MEMO RANDU Outside System NATIONAL SECURITY COUNCIL ACTION r' 32% 8 September 1971 S NLY MEMORANDUM FOR DR KISSINGER 3 FROM ARNOLD SUBJECT 40 Committee Meeting September 9 1971 The 40 Committee meeting is scheduled to consider a request E1 Me rcurio the large st inde endent newsPaper in Chile for covert 511 art totallin 25x 1 and will be prepared to brief on this subject you W15 to take it up after the Chile discussion If not this can be covered at the next 40 Committee meeting scheduled for September 15 CHILE The CIA paper on the El Mercurio pr0posal tabbed reports on the increasing pressure which the Allende Government is bringing to bear against El Mercurio The economic squeez on the newspaper is made possible by the increasing governmental control over finance and business in Chile zsxu the paper needs at least $1 ion to survive for the next year or two The pressure for an immediate decision comes from the fact that an ortunit has The basic options posed in the CIA paper are A Ib provide extensive financing brthe newspaper with the understanding 3 that this may not be sufficient to step the Allende Government from closing the paper anyway g through control of newsprint or labor stoppages This would involve an initial commitment of at least $700 000 use biometrics-non REVIEW 129551 b0 Exempt in part and redact as shown - by L Sa1vetti Date 9 14 2000 r 11 437 if bui - - - 3 25 31 15 m at assassin-Se - 2 - B Allow E1 Mercurio to go out of business and arrange a maximum propaganda effort on the issue of freedom of the press Allende might be able to counter that by demonstrating that it was E1 Mercurio s financial ineptitude which resulted in its closing Ambassador Kerry and the Station Chief recommend the first option Their position is that we have a great interest in maintaining an Opposition voice in Chile and that Without it the political opposition would be seriously weakened Allende's intense efforts to destroy El Mercurio indicate that he probably regards it as a signi cant barrier to his internal political strategy On the negative side however $l'l-hillion would be a very ex- pensive price to pay for a little extra time if we conclude that Allende in tends and has the capability to close down the'newspaper anyway thion would obviously be less costly and might force Allende to a con- irontation on the press freedom issue before he reall is re ared 25xl1 My judgment is that we should probably take both options and link them I believe we should go ahead with the $700 000 deal understanding full well that this may buy only a very limited amount of time for El Mercurio and that we are not making a commitment to continue to bail out El Mercurio in the future Moreover we shpuld condition our support on an understanding that El Mercurio will launch an intensive public attack on the Allende Government's efforts to force them out of business-m 25x 1 overnrnen 0 -_ course match on this is sue It seems to me that this gogrse would keep Opposition voice alive for awhile and force Allende either to back down or risk intensive criticism on the press freedom issue If he classes the latter course it should be helpful to us in diverting and perhaps even undercutting some of his support 0n the capper compensation which will probably reach a climax in the next couple of months Your Talking Points pursue this line of reasoning 235 3 are ull 1 11 F s-55 4                     National Security Archive    Suite 701  Gelman Library  The George Washington University    2130 H Street  NW  Washington  D C  20037    Phone  202 994‐7000  Fax  202 994‐7005  nsarchiv@gwu edu