitted the wealthy classes, according to the news agency ACAN of Panama. Britain OKs new Belize talks. The Brit­ ish government agreed to resume talks with Guatemala over the future of Belize (formerly British Honduras), the British dependency over which Guatemala had claimed sovereignty for more than 100 years, it was reported Feb. 20. The agreement followed eight months of overtures by Guatemala, which had broken off the talks in March 1972 after Great Britain rushed reinforcements to Belize in fear of a Guatemalan invasion. Guatemala recently had softened its position, saying it would respect the “traditions, administrative structures and social and political institutions” of Belize under future Guatemalan sovereignty, it was reported Feb. 28. However, Pablo Rodriguez, mayor of Belize City, said March 6 that Belize sought full inde­ pendence. Britain’s Prince Philip, on a visit to Belize March 5, reaffirmed the British government’s “continuing and un­ stinting support for the [Belizean] as­ piration of independence.” British troops increased their patrols along Belize’s border with Guatemala Feb. 23 after Prince Philip’s impending


visit was announced, according to trav­ elers quoted by the French news agency Agence France-Presse. Britain was con­ cerned over a proposed arms deal between Guatemala and the U.S. under which Guatemala would get 25 phased-out U.S. patrol boats, according to “confidential reports from London” cited by the Reporter of Belize City April 6. The internal political situation in Belize had turned further against Guatemala, the London newsletter Latin America reported Feb. 28. Premier George Price had promised complete independence “soon,” following losses by his People’s United Party (PUP) to the United Demo­ cratic Party (UDP) in general elections in October 1974 and in Belize City council elections later in 1974. UDP leaders fa­ vored continued ties with Britain, ac­ cording to Latin America.

163 that it would renew its claim to part of northern Belize if any or all of Belize were transferred to Guatemalan sovereignty. Mexican President Luis Echeverria said Nov. 15, after a three-day visit to Guate­ mala, that “Guatemala has rights [in Be­ lize], as do Belize and also Mexico.” Guatemalan President Kjell Laugerud rejected Mexican claims to Belize Nov. 18, asserting “Guatemala is the only country with juridical and historical rights” over the colony.

Banana tax raised. Congress Nov. 19 approved an increase in the export tax on bananas from 2« per crate to 35c per crate.

HAITI U.N. backs Belize independence. The United Nations General Assembly passed a resolution Dec. 8 reaffirming “the in­ alienable right of the people of Belize to self-determination and independence” and declaring that the territorial integrity of the British colony “must be preserved.” The resolution, adopted by 110-9 vote with 16 abstentions, asked Britain and Guatemala “urgently to renew their nego­ tiations to resolve as rapidly as possible their differences over the future of Belize.” Resumption of the negotiations had been announced Nov. 28 during a visit to Guatemala by Edward Rowlands, minister of state at the British foreign office, and Ivor Richard, Britain’s am­ bassador to the U.N. The two had visited Belize the day before. Guatemala had received an earlier blow Nov. 8 when Venezuela withdrew its sup­ port for Guatemalan sovereignty over Be­ lize and urged the U.N. to rule on the colony’s future. Venezuelan President Carlos Andrez Perez said that for his­ torical reasons Venezuela had always sup­ ported Guatemala’s claim to Belize and opposed colonial situations in the Western Hemisphere, but it could not overlook the fact that the customs, language and way of life of Belize were different from those of Guatemala. Mexico, meanwhile, continued to hint

Commerce minister jailed. Commerce and Industry Minister Serge Fourcand was dismissed from office and arrested March 8 for his alleged role in an illegal plan to sell Haitian postage stamps to foreign collectors for $1.5 million. Seven other persons were jailed. In a possibly related development, the Cuban press agency Prensa Latina re­ ported March 27 that, according to Haitian exile sources in New York, a power struggle was taking place in Haiti between President Jean-Claude Duvalier and Defense Minister Paul Blanchet. The president’s influential mother, Simone Duvalier, sought to replace Blanchet and several other Cabinet ministers, according to one of Prensa Latina’s sources, the leftist exile newspaper Haiti-Observateur. (Mrs. Duvalier was widely reported to be seriously ill with leukemia, Prensa Latina noted. The army, which had gained influence in recent years, would wait unitl her death to assert its power, the Haitian sources reported.) The Prensa Latina sources said cer­ tain pro-government sectors had become “disenchanted” with the Duvalier fam­ ily, noting that it had appropriated $7 million in “excess profits” collected by the


government in 1974 from Reynolds Metals of the U.S., which mined bauxite in Haiti.

Foreign investment, loans. Attracted by political stability and the abundance of cheap labor, foreign companies, govern­ ments and lending agencies were pouring money into Haiti at a rate of $100 million a year, the Wall Street Journal reported March 25. Some 150 foreign companies had es­ tablished Haitian operations in the last four years to take advantage of low labor costs, notably a minimum wage of only $1.30 a day, the Journal reported. Nevertheless, urban unemployment in Haiti remained at 60% and the annual per capita income at $70, according to the Journal. Foreign aid was contributed by the U.S., Canadian, French and West German governments and by the World Bank and the Inter-American De­ velopment Bank. Harry Shlaudeman, a U.S. State Department spokesman, said U.S. aid to Haiti had increased to $11 million in 1974 because the government there had “improved” since the inauguration of President Jean-Claude Duvalier in 1971. A World Bank spokesman said the bank was concerned only with Haiti’s promotion of “economic growth.” “The political regime is none of our business,” the spokesman said. Haiti’s political stability had con­ tributed to an increase in tourism, the Journal noted. Some of the foreign money was absorbed by Haiti’s system of institu­ tionalized graft, under which the govern­ ment annually failed to include in its bud­ gets some $10 million-$20 million of its revenues, the Journal reported. The money reportedly was deposited in the private accounts of the Duvalier family.

NICARAGUA Repression reported increasing. Military repression in Nicaragua had increased to


such an extent recently that the country was experiencing “a state of internal war,” the Honduran newspaper Tiempo reported Jan. 25. The repression resulted from a suc­ cessful operation by guerrillas of the leftist Sandinista National Liberation Front at the end of 1974, in which a group of prominent officials were kidnapped and exchanged for 14 political prisoners and a large ransom. Troops of the National Guard, Nic­ aragua’s army, occupied the National University in Managua and raided private homes in the city, Tiempo reported. Military patrols were so intense that it was impossible to travel in the capital at night, according to the newspaper. Censorship of the press and of telegraph communications also had increased, Tiempo reported. Nicaragua was under martial law declared by President Anastasio Somoza Debayle Dec. 28, 1974, after the San­ dinistas took their hostages. The siege was lifted Dec. 31, after the hostages were ransomed, but Somoza immediately reim­ posed it, claiming there was a guerrilla plan to assault the U.S. embassy. Somoza declared that the siege would be main­ tained “until we establish responsibility for this embarrassing crime.” Somoza ordered creation of a special military court Jan. 11 to handle cases of subversion. The first person called before the court was Pedro Joaquin Chamorro, publisher of the opposition newspaper La Prensa and reputed leader of the Demo­ cratic Liberation Union (UDEL), a coalition of outlawed political parties and labor federations. The government charged Jan. 17 that Chamorro had violated martial law by signing a secret document which called for the law to be lifted; Chamorro denied it. (The Cuban press agency Prensa Latina reported Jan. 5 that Chamorro and other UDEL leaders, in declarations to the Mexican newspaper Excelsior, had criticized Somoza and called for a “political opening” in Nicaragua. Chamorro also had told the New York Times, in an interview reported by Ex­ celsior Jan. 12, that the reconstruction of earthquake-ravaged Managua had been “incompetent” and designed principally to increase Somoza’s personal wealth.)

OTHER AREAS The Sandinistas, meanwhile, held a press conference Jan. 2 in a hospital in Havana, Cuba, where several guerrillas ransomed in the Managua operation were confined because their health had dete­ riorated in prison. The guerrillas said they would use their ransom money to finance subversion in Nicaragua. They accused the Somoza government of increasing repression and economic misery, and of torturing citizens with methods learned from Brazilian and U.S. police advisers. The Nicaraguan government reported several skirmishes between National Guardsmen and Sandinistas outside Managua Jan. 11. One soldier was reported killed and another wounded. Two Sandinistas were either captured or killed, according to varying reports.

PARAGUAY Widespread political arrests. Interior Minister Sabino Montanaro admitted at a press conference that “more than 1,000” political arrests had been made since the discovery in November 1974 of an alleged plot against President Alfredo Stroessner, the Paris newspaper Le Monde reported Feb. 21. The plot was attributed by police to six Paraguayan extremists allegedly trained in Argentina by the People’s Revolu­ tionary Army (ERP). However, many of those arrested subsequently were mem­ bers of Stroessner’s Colorado Party and of the opposition Radical Liberal Party (PLR), which generally gave tacit support to the president. (According to official versions of the alleged plot, cited by the newsletter Latin America Jan. 24 and Le Monde Feb. 8, highly placed officials had collaborated in the plot. The plotters allegedly had planned to kidnap three government ministers and three prominent civilians, and to kill Stroessner with a bomb.) The detainees reportedly included Bene­ dicto Flecha, Colorado boss of Luque; Edgar Insfran, a former interior minister (held for only one day); Roberto Thompson, managing editor of the news­

165 paper ABC Color; Cesar Cubilla and Oscar Rodriguez, leaders of the Indepen­ dent University Student Movement, and eleven members of the Febrerista Revolu­ tionary Party. Reports that several detainees had been tortured to death were cited by both Latin America and Le Monde. Teruco Papalardo, Stroessner’s chief of protocol, said the U.S. Central Intelligence Agency had sent an interrogation team to help ques­ tion the detainees, Latin America re­ ported. Stroessner was most concerned about dissent within the Colorados and the PLR, according to Latin America March 7. Some 500 members of the Colorado youth wing had signed a manifesto earlier urging Stroessner’s replacement after his presidential term ended in 1978. At the PLR convention Jan. 25 a group of young progressives led by Deputy Domingo Laino won the party leadership and voted in a new program calling for formation of a National Liberation and Development Front; lifting of the state of siege; freedom for political prisoners; support for workers and students and foreign nations fighting “imperialism”; solidarity with the governments of Peru, Panama and Vene­ zuela; and condemnation of the Chilean militaryjunta.

Latin America and Le Monde reported that the army had carried out a raid Feb. 8 on a peasant community and co­ operative in San Isidro de Jejui. The Na­ tional Council of Bishops, which spon­ sored the community, charged Feb. 23 that the troops had killed eight peasants, burned down peasants’ shacks and stolen money from the community’s treasury. (The raid was led by Col. Joaquin Grau, trained by U.S. Army Green Berets in Panama, whose earlier anti-insurgency raids had been noted for their cruelty, ac­ cording to Le Monde March 6. In 1961, Grau reportedly had personally hatcheted to death five guerrillas who had sur­ rendered to his troops.) The widespread political arrests followed growing opposition to the government’s alliance with Brazil, with which Paraguay planned to build the huge Itaipu hydroelectric complex on the Pa­ rana River, Latin America noted Jan. 24.


ABC Color had been particularly critical of the Itaipu project pact and of Brazilian incursions into Paraguayan territory. Radical Liberal leader penalized. Radi­ cal Liberal Party President Domingo Laino was reported May 30 dismissed from his teaching job at the Catholic University for allegedly “insulting the fatherland” and being a Marxist. Laino had ordered Radical Liberal congressmen not to attend the inaugural of the new Congressional session in April, at which President Stroessner spoke, to protest government violations of human rights, repression against peasants, and arrests of Radical Liberal supporters. Editor seized. Miguel Angel Martinez, editor of the Asuncion newsmagazine El Radical, was arrested July 9 in connection with a slander suit filed against him by Gen. Otelo Carpinelli, commander of the military region based in Guaira Depart­ ment. A recent article in El Radical had ac­ cused Carpinelli of committing crimes in the town of Yhu, according to the Asun­ cion newspaper ABC Color. ABC did not specify the crimes. Roberto Thompson, managing editor of ABC Color, had been released from prison March 22. He had been jailed in December 1974 during a wave of political arrests. South African loans. The South African government had granted Paraguay loans worth $31.9 million to help finance Paraguayan development projects and in­ crease trade between the two countries, according to the Andean Times’ Latin America Economic Report March 7. A $10 million loan for construction of public buildings had been arranged by a South African trade mission during a visit to Paraguay in January. The remaining loans, for agricultural development projects, imports of agricultural equip­ ment and fertilizer, construction of roads and low-cost housing, and improvement of trade, were negotiated later. South African Prime Minister John


Vorster met with President Stroessner in Asuncion Aug. 13-16 and agreed Aug. 14 to lend Paraguay $9 million for housing and agricultural projects. Other economic . development. Vene­ zuela planned to finance the building of cellulose and petrochemicals plants in Paraguay, it was announced March 6. U.S. oil companies had begun exploring for oil in the Chaco region under 40-year contracts which had been denounced by opposition leaders as overly generous to the oil firms, the New York Times reported Jan. 20. If oil were discovered in commercial quantities, the government would receive 14% in royalties. (Most other new Latin oil contracts gave the government at least 50% in royalties.) Sen. Carlos Levi Rufinelli, a leader of the Radical Liberal Party, called the contracts “scandalous” and the govern­ ment “incompetent and stupid” for signing them. The Central Bank announced that Paraguay’s gross national product had grown by 8% in 1974, against a 5.5% average increase for the previous five years, it was reported July 4. The total value of the GNP was $674 million. Agri­ cultural production rose by 11.5% in 1974, despite ' a poor performance by the livestock sector. Wheat, tung nuts, soya, tobacco and rice registered the largest production increases. The entire coffee crop in Amambay De­ partment in northeastern Paraguay had been destroyed by frost, it was reported July 27.

Brazilian border population grows. The Brazilian population in four of Paraguay’s border departments—Alto Parana, Caaguazu, Amambay and Kanendiyu—was believed to have doubled to 60,000 in 1971-75, to the distress of Paraguayan nationalists, the London newsletter Latin America reported Aug. 1. The increase in Brazilian settlers was attributed to the Itaipu hydroelectric project, a giant complex being built by Brazil and Paraguay on the Parana River, and to the poverty of Paraguayan farm­

OTHER AREAS ers, who sold their land to Brazilians who had enough capital and technical knowl­ edge to exploit it. In some Para­ guayan border areas the Brazilian cru­ zeiro had become the local unit of cur­ rency, Latin America reported. In a related development reported July 18, Paraguay and Brazil signed an agreement to build a $46 million steel rolling mill outside Asuncion. Sidepar, a Paraguayan mixed venture with public and private participation, would hold 60% of the equity, and two Brazilian firms, Tenenge and Coferraz, would hold the other 40%.

PUERTO RICO Output falls, unemployment rises. Due partly to the economic recession on the U.S. mainland, Puerto Rico’s gross prod­ uct (total output of goods and services) declined 3.5% in fiscal year 1975 while its unemployment rate rose in August to an official level of 19.9%, it was reported Oct. 15. “There has never been anything like this before, never,” said Labor Secretary Luis Silva Recio in announcing the official jobless rate. Unofficial estimates put the rate as high as 40%, compared with the 12.9% rate recorded in 1950, the year Operation Bootstrap was launched to shift Puerto Rico’s economic base from agriculture to industry. The fall in the gross product followed annual rises averaging 10% since 1950. Tourism, manufacturing and construction were among the industries in deepest financial trouble. Five luxury hotels were reported on the verge of closing, following a fall in the room occupancy rate in June to less than 45% despite the previous closing of 600 rooms. More than 23,000 jobs had been eliminated in the manufacturing industry, while construction permits for new proj­ ects had declined almost 29% from 1974 and employment in the construction in­ dustry had fallen by almost 23%. Puerto Rico was particularly hard hit by the increase in world oil prices, which


had cost it hundreds of millions of dollars and forced the indefinite postponement of plans to use a new petrochemicals plant and to develop the first U.S. superport oil rig. The island imported most of its oil from Venezuela. Puerto Rico also imported all of its rice, most of its meat and much of its clothing, aggravating the effects of the higher oil prices and the recession and inflation on the mainland. The island was the largest per capita purchaser of main­ land U.S. goods in the world, and in terms of volume of purchases, it was sixth in the world after Canada, Great Britain, West Germany, France and Japan. About 71% of the 3.3 million U.S. citizens in Puerto Rico depended on the Federal Food Stamp Program for survival. Among other economic developments: The Puerto Rican government had ne­ gotiated a $612 million, four-year note purchase agreement in September with 12 U.S. and Puerto Rican banks, it was reported Oct. 20. The island’s debt now totaled about $65.6 billion. Employes belonging to the Newspaper Guild struck the San Juan Star Oct. 18 for the third time in 1975, after their representatives were unable to negotiate wage increases and job security provisions with the paper’s management. The work­ ers had struck May 1-23, ending that stoppage because of a court restraining order. Their last work contract had expired in November 1974. Some 2,800 employes of the Puerto Rico Telephone Co. had begun an indefinite strike April 22 because the com­ pany refused to bargain with their rep­ resentative, the Telephone Workers Inde­ pendent Union, for a new contract to re­ place the one which expired in January. Bomb explosions damaged four company trucks in San Juan June 16 in what police believed was sabotage by strikers. (Bombs were also exploded in May and June at offices of airlines, banks, news­ papers, government agencies and private companies, it was reported July 7.) A labor dispute between the National Maritime Union (NMU) and the Sea­ farers International Union (SIU) was temporarily resolved Oct. 27 when a judge of the 1st U.S. Circuit Court of Appeals


in Boston overruled an earlier action by the U.S. District Court in San Juan which called for the restoration of NMU crews on board four roll-on container ships owned by the Puerto Rican Maritime Shipping Authority. NMU pickets had prevented the unloading of a number of Puerto Rican ships Oct. 1-13, after the authority transferred the ships to a management company which laid off the NMU employes because it had a labor contract with the SIU. A final ruling on the case was expected to be made by the National Labor Relations Board. Cuba hosts pro-independence parley. Representatives of 79 countries and 18 international organizations attended a conference in Havana, Cuba Sept. 6-8 to support the small Puerto Rican inde­ pendence movement. The delegates issued a declaration con­ demning Puerto Rico’s commonwealth status with the U.S. as “the most flagrant act of colonialism” in Latin America. Cuban President Osvaldo Dorticos as­ serted at the end of the meeting that Puerto Rican independence was “not ne­ gotiable with the U.S.” Secretary of State Henry Kissinger charged Sept. 9 that Cuba was interfering in internal U.S. affairs and damaging its chances for normalizing relations with Washington. In a reply Sept. 29, Cuban Premier Fidel Castro said there would “never” be a normalization of relations if it meant Cuba must abandon support for an independent Puerto Rico. Cuban representative Ricardo Alarcon Quesada reaffirmed this position before the United Nations General Assembly Oct. 8, calling the independence movement an “ad­ mirable example of national resistance.” The U.N.’s Decolonization Committee had held hearings on Puerto Rico Aug. 14-15 but had postponed until 1976 consideration of a resolution that would give the independence movement per­ manent observer status in the U.N. The committee heard Aug. 14 from three leaders of the splintered movement—Juan Mari Bras, secretary general of the Puerto Rican Socialist Party; Sen. Ruben Berrios of the Puerto Rican Peace


Council, and Noel Colon Martinez of the Independence Party. Mari Bras alleged that repression against advocates of inde­ pendence had been increased recently by the Puerto Rican police in close associa­ tion with the U.S. Central Intelligence Agency, Federal Bureau of Investigation and Secret Service. Officials in Washington did not attach great importance to the independence movement, noting that it had not won more than 5% of the vote in any Puerto Rican election. The White House was con­ sidering at the time a report by a commit­ tee of prominent Puerto Ricans and some U.S. Congressmen proposing greater au­ tonomy for the island within its current commonwealth status, it was reported Oct. 2.

FALN bombing in New York. A bomb explosion at Fraunces Tavern, a Revolu­ tionary War landmark in the Wall Street area of New York, Jan. 24 killed four people and injured 53 others. An hour after, callers to the United Press Interna­ tional and the Associated Press identi­ fying themselves as members of the Armed Forces of the Puerto Rican Na­ tional Liberation (FALN) claimed re­ sponsibility for the attack. A typed message, left by the FALN in a telephone booth near the tavern, said the blast was in retaliation for the “CIA ordered bombing” in which two were killed and 11 injured at a rally Jan. 11 in Mayagüez, Puerto Rico.

TRINIDAD & TOBAGO Oil, sugar strikes cause crisis. Striking workers paralyzed the oil and sugar indus­ tries in March and April, causing the worst crisis for the government since the Black Power army unrest in 1970. The stoppages, initially reported by the Miami Herald March 12, were the first co-ordinated strikes by workers in the two major sectors of the economy. They cost the country an estimated $150 million-

OTHER AREAS $200 million, creating a “serious balance of payments position,” according to Prime Minister Eric Williams April 11. The sugar strike was resolved April 19, but the oil stoppage continued despite government intervention to guarantee dis­ tribution of oil and petroleum products. The oil and sugar labor unions, joined in the United Labor Front (ULF), de­ manded wage increases and other ben­ efits, expulsion of multinational corpora­ tions from the country, nationalization of the oil industry, and government recognition of a breakaway cane farmers’ union. They were supported by solidarity strikes of varying duration by electricity and transport workers. The 12,000 striking sugar workers de­ cided to return to work April 19 after Caroni Ltd., the government-controlled sugar firm, approved referral to an in­ dustrial court of a number of union de­ mands including profit-sharing and improved working conditions. The com­ pany earlier had agreed to a 100% wage increase demanded by the workers. A Caroni spokesman said that with good weather and smooth operations the company could produce 10,000-12,000 tons of sugar per week, but it could not reach the total of 210,000 tons projected when the harvest began Jan. 2. Caroni produced nearly all of the Trinidad’s sugar. The oil strikers, led by the Oilfield Workers’ Trade Union (OWTU), first de­ manded a 147% wage increase, lowering it later to 107% on condition that their major employer, Texaco Inc. of the U.S., agree to establish a special fund to aid unemployed laborers and sugar cane farmers. Texaco offered a 40% wage in­ crease on a three-year contract retro­ active to January, plus a 6% productivity bonus on 1974 basic wages and a cost of living allowance. OWTU leader George Weekes had called Feb. 18 for nationalization of Texaco and solidarity with the planned na­ tionalization of foreign petroleum com­ panies in neighboring Venezuela. The OWTU charged March 14, without substantiation, that the U.S. planned to use Trinidad & Tobago as a base for a


military invasion of Venezuela to prevent the nationalizations. Some 8,000-10,000 sugar and oil strikers massed in San Fernando March 18 for a march on Port-of-Spain to dra­ matize their demands, but the government declared the march illegal and police dis­ persed the demonstrators with clubs and tear gas. Several labor leaders were beaten and arrested, including Weekes, sugar workers leader Basdeo Panday, and Democratic Labor Party leader Vernon Jamadar, who were indicted on minor public order offenses and freed on bail. The government later put out an arrest warrant for Raffique Shah, a leader of the 1970 unrest and current head of a cane farmers’ union. Officials said March 21 that Shah had surrendered and that he and Joe Young, a transport labor leader, had been indicted and freed on bail. Transport workers joined the sugar and oil strikes, forcing the government to call out the army April 10 to assure dis­ tribution of oil, petroleum products and sugar. The government took over all Texaco gasoline stations April 14, be­ coming the sole gas retailer in the country. The strikes threatened the government because they brought together the na­ tion’s normally separate racial group­ ings—the blacks, mostly in the oil in­ dustry, and East Indians, mostly in the sugar industry, the London newsletter Latin America reported March 28. The ULF combined Weekes’ OWTU, Young’s transport workers, and the sugar unions of Panday and Shah. Adding to the government’s troubles were protests from business leaders, who charged the country was “steadily and persistently deteriorating” because Williams was “insensitive” to its prob­ lems and he failed to provide “necessary leadership,” Latin America reported. Another traditional supporter of Williams, the mass circulation weekly newspaper The Bomb, had recently ac­ cused him of “presiding over the liqui­ dation of the richest country in the Carib­ bean,” according to Latin America. Williams, in his 18th year in power, generally kept silent during the crisis, ap­ parently hoping it would pass with the help of increased oil revenues obtained be­

170 fore the strikes began, Latin America noted. Higher world oil prices and new discoveries off Trinidad’s shores (which helped make the Trinidad the third leading oil exporter in the Western Hemisphere) had given the government funds to reach a favorable balance of payments, to invest in light-manufacturing enterprises at home and on neighboring islands, and to submit a 1975 budget which lowered taxes, raised old-age pensions and welfare payments, and subsidized food and

LATIN AMERICA 1975 gasoline prices, it was reported Feb. 2. Nevertheless, the nation faced a 23% inflation rate and 17% unemployment, Latin America noted March 28. Among other economic developments: Japan agreed March 7 to give Trinidad & Tobago technical assistance in manage­ ment and technology in a number of areas including petroleum and technical edu­ cation. The agreement followed talks in Japan between Prime Minister Williams and Japanese Premier Takeo Miki.



ALMIRON, Luis—23 ALTOS Hornos de Mexico (steel firm) — 119 ALUMINUM 156 ALVARADO, Huberto—162 ALVAREZ, Col. Domingo—107 AMERICAN Smelting & Refining Co.—145 ANACONDA Co.—68 ANAYA, Gen.Leandro—21,35 ANDEAN Development Corp.—48, 139 ANGOLA—89-90 ANTI-Defamation League (of B’nai B’rith)—120 ANTIGUA—9 ANZORREGUY, Hugo Alfredo—33-4 APRA Party (Peru)—136, 138, 141 AQUI Esta (Uruguayan newspaper)—147 ARANA Osorio, Carlos—162 ARAUZCastex, Manuel—27 ARBENZ, Jacobo—8 ARBOLEDA, Pedro Leon—76 ARDITO Barletta, Nicolas—10-1, 133 ARELLANO, Lt. Col. Francisco—115 ARGENTINA: Agriculture—25, 42. Argentine Anticommunist Alliance (AAA)—22-3, 31-2,34-7, 39-40 Cuba—5-6 Economy—23-5, 28-9; monetary developments—23, 25 Government & politics—19-23, 25-7, 29-42; repression & torture charges—39-40 Labor—21-5, 27-9, 34, 36

AAA—See ARGENTINE Anticom­ munist Alliance ABRAMO, Claudio—52 ABU, Omar—4 ACUNA, Hipólito—32 AEROLINEAS Argentinas—29 AEROPERU—140 AFRICA—56 AGEE, Philip—4, 8 9 AGOSTI, Gen. Orlando—29 AGRICULTURE—57, 66, 76-7,92, 100, 102-3,132-3, 149-50, 161 ‘Banana war’—105-10; banana cartel—159 Coffee—14, 56 Disasters—97, 107-8, 166 Grain—42, 67 Land reform—110- 1, 1 14 5, 155 Production—25, 29,67, 135, 166, 168 9 Strikes—24, 28. Sugar—168 9 AIRLINES—29,66, 140 ALARCON Quesada, Ricardo—5, 168 ALCAN Aluminium, Ltd. (Canada)—56 ALCASA (Venezuelan aluminum firm) ALCOREZA, Gen. Carlos—46 ALFONSIN, Raul—37 ALGERIA—121 ALLENDE, Jose Antonio—21 ALLENDE, Mrs. Hortensia Bussi de—123 ALLENDE Gossens, Salvador—8, 69 71 ALMEYDA, Clodomiro—61 171



Oil-23, 29 Press & censorship -9, 36, 43 Terrorism & counterterror­ ism—22-3, 31-42 U.S.—3, 11-3,24, 29,42 ASSASSINATIONS—See under POLITICAL Violence, Terrorism & Guerrilla Activity ARGENTINE Anticommunist Alliance (AAA)—22-3, 31-2, 34-7, 39-40 ARISMENDI, Rodney—147 ARMED Forces of the Puerto Rican Na­ tional Liberation (FALN)—168 ARMS Sales—121 ARNS, Paulo Evaristo Cardinal—52-4 ARRIGHI, Pedro—25 ATLANTIC Richfield Co. (U.S.)—119, 144 ATOMIC Energy—10, 57-8 AUTHENTIC Peronist Party—19-20, 25 AUTOMOBILE Industry—23-4, 28, 67, 104, 119 AYALA, Segundo—76 AYOROA Montano, Miguel—45 AZEREDO da Silveira, Antonio— 11 B

BAEZA, Gen. Ernesto—59 BAHAMAS—9 BALAGUER, Joaquin—15, 96-7 BALBIN, Ricardo—28, 33, 42 BALEEIRO, Justice Aliomar—51 BANANAS—105-10, 159, 163 BANK of America (U.S.)—49 BANZER Suarez, Hugo—45-6, 48-9 BARBADOS—11-3,90 BARILLAS, Danilo—162 BARRA Garcia, Felix—115 BARRIENTOS Ortuno, Gen. Rene—49-50 BARUA Castaneda, Luis—142 BASSO, Elio—4 BASUALDO, Ana—40 BATRES, Cesar—106 BAUXITE—56 BAYARSKY, Alberto—32 BELIZE (formerly British Hon­ duras)—6-8,162-3 BENEDETTI, Mario—35 BENITEZ, Antonio—30 BENNATON, Abraham—106, 109 BERBERENA, Miguel Angel—117 BERCOVICH Rodriguez, Raul—27 BERNAL, Rene—50 BERRIOS, Sen. Ruben—168

BETANCOURT, Carlos Galvez—117, 157 BETETA, Mario Ramon—117 BETHLEHEM Steel Corp.—155 BIDEGAIN, Oscar—20 BIEBRICH, Carlos—115 BILLITON N.V. (Dutch mining firm) — 145 BINGHAM, Rep. Jonathan (D, N.Y.)—86,88 BIRTH Control—122 BLACK, Eli M.—108-9 BLANCHET, Paul—163 BLANCO, Hugh—143 BLODET, Andre—136 B’NAI B’rith: Anti-Defamation League—120 BOLIVIA; Economy—46-8. Foreign rela­ tions & trade—48-9, 145. Government & politics—9-10, 45-7. Oil—46-9. U.S.—3-4, 11-3, 46-50; CIA—50 BOLIVIAN Mineworkers Federation (FSTMB)—46 BONILLA, Gen. Oscar—62-3 BONNET, Nicole—136 BORCHE, Carlos—148 BORDABERRY, Juan Maria—147-9 BORN, Jorge—36-8 BORN, Juan—36 BOSCH, Juan—4 BOTE RO, Rodrigo—77-9 BRANIFF International Airways (U.S.)—140 BRAVO, Douglas—157 BRAZIL—89, 166-7. Communists—60. Economy—10, 56-8. Energy develop­ ments—48, 57-8. Foreign relations & trade—5, 57-8, 150; U.S.—4, 11-3, 56. Government & politics—9 10, 51-5. Press & censorship—9, 57 BRAZILIAN Communist Party (PCB)—52 BRAZILIAN Democratic Movement (MDB)— 52-4 BRITISH Honduras—See BELIZE BRITISH Petroleum Co., Ltd.—144, 154 BRUFAU, Most Rev. Jaime— 111 BRUNA Fernandes, Graciano—51 BUCARAM, Asaad—100 BUCKLEY, Patrick—136 BUNGE & Born—32, 34, 37-8 BUNKER, Ellsworth—125, 127-32 c

CAAMANO, Claudio—95 CABANAS, Lucio—114

INDEX CABO, Dardo—36 CACERES, Gen. Alberto—26 CAFES Suaves Centrales (coffee cartel)—14 CAFIERO, Antonio—26, 29 CALABRO, Victorio—27, 42 CALDERA, Rafael—151 CAMPILLO Sainz, Jose—14 CAMPORA, Hector—20, 27 CAMPOS, Gen. Cesar—142 CAMPOS, Wilson—53-4, 58 CANADA—17, 144 CANADIAN Javelin, Ltd.—132 CANALES, Paul del Rio (Maximo Canales)—157 CANZIANI, Fortunato—32 CAPELLINI, Brig. Gen. Jesus Orlando—29 CARCAMO Chinchilla, Col. Mario—106-7 CARETAS (Peruvian news magazine)—138-9, 143 CARIBBEAN—5, 11-5, 17,90 CARMONA, Ernesto—35-6 CARONI, Ltd. (Trinidad-Tobago sugar firm)—169 CARPINELLI, Gen. Otelo—166 CARRASCO, Jose Herman—59, 61 CASTELLANOS, Serapio Hernandez—110 CASTELLO Branco, Carlos—51 CASTLE & Cooke, Inc. (U.S.)—110 CASTRO, Fidel—5, 11,81-91, 168 CASTRO, Raul—92 CATHOLICS, Roman—23, 47, 51-2, 54, 62, 111, 122 CAUAS, Jorge—64-5, 68 CAVALLI, Adolfo—33 CAZANZA, Luis—32 CENTRAL America—3-4, 8, 14. See also specific country CENTRAL Intelligence Agency (CIA) (U.S.)—4, 8-9, 50, 81-6, 92, 145, 158, 165,168 CENTROMIN (Peruvian state mining complex)—140, 143 CEPE (Ecuador state oil firm)—103 CERVANTES del Rio, Hugo—117 CHAMORRO, Pedro Joaquin—164 CHASE Manhattan Bank (U.S.)—118 CHAVEZ, Rodolfo—32 CHEMICAL Bank of New York—29 CHEVRON Oil Co. (U.S.)—78, 150 CHILE: Agriculture—67 Communists—9-10. Copper—13-4

173 Economy—10-4, 65-8. Energy developments—48, 67 Foreign relations & trade—11-3, 66-8, 145; U.S.—4, 8, 11-3, 67-72; CIA—8,68-72 Government & politics—9 10, 59-64 Press & censorship—9 CHILEAN National Committee to Aid Refugees—61 CHIRINO, Jose—35 CHIRIQUI Land Co. (Panama)—133 CHRISTIAN Democratic Party (DCG)—161-2 CHURCH, Sen. Frank (D, Ida.)—69, 82 COAL—77-8 COBRE Panama S.A.—132 COELHO, Marco Antonio—51, 53-4 COFFEE—14, 56, 161 COLADOS, Claudio—60 COLOMBIA—73-9, 101-2. Agricul­ ture—14, 76 7. Communists—73-4. Economy—14, 56, 77-9. Energy developments—48, 77-8. Foreign rela­ tions & trade—11-3, 78-9,90-1,127-8. Government & politics—1,9-10. Press & censorship—76-7. Terrorism & civil unrest—73-7 COLOMBIAN Revolutionary Armed Forces (FARC) (guerrilla group)—75-6 COMECON (Communist economic alliance)—119 COMIBOL (Bolivian state mining firm) —47-8 COMMUNISTS—See country involved CONCENTRATION of the Popular Forces (CFP)—100 CONDITTI, Cecilio—21 CONSULTATIVE Group for Colombia—78 CONTINENTAL Oil Co. (U.S.)-78 COOPER, Donald—76 COPEI (Social Christian Party) (Vene­ zuela)—151 COPELAND, Miles—9 COPPER—13-4, 65,68, 120, 122-3, 140, 145 CORFO (Chilean development agency)—68 CORN—161 CORSO, Eduardo—149 CORTAZAR, Julio—4 CORVALAN, Ernesto—25 COSTA, Elson—51 COSTA, Emiliano—36 COSTA Rica—5,8, 11-4, 128, 159-60


174 COTTON—161 COVARRUBIAS, Archbishop Emilio Tagle—62 CREOLE Petroleum Corp (U.S.)—4, 153-4 CUBA: Economy—10-1, 15,92. Foreign relations & trade—14, 86-7, 90-1, 121-2; Angola—89-90. UN develop­ ments—4-5. USSR—14. U.S.—86-9; CIA role—81-6, 92; Puerto Rican inde­ pendence—168. Government & politics—5, 9-11,81-92, 168. Press & censorship—9 CUBILLA, Cesar—165 CUNHA, Marcos—52 CUNHAL, Alvaro—92 CYPRUS Mines Corp. (U.S.)—144-5


DALBOSCO, Reinaldo—41 DALTON Garcia, Roque—161 DAMASCO, Vicente—25-7 DANTE Gullo, Juan Carlos—36 D’ANTONIO, Most Rev. Nicholas—111 Da SILVEIRA, Antonio Azeredo—57-8 D’AVILA, Gen. Ednardo—55 De ALMEIDA, Lt. Jose Ferreira—53 De ALMEIDA Magalhaes, Luiz Claudio—57 DEAN, Robert—136 De ANDRADE, Col. Jose—53 ‘DEATH Squads’—55. Argentine Anti­ communist Alliance (AAA)—22-3, 31-2, 34-7,39-40 De CARVALHO, Antonio Carlos—52 De CASTRO, Sergio—64 DeCROVO, Maria Elena—73 De la RUA, Fernando—28 DELIA Larroca, Gen. Carlos—26 De LORIA, Juan Carlos—50 DELOUBIEUX, Jean—40 Del VILLAR, Samuel—120 DEMOCRATIC Action Party (AD)—151 DEMOCRATIC Liberation Union (U DEL)—164 DEMONSTRATIONS & Riots—See ‘Strikes & civil unrest’ under LABOR Developments De SOUZA, Alves, Raimundo—51 DIAZ Ordaz, Gustavo—8 DIX, Raymond—9, 55 DOLPH, Robert—153-4

DOMINICAN Republic: Economy —96-7. Government & politics—5, 9-10. Terrorism & civil unrest—93-5. U.S.—3-4, 11-3 DONGO, Carlos—143 DONOVAN, James—82 DORADO Chopitea, Carlos—49 50 DORSEY, Bob R — 49-50 DORTICOS, Osvaldo—168 Dos SANTOS, Manoel Conceicao—55 DRUGS & Narcotics—79, 121 DURAN, Gen. Guillermo Marco—101 DUVALIER, Jean-Claude—163 DUVALIER, Simone—163 E

EAST Germany (German Democratic Republic)—139 ECHEVERRIA Alvarez, Luis—8-11, 115-6,120-3,163 ECONOMIC Commission for Latin America (ECLA)— 15-6 ECONOMY—5-6, 10-7, 21-4, 28, 56-7, 65-6,68, 75, 77-9, 92, 96-7, 99-100, 102-11, 125, 132-3, 139-40, 144-5, 149-50, 155-7, 161, 164, 166-70 Aid (economic)—16-7, 118 Foreign trade—See under ‘F’ Industrial production & growth— 24, 28, 47,68,77-8,97, 117-20, 166-7 Monetary developments—23, 25, 28,66-8,78,100,118, 132-3, 139-40, 142, 149-50, 156-7; Special Drawing Rights (SDRs)—150, 156 Nationalizations & expropria­ tions—See under ‘N’ See also LATIN American Eco­ nomic System (SELA) ECOPETROL (Colombian state oil firm)—78 ECUADOR—5,89. Economy—99-100, 102-4. Energy developments—48, 100, 103. Government & politics—9-10, 99-102. U.S. relations & trade—11-3, 104 EDWARDS, Col. Sheffield—81 EGAN, John Patrick—33 El DIA (Uruguayan newspaper)—148 ELECTRICITY—23, 57-8 El PASO Venezuelan Oil Co. (U.S.)—153 El SALVADOR—5. Agriculture—56, 161. Economy—161.Terrorism & civil unrest—160-1. U.S. aid—3-4



ELVIR Sierra, Col. Cesar—107 EMERY, Carlos—25 ENERGY Resources Develop­ ment—9-10, 23, 48, 56-8,77-8, 149. See also ATOMIC Energy; COAL; ELECTRICITY; PETROLEUM Developments; see also specific country ENRIQUEZ, Miguel—60 ERP—See PEOPLE’S Revolutionary Army ERRO, Enrique—148 ESTRELLA Sadhala, Cesar—97 EUROPE—14-5, 139. See also specific country EUROPEAN Economic Com­ munity— 119, 144 EXPRESO (Peruvian newspaper)—141 EXXON Corp. (U.S.)—4, 119, 150-4 F

FACIO, Gonzalo—5, 8, 89 FAL—See LIBERATION Armed Forces—34 FALCAO, Armando—51-2 FAR—See REVOLUTIONARY Armed Fo rces FARNSWORTH, Elizabeth—71-2 FASCELL, Rep. Dante (D, Fla.)—121 FAURA, Guillermo—135, 140 FAUTARIO, Gen. Hector—29 FEDERAL Bureau of Investigation (FBI) (U.S.)—81-2 FEDERATION of Communist Youths (Argentine terrorist group)—36 FEDERATION of Peruvian Mine & Metal Workers (FTMMP)—141 FERNANDEZ Maldonado, Gen. Jorge—9, 137, 144 FERREYROS, Carlos Enrique—141 FEY, Msgr. Bernardo—47 FIAT-Concord (Argentina)—67 FIGUERES, Jose—8 FIRMEN1CH, Mario—37 FIRST National City Bank (Citibank) (N.Y.)—24 FIRST National City Corp. (U.S.)—118 FISHING Industry—123, 133, 139 FITZGERALD, Desmond—82 FLECHA, Benedicto—165 FLETCHER & Steward Co.—161 FLOOD, Rep. Daniel J. (D, Pa.)—126 FLORES de la Pena, Horacio—116 FLORES Guerra, Col. Alfonso—106 FORD, Gerald R.—79 FORD Motor Co.—21 -2, 24

FOREIGN Trade—11-5, 17, 48-9, 56-8, 67,78,96-7,100,104-10, 118-9, 139, 149-50,155,161,163, 170 FOURCAND, Serge—163 FPN—See NATIONALIST Popular Front FRAMINI, Andres—27 FRANCE—17,58,67, 145 FRASER, Rep. Donald (D, Minn.)—63 FREJULI (Justicialista Liberation Front)—20, 22, 25 FRIEDAN, Betty—123 FRONDIZI, Arturo—20 FUNDIDORA Monterrey S.A.— 119 FUNSETH, Robert—85 FURTADO, Alencar—56-7 G

GALEANO, Alberto—91 GALVAIN, Rafael—113 GALVEZ, Virgilio—106 GARCIA Marquez, Gabriel—4 GARCIA Rey, Hector Luis—31 GARRIDO, Jorge—21,25 7 GEISEL, Ernesto—11, 51-4, 58 GENERAL Confederation of Peruvian Workers—140 GENERAL Economic Confederation (CGE)—25, 28 GENERAL Foods Corp. (U.S.)—56 GENERAL Labor Confederation (CGT)— 21-2, 25, 148 GENERAL Motors Corp. (U.S.)—23, 67 GENSCHER, Hans-Dietrich—57 GERMANY, West (Federal German Re­ public)—57-8, 66-7,90-1 GIANCANA, Sam—82 GIRON, Arturo 76 GIROUD, Françoise—123 GLITMAN, Maynard W.—13 GOES, Walter—20 GOGUEI, Carlos—32 GOLD—97, 117 GOMES, Severo—12, 58 GOMEZ Morales, Alfredo—21,24-5 GOM EZ Villanueva, Augusto— 117 GONZALEZ, Julio Cesar—27 GONZALEZ Alvear, Gen. Raul—99 GONZALEZ Casales, Ramiro— 114 GRAHAM Hurtado, Gen. Jose—139 GRAHAM-Yooll, Andrew—40 GRAIN—29, 42, 150, 161. See also spe­ cific types GRAU, Col. Joaquin—165 GRAUBARD, Seymour—120



GREAT Britain—6-8, 17,67-8, 152, 154, 161-3 GRENADA—9 GUATEMALA—5, 161-3. Belize terri­ torial dispute—6-8, 162-3. Government & political unrest—161-2. U.S. rela­ tions & trade—3-4, 11-3; CIA role—8 GUATEMALAN Labor Party (PGT)—161-2 GUESE, Guillermo—106 GUIMARAES, Jurandi—51 GULF Oil Corp. (U.S.)—49-50, 78, 144, 150,152-3 GULF & Western Industries, Inc. (U.S.)—97 GUTIERREZ, Msgr. Armando—47 GUYANA—9 GUZMAN Acosta, Gen. Rafel—93-4


HAITI—5, 163-4. Economy—164. Press & censorship—9 HARRINGTON, Rep. Michael (D, Mass.)—70, 158 HARVEY, William—82 H A Y-Bunau-Varilla Treaty of 1903-128-9 HEINZ Co., H. J.—144 HELMS, Richard—69-70, 82 HERNANDEZ, Valentin—153-4 HERNANDEZ Castellon, Bernal—162 HERNANDEZ Fernandez, Antonio—114 HERRERA, Claudio—60 HERRERA, Tomas—133-4 HERZOG, Rabbi Arthur—120 HERZOG, Vladimir—55 HIJACKINGS—See under POLITICAL Violence, Terrorism & Guerrilla Activity HONDURAN General Labor Federation (C GT)—110-1 HONDURAN National Peasants Association (ANACH)—110 HONDURAS—5, 105-11. Agricul­ ture—110-1. Banana bribe scandal—105-10. Government & civil unrest—105 7, 110 2. U.S. relations & aid—3-4, 11-3 HOYOS Arango, Manuel—76, 79 HOYOS Rubio, Gen. Rafael—135 HUEPE, Claudio—61 HURTADO, Hector—15, 156 HURTADO, Gen. Jose Graham—137

IBANEZ, Gen. Enrique—135-6 IBANEZ, Gen. Gaston—142 IGNACIO Paez, Jose—76 IKA-Renault (Argentina)—24 INDEPENDENT University Student Movement—165 INDIA—121 INDUSTRIA de Material Belico do Brasil (IMBEL)— 57 INDUSTRIAL Development Society (Sofofa)—67 INFORMACIONES (Uruguayan magazine)—147 INGERSOLL, Robert—63 INGREY, Frank—39 INS FRAN, Edgar—165 INSIDE The Company: CIA Diary (book)—8 INTEGRATION & Development Move­ ment (MID)—20 INTER-American Development Bank (IDB)—14-5,29,48,67, 111, 118, 144, 150,155-6, 161, 164 INTER-American Treaty of Reciprocal Assistance (Rio Treaty)—5, 89 INTER-American Press Association (IAPA)—9, 57 INTER-Governmental Council of Copper Exporting Countries (CIPEC)—13—4 INTERNATIONAL Bank for Re­ construction (World Bank)—48, 56, 78, 118, 144, 164 INTERNATIONAL Commission of Ju­ rists (ICJ)—63 INTERNATIONAL Controls Corp. (ICC)—159 INTERNATIONAL Federation for the Rights of Man (Argentina)—40 INTERNATIONAL Labor Organization (ILO) (UN)—63 INTERNATIONAL Monetary Fund (IMF) —29, 144, 150, 156 INTERNATIONAL Movement of Catholic Jurists (Argentina)—40 INTERNATIONAL Petroleum Corp. (IPC)—144 INTERNATIONAL Telephone & Tele­ graph Corp. (ITT)—68 INTERNATIONAL Tin Council—48 INTERNATIONAL Women’s Year Conference—120 INVESTORS Overseas Services, Ltd.—159 IRAN—121, 154 IRON—56, 155-6 IRVING Trust Co. (N.Y.)—78



ISRAEL—15, 120-1 ISRAEL, Guillermo—147 ISRAEL, Tomas—148 ITAIPU hydroelectric project (BrazilParaguay)—56, 166-7 J

JAMADAR, Vernon—169 JAMAICA—11-3 JAPAN—15,67, 132, 170 JAVIER Alejo, Francisco—116 JAVITS, Sen. Jacob (R, N.Y.)—84 JENKINS, Kempton B.—86 JEWS—120 JIMENEZ, Ramon Emilio—96, 134 JIMENEZ de Lucio, Alberto— 142 JIMENEZ Gallo, Col. Guillermo—48 JORQUERA, Carlos—61 JUSTICIALISTA Liberation Front (FREJULI)—20, 22, 25 K

KADAR, Janos—92 KAHN, Heriberto—40 KANSAS Grain Co., Inc. (U.S.)—161 KARAM, Anuar—119 KASTLER, Alfred—4 KENNEDY, Sen. Edward M. (D, Mass.)—83-4, 86 KENNEDY, John F.—82 KIDNAPPINGS—See under POLITICAL Violence, Terrorism & Guerrilla Activity KISSINGER, Henry A.—3-4, 33, 42, 69, 79,84,120-1, 126-7, 168 KLEIN, Joseph—144 KOZAIM, Norberto— 35 L

LABOR Developments—27-8, 141. Strikes & civil unrest—21-5, 28-9, 34, 36,38,46-7,73-4, 95-7, 103, 110-1, 140, 143, 157, 161, 167-8. Unemploy­ ment—57, 65-8, 74-5, 164, 167,170. Wages—21-4, 29, 46-7, 57, 66-7, 74, 97,103,111, 120,140,149-50,161, 164, 169 LACABANNE, Brig. Gen. Raul—27, 31 LACOMBE, Houston—107 LALLIA, Oscar—32 LANUSSE, Gen. Alejandro—20 LARRABURE, Julio—39 LASTIRI, Raul—21-2, 25

LATIN American Economic System (SELA)—10-1 LATIN American Free Trade Associa­ tion (LA FT A)—15-7 LAUGERUD, Kjell—6, 8, 163 LECHIN Suarez, Gen. Juan—48 LEDERER, Edith—145 LEIPEN, Jorge—117 LEITE Chaves, Francisco—54-5 LIBERATION Armed Forces (FAL) (Argentine terrorist group)—34 LIEVANO, Indalecio—90 LLUBERES Montas, Gen. Salvador—96 LOCKWOOD, Charles Agnew—38 LOGRONO Contin, Cmdr. Manuel—96 LONGRIOTTI, Arturo—41 LOPEZ Arellano, Gen. Oswaldo—105-10 LOPEZ Balboa, Enrique—107 LOPEZ Mateos, Adolfo—8 LOPEZ Michelsen, Alfonso—74-5, 78-9 LOPEZ Portillio, Jose—116-7 LOPEZ Rega, Jose—19-23, 25, 30 Los TRINITARIOS (Dominican Re­ public terrorist group)—95-6 LUCIANO, Jaime—32 LUDER, Italo—26-8, 39 M

MACHIN, Jose Maria—13 MAHEU, Robert—81-2 MAILLIARD, William—5 MALDONADO, Gen. Jorge Fernandez—142 MALDONADO Munoz, Lt. Col. Mario—106-7 MANRIQUE, Francisco—37 MARCHAIS, Georges 92 MARCONA Mining Co. (Peru)—144-5 MARCONDEZ Ferraz, Octavio—56 MARGUERITE, Alfonso—34 MARIATEGUI, Francisco—142 MARI Bras, Juan—95, 168 MARKA (Peruvian magazine)—141, 143 MARTINEZ, Angel—166 MARTINEZ, Eusebio—113 MARTINEZ, Noel Colon—168 MARTINEZ, Orlando—94 MARTINEZ Baca, Alberto—19-20 MASSERA, Emilio—37 McCLELLAN, Sen. John (D, Ark.)—126 McCONE, John A.—83 McGEE, Sen. Gale (D, Wyo.) 84 McGOVERN, Sen. George S. (D, S.D.)— 81,84-7 MEAT (beef)—28

178 MELGAR Castro, Col. Juan Alberto—105-7, 109, 111 MENDOZA, Eusebio—114 MENDOZA, Pedro—110 MENEZES Sa, Carlos Alberto—53-4 MERCADO Jarrin, Edgardo—135 MERCEDES-Benz(West German au­ tomobile firm)—41 METALLURGICAL Workers Union (UOM) (Argentine union)—24, 28, 34 METALS & Mining—13-4, 24, 47-8, 56, 65,77-8,97, 117, 119-20, 132, 139-40, 144-50, 155-7. See also specific metal or mining firm METZ, Heinrich Franz—41-2 MEXICO—5,60 Agriculture—114-5. Arms sales—121 Belize dispute—7-8, 163 Communist Party—113, 116-7 Economy—14-5, 117—20 Fishing boundary— 123 Government & politics—9-10, 114, 116-7, 121-2; National Action Party—113; Worker’s Party— 113, 116-7; Zionist resolution— 120 Oil—118-20 Terrorism & civil unrest—113-6 U.S. relations & trade—11-3, 118, 120-3; CIA—8-9 MICHELINI, Luis—148 MIDDLE East—78, 154-5 MIGUEL, Lorenzo—24 MIJANGOS, Axel—162 MILLIARD—6 MILLS, Don—4 MINOPERU (Peruvian state mining firm)—139 MIRO Quesada, Gen. Fernando—143 MITSUI Mining & Smelting, Ltd.—132 MOBIL Oil Corp.— 119 MOLINA, Adolfo—6 MOLINA, Alfredo—161 MONCAYO, Jaime—10 MONEY, Jorge—36 MONTALVO, Carlos Alfredo—161 MONTANARO, Sabino—165 MONTES, Fernando— 111 MONTONEROS (Argentine terrorist group)—24, 31-4, 36-42 MORALES, Gabriel—35 MORALES Bermudez, Gen. Francisco—141-3 MORENO Aguirre, Hilario—113 MORGAN Guaranty Trust Co. (U.S.)—118


MOYA Palencia, Mario—117 MUNOZ, Luis Enrique—61 MUSCAT, Antonio—32


NATIONAL Agriculture & Livestock Services Co. (EPSA) (Peru)—143 NATIONAL Electricity Co. (Endesa) (Chile)—66 NATIONAL Federation of Farmers & Cattle Ranchers (Honduras)—111 NATIONAL Front for the Liberation of Angola—90 NATIONALIST Democratic Union (El Salvador)—161 NATIONALIST Popular Front (FPN) (Bolivia)—45 NATIONALIZATIONS & Expropria­ tions—29, 49, 68, 138-9, 144-5,151-4, 169 NATIONAL Liberation Armed Forces (FALN) (Venezuelan guerrilla group)—157 NATIONAL Liberation Army (Bolivian terrorist group)—36 NATIONAL Liberation Army (Colom­ bian guerrilla group)—73-6 NATIONAL Liberation Movement (Gua­ temala)—162 NATIONAL Maritime Union (NMU) (U.S.)—167-8 NATIONAL Opposition Union (El Salvador)—161 NATIONAL Union for the Total Inde­ pendence of Angola—90 NATIONAL Peasants Union (UNC) (Honduras)—110-1 NEGREIROS Criado, Luis—141 NESSEN, Ron—85, 87 NEWMONT Mining Corp. (U.S.)—145 NICARAGUA—5, 9, 11-3. Government & political unrest—164—5. U.S. aid—3-4 9 DE FEBRERO (Uruguayan magazine)—148 NISSAN (Japan)—67 NIVAR Seijas, Gen. Neit—96 NIXON, Richard M.—69 NOCETTI Fasolino, Judge Alfredo—30 NOGUEDA Otero, Gov. Israel—114 NUMA Laplane, Gen. Alberto—21,26


179 o

OCCIDENTAL Petroleum Corp. (U.S.)—153 OIGA (Peruvian magazine)—143 OILFIELD Workers’ Trade Union (OWTU)—169 OJEDA Paullada, Pedro—123 OLIVARES Santana, Enrique—117 OLIVEIRA Matos, Renato—53 OMANG, Joanne—63-4 ONGARO, Alfredo—36 ONGARO, Raymundo—36 ORFILA, Alejandro—6 ORGANIZATION of American States (OAS)—3, 5-6, 12-3,50, 89 ORGANIZATION of Petroleum Export­ ing Countries (OPEC)—11, 13, 103, 116,119,154-5 OTERO, Ricardo—23-4 ORTIZ Mena, Antonio—15 OVANDO Candia, Gen. Alfredo—49-50 OVERSEAS Private Investment Corp. (OPIC)—68


PAGES, Walter—149 PANAMA—89. Agriculture—132-3. Cuba—5, 89. Canal dispute—1, 125-32. Communists—9-10. Economy—125, 132- 3. Government & politics—9-10. Oil—133. Press & censorship—9, 133- 4. U.S.—3-4, 11-3 PAPALARDO, Teruco—165 PARAGUAY—165-7. Agriculture—166. Brazil—166-7. Economy—166-7. Government & political unrest—9 10, 165-6. Press & censorship—9. U.S. aid—3-4 PAREDES, Isaias—140 PARKER, Daniel—123 PATINO Ayoroa, Jose—45 PAZ Galarraga, Jesus—157 PAZ Garcia, CoL Policarpo—106 PEILE, Eduardo—149 PEIREZ, Lawrence—120 PELAYEZ, Juan Enrique—38 PELL, Sen. Claiborne (D, R.I.)—84 PEMEX (Petroleos Mexicanos, Mexican state oil monopoly)— 119-20 PENA Jaquez, Toribio—95 PEOPLE’S Electoral Movement (MEP) (Venezuela)—152 PEOPLE’S Liberation Army (EPL) (Colombian guerrilla group)—76

PEOPLE’S Revolutionary Armed Forces (Mexican guerrilla group)—115-6 PEOPLE’S Revolutionary Army (Ar­ gentine terrorist group) (ERP)—31-3, 35-6,38-42 PEOPLE’S Revolutionary Army (ERP) (El Salvadorian guerrilla group)—38, 41-2,161, 165 PEOPLE’S Union (Mexican leftist group)—114 PEOPLE’S United Party (PUP) (Guate­ mala)—7,163 PERCY, Sen. Charles (R, Ill.)—86, 121 PEREDA Asbun, Juan—45, 47 PERETTE, Carlos—28 PEREZ, Carlos Andres—7, 11-2, 49, 151-5,157-8, 163 PEREZ, Jaime—148 PEREZ, Luis Carlos—74 PEREZ y Perez, Gen. Enrique—96 PERON, Juan—38 PERON, Maria Estela Martinez de: Economy—21-2, 28-9. Government & political unrest—19-30, 40-1; armed revolt—29-30. Terrorism—32-3 PERONIST Youth (JP)— 31, 36 PERU—5. Agriculture—135. Com­ munists—9-10. Economy—135, 139-40, 144-5. Energy developments— 48, 144. Foreign relations & trade—113, 48, 144-5. Government & political unrest—9-10, 135-44. Mining in­ dustry—13-4,139-40, 144-5. Press & censorship—9, 138-41, 143. Terror­ ism—135,141 PERUVIAN Peasant Federation (CCP)—141 PESCAPERU (Peruvian state fishing concern)—139 PETROBRAS (Brazilian state oil firm)—58 PETROLEOS Mexicanos (Pemex, Mexican state oil monopoly)— 119-20 PETROLEOS Venezolanos (Petroven, Venezuelan state oil firm)—151-2 PETROLEUM—4, 57, 67, 78, 100, 103, 118-20,140,144,150—5,168-70. Ex­ ploration & expansion develop­ ments—13-5, 17,46-9,58, 119—20, 133, 144 150, 166. Prices & production—13, 15, 23, 29, 48, 58,78, 100, 103, 119-20, 153-5 PETROPERU (Peruvian state oil firm)—144 PETROVEN (Petroleos Venezolanos, Venezuelan state oil firm)—151-2 PEUGEOT-Renault (France)—67

180 PHELPS Dodge Corp. (U.S.)—145 PHILIP, Prince (Great Britain)—162 PHILLIPS, David A. 8-9, 70 PHILLIPS Petroleum Co. (U.S.)—119 PINOCHET Ugarte, Augusto—36, 48 9, 62-4 PLAZA, Most Rev. Antonio Jose—30 PLAZA, Galo—6 PODESTA, Gen. Cesar—142 POGGI Moran, Gen. Dante—135, 143 POLITICAL Violence, Terrorism & Guerrilla Activity: Assassinations—1,23, 31-4, 36, 38,75-6,81-4, 86,94, 111, 115-6, 162 Coups & coup attempts—1, 29-30, 99-102,105-7, 141-3, 165 ‘Death Squads’—55; Argentine Anticommunist Alliance (AAA)—22-3. 31-2,34-7,39-40 Hijackings—87-8 Kidnappings (including kidnap­ murders)—23, 31-5, 37-9,74-7, 161-2, 164-5 Other guerrilla activities—24, 30-42, 62, 73-7, 93, 115-6, 157, 161-2; see also specific group, e.g. MONTONEROS, NATIONAL Liberation Armed Forces (FALN), PEOPLE’S Revolutionary Army (ERP), REVO­ LUTIONARY Left Movement (MIR). Other terrorism—6, 23-4, 30-42, 75-6, 93,112-4,141, 164-5, 168. Other political violence—29, 59, 74-6, 93-6, 99-100,110-1, 114-5, 135-6,138-9, 160-2, 169 Torture charges—39-40, 51-5, 60, 62-4,75-6,147-8, 161, 165-6 PONCE, Teodoro—32 POPULAR Socialist Party (Mexico)—113 POPULAR Electoral Movement (MEP) (Venezuela)—157 POPULAR Movement for the Liberation of Angola (MPLA)—90 PORTO, Jesus—22-3 POSNETT, Richard—6 PRADO Salmon, Maj. Gary—46 PRESS & Censorship- -9, 36, 43, 51-4, 57,59,76-7,133-4, 138-41, 143, 147-8, 164 PRICE, George—7, 163 PROUTY, L. Fletcher—82 PRUDENTIAL Insurance Co. of America—119 PUERTA, Gabriel—157 PUERTO Rico: Economy—167. Govern­ ment & political unrest—167-8 PUJADAS, Mariano—38


QUIETO, Roberto—42 QUIROGA Santa Cruz, Marcelo—50 R

RABASA, Emilio—7, 13, 119-20 RABIN, Leah—123 RADICAL Civic Union (Argentina)—20, 23,34-5 RADICAL Liberal Party (PLR) (Paraguay)—165 RADRIZZANI, Miguel—23 RAICO, Santiago—23 RAILROADS—48, 140, 156 RAMIREZ Ortega, Col. Andres—112 RAMON Morales, Juan—23 RANGEL, Jose Vincente—157 REBEL Armed Forces (Guatemalan guerrilla group)— 162 RED Flag (Venezuelan guerrilla group)—157 REFUGEES—60-1,65 REINA, Jorge Arturo—105, 109 RELIGION—23,47, 111 REVERDITTO, Carlos—147 REVOLUTIONARIES—See POLITICAL Violence, Terrorism & Guerrilla Activity REVOLUTIONARY Armed Forces (FAR) (Argentine terrorist group)—35 REVOLUTIONARY Institutional Party (PRI) (Mexico)—! 13-4, 116-7 REVOLUTIONARY Left Movement (Chilian guerrilla group)- -36 REVOLUTIONARY Left Movement (MIR) (Chilean guerrilla group)—60-2 REVOLUTIONARY Party (PR) (Guate­ mala)—162 REVUELTAS, Jose—113 REYES Heroles, Jesus—117 RICE—28 RICHARD, Ivor—7, 163 RICHTER Prada, Gen. Pedro—137, 141-2 RICO, Col. Martin—35 RINCON Quinones, Gen. Ramon—75-6 RIO Treaty : Inter-American Treaty of Reciprocal Assistance—5, 89 ROBALLOS, Rodolfo—25 ROBLEDO, Angel—25-7 ROCA, Blas—91 ROCAMORA, Alberto—32-3, 35, 37 ROCCA, Jose Maria—149 ROCKEFELLER, Nelson A.—83-4 RODRIGO, Celestino—21,25 RODRÍGUEZ, Carlos Rafel—88



RODRÍGUEZ, Oscar—165 RODRÍGUEZ, Pablo—7, 162 RODRÍGUEZ Lara, Guillermo—99 103 ROGERS, William D.—13, 15, 88 ROSELLI, John—81-2 ROSSETTI, Essio—52 ROWLANDS, Edward—7, 163 RUBIO, Msgr. Andres—148 RUCKAUF, Carlos—25 RUFINELLI, Sen. Carlos Levi—166 RUIZ Andrade, Col. Francisco—107 RUMANIA 119 RUSSELL, Bertrand—4, 55 6 s

SAENZ, Orlando—68 SAEZ, Raul—64 SAGASTUME Perez, Carlos—162 St. KITTS—9 St. VINCENT—9 SALA Orosco, Gen. Pedro—125 SALAZAR Landaeta, Rear Adm. Luis—101 SALGADO, Gen. Enrique 31 SALISBURY, Harrison—8 SANDINISTA National Liberation Front (Nicaraguan guerrilla group)—164-5 San MARTIN, Capt. Armando—106 SANTOS, Most Rev. Hector Enrique— 111 SANTUCHO, Roberto—33 SAUDI Arabia—78 SAURNIER, Rodolfo—31 SAVING, Adolfo—21 SCHACHT, Efrain—157 SCHNEIDER, Gen. Rene—68-9 SCHNEIDER, Sergio—33 SCHORR, Daniel—82 SEAFARERS International Union (SIU) (U.S.)—167-8 SECURITIES & Exchange Commission (SEC) (U.S.) -105, 108-9 SENEGAL—121 SENTIES, Octavio 113 SEPTEMBER 23rd Communist League (Mexican guerrilla group)— 115—6 SEREGNI, Gen. Liber 147 SERRA Hernandez, Col. Jose—107 SHAH, Raffique —169 SHELL International Petroleum Co.—119, 152-4 SHIPS & Shipping—43, 132 SHLAUDEMAN, Harry W.—158, 164 SILBERMAN, David—59 60 SILVA, Ana Rosa Kucinski—52

SILVA, Jose Joaquin—99 SILVA, Rodolfo-6 SILVA, Wilson—52 SILVER—97, 117 SIMON, William—15 SIMONSEN, Mario Henrique—58 SINAMOS (Peruvian social mobilization agency)—135, 137, 139 SINDICAT Beige d’Entreprises a Etranger S.A.—139 SIPILA, Helvi—123 SMITH Jr., Frederick—121 SNYDER, Rep. Marion G. (R, Ky.)—126 SOCIAL Christian Party (Copei) (Vene­ zuela)—151 SOCIALIST Action & Unity Movement (Mexico)—116-7 SOCIALIST Organization Movement (Mexico)— 116-7 SOCIALIST Party (Brazil) 60 SOLA, Francisco—161 SOLORZANO, Jose Jorge—106 SOMOZA Debayle, Anastasio—164 SOSA Molina, Col. Jorge—26 SOTOMAYOR, Humberto—60 SOUTH Africa, Republic of—166 SOUTHERN Peru Copper Corp.—145 SPAIN—91, 144 SPARKMAN, Sen. John J. (D, Ala.)—84,87-8 SPECIAL Latin American Coordinating Committee (CECLA)—10 SPOCK, Benjamin—4 STANDARD Fruit & Steamship Co. (U.S.) 106-10 STEEL—24, 56, 156 STRIKES—See under LABOR Develop­ ments STROESSNER, Alfredo 165 SUAREZ, Luis—93 SUGAR—47,92,96-7, 149, 161, 168 9 SULE, Anselmo—61 SUN Oil Co. (U.S.)—78 SUPERIOR Oil Co. (U.S.)—78 SUSLOV, Mikhail-92 SUTEP (Peruvian teachers union)—141, 143


TACK, Juan Antonio —125, 127-8 TANTALEAN Vanini, Gen. Javier—137, 141-3 TAPIA, Jorge—61 TARNOWSKI, Andrew—136 TAYLOR, John—109


182 TEACHERS Revolutionary Movement (Mexico)—113 TEDESCHI, Aldo—34 TELA Railroad Co. (U.S.)—107, 109 TELLEZ, Rafael—162 TERRITORIAL Waters—48-9, 104, 123 TERRORISM—See POLITICAL Vio­ lence, Terrorism & Guerrilla Activity TEXACO, Inc. (U.S.)—132-3, 169 THOMPSON, Roberto—165-6 THOMSON-Urrutia Treaty of 1914—128 THURMOND, Sen. Strom (R, S.C.)—126 TIN—47-8 TOHA Gonzalez, Jaime—61 TOLOSA, Eustaquio—33 TORRIJOS, Gen. Omar—123, 126-8 TORRIJOS de Arosemena, Berta—123 TORTOLO, Antonio—30 TOURISM—118, 120, 167 TRADE Reform Act (U.S.)—3 TRANSPORTATION—48,66, 156 TRIMINIO, Juan Ramon—110 TRINIDAD & Tobago—5, 168-70. Agri­ culture—168-9. Economy—170. Labor unions & strikes—168-70. Oil—168-70. Press & censorship—9 TRUJILLO, Julio Cesar—101 TUCKER, Joseph L.—161 TUPAMAROS (Uruguayan guerrilla group)—35-6

126-7. Cuban relations & trade—5, 81-9,92, 168 Drugs—79, 121 Ecuador—11-2,104. El Salvador— 11-2,161 Foreign relations & trade—1, 3-5, 1 U2, 15, 24, 29, 33, 42, 49, 68, 87-9, 104- 10, 119-21, 136, 140, 144-5,150, 152-4, 159-61, 166, 169; CIA role—4, 8-9,68-72,81-6,92, 158, 168 Gun smuggling—121 Haiti—164. Honduras—11-2, 105- 10 Kidnappings—33 Mexico—11-2, 120-1 Nationalizations—144-5 Panama Canal dispute—1, 11-2, 125-32. Paraguay—11-2, 166. Peru—11-2, 136, 140, 144-5. Petro­ leum—49, 119,152-4,159,166,169. Puerto Rico—168 Uruguay—11-2, 150 Venezuela—11-2, 152-4, 158. Vesco suit—159-60 U.S. STEEL Corp.—155 UNITY Movement (Mexico)—116-7 URUGUAY: Economy—10, 149-50. Government & political unrest—9-10, 147-9. Oil—150. Press & censor­ ship—9, 147-8. U.S. relations & trade—3-4, 150 UTAH International, Inc. (U.S.)—144


UNEMPLOYMENT—See under LABOR Developments UNION of Banana Exporting Countries (UPEB)—159 UNION of Soviet Socialist Republics (USSR)—14,42,78,89-90 UNITED Brands Co. (U.S.)—105-10, 159 UNITED Democratic Party (UDP) (Gua­ temala)—7,163 UNITED Labor Front (ULF) (Trinidad & Tobago)—169 UNITED Nations—63-4, 120, 122-3, 168. Belize territorial dispute—6-8, 163. Cuban developments—4-5 UNITED States: Aid (economic & military)—3-4, 24, 29,48-9, 56,67,78-9,97,118,144, 164. Argentina—3, 24, 29, 33, 42 Caribbean nations—5; see also specific country. Chile—11-2, 67-72. Colombia—11-2,78-9. Congress—


VALDEZ Angulo, Gen. Enrique—143 VALENCIA Tovar, Gen. Alvaro—75 VANGUARDIA Revolucionaria (Maoist guerrilla group) (Peru)—141 VARGAS, Freddy—46 VARGAS, Col. Raul—103 VARGAS Llosa, Mario—138 VARGAS Prieto, Gen. Oscar—135, 142 VARON Valencia, Gen. Abraham—75 VASQUEZ Castano, Fabio—73-4 VAZQUEZ, Demetrio—20 VEGH Villegas, Alejandro—149-50 VELASCO Alvarado, Juan—12, 137, 140-2 VELASQUEZ, Nander Pitty—5 VENEZUELA—5-6, 89, 151-8 Agriculture—155 Economy—155-7. Energy develop­ ments—48; oil—14, 151-5, 166 Foreign trade—11-4, 48



Government & political unrest—9-10, 157—8 Metals industry—155-7 Panama canal dispute—127-8 U.S. relations & trade—11—3; CIA role—4 VENEZUELAN Investment Fund (FIV)—156 VERA, Gen. Luis—142 VESCO, Robert—159-60 VIDELA, Gen. Jorge—26, 29-30, 37, 42 VIECO, Hernan—74 VIEIRA, Laerte—52 VIEJOBUENO, Domingo—41 VIGNES, Alberto—3, 21,42 VILLA, Martin—76 VILLA Constitución steel mill (Ar­ gentina)—24 VILLANUEVA del Campo, Ar­ mando—141 VILLEGAS, Ivan—75 VILLONE, Carlos—21,25, 30 VIRGILIO Carias, Marco—106 VISPERAS (Uruguayan magazine)—148 VOLKSWAGEN (West German automo­ bile firm)—67 VORSTER, John—166 VOTTERO, Tomas—26 VUSKOVIC, Pedro—4 W

WAGES—See under LABOR Develop­ ments WALD, George—4 WEEKES, George—169 WEST Germany (German Federal Re­ public)—57-8, 66-7, 90-1 WEST Indies Associated States—90 WHEAT—29, 67, 157, 166 WILLIAMS, Eric—17, 169 WILLIAMS, Vicente—111

WIMER, Adalberto—38 WOMEN—122-3 WOODWARD, Miguel-60 WOOL—42 WORLD Bank (International Bank for Reconstruction & Development)—48, 56,78,118,144,164 WORLD Federation of Trade Unions—59-60 WORKERS’ Revolutionary Organization (El Salvadorian guerrilla group)—161 WORKERS’ Syndical Confederation (CSTC) (Colombia)—73 x

XEROX Corp.—40 Y

YOUNG, Joe-169 YPFB (Bolivian state oil firm)—46-8 z

ZAIRE 13-4 ZAMBIA—13-4 ZAPATA de la Flor, Gen. Gaston -136 ZAPATA Urban Front (Mexican guer­ rilla group)—115-6 ZARAGOZA, Ramon—37 ZAVALETA Rivera, Gen. Rudecindo 125 ZELAYA, Col. Omar Antonio—107 ZERO Point (Venezuelan guerrilla group)—157 ZHIVKOV, Todor—92 ZILERI Gibson, Enrique—138 ZIMMERMAN, Augusto—143 ZINC—139 ZUFRIATEGUI, Col. Carlos—148 ZULJEVIC, Leopoldo—61