Inside the Company: CIA Diary, by Philip Agee

"Science," the Greek word for knowledge, when appended to the word "political," creates what seems like an oxymoron. For who could claim to know politics? More complicated than any game, most people who play it become addicts and die without understanding what they were addicted to. The rest of us suffer under their malpractice as our "leaders." A truer case of the blind leading the blind could not be found. Plumb the depths of confusion here.

Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:25 am


Montevideo 15 July 1964

The coup rumours have subsided since the general strike last month but several strikes have continued. Headquarters sent down a strange dispatch that Holman believes is a prelude to getting back into political-action operations. According to him the dispatch, although signed as usual by the Division Chief, was actually written by Ray Herbert ‡ who is Deputy Division Chief and an old colleague of Holman's from their days in the FBI. In rather ambiguous terms this dispatch instructs us to expand our contacts in the political field to obtain intelligence about political stability, government policy concerning activities of the extreme left, and possible solutions to current problems such as constitutional reform. Holman believes that Herbert deliberately did not mentioned political-action operations (as opposed to political-intelligence collection) but that the message to prepare for renewal of these operations was clearly implied.

For preliminary organization Holman has given me the responsibility for reporting progress and for developing new political contacts. He will increase somewhat his meetings with Mrs. Nardone and with Gari and soon will introduce me to yet another Ruralista leader, Wilson Elso, ‡ who is a Federal Deputy. We will not make contact with the other principal Ruralista leader, Senator Juan Maria Bordaberry, because he is already in regular contact with Ambassador Coerr, and Holman wants no problems with him. The importance of the Ruralistas is that they have already announced support for constitutional reform in order to return Uruguay to a strong one-man presidency. The other parties are openly opposed to such reform.


In addition to the Ruralistas, Holman asked me to arrange with one of the legitimate political section officers to begin meeting some of the more liberal leaders of the Colorado Party, mainly of the List 15 and the List 99. These two factions will be in the thick of the elections coming up in 1966, and they also constitute an attractive potential for access agents in the Soviet operations programme.

For purposes of political reporting Holman will also have his new contact with Adolfo Tejera, ‡ the Minister of the Interior with Colonel Ventura Rodriguez, the Chief of Police, and with Colonel Carvajal, Chief of Military Intelligence. For the time being he will refrain from reinitiating contact with Colonel Mario Aguerrondo ‡ who was Rodriguez's predecessor as Chief of Police and a close station liaison collaborator, because Aguerrondo is usually at the centre of rumours of a move by Blanco military officers against the government. Also O'Grady will meet more regularly with Juan Carlos Quagliotti, ‡ the wealthy rancher and lawyer who is active in promoting interventionist sympathies among military leaders.

In discussing expansion of political contacts Holman said we have to be very careful to avoid giving the Ambassador any reason to suspect that we're getting back into political-action operations. When the time comes, he said, the decision will be made in Washington and the Ambassador will be informed through department channels.

This is bad news. All the work with political leaders in Quito only emphasized how venal and ineffectual they were and in Uruguay the politicians seem to be even more so. I couldn't be less enthusiastic. I don't want to cultivate senators and deputies -- not even for the Director.

Montevideo 20 July 1964

Another purchase of Chilean currency at the Montevideo branch of the First National City Bank for shipping by pouch to the Santiago station. This time the Finance Officer who is in charge of the purchasing operations in Lima and Rio came to Montevideo to assist in the pick-up from Hennessy ‡ and to count the escudos afterwards. This one was also worth over 100,000 dollars and, according to the Finance Officer, is only a drop in the bucket. He says we are spending money in the Chilean election practically like we did in Brazil two years ago.

We've had serious trouble in the AVENGEFUL/AVALANCHE telephone-tapping operation. AVOIDANCE, ‡ the courier who takes the tapes around to the transcribers, reported to Paul Burns, his case officer, that a briefcase full of tapes was taken from the trunk of his car while he was on his rounds making pick-ups and deliveries. AVOIDANCE has no idea whether the tapes were taken by a common thief or by the enemy. Although he claims he has been very careful to watch for surveillance (negative), the chances are that the tapes will be listened to, even if only stolen by a thief, in order to determine saleability.

After a discussion with Holman and Burns, I advised Commissioner Otero and Colonel Ramirez, Chief of the Metropolitan Guard, that we had lost some tapes and believe all the lines except the Cuban Embassy should be disconnected. Ramirez agreed that the Cuban line should be retained because of our coming OAS meeting and the possibility of a break in relations with Cuba. He is also going to keep several of the contraband lines in operation for cover, although there is no way of denying the targets of the lost tapes.

For the time being AVOIDANCE will be eliminated from the operation although he will go through the motions of a daily routine very similar to normal while continuing to watch for surveillance. The tapes of the Cuban line will be sent over to the station with the daily police intelligence couriers and we will give them to Tomas Zafiriadis ‡ who is an Uruguayan employee of the Embassy Commercial Section. He will serve as courier between the station and his wife (AVENGEFUL-3) ‡ who transcribes the Cuban Embassy line. His wife's sister (AVENGEFUL-5), ‡ the transcriber of the PCU Headquarters line, will also help on the Cuban Embassy line since her line is being disconnected. Using an Embassy employee like this is-against the rules but Holman is willing to risk the Ambassador's wrath to keep the Cuban Embassy line going.

Montevideo 25 July 1964

News is in that the OAS passed the motion that all members should break diplomatic and commercial relations with Cuba and that except for humanitarian purposes there should be no air or maritime traffic. It took four years to get this motion passed -- not only CIA operations but all our Latin American foreign policy has been pointing to this goal. The countries that still have relations, Chile, Mexico and Uruguay, voted against the motion, while Bolivia abstained. Whether Uruguay or any other of these countries honour the motion or not is another matter but headquarters' propaganda guidance is certain to call for an all-out campaign to force compliance with the motion.

Perhaps with the vote to break relations the AMHALF agents in the Uruguayan Embassy in Havana, Roosen and Goncalves will be able to get information out of Perez Freeman. Even with the assistance of Inspector Piriz in Miami, the Uruguayan diplomats still were unable to exert enough pressure to force Perez to begin talking about Cuban operations in Montevideo. We need the information to support the campaign for a break by Uruguay with Cuba through Perez's revelations of Cuban intervention here. We could alternatively write our own document based on a little fact and a lot of imagination and attribute it to Perez, whose presence in the Embassy is public knowledge. Such a document could backfire, however, if Perez had actually been sent by the Cubans to seek asylum -- this suspicion grows as he continues to refuse to talk -- because after the document was surfaced Perez could escape from the Embassy and issue a public denial through the Cuban authorities. For the time being Inspector Piriz will return and we will hold up the false document project until we see how our media campaign progresses without it.

Station labour operations limp along with Jack Goodwyn ‡ and the AIFLD ‡ in the lead. This week we had a visit from Joaquin (Jack) Otero, ‡ the representative of the International Transport Workers' Federation ‡ (ITF) who worked with me in Quito last year. Otero is now the chief ITF representative for all of Latin America and the Caribbean, and he came to assist in a boycott against meat exports by non-union packing plants. The hope is that his assistance will help strengthen the democratic unions involved.

Agency-sponsored trade-union education programmes through ORIT are being expanded. Through the ICFTU International Solidarity Fund, headquarters is pumping in almost 200,000 dollars to establish an ORIT training school in Cuernavaca. Until now the ORIT courses have been limited by the space made available in Mexico City by the Mexican Workers' Confederation ‡ which is the most important ORIT affiliate after the AFL-CIO. Opening of the Cuernavaca school is still a year or two away but already the ORIT courses have become an effective combination with the AIFLD programme in Washington.

As if we don't have enough problems with Argentines, Paraguayans and Brazilians now we have Bolivians to worry about. A week or so ago the new Bolivian Ambassador, Jose Antonio Arce, ‡ arrived and the La Paz station asked that we keep up their relationship with him. He has been in and out of various government jobs since the Bolivian revolution, most recently as Minister of the Interior when he worked. closely with the La Paz station. Holman will be seeing him from time to time, probably no more than is absolutely necessary, so that when he returns to La Paz this important supporter of President Paz Estenssoro can be picked up again for Bolivian operations.

Arce's main job here will be to watch the supporters of former Bolivian President Hernan Siles Suazo, and Siles himself if he settles in exile in Montevideo as is expected. Siles aspires to succeed current President Victor Paz Estenssoro in keeping with their custom, since the revolution of 1952, of alternating in the presidency. Paz, however, against the tradition, was re-elected in May and must now contend with Siles's plots against him. The La Paz station is anxious to prevent Siles from returning to the presidency !n Bolivia because of his recent leftward trends, and his friendly relationship with the Soviets when he was Bolivian Ambassador in Montevideo during 1960-62. As an initial move to support the La Paz station I have asked Commissioner Otero, Chief of Police Intelligence, to make discreet inquiries about Siles' plans among his political friends and to watch for signs that he will be settling here.

Montevideo 11 August 1964

Uruguayan compliance with the OAS resolution on Cuba looks very doubtful. The Foreign Minister on his return from Washington announced that the NCG will now have to decide whether the OAS resolution should be passed to the UN Security Council for approval before it can be considered binding. This is only a delaying manoeuvre to avoid a difficult decision but the most damaging developments are that Mexico has announced that it will ignore the resolution and Bolivia is undecided. Unless Uruguay can be made to seem isolated in its refusal to break, the chances are not good. Moreover, although we have intensified our propaganda output on the Cuban issue through ABBUZZ-1 considerably, it's no match for the campaign being waged by the extreme left against breaking relations, which has been carefully combined with the campaign against the government on economic issues.

Today the National Workers' Convention (CNT), formed only a week ago as a loosely knit coordinating organization of the CTU and the government workers, is leading another general strike. Again most of the country's economic activity has stopped: transport, bars, restaurants, port, construction, wool, textiles, service stations, schools and many others. The strike was called to show support for continued relations with Cuba, admittedly a political purpose, but not unprecedented in Uruguay.

Apart from the strike today, the formation of the CNT is a very significant step forward by the communist-influenced trade-union movement, because, for the first time, government workers in the Central Administration (the ministries and executive) and the autonomous agencies and decentralized services are working in the same organization as the private-sector unions of the CTU. With continuing inflation and currency devaluation (the peso is down to almost 23 per dollar now) the CNT will have plenty of legitimate issues for agitation in coming months. Besides the Cuban issue the CNT campaign is currently targeted on pay rises, fringe benefits and subsidies to be included in the budget now being drawn up for next year.

Montevideo 21 August 1964

Through the AVBUZZ media operation we're getting editorials almost daily calling for Uruguayan compliance with the OAS resolution to break with Cuba. President Alessandri in Chile has done this already, instead of waiting until after the elections. Today Bolivia announced it is breaking in accordance with the resolution, leaving only Uruguay and Mexico still with ties to Cuba.

The NCG will surely buckle under such isolation, but getting decisions here is cumbersome. On important matters, the majority NCG members decide their position only after prior decisions within each of the Blanco factions represented on the NCG. Likewise the Colorado factions must decide. Eventually the NCG meets to formalize the positions taken by each faction earlier and a decision may emerge. In the case of Cuban relations the Foreign Minister has yet to present his report on the OAS Conference and related matters even with a month already passed since the Conference.

For additional propaganda, we have arranged for Juana Castro, ‡ Fidel's sister, to make a statement favouring the break during a stopover next week at the Montevideo airport. She defected in Mexico this June and is currently on a propaganda tour of South America organized by the Miami station and headquarters. We'll get wide coverage for her statement, and a few days later still another Miami station agent will arrive: Isabel Siero Perez, ‡ important in the International. Federation of Women Lawyers, ‡ another of the CA staff's international organizations. She'll describe the Havana horror show and emphasize the Soviets' use of Cuba as a base for penetration throughout the hemisphere.

Montevideo 31 August 1964

The Montevideo association of foreign diplomats recently held their monthly dinner and Janet and I went along with several others from the Embassy. By chance we began a conversation with two of the Soviet diplomats and later joined them for dinner. I wrote a memorandum for headquarters on the conversation -- one of the Soviets, Sergey Borisov, is a known KGB officer -- and Holman later asked me to keep up the contact and see if Borisov is interested. Russell Phipps, ‡ our Soviet operations officer, isn't the outgoing type and Holman is clearly not pleased with Phipps's failure to recruit any decent new access agents.

I'll go to the diplomatic association meeting next month but I'm not keen on getting deeply into Soviet operations. Just keeping the telephone transcripts analyzed and the files up to date is deadly dreary and requires far too much desk work. We shall see if Borisov is interested in continuing the contact -- he's the Consul and lives in the Soviet side of the AVERT house.

I decided to try another Cuban recruitment with the possibility that the spectre of a break in relations might help us. The target was Aldo Rodriguez Camps, the Cuban Charge d'Affaires in Montevideo, whose father-in-law is an exile living in Miami. Last year the Miami station sent the father-in-law, AMPIG-1, ‡ down to Montevideo to discover the political views on Castro and communism of the Charge and his wife. He felt from his conversation that neither seemed to be particularly ardent communists although they were clearly loyal to the Cuban revolution. At that time it was decided not to try for the recruitment or defection of either Aldo or Ester but to wait for a future date.

At my request the Miami station proposed to the father-in-law that he come back to Montevideo as soon as possible for a more direct approach to his daughter, who appeared to be the more susceptible of the two. If Ester had agreed to defect we would have made arrangements to evacuate her to Miami, but only after she had had a few days to work on Aldo. The key to Aldo, the Charge, is their two young children, to whom he is very attached and when confronted with their flight to Miami he just might have decided to come along.

Unfortunately, this recruitment failed. The father-in-law came as planned and made the initial meeting with his daughter but she cut him off at the beginning and refused any discussion of defection. After two days he went back to Miami, sad and broken, with no idea if he'll ever see his daughter and grandchildren again.

Montevideo 4 September 1964

The main Blanco and Colorado newspapers are carrying a torrent of AVBUZZ-sponsored articles and statements calling for the government to heed the OAS resolution. However, manoeuvring among the different Blanco and Colorado NCG members and their factions is causing the outlook on the break with Cuba to change almost daily. In the past three days there have been a meeting of the NCG Foreign Relations Commission that was scheduled but didn't convene for lack of quorum, new scheduling of debate by the full NCG for 10 September, and finally last night an NCG decision to consider the OAS resolution at a special meeting on 8 September. So far only two of the NCG members have indicated how they'll vote -- one for and one against -- and there is a good chance we'll lose. Nevertheless, relations with Brazil are again at crisis point, and the thesis that Uruguay must go along with the majority in order to assure protection against pressures from Argentina or Brazil is gaining ground.

If they don't break relations this week, I'll write the 'Perez Freeman Report' right away and we'll make it public either through Inspector Piriz or the AMHALF agents, Roosen or Goncalves. The Foreign Minister, who is against the break, is the first guy I'll burn as a Cuban agent -- he probably is anyway.

Returns from the elections in Chile today show Eduardo Frei an easy winner over Allende. Chalk up another victory for election operations. Allende won't be a threat again for another six years.

Montevideo 8 September 1964

A great victory. Forty-four days after the OAS resolution on Cuba the NCG has voted to comply. How the vote would go wasn't known for sure until the last minute when the N CG President changed his position and carried a Counsellor from his faction with him. Final vote: six in favour of breaking (five Blancos and one Colorado) and three against (one Blanco and two Colorados).

While the Councillors were debating several thousand pro- Cuban demonstrators gathered in Independence Plaza in front of Government House where the N CG was meeting. When the vote was announced a riot was on, and the crowd surged down the main street, 18 de Julio, breaking store fronts and clashing with the anti-riot Metropolitan Guard and the mounted Republican Guard. At least ten police were injured and twenty-six demonstrators arrested before the water cannons and tear-gas dispersed the mob. Somehow many of the demonstrators got back to the University buildings further down 18 de Julio, and right now the battle is continuing there with stones and firecrackers being hurled from the roof of the main University building.

I'm spending the night in the station just in case anything drastic happens that has to be reported to headquarters. Tomorrow we'll see if any of the Cubans can be picked off before they leave for home.

Montevideo 10 September 1964

Rioting continues, mostly centred at the University of the Republic buildings on 18 de Julio. Although some demonstrators abandoned the University during the early morning hours yesterday at the urging of Colonel Rodriguez, ‡ Chief of Police, and Adolfo Tejera, ‡ Minister of the Interior, new riots began yesterday morning at about ten o'clock and have continued since. The demonstrators' tactics include, besides the throwing of stones from the University buildings, lightning street riots at different places to throw the police off guard. Shop windows and cars parked at our Embassy have also been stoned.

During the early hours of this morning, several US businesses were attacked. A powerful bomb exploded outside the First National City Bank shattering the huge plate-glass windows and causing the hanging ceiling in the lobby to fall. Another bomb exploded at the Western Telegraph Company while an incendiary device started a fire at the Moore-McCormick Lines offices. General Electric's offices were also damaged.

The Cubans advised the Foreign Ministry that they'll be leaving on Saturday for Madrid. Last night with Roberto Musso, ‡ the chief of the AVENIN surveillance team, I tried to talk to the new code clerk by telephone. Musso, using the name of someone we already know is in contact with the code clerk, got him on the telephone and passed it to me. I said I was a friend of Roberto Hernandez, his predecessor, and would like to make a similar offer of assistance. He told me to kiss his ass and hung up, but I'll try again if I have time after I've done the same with the other three -- two of whom are new arrivals since the Hernandez episode.

The Cubans may have made, a serious mistake yesterday, in their haste to tie up loose ends before leaving. They sent the chauffeur, my agent, to send a telegram to Tucuman, Argentina with the message, 'Return for your cousin's wedding'. This can only be a code phrase and the urgency attached to sending the telegram led the chauffeur to conclude that someone is being called for a meeting before Saturday. I've passed the addressee and address by cable to the Buenos Aires station for follow-up and will watch carefully the air and riverboat passenger lists for this and other names of possible Cuban agents. We know nothing about the person this was addressed to, but he is probably involved in the guerrilla activity in the Tucuman area.

Montevideo 11 September 1964

Demonstrators continue to occupy the University and bombings have occurred at the OAS offices, the Coca-Cola plant, newspapers that promoted the break (El Dia, El Pais and El Plata), the homes of four councillors who voted for the break, and several of the neighbourhood clubs of the factions that favoured the break. At the University, which is still sealed off by police, minors were allowed to leave and the Red Cross entered with doctors to distribute blankets and examine the students, who were suffering from cold and hunger. Any who decide to leave, however, will have to be registered, identified and face possible arrest. Colonel Rodriguez's plan is to trap all the non-students among the 400 or so people occupying the University.

Not to be outdone by the students and political demonstrators, the municipal-transit system workers struck for three hours this afternoon and the workers of the autonomous agencies and decentralized services staged a huge demonstration at the Legislative Palace. Again the issue was budget benefits.

I've spoken to all but one of the Cubans and none has been willing to meet me. One of them last night invited me to the Embassy for coffee but I thought it prudent to decline in spite of the freezing wind howling through the telephone booth. When they leave tomorrow I'll be at the airport just in case -- as will Otero, ‡ Piriz ‡ and other police officers who can take charge if a last-minute defection occurs.

Montevideo 12 September 1964

This morning the demonstrators at the University surrendered and were allowed to leave after fingerprints, identification photographs and biographical data were taken. Forty-three nonstudents were arrested among the 400 who came out.

At the airport this afternoon several thousand demonstrators came together to bid the Cubans farewell. When the police began to force the demonstrators back to a highway some distance from the main terminal building another riot broke out followed by a pitched battle. The police won easily, using the cavalry effectively in the open areas around the terminal building, but many were injured on both sides.

All the Cubans left as scheduled. Only one remains behind: the Commercial Counsellor, who is being allowed to stay on for a couple of weeks to close a Cuban purchase of jerked beef.

Of all the Latin American and Caribbean countries only Mexico still has relations with Cuba. If Mexico refuses to break, as seems likely, the Mexican channel could be used for various operational ploys against Cuba -- it's even possible that the Mexican government was encouraged by the station there not to break with Cuba. Here we've done our job, but poor O'Grady will be working until the end of the year to send headquarters all the clips on Cuba we've managed to place in the media.

Efforts by the Miami station to get information out of Earle Perez Freeman through the Uruguayan diplomats, Roosen and Goncalves, have ended, as these agents are returning to Montevideo. Although Switzerland is taking charge of Uruguayan affairs in Havana the Uruguayan Charge is staying to close the Embassy and to transfer the eight remaining asylees, including Perez Freeman, to another Embassy. According to the Miami station Goncalves is too insecure and frivolous to consider incorporating into other operations so I've asked them to forward a contact plan for Roosen only. Just possibly he could develop a relationship with a Soviet officer here, but this will depend on a careful analysis of the possibility that he was known by the Cubans to be working with us.

No sooner do we get the Cubans out than the Chinese communists try to move in. Only yesterday the Foreign Minister told a reporter that the Chicoms have asked permission to set up a trade mission in Montevideo and that as far as he is concerned it would be all right. Holman gave O'Grady the responsibility for following this one up but as in the case of the Brazilians the details are mine because we'll use the police intelligence office to get more information.

Manuel Pio Correa, ‡ the new Brazilian Ambassador, arrives tomorrow. He is pointedly visiting Brazilian military units along the Uruguay-Brazil border on his way here. Holman will establish contact with him next week.

Montevideo 16 September 1964

In spite of the intensity of station operations against the Cubans and other matters like the Brazilians, and local communist gains in the trade-union field we have a serious morale problem that's getting worse as weeks go by. In most stations, I suppose, the day to day demands of work keep personal dissentions to a minimum because one doesn't have the time or energy to feud. But here the problem is with Holman and everyone in the station is affected.

The problem is that Holman expects all the station officers to give outstanding performances in their particular areas of responsibility but he's not willing to exert very much effort himself. Besides that he is a great player of favourites, and for better or worse he's chosen me as his favourite. He invites me to lunch several days each week and practically insists that I play golf on Saturday afternoons with his crowd out at the Cerro Club even though I've made it clear I'm not enthusiastic. When we're alone he speaks derisively of the other station officers, especially O'Grady, Phipps and Zeffer. O'Grady, in fact, has turned into a bundle of nerves under Holman's criticism, which he's sure is the cause of his increasingly frequent attacks of hives. Usually Holman's criticisms are about shortcomings in language or failure to make new recruitments but sometimes he even criticizes the wives.

His attitude would be understandable, perhaps, if his own work habits were more inspiring, but he avoids work as much as possible and requests from other stations like Rio or La Paz or Buenos Aires seem like personal insults to him. Just the other day when we were playing golf, Holman told me that in fact he was rather relieved when the recruitment of Hernandez, the Cuban code clerk, failed. He said he came to Montevideo for a relaxing last four years before retiring and only hoped to keep operations to a minimum and the Ambassador happy. If Hernandez had been recruited, headquarters would have bothered us constantly with advice and probably would have sent down' experts' to tell us how to run the operation.

Holman is not only determined to keep operations to a minimum. At night or on week-ends when priority cables are received or have to be sent Holman refuses to go to the station to take action. He either sends O'Grady in to bring the cable out to his house in Carrasco -- against all the rules of security -- or he has the communications officer bring it out to him. If another officer has to take action he simply calls that officer to his house.

I'm not sure what to do since I'm the only officer Holman thinks is doing a good job -- nothing to be proud of, it could even be the kiss of death. Warren Dean told me before leaving Quito that Holman isn't considered one of the more outstanding Chiefs of Station in the Division, but he's apparently protected by Ray Herbert, the Deputy Division Chief, who is Holman's best friend.

Montevideo 25 September 1964

Today the Congress approved the new budgets for the state-owned banks with provisions for a 30 per cent salary increase retroactive to January of this year plus improved fringe benefits. Political motivation prevailed at the last moment 'ven though the NCG had previously rejected such generous increases, which is not to say they aren't justified when inflation is taken into account. The main problem is that this increase of 30 per cent will set the standard for demands by all the other government employees which in turn will accelerate inflation with new budget deficits.

The new National Workers' Convention, heavily influenced by the PCU, is also intensifying its efforts to unify the government and private-sector workers through a series of rallies and marches in coming weeks, culminating in a mass meeting in early December to be called the Congress of the People with representation from the trade unions and other popular mass organizations. At the Congress of People they will formulate their own solutions to the problems afflicting this country -- not a bad idea what with the mess they're in.

Relations between Uruguay and Brazil are back at boiling-point. Police in Porto Alegre, the capital of the Brazilian state bordering Uruguay, have just discovered a new plot by Goulart and his supporters to foment a communist-oriented takeover. A written plan, supposedly found on a university student, included the formation of terrorist commando units. Earlier, another plot was discovered in Porto Alegre involving Army officers loyal to Goulart. Here in Montevideo, the 300 Brazilian exiles have formed an association to help those unable to get along financially. However, at the first meeting considerable discussion was devoted to ways in which the military government could be overthrown, and Brizola's wife, who is Goulart's sister, was elected to the association's governing board.

In tracking down the possibility that the Chinese communists will establish a trade mission here, we discovered that permission has in fact been granted, not to the Chinese but to the North Koreans. They have just arrived and are taking a house on the same street as the Soviet Legation. Holman asked Tejera, ‡ the Minister of the Interior, what could be done to keep them from staying permanently, but Tejera made no promises. Already head-quarters is asking for a programme to get them thrown out.

Two recent developments of note have occurred in our otherwise stagnated student operations. A new publication aimed at university and secondary students is now coming out: it's called Combate ‡ and is published by Alberto Roca. ‡ Also, at the Alfredo Vazquez Acevedo Institute, which is the secondary school associated with the University and as such the most important on that level, the student union supported by the station has just defeated the FEUU-oriented candidates for the fifth straight time. Sooner or later our work with this group, the Association of Preparatory Students, ‡ is bound to be reflected in the FEUU.

Montevideo 29 September 1964

Montevideo was alive with new rumours this morning that senior Blanco military officers are planning a coup against the government. Cause of the rumours is a dinner given last night by Juan Jose Gari, the long-time station agent in the Ruralist League and currently President of the State Mortgage Bank, in honour of Mario Aguerrondo, ‡ former Montevideo Police Chief, who was recently promoted from Colonel to General. Among the guests at the dinner were other Ruralista leaders and practically all of the top military commanders from the Minister of Defense down. Holman checked out the rum ours with Gari and with Adolfo Tejera, the Minister of the Interior, while I checked with Colonel Roberto Ramirez, Chief of the Metropolitan Guard, who was also there. The dinner was simply an expression of homage to Aguerrondo but the rumours, entirely unfounded, reveal just how nervous people are that a military takeover may occur, what with the increasing strength of the PCU-dominated unions and the government's incapacity to slow inflation. New strikes are being planned.

Holman thinks he has at last got agreement from the Minister of the Interior, Adolfo Tejera, for setting up a Public Safety mission for work with the police under AID. For some time Colonel Rodriguez, the Chief of Police, has wanted the programme but the delicate question of foreigners working openly with the police has caused Tejera to delay his decision. No wonder Tejera has now finally decided. He has just testified before the Budget Commission of the Chamber of Deputies that his ministry is too poor to buy paper, the police lack uniforms, arms, transport and communication, and the fire departments lack hoses, chemicals, trucks and other equipment.

It's not just a question of money and equipment for the police; they are also very poorly trained. Not only are bank robberies frequent, for example, but successful escapes often involve not only stolen cars but motor scooters, bicycles, trucks, buses -- even horses. In one recent robbery the getaway car wouldn't start so the robbers simply walked down the street to the beach and disappeared into the crowd. In August four thieves were caught robbing a house on the coast near Punta del Este but escaped to the nearby hills, and after a two-day gun battle they slipped through a .cordon of several hundred police. Their escape car, however, got stuck in the sand and they walked down the beach, robbed another house, were again discovered, but this time escaped in a rowing-boat. For six days the police chased them in cars, helicopters and on foot but they finally escaped completely -- carrying their loot on their backs as they rode their bicycles down the main highway into Montevideo.

The competence of the AVALANCHE service is similarly limited in its attempts to suppress terrorist activities. Undoubtedly some of the bombings at the time relations with Cuba were broken were the work of the terrorist group led by Raul Sendic. Last March Sendic returned from several months in hiding in Argentina after an arms theft from a shooting club in Colonia. He arrived in a light aircraft at a small airport near Montevideo, but when discovered he simply rushed past the police guard and escaped in a waiting truck. The following month 4000 sticks of dynamite were stolen from a quarry and a few days later enough caps and fuses to explode it disappeared from another site. All the police could report was that these thefts may have been the work of the Sendic band.

Building up the police is like labour operations -- we're still at the beginning with a long road ahead requiring training, equipment, money and lots of patience.

Montevideo 7 October 1964

This is the final day of the forty-eight-hour strike in the autonomous agencies and decentralized services. Only the electric company and the state banks have been operating although the banks have been stopping work for one hour each shift in solidarity with the others. Yesterday the striking government workers, CNT unions and FEUU held a demonstration at the Legislative Palace to demand salary increases equivalent to the 30 per cent won two weeks ago by the government bank workers.

Two days ago all the privately owned gasoline stations were closed indefinitely in an owner's strike against the government for a higher profit margin from the state-owned petroleum monopoly, ANCAP, which also has a large number of gasoline stations. As the ANCAP workers are participating in the forty-eight-hour government workers' strike, no stations were open yesterday or today. More strikes and demonstrations coming up: teachers, the ministries, postal workers and some unions in the private sector.

Montevideo 17 October 1964

Commissioner Otero and others have had a stroke of luck against the Sendic group of terrorists. Two leaders of the group, Jorge Manera, an engineer in the electric company, and Julio Marenales, a professor in the School of Fine Arts, were arrested in an unsuccessful bank robbery. They confessed that their purpose was to aid the sugar-cane workers of Bella Union and that the focal point for their activities is the School of Fine Arts. Police seized arms and are searching for two other members of the group. Otero's leads from these arrests are very important because this is the only active armed group. If he can get good information from the interrogations we may be able to target some recruitment operations against them. So far they've been completely underground.

We've decided to hook up the AVENGEFUL lines again on the Soviets and the PCU. I'll also put a line on Prensa Latina and another on the Czech Embassy which has taken over the Cubans' affairs. If the transcribers can manage I'll also put a tap on the telephone of Sara Youchak, a young activist in the FIDEL political front who has all the marks of being a Cuban intelligence agent.

Still no sign of who was behind the theft of the tapes from AVOIDANCE'S car. He'll now take over the courier duties again so that we can stop using the Embassy employee. Colonel Ramirez, Chief of the Metropolitan Guard, is really happy about AVENGEFUL. A few days ago his men, acting on data from telephone taps, intercepted a truck containing 600 transistor radios that had been off-loaded from a light aircraft running contraband from Argentina. The 300,000 pesos that the haul is worth will be divided among Ramirez and his men.

Meanwhile the government announced that they simply had no money to start paying September salaries -- even the police and the Army, always the first to be paid -- have received nothing for September. Nevertheless, the NCG has just approved the 30 per cent increase for employees of the state-owned telephone, electricity and petroleum monopolies.

Montevideo 25 October 1964

Perez Freeman has been killed trying to escape from the Uruguayan Embassy in Havana! The story was carried in wire-service reports this morning and said that he had been trying to hold the Uruguayan Charge, who is still trying to arrange for another Embassy to take over the asylees, as hostage. The Miami station is attempting to check the story but no confirmation so far. If only the Mexico City station had handled his defection correctly in January we would have all his information and he'd be basking in the Miami sun.

Montevideo 31 October 1964

On the Perez Freeman case the Foreign Ministry received what is being called the longest cable in its history -- some 1300 groups in code from the Embassy in Havana. The communications office of the Foreign Ministry, however, was unable to decode it for 'technical' reasons -- meaning, probably, that too much effort was involved -- so the Foreign Minister called the Embassy by telephone to get the story the Charge had put in the cable.

Perez Freeman, according to the Charge, was the leader of a group of four asylees who took the Charge hostage and escaped from the Embassy in the Charge's car. Cuban security forces gave chase and when the escaping group arrived at a roadblock Perez Freeman jumped out of the car and was shot running away. The others were taken to the fortress where executions are normally held. I've asked the Miami station to try to verify the Charge's version.

Hernan Siles Suazo, the former Bolivian President, was caught plotting and was deported by President Paz Estenssoro. He's arrived back in Montevideo and we're supposed to report any signs that he may be returning to Bolivia. Paz Estenssoro is in serious trouble right now, and the La Paz station wants to head off any complications from Siles. Holman continues to meet with Jose Arce, the Bolivian Ambassador, to pass tidbits from police intelligence. Yesterday Arce gave a press conference to assure everyone that the rebellion now underway against Paz Estenssoro is communist-inspired and doomed to failure. He emphasized that Paz has the full support of the Bolivian people and that current problems have been blown all out of proportion -- adding that the minority groups opposing Paz are so few in number that they could all be driven off together in a single bus. So far ex- President Siles hasn't moved from Montevideo but Otero has posted a special 'security' guard for Siles in order to watch him more closely.

Montevideo 6 November 1964

In Bolivia President Paz has been overthrown by the military and allowed to go to Lima in exile. Ambassador Arce has resigned and has announced that he plans to continue living in Montevideo for a while. Meanwhile ex-President Siles has started to pack and will be leaving for Bolivia within a few days. Holman's not very happy, though, because rumours are strong that Paz Estenssoro is coming to live in Montevideo -- meaning exile-watching will continue, only with new targets.

Late tonight the Budget was finally passed by the Chamber of Deputies, ten minutes before the final constitutional deadline and after forty hours of continuous debate. Passage was made possible by a last-minute political pact between the Blancos, who lack a majority in the Chamber, and the Ruralistas, Christian Democrats and a splinter faction of the Colorados. Opinion is unanimous, .even among Blancos, that the Budget is unworkable because of its enormous deficit and that not even the devaluation of the peso included in the Budget exercise -- the third devaluation since the Blancos took over in 1959 -- will allow for printing enough new money to cover the deficit.

I've seen my Soviet friends at several recent diplomatic receptions and have become acquainted with a couple of Romanians and Czechs as well. Headquarters has reacted favourably and asked that I develop the relationship further with the Soviet Consul, Borisov. Tomorrow night I go to the Soviet Embassy as the Ambassador's representative for their celebration of the October Revolution. Phipps tells me to expect plenty of vodka, caviar and singing.
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Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:26 am


Montevideo 28 November 1964

Relations between Uruguay and Brazil are heating up again although Goulart's importance is diminishing fast because he has heart trouble and recently underwent an operation. Brizola is the centre of controversy now because of recent declarations against the Brazilian government that were published both here and in Brazil. Manuel Pio Correa, ‡ the Brazilian Ambassador, has filed another official protest against Brizola's conduct. Perhaps more important are the recent arrivals of two former high officials in Goulart's government, Max de Costa Santos, formerly a Deputy, and Almino Alfonso, former Minister of Labor. Both are far-left and Pio has protested against their arrival here, claiming they entered Uruguay illegally and cannot obtain asylum because they had already been granted asylum in other countries following the military coup. The Minister of the Interior, Adolfo Tejera, ‡ is studying the case and Holman is urging him to throw them out.

In Brazil, the federal government has been forced to take over the state of Goias, throwing out the state government because of what is being described as communist subversion there. Yesterday the Brazilian Foreign Minister blamed the intervention in Goias (the military government's worst crisis yet) on the activities of exiles in Montevideo. Today President Castelo Branco told the Brazilian Congress that he had ordered the takeover in Goias in order to forestall a plot led by Brizola from Montevideo. New protests from Pio Correa are certain.

Outright military intervention in Uruguay by Brazil is getting closer. We've had several alarming reports lately through the communications intelligence channel based on monitoring of the military traffic in southern Brazil. According to these reports the Brazilian Army is ready at any time to implement a plan to invade Uruguay and take over Montevideo in a matter of hours.

Montevideo 2 December 1964

I have been trying in recent weeks to follow up some of the mass of leads on probable agents and operations of the Cubans. Most of these leads have come from telephone tapping, surveillance, letter intercepts and monitoring of communications channels. Several of these cases have interesting aspects.

I continue to receive the mail addressed to the Cuban intelligence support agent, Jorge Castillo, through the postman AVBUSY-1. In May the Cubans changed the cryptographic system of their network in Latin America (the ZRKNICK agents), probably as a result of the near-recruitment of Hernandez here and of the defection of the Cuban intelligence officer, AMMUG-1, ‡ in Canada. Since then the National Security Agency has been unable to decrypt the messages which continue, nevertheless, to be sent to agents operating in several parts of Latin America. Although I haven't intercepted any mail that would appear to be sent by the Cuban agent believed to be working in Lima or La Paz, I have received some very suspicious letters mailed from a provincial Uruguayan town.

Telephone tapping and suveillance of Sara Youchak, a frequent overt contact of one of the Cuban intelligence officers before the break in relations, revealed that she travels frequently to Buenos Aires, where she sees her cousin, whom the Buenos Aires station has connected with guerrilla activities in northern Argentina and with communist student organizing. Moreover, Sara has a first cousin (whom she has never seen) who is a State Department Foreign Service officer. Soon I'll ask headquarters to check with State Department security people to see if we might use the cousin to place an agent next to Sara.

Through monitoring of airline reservation communications the National Security Agency has discovered that the manager of the Montevideo office of the Scandinavian Airlines System, Danilo Trelles, is in charge of assigning pre-paid tickets for passengers from many Latin American countries on the SAS flights that start several times each week in Santiago, Chile, and arrive after a number of stops in Prague. The pre-paid tickets are usually requested by the Prague office of Cuban a Airlines and are intended for Latin Americans travelling to Cuba. Because the pre-paid tickets are sent as 'no-name', Trelles can assign them and assure that the identity of the traveller is protected. What we are trying to discover is how Trelles is advised of the identities of the travellers. The answer may be through the Czech or Soviet embassies which Trelles's assistant, Flora Papo, often visits. Papo in fact takes care of the details of this travel-support operation and the A VENIN surveillance team has turned up interesting vulnerability data on her.

AVENGEFUL telephone tapping on the Montevideo office of Prensa Latina, the Cuban wire service, seems to reveal what I suspected -- that PL is serving as a support mechanism for Cuban intelligence operations now that the Embassy is gone. The monthly subsidy for the office is about five thousand dollars, which is wired to the Montevideo branch of the Bank of London and Montreal from the Bank of Canada. The tap also revealed that the total of all the salaries, rent, services of Press Wireless and other expenses amount to only about half the subsidy. Headquarters is currently processing clearance for an Assistant Manager of the Bank of London and Montreal whom I already know rather well and whom I'll recruit for access to cheques on the PL account. It would be interesting to discover the recipients of the unaccounted half of the subsidy, but right now I can still only suspect that it is used for intelligence operations.

We have a new case officer for operations against the Communist Party of Uruguay and related organizations. He's Bob Riefe ‡ who was the chief instructor in communism for the headquarters' portion of the JOT course five years' ago. Riefe has a Ph.D. and has spent his entire career in training, but he was able to wangle an assignment in the DDP as part of the Office of Training's 'cross-fertilization' programme. A couple of years ago he was to have been assigned to a WH station but a heart-attack delayed him. Hopefully I can convince Riefe to take back the former Cuban Embassy chauffeur, AVBARON-1, whom I've been unsuccessfully trying to push back into PCU work since the Cubans left.

Riefe's predecessor, Paul Burns, is returning to headquarters rather discouraged after four years here without getting a really high-level penetration of the PCU. In recent months he has spent most of his time struggling with the AVPEARL audio penetration of the PCU conference room. The bugged porcelain electrical sockets arrived from headquarters some months ago but when AYCAVE-1, the PCU penetration agent assigned to make the installation, got his next guard duty he found that the paint flecks were not quite exact. Back in the station the paint was corrected by Frank Sherno, ‡ a TSD technician who is setting up a regional support shop in the Buenos Aires station to service Uruguay and Chile as well as Argentina. (This new shop will give us much faster service than the Panama station regional support base for technical operations.)

At last a listening post has also been found -- it's a tiny apartment in a building behind the PCU headquarters but located where the carrier-current transmitters in the sockets can be picked up. Then AVCAVE-1 got guard duty again, Sherno came over from Buenos Aires again, and during the course of guard duty the agent was able to replace the original sockets with our bugged ones for testing. Sherno in the LP had transmitters to test the switches (one frequency to turn them on and another frequency to turn them off) and a receiver to test the RF and audio quality. Then AVCAvV-1 removed our sockets and replaced the original ones since there was no way to. get a message from Sherno back to him if they hadn't worked properly.

The testing operation was very risky, both for AVCAVE-1 and for Sherno in the LP. Guard duty at PCU headquarters is always in pairs and for AVCAVE-1 to slip loose from his colleague and install the bugged sockets was difficult even though it only involved the use of a screwdriver. Getting Sherno in and out of the LP with the transmitters and receivers was also dangerous because almost all the people around the PCU headquarters are party members and suspicious of strangers. Somehow both AVCAVE-1 and Sherno came out undiscovered, and now Riefe will proceed with finding a permanent LP-keeper and with the final installation by AVCAVE-1. According to Sherno the signal is excellent.

Montevideo 4 December 1964

Pio Correa, ‡ the Brazilian Ambassador, is making a loud noise over the two former Goulart government leaders, Max da Costa Santos and Almino Alfonso. Adolfo Tejera, the Minister of the Interior, recommended to the NCG ten days ago that they be expelled because they had indeed entered Uruguay illegally. A week later the Foreign Minister announced that they can remain in Uruguay because their documentation is, after all, in order -- according to a Ministry of the Interior investigation. Furious, Pio Correa has filed another protest note asking for their expulsion and Brizola's internment -- complaining also that Brizola has several light aircraft at his disposal for courier flights to and from Brazil.

The NCG has passed this latest protest back to the Ministers of the Interior and Foreign Relations with an instruction to the latter that the Brazilian government be asked for an explanation of the recent repeated violations of the border by Brazilian military vehicles. Three aircraft belonging to Brizola were also grounded. Commissioner Otero's ‡ Intelligence and Liaison Department of the Montevideo Police, however, have arrested one of Colonel Camara Sena's ‡ spies -- a Navy sergeant who came posing as a student but was caught surveilling one of the exiles. He was charged with spying but set free when the Brazilian Embassy intervened.

According to Holman, Pio Correa is going to keep protesting until Brizola either leaves Uruguay or is interned and until a favourable resolution of the Alfonso and Santos cases. Otherwise we can expect Brazilian military intervention.

Montevideo 18 December 1964

A new victory for the station at Georgetown, British Guiana, in its efforts to throw out the leftist-nationalist Prime Minister and professed Marxist, Cheddi Jagan. In elections a few days ago lagan's Indian-based party lost parliamentary control to a coalition of the black-based party and a splinter group. The new Prime Minister, Forbes Burnham, is considered to be a moderate and his ascension to power finally removes the fear that lagan would turn British Guiana into another Cuba. The victory is largely due to CIA operations over the past five years to strengthen the anti-Jagan trade unions, principally through the Public Service International ‡ which provided the cover for financing public employees strikes. lagan is protesting fraud -- earlier this year he expelled Gene Meakins, ‡ one of our main labour agents in the operation, but it was no use.

Montevideo 25 December 1964

Christmas in Uruguay is like the 4th of July at home. It's hot and everybody goes to the beach -- and it's almost completely secular with the official designation 'Family Day'. (Holy Week is similarly changed to 'Tourism Week' and most of the country goes goes on vacation.) How different from Ecuador where the Church is so powerful.

I stopped over at O'Grady's house this morning for a little Christmas cheer but ended up commiserating with him over the latest Holman outburst. A few days ago O'Grady and his wife gave a little cocktail party and buffet as a welcome for the new cp operations officer, Bob Riefe. Holman didn't hold his drinks very well that night and soon began to lash out at O'Grady and then at Riefe and Riefe's wife. It was all pretty unpleasant and now O'Grady's hives are back out in full bloom, in spite of the fact that we all know now that Holman is coming out the real loser.

Apparently certain powers in headquarters are not entirely pleased with the station's performance, particularly in the area of Soviet operations, and Holman is to be transferred in about six months to Guatemala. His replacement as Chief of Station will be a man named John Horton, ‡ who came to WH Division from the Far East Division along with so many others after the Bay of Pigs invasion. Holman has-only just got official notification but he heard the change was coming, some time ago from his protector Ray Herbert, the Deputy Division Chief. Although Herbert was able to salvage the situation somewhat by arranging Holman's reassignment to Guatemala, Holman's bitterness keeps growing. Russ Phipps, the Soviet operation officer, is now almost up to O'Grady's level on Holman's list of persons to blame, but Riefe was attacked because he's obviously part of the new crew being assembled by Horton. Clearly Holman resents being edged aside by newcomers from FE Division because his days in Latin America go back to World War II.

What O'Grady and Phipps, and Alexander Zeffer too, are worried about is that Holman's search for scapegoats will seriously damage their careers and chances for future promotions and assignments. A couple of months ago I chanced across the combination to Holman's safe-cabinet and out of curiosity began to read some of the 'Secret-Informal Eyes Only' letters that he exchanges more or less weekly with Des FitzGerald, ‡ the Division Chief. I was so shocked at the knives he was putting into everyone but me that I gave the combination to O'Grady. Now he's reading the letters -- which only makes his hives worse -- and I think he's passed the combination on to Zeffer and Phipps. The dangerous part is that Holman is not so damning in the official fitness reports on the other officers, but that he cuts them so badly in these letters that they aren't supposed to see. Reading these letters, in fact, is highly dangerous, but all these officers are competent and certainly harder workers than Holman. I wonder if we can hold together for these next six months without rebellion.

Montevideo 15 January 1965

Some decisions on Brazilian affairs indicate the Blancos are persisting in efforts to elude Brazilian pressures. The NCG voted not to give political asylum to Almino Alfonso and Max da Costa Santos on the grounds that they had come to Uruguay after having received asylum in other countries. However, they were given ninety-day tourist visas which isn't going to please Pio Correa. No decision on Brizola was needed because he promised the Minister of the Interior that he'll be leaving Uruguay no later than 23 January. On the other hand Brizola will be allowed to return to Uruguay in which case he can request political asylum again.

Two important new exiles are now here. One, a former Brazilian Air Force officer and one of its most highly decorated men, escaped from a military prison in Porto Alegre and made it across the border. The other is a former deputy who was in exile in Bolivia until ex-President Paz was overthrown, but came here recently for fear the new rightist regime in Bolivia would expel him to Brazil. Both are important supporters of Brizola.

In a personal complaint to the NCG President, Pio Correa tried to get action started on the fourteen recent requests he has made regarding the exiles. This prompted several notes from the Uruguayan Foreign Ministry but resistance continues. The Brazilian press, meanwhile, probably at the government's instigation, has started a campaign to raise the tension by speculating that relations are about to be broken and that commercial pressures are being exerted on Uruguay. For their part the Uruguayan and Brazilian Foreign Ministers have denied that relations are about to be broken, while in the NCG a Colorado Councillor called for the Foreign Minister's resignation for his inept handling of Brazilian problems.

These Brazilian affairs are a nuisance for me because I have constantly to be checking rumours and requesting special reports from the police on the exiles for Holman or O'Grady to use with Pio Correa, Fontoura and Camara Sena. Who could believe a handful of exiles here could be a threat to the Brazilian military government? Even so, headquarters keeps insisting that we help the Rio station in their operations to support the military.

If the military in Brazil weren't so strongly anti-communist our support for them would be embarrassing. In recent weeks the Brazilians have had an internal crisis going over the question of whether the Navy or the Air Force is to operate the aircraft of their only aircraft-carrier -- a decrepit cow discarded by the British. Two ministers of the Air Force have recently resigned over decisions by the President to have the Navy fly the airplanes, but he changed his mind again and yesterday the Minister of the Navy resigned. Now, it seems, the Brazilian carrier strike force will have Air Force pilots.

To make matters with Brazil worse, a few days ago the commercial offices of the Brazilian Embassy were bombed, although little damage was done because the bomb was poorly placed. However, written on a wall nearby was the name 'Tupamaros' which appeared at several other recent bombings. Commissioner Otero, Chief of Police Intelligence, is trying to find out who these people are. He thinks they may be the Sendic group. Raul Sendic, the revolutionary socialist leader, who had been arrested on a contraband charge in an Argentine town near the border, was recently released, and may have returned to Montevideo.

Inability to curb these bombings illustrates the difference between good penetrations of the CP and related groups and bad ones. In Ecuador a group like this would have been wiped up by now. Nevertheless, Riefe doesn't take the bombings very seriously and seems intent on concentrating on the strictly-reformist PCU.

Montevideo 4 February 1965

At Headquarter's instruction I'm continuing to develop the relationship with Sergey Borisov, the Soviet Consul and KGB officer.

Last Sunday Janet and I went with Borisov and his wife Nina to the beach. First they came out to our house in Carrasco and then Borisov drove us out to a beach near Solymar. His driving is very odd and made me nervous -- practically like a beginner. Not so his chess, of course, where he beat me easily. Phipps tells me that Borisov knows I'm a CIA officer without any doubt, so I wonder sometimes why I bother meeting him. Headquarters says that's just the reason to keep the relationship going -- on the chance that Borisov could be disaffected and trying to 'build a bridge.'

Holman has asked me to take over complete responsibility for the satellite missions, which include Czechs, Romanians, Bulgarians, Poles and Yugoslavs. For East European countries we have no elaborate operational procedure such as we do for the Soviets. Headquarters apparently has such high-level penetrations in those countries that the painstaking work of spotting and placing access agents next to them simply isn't justified. Successes in the case of the satellites have come from CIA officers in direct contact with them. As a start, however, I'm going to bring the files up to date on the personnel of each mission and next week I'll try to get the Foreign Ministry protocol files through AVDANDY-1 for that purpose. Then I'll start a photographic album and get reports from headquarters on the new arrivals. Right now I'm not even sure who they all are, because Phipps has been concentrating on the Soviets and ignoring the Eastern Europeans.

Last week I made my first visit to the AVENGEFUL telephone-tapping LP at the Montevideo Police Headquarters. I took along a visiting TSD technician who wanted to see how the equipment is being maintained -- in the operational files I couldn't find the last time it was visited by a station officer, probably some years ago. The room is located right over the office of the Deputy Police Chief on the same floor as Commissioner Otero's Intelligence and Liaison Department. However, there is a locked steel door between I and E and the LP -- in fact the normal way to enter the LP section of the floor is by an elevator from the underground garage for which a special key is necessary. Off the same hallway as the LP are several rooms that I was told are used by the Chief and Deputy Chief as rest quarters.

DeoAnda ‡ and Torres, ‡ the technicians and LP operators, do an excellent job in keeping up the equipment but they have an uncomfortable situation with the heat. Those tube-operated Revere recorders give off so much heat that the room is stifling in the summer. I promised to get them an air-conditioner that they'll install either in a small high window to the inside hallway, or else they'll have to make another opening. The LP has no windows to the street and only the one small window to the hallway -- good security but no ventilation.

Montevideo 7 February 1965

Investigation of Prensa Latina (the Cuban wire service) has got more interesting. Because of procedural agreements I had to postpone recruitment of my friend at the Bank of London and Montreal until the, intelligence chief of his country's service spoke to him and to his superior, the bank manager -- whom I also know from the Cerro Golf Club. This cumbersome process completed, I started reviewing the Prensa Latina account. As cheques are not returned to the account holder in Uruguay, it was easy to discover that practically all the money is paid out in cash. Legitimate expenses still total only about half of the monthly subsidy, so the rest of the money is clearly going into 'other activities'. The next step is to check the financial reports filed with government offices to see if we have a case for shutting down Prensa Latina for falsifying financial reports or similar irregular procedures inconsistent with the subsidy.

Montevideo 11 February 1965

At last the NCG voted to intern Brizola -- an accomplishment that has taken every ounce of Pio Correa's ‡ considerable energy and persistence. Typically, however, the NCG decided to let Brizola pick the town where he wants to live -- any except Montevideo and no closer than 300 kilometres to the Brazilian border. Now we can begin to relax about these messy Brazilian operations.

Pio Correa has done an excellent job bringing the Uruguayans into line over the exiles, which made possible the Foreign Minister's pleasant visit. Brizola, incidentally, has chosen the beach resort of Atlantida as the town where he'll be interned. Otero will continue the logs by 'security guards' from police intelligence -- it's only 35 kilometres from Montevideo where Brizola could still be fairly active -- and right at the limit on proximity to Brazil: 301 kilometres.

Final approval for the AID Public Safety Mission was obtained by Holman from Tejera, the Minister of the Interior, and last month the first Chief of Public Safety arrived. For the time being we will refrain from putting one of our officers under Public Safety cover, and I'll continue to handle the police intelligence operation. After the Mission gets established through straight police assistance (vehicles, arms, communications equipment, training) we'll bring down an officer to work full-time with Otero's intelligence department. About the best I can do part-time is to keep AVENGEFUL going and increase Otero's subsidy for intelligence expenses.

These Montevideo police are getting the Public Safety assistance none too soon. In another bank robbery just three days ago the policeman on guard got excited and fatally shot one of the customers -- mistaking the customer for one of the robbers. Seeing this, the robbers, a man and a woman, rushed out of the bank leaving the money behind. They walked for several blocks and hailed a taxi which took them to the other side of the city. Since they had no money to pay the fare, the robber gave his pistol to the taxi driver in payment. The driver, however, heard of the robbery on the radio and turned the pistol over to the police. On checking the weapon the police discovered that it was the service revolver of one of their own policemen. He was arrested at home and admitted forcing his wife to go along with him on the robbery. The last time that particular bank had been robbed was in 1963 by two women (or men?) dressed as nuns who were never caught.

New strikes: Montevideo buses and trolleys for payment of subsidies and salaries; port workers for last year's Christmas bonus; city employees for retroactive fringe benefits. Inflation during 1964 was almost 45 per cent and last month reached the 3 per cent per month rate. The Blancos are trying to put through another devaluation, while the peso is unsteady and has now slipped to 30.

Montevideo 25 February 1965

I got an important hit on the postal intercept operation against Jorge Castillo, the Cuban intelligence support agent used as an accommodation address for Agent 101 in Lima or La Paz. The letter-carrier, AVBUSY-1, offered me a large brown manila envelope the other day but it was addressed not to Castillo but to Raul Trajtenberg who lives in the same huge apartment building as Castillo. I took the envelope because it was sent from Havana and the words Edificio Panamericano in the address were underlined just as they were to have been underlined in correspondence to Castillo.

I arranged with AVBUSY-1 to keep the envelope for several days in case headquarters wanted to send down a secret-writing technician to test the contents. Inside were Cuban press releases and clippings from Havana newspapers. Headquarters answered my cable by sending a technician immediately from Panama (the Buenos Aires regional support technician is a specialist in audio and photo rather than SW techniques) and he was going to try to 'lift' secret writing from the contents. However, we couldn't find a letter press fast enough so I had to return the envelope to AVBUSY-1without the test.

On checking station files on Trajtenberg I found a letter that he had written from Havana two years ago that was intercepted through the AVIDITY operation. Strangely, the handwriting on the manila envelope was exactly the same as that of the Trajtenberg letter written from Havana -- meaning, probably, that Trajtenberg addressed the envelope to himself and, along with other self-addressed envelopes, gave it to a Cuban intelligence officer for later use. Trajtenberg's mail will also be given to me regularly by AVBUSY-1 although Trajtenberg is leaving soon to study at the University of Paris. So far other Trajtenberg intercepts reveal that his father (he lives with his parents) is manipulating large sums of money in a numbered Swiss bank account. The Berne station advised that the Swiss security service will provide data from numbered accounts but insist on all the details and reasons -- which headquarters doesn't want to give right now because of the sensitivity of other cases in this same Cuban network.

Montevideo 18 March 1965

Washington Beltran, the new NCG President, has had plenty of labour unrest in spite of the recent carnival distractions: railway workers striking for the 1964 retroactive pay increases, the interprovincial buses stopped again for back salaries and subsidies, the Montevideo bus and trolley employees also striking for salaries and subsidies, and public-health clinics and hospitals struck by employees demanding their January salaries. Today there is no public transportation in Montevideo except taxis, and the Sub-Secretary of the Treasury just announced that government receipts amount to only half the daily cost of the central administration.

We've been trying to find a little relief from the gloomy atmosphere of dissention in the station. Holman's letters to Fitz- Gerald are getting even worse if that's possible and each time O'Grady reads the file his hives start up again. Bob Riefe, the CP officer, has a way of reading the news of each day's mismanagement by the Uruguayan government with loud rhetorical questioning broken by equally loud and contemptuous guffaws and cackles. His approval of the strikes and other agitation by his target group are shared by all of us, though perhaps for different reasons, as we watch political partisanship prevail over the reforms (land, fiscal) and austerity needed to stop the country's slide. Russ Phipps, who sits on the other side of me from Riefe, pores over his surveillance reports, telephone transcripts and observation post logs, muttering from time to time that's it not the PCU but the Soviets who deserve the honour of putting this country straight.


Riefe and Phipps always catch me in the middle because I'm supposed to be building up the police intelligence department and developing political contacts. When things get bad I usually call over beyond Riefe to Alex Zeffer but his morale is so low he can rarely summon more than an agonizing oath. Then I have to call on O'Grady for support because he works with military intelligence, such as it is, and is the most terrorized of all by Holman. The five of us then discuss solutions. Usually Holman is selected to save Uruguay -- one plan is to send Phipps over to the KGB Chief to request that they defect Holman, with our help if they want it, but if they turn him down, as is likely, well, there's always AVALANCHE.

Officers from the Inspector-General's staff were just here on a routine inspection. This was the time to get the word back to headquarters about Holman's incompetence, but I don't think anyone opened his mouth.

Montevideo 31 March 1965

The AVPEARL audio penetration of the PCU headquarters conference room is another step closer. AVCAVE-1, again on guard duty, permanently installed the two electrical sockets and final tests by Frank Sherno in the LP were successful. Now the problem is to find a good LP-keeper who can monitor the installation and record the meetings. Ideally this person could also transcribe, but chances are that transcribing will have to be done at first by AVENGEFUL-5, ‡ transcriber of the PCU telephone tap, who already knows the names and voices.

Montevideo 6 April 1965

The general strike today is very effective: Otero's office estimates that 90 per cent of organized labour is participating. No government offices are open, there are no taxis or buses, no restaurants, no newspapers. The theme is protest against government economic policies and marches have been loud and impressive although no violence is reported. Speakers have called for radical solutions to the country's problems -- solutions that will attack the privileged classes, where the problems begin.

The strike is also being used to promote coming CNT programmes, including the preparatory meeting for the Congress of the People that was postponed from last December and the annual protest march of the sugar-cane workers from Artigas in the far north to Montevideo. Recent statistics support the protests: the OAS reported this month that inflation in Uruguay during 1962-4 was 59.7 per cent -- higher than Chile (36.6), Argentina (24.4) and even Brazil (58.4).

The government is getting uneasy about the CNT's successes of late. Adolfo Tejera, the Minister of the Interior, made a radio speech last night on the rights and duties of citizens in the context of today's general strike.

Holman keeps insisting that I develop more political contacts but I'm keeping the activity to a minimum. Even if we reached a level of effectiveness in political action similar to what we had in Ecuador, we would simply have better weapons to use against the PCU, CNT and others of the extreme left. What's needed here is intensification of land use, both for increasing export production and creating more jobs, but this can never happen without land reform. If we were to have a political-action programme to promote land reform, as well as action against the extreme left, some justification might be found in the balance. But these Uruguayan politicians are interested in other things than land reform.

Montevideo 14 April 1965

The government has taken a first step towards suppressing agitation organized by the extreme left. Last week the NCG designated an emergency commission with special executive powers to deal with the drought, now some months old, which is seriously endangering livestock. The commission includes the Ministers of Defense and Interior and similar commissions have been established in each department under the local police chief with representatives of the Ministry of Defense, a regional agronomist and a veterinarian. The same day the NCG also decreed special powers for the Minister of the Interior to limit public gatherings to twenty-four hours. This second decree, which the Minister later admitted. is to be used against the march of the sugar-cane workers, was enacted in a manner designed to confuse it with the special drought measures and with the hope that it might pass without much comment.

The CNT immediately denounced the measure as directed against the sugar-workers' march, which prompted the Minister's admission; and the Colorado minority NCG Councillors unsuccessfully tried to rescind it. Because these decrees allow for restriction of civil liberties they were presented to the Legislature for approval. The Blancos, however, knowing that the Colorados and others would rescind the decree aimed at the marchers, have prevented a quorum from being constituted each day by simply staying away.

In passing the decrees the NCG clarified that they were not adopting emergency security measures as defined in the Constitution (equivalent to a state of siege) and Tejera has given assurances that his special powers will be used with reason. However, in a public statement two days ago he accused the marchers of taking along women and children as hostages, of not having proper health and educational facilities for children, and of allowing promiscuity dangerous to collective morals. Clearly we have a confrontation building up, aided by press reports coming from the Ministry of the Interior that the march will be broken up before it reaches Montevideo. Right now the marchers are in San Jose, only a few days away, where police are registering them by taking biographical data, fingerprints and photographs for Otero's intelligence files. If Tejera gives orders for the march to be broken up not too many people will notice because this is tourism week and most of the country is on vacation. From our viewpoint he ought to do just that because the sugar-cane workers are led by Raul Sendic, now a fugitive and believed to be the organizer of most of the terrorist bombings in the past year.

Montevideo 25 April 1965

The march of the sugar-cane workers arrived in Montevideo yesterday -- almost unnoticed and with no danger of intervention by the government. Something much bigger has suddenly attracted everyone's attention: one of Uruguay's major banks has failed and been taken over by the Bank of the Republic. The sensation is causing mild panic and fear that other banks may go under, which might not be a bad thing. In this small country there are about fifty private banks even though the government banks do about 65 per cent of commercial business. The peso has slipped to 39.
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Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:28 am


Montevideo 27 April 1965

Inspector Piriz was assigned to handle investigations into fraud and other crimes related to the bank failure. So far eleven of the officers and directors have been jailed. Today, however, two more private banks were taken over by the Bank of the Republic, and for fear of a run on banks in general a holiday was decreed for all private banks. The holiday doesn't make much difference, though, because all the private banks have been closed since the first failure six days ago, when the unions struck to demand job security for employees of the bank that failed. Almost unnoticed today was the NCG'S lifting of the emergency drought decree of 8 April although the special decree on limiting public gatherings was retained.

Montevideo 28 April 1965

I don't quite understand this invasion of the Dominican Republic. Bosch was elected in 1962 thanks to the peasant vote organized by Sacha Volman. ‡ Volman earlier set up the Institute of Political Education ‡ in Costa Rica (cryptonym ZREAGER) where we sent young liberal political hopefuls for training. Bosch is from the same cut as Munoz Marin, Betancourt and Haya de la Torre. He stands for the reforms that will allow for redistribution of income and integration. Rightist opposition to his land reform and nationalistic economic policies brought on his overthrow by the military in 1963 after only seven months in power. This was another chance for him to turn the balance towards marginalized peasants and to channel income from industry, mostly sugar, into education and social projects.

Now, just as the Constitutionalists have the upper hand to restore Bosch to power, we send in the Marines to keep him out. Nobody's going to believe Johnson's story of another Cuba-style revolution in the making. There has to be more to the problem than this -- for some reason people in Washington just don't want Bosch back in. Uruguayans don't understand either. People here think Bosch stands for the kind of liberal reform that brought social integration to Uruguay. Already the street demonstrations against the US have started. Very depressing. AVBUZZ-1 is going to look silly trying to place propaganda -- headquarters says we must justify the invasion because of a danger to American and other foreigners' lives and a takeover of the Constitutionalist movement by communists.

Montevideo 4 May 1965

Headquarters has sent about fifty operations officers to the Dominican Republic to set up outposts in rural areas for reporting on popular support for the Caamano forces. The officers were sent with communications assistants and equipment for radioing reports straight back to the US. All WH stations were notified to put certain officers on stand-by for immediate travel, but Holman is not going to let me go -- probably because he would have to work a little harder. I would like to go and see for myself. Surely the Constitutionalist movement hadn't fallen into the hands of the communists. And this Johnson Doctrine! 'Revolutions that seek to create a communist government cease to be an internal matter and require hemisphere action.' Bullshit. They just don't want Bosch back in and the 'they' is probably US sugar interests.

We've had more protest demonstrations against the invasion, some violent. Targets of the attacks: US Embassy, OAS, US businesses. Today four demonstrators were wounded by gunfire when police broke up a street march following a meeting at the University. The private banks are still closed -- fifteen days now -- and there's no telling when government employees' salaries for April will begin being paid. Today both the Minister of Defense and the Minister of the Interior publicly denied the rumours of an impending coup.

Montevideo 7 May 1965

Ambassador Harriman came to explain the Dominican invasion and to propose Uruguayan participation in the multilateral peacekeeping force He spoke to President Beltran yesterday and afterwards held a press conference in which he blamed those fifty-eight trained communists for having taken over the Bosch movement, thereby creating the need for intervention. He admitted, though, that Caamano, the leader of the Bosch movement, isn't one of the fifty-eight. Then he said the US government is not going to permit the establishment of another communist government in the hemisphere.

I can easily imagine the station in Santo Domingo in a panic compiling that list of fifty-eight trained communists from their Subversive Control Watch List. There were probably more than fifty-eight, but Caamano and the Bosch people were in control, not trained communists. The movement was put down not because it was communist but because it was nationalist. The Uruguayans weren't convinced by Harriman -- after he left, the NCG voted not to participate in the peacekeeping force approved yesterday by the OAS. 'Fifty-eight trained communists' is our new station password and the answer is 'Ten thousand marines'.

Montevideo 12 May 1965

Protest'. demonstrations and attacks against US businesses over the Dominican invasion continue. The CNT, FEUU and other communist-influenced organizations are most active in the demonstrations, but opposition to the invasion is a popular issue going all the way up to the NCG. All America Cables and IBM are among the businesses bombed.

The CNT is also leading protests against economic policies, and new revelations of corruption in the banking sector are coming up almost daily. Although the Congress passed a special law assuring jobs for the employees of banks that have failed, tension continues, with three more banks taken over by the Bank of the Republic yesterday. The bank workers' union voted to return to work but today the government announced that the banks won't open until 17 May. The reason is that they can't open until a shipment of 500 million new pesos arrives from London.

Coup rumours continue and yesterday Tejera told the NCG that he believes the 8 April decree limiting public gatherings is unconstitutional. He complained that the only law relating to public meetings dates from 1897, but he promised the NCG a new constitutional decree on the subject for next week. Port workers struck yesterday and judicial branch employees began partial work stoppages for payment of April salaries.

Montevideo 20 May 1965

Financial corruption in Uruguay seems to have no end. Yesterday the NCG fired the entire board of directors of the Bank of the Republic. Nineteen officers and directors of banks taken over have been imprisoned and investigations are continuing. After being closed for twenty-six days the private banks have reopened but the falling peso -- it's down to 41 -- suggests more scandal to come.

On the labour front, strike action for payment of April salaries has been started by government employees in the judiciary, public schools, port, petroleum monopoly, fishing enterprise, postal system, communications and University. Other strikes are being planned or threatened.

Coup rumours are so strong that the Ministry of Defense yesterday issued a denial. The latest rum ours relate to speculation in the Brazilian press that Brazilian and Argentine military leaders are watching the increasing strikes and banking scandals in Uruguay closely, and that perhaps Uruguay is becoming a bad risk because of its opposition to intervention in the Dominican Republic and its tolerance of exile activities. Meanwhile the NCG is considering Pio Correa's latest protest on the exiles' meetings, finances and infiltration from Uruguay back to Brazil.

The PCU has in recent months been planning to host an international pro-Cuba conference to be called The Continental Congress of Solidarity with Cuba -- now scheduled for 18-20 June. Headquarters is anxious to prevent the conference so Holman proposed to Tejera that it be prohibited because it might reflect badly on Uruguay in the US (where emergency loans are going to be sought for financial relief), and in Latin America. Tejera immediately saw the connection with Brazilian problems, and promised to take up the matter with the NCG.

Montevideo 29 May 1965

Suddenly we've had a flurry of security moves sparked by controversy over the activities of one of O'Grady's people, Juan Carlos Quagliotti, ‡ and others of his group. Last night extraordinary police control was established in Montevideo and the interior departments, with special patrols, check points and security guards at radio stations, the telephone company, waterworks, railroad stations, bridges and crossroads. This morning Tejera said publicly that these measures were taken to help the electric company promote voluntary rationing of power, because of low generating capacity as a result of the drought last summer. The Minister of Defense also denied any special reasons for the police measures, but rumours are stronger than ever of a military move against the government.

According to Commissioner Otero of police intelligence, what really happened is that Quagliotti was arrested after Otero's investigation revealed that he had arranged for the printing and distribution of a distorted version of an article written in 1919 by President Beltran's father, on justification of military intervention in politics. The judge who heard the case refused to take jurisdiction, however, and Quagliotti was released pending action by military courts. Quagliotti's release caused a wave of ill-feeling in the police, while resentment also broke out in certain military circles against the police for having made the investigation and arrest.

So far the Quagliotti case hasn't been connected with the special security measures and for the time being O'Grady is going to avoid meeting him. Similarly when Otero asked me several days ago what I knew about Quagliotti I said nothing. Headquarters is very concerned that a breach is opening up between police and military leaders, but we've reported that the storm will probably pass. According to the Chief of Police, Colonel Ventura Rodriguez, the crisis is being resolved.

At an NCG meeting yesterday before imposition of the special security measures, Tejera asked for permission to ban the Continental Congress of Solidarity with Cuba. Using a report we had prepared on the Congress as his own, the Minister said the purpose of the Congress was to raise the question of relations with Cuba once more and to promote foreign ideologies that are incompatible with Uruguayan institutions. He said he wishes to avoid the pernicious proselytism by trained communist elements who promote infiltration by dangerous extremists, adding that Uruguay already has enough problems without this Congress. The NCG postponed a decision but chances are good that they'll prohibit the Congress in order to avoid jeopardizing their already difficult prospects for refinancing the Bank of the Republic, which is bankrupt, owing some 18 million dollars to New York banks. The President of the Bank has resigned, and the bank has been taken over by the NCG. The peso is now down to 52, and the scandals are moving into wool-exporting companies.

Montevideo 2 June 1965

Last night the NCG discussed the Quagliotti case with speeches from Tejera and the Minister of Defense. Tejera admitted that the special security measures of last week -- which are still in force -- were a result of Quagliotti's agitation in military circles and of dissention over whether he will be prosecuted or not. Today Quagliotti appeared before a military court which refused to take jurisdiction because he hadn't actually entered any military installation. It seems the crisis has passed for the time being thanks to Quagliotti's friends among the senior military officers, but resentment continues in the police over the failure to prosecute in both civil and military courts.

Tejera's request to the NCG to ban the pro-Cuban Congress went through. They voted to prohibit it on the principle of nonintervention. Headquarters will be pleased.

Montevideo 4 June 1965

Only a few more weeks until Holman is transferred. What none of us can imagine is why he is going to Guatemala, where one of the most serious insurgency threats exists. Surely if he is bad enough to be transferred from Montevideo after only two years, he's bad enough not to be sent as Chief of Station where armed action is under way.

About the only success he can claim is getting the Public Safety programme going. After the first AID officers arrived, Holman gave a couple of dinners to introduce them to the Minister of the Interior and senior police officers. As the station officer in charge of police liaison I had to go to Holman's house for these dinners, and soon he'll be giving more parties to introduce the new Chief of Station and say farewell. Strange man this Holman. Surely he can sense his isolation at the station but he never mentions it. He just keeps on denigrating the other officers.

Holman has asked me to take over another operation. This one is an an effort, not yet off the ground, to make a technical installation against the Embassy of the United Arab Republic on the street behind our Embassy and 'on the floor above the AI D offices. Phipps had been handling this operation without enthusiasm, but headquarters is getting anxious because if successful it will enable an important UAR cryptographic circuit to be read. As part of planning they asked for a floor plan of the Embassy, which I got through the AVENIN electric company agent, and soon a Division D officer will be coming to survey the place. As my office is in the back of our Embassy I can almost look out into the windows of the UAR Embassy.

I still can't believe the reasons for the Dominican invasion that we're trying to promote through AVBUZZ-1. Holman says it all goes back to the Agency's assassination of Trujillo. He was Chief of the Caribbean branch in headquarters at the time and was deeply involved in planning the assassination, which was done by Cuban exiles from Miami using weapons we sent through the diplomatic, pouch. The weapons were passed to the assassins through a US citizen who was an agent of the Santo Domingo station and owner of a supermarket. He had to be evacuated though, after the assassination, because the investigation brought him under suspicion.

Why is it that the invasion seems so unjustifiable to me? It can't be that I'm against intervention as such, because everything I do is in one way or another intervention in the affairs of other countries. Partly, I suppose, it's the immense scale of this invasion that shocks. Ob the other hand, full-scale military invasion is the logical final step when all the other tools of counter-insurgency fail. The Santo Domingo station just didn't or couldn't keep the lid on. But what's really disturbing is that we've intervened on the wrong side. I just don't believe 'fifty-eight trained communists' can take over a movement of thousands that includes experienced political leaders. That's a pretext. The real reason must be opposition to Bosch by US business with investments in the Dominican Republic. Surely these investments could have produced even while the land reform and other programmes moved ahead.

Montevideo 17 June 1965

We almost just lost one of our principal police liaison officers, Carlos Martin, ‡ the Deputy Chief of the Montevideo Police. Martin is an Army colonel, as is the Chief, but he is also a chartered accountant and has been supervising the police investigations that have uncovered so much corruption since April. He resigned two days ago because a judge denied his request to interrogate one of the convicted officers of the first bank to fail about lists of payments to high government officials by that bank. The lists are purposely cryptic notes that Martin wants clarified to aid the investigation. Martin's resignation in protest against political suppression of the investigations provoked such a row that the N CG agreed to take up the matter of the lists, and today Martin withdrew his resignation. So far there have been thirty-one convictions.

Montevideo 24 June 1965

The NCG now has the lists of political bribes paid by the first bank that failed in April. Names include an important Blanco Senator, the Vice-President of the State Mortgage Bank, a Blanco leader who has just been nominated as Uruguay's new Ambassador to the UN, two high officers of the Ministry of the Treasury, the person in charge of investigating one of the banks that failed, and a person known only by the initials J.J.G. This last person can only be Juan Jose Gari, our Ruralista political contact from the Nardone days and now the President of the State Mortgage Bank.

Meanwhile the Bank of the Republic debt has been determined at 358 million dollars, with 38 million dollars currently due. Gold from the Bank of the Republic, perhaps as much as half the Bank's holdings will have to be sent to the US as collateral for refinancing. Such an emotional and humiliating requirement is sure to cost the Blancos heavily.

In an important policy decision on the labour front, the BIancos decided to apply sanctions against the central administration employees for a strike on 17 June. Justification for the sanctions is that strikes by government employees are illegal, although until now the government had been reluctant to invoke illegality because of inflation and the obvious political consequences. The decision was answered by another strike of central administration employees -- this one began yesterday and will end tonight. The issues again are employees' benefits, agreed upon last year but still unpaid, payment of salaries on, time, and now the sanctions. The strike is complete, with even the .Montevideo airport and the government communications system closed. Other strikes continue in the judiciary, University and the huge Clinics Hospital. The peso is down to 69 and one of the Colorado Councillors has called for the resignation of the Minister of the Treasury.

Montevideo 7 July 1965

The Movement of the Revolutionary Left (MIR) in Peru has finally gone into action and seems to have had several initial successes against Peruvian police. Three days ago the Peruvian government declared a state of siege and the military services have been called in to supplement police operations. Hundreds of leftists are being arrested all over the country but the guerrilla operation seems to be located mostly in the eastern slopes of the Andes towards the Brazilian border. Undoubtedly the Lima station's notebook of intelligence from Enrique Amaya Quintana, ‡ the MIR walk-in in Guayaquil two years ago, is now in the hands of Peruvian military liaison officers.

The Continental Congress for Solidarity with Cuba was shifted to Santiago, Chile, after we got the Uruguayans to ban it. Now the Santiago station has gotten the Chilean government to ban it and they'll have to try still another country. More likely it will be quietly forgotten.

Montevideo 16 July 1965

Holman is gone. No one from the station went to see him off at the airport except John Horton, the new Chief of Station. Already the atmosphere in the station has changed beyond recognition. O'Grady's hives are much better although he got the bad news that he is going to be transferred so that a new Deputy Chief with better Spanish can come. Horton speaks almost no Spanish and has already told me he wants me to work closely with him on the high-level liaison contacts like the Minister and the Chief of Police. I suppose this means interpreting for him until he can get along, but anything is better than Holman. Horton is such a contrast: very approachable, good sense of humour, very anglophile from his years as Chief of Station in Hong Kong. He's even running a car pool with his chauffeur and office vehicle, picking us all up in the morning so that wives can get around easier.

Montevideo 23 July 1965

Financing for the new government employees' benefits was passed by the Senate last night after days of increasing strike activity in the postal system, University administration, central administration, judicial system and public-health system. Even the Ministry of the Treasury tax collectors were on strike. The financing measure calls for putting out 1.7 billion new pesos, much less than the request of the Blanco NCG Councillors, which prompted senators of the NCG President's faction to vote against the bill. This faction had wanted five billion in new currency -- almost double what is now in circulation. Payments are progressing for June salaries and many of the government employees on strike are now going back to work. The FEUU, however, is organizing lightning street demonstrations as a protest against government refusal to deliver some 100 million pesos overdue to the University. The next battle begins in a few days when the Chamber of Deputies starts work on the budget review, in which the government employees' unions will attempt to include salary increases for next year. Inflation during January-June this year was 26.3 per cent, which is one of the reasons why the government backed down on its threat to impose sanctions.

Horton is anxious to build, up the capabilities of the police intelligence department -- making it a kind of Special Branch for political work along the lines of British police practice. He wants me to spend more time training Otero, Chief of Intelligence and Liaison, and to give him more money for furniture, filing cabinets and office supplies. As soon as possible Horton wants Otero put in for the International Police Academy and for additional training by headquarters at the conclusion of the Academy course. Before leaving Washington Horton obtained AID approval for a CIA officer to be placed under Public Safety cover, and after we get approval from the Chief of Police and get the officer down here we will have him working full-time with Intelligence and Liaison.

Physical surveillance and travel control are the kinds of operations that we plan to emphasize from the beginning. Expansion of AVENGEFUL will come later, perhaps, along with recruitment operations against targets of the extreme left, but these changes will follow Otero's training in Washington. In travel control we will start by trying to set up the often-delayed passport photography and watch-list operation at the Montevideo airport.

The AID Public Safety programme is moving along well. Vehicles, communications, riot-control equipment and training are the main points of emphasis. Until our Public Safety cover officer arrives, however, we plan to keep the police intelligence work strictly in our office. It's going to be a long and difficult job and I won't have time to do it adequately because of other work. Somehow we have to make them start thinking seriously on basic things like security and decent filing systems.

Headquarters is sending down a disguise technician in order to train the station operations officers in its use. The technician is Joan Humphries, ‡ the wife of the audio technician at the Mexico City station. Equipment will include wigs, hair colouring, special shoes and clothing, special glasses, moustaches, warts, moles and sets of false documentation.

Montevideo 15 August 1965

We have a new Soviet operations officer to replace Russ Phipps who has been transferred back to headquarters. The new officer is Dick Conolly, ‡ a West Point graduate with previous duty in Cairo and Tokyo. Because Conolly can't handle Spanish yet, Horton asked me to help him on an operation that Phipps got going during his final weeks here. The operation is another chauffeur recruitment -- this time it's AVAILABLE-1, ‡ the chauffeur of the Soviet Commercial Office. Although the agent has Soviet citizenship, he is considered a local employee by the Soviet mission, because he was raised in Uruguay and is the son of Russian emigres.

Phipps used one of the AVBANDY surveillance-team members for the recruitment. This agent, AVBANDY-4, ‡ is the father of the team chief, an Army major. He had some visiting cards printed, identifying himself as Dr. Nikolich, a Buenos Aires import-export consultant. He approached the chauffeur as if interested in assistance in his efforts to promote imports to Argentina and Uruguay from the Soviet Union. In return for inside information on the Soviet Commercial Office in Montevideo Dr. Nikolich would pay the chauffeur a commission on all deals. Phipps's interest, however, was to use the chauffeur as an access agent to the Soviets working in the Commercial Office -- two are known intelligence officers and one is suspect.

As the recruitment was made just as Phipps was leaving, AVBANDY-4 turned the chauffeur over to me as a Canadian business colleague working in Montevideo, claiming, as Dr. Nikolich, that he would return occasionally from Buenos Aires and if possible would see him. Phipps also got a new safe apartment site, a miserable basement room in a building on Avenida Rivera a couple of blocks from the Montevideo zoo. The room has only a small skylight and is extremely cold. Nevertheless, the chauffeur and I are meeting one night each week. His information on the five commercial officers and their families plus the secretary, all of whom live in the seven-storey building housing the Commercial Office, is not earth-shaking but it's better than anything we've had until now from the other access agents.

The Tupamaros terrorist group continues to be active, recently bombing the Bayer Company offices and leaving behind a protest note against US intervention in Vietnam. Riefe still doesn't think they're important enough to justify a targeting and recruitment programme, so I have begun to encourage Otero, Chief of Police Intelligence, to concentrate on them. There's no doubt now that this is the group led since 1962 by Raul Sendic, the far-left leader of sugar-cane workers who broke away from the Socialist Party.

Montevideo 20 August 1965

The CNT-sponsored Congress of the People, postponed several times since originally scheduled last year, has at last begun and shows signs of considerable success. The PCU is playing the dominant role, of course, but quite a lot of non-communist participation has been attracted. Practically all the significant organizations in fields of labour, students, government workers and pensioners are participating along with consumer cooperatives, neighbourhood groups, provincial organizations and the leftist press. Meetings continue in the University and at other sites where participants are drafting solutions to the country's problems along leftist-nationalist lines. Given the obvious failure of the traditional parties and Congress, this Congress of the People is attracting much attention and will undoubtedly provide the PCU and similar groups with new recruits as well as a propaganda platform.

It is too successful to ignore so we have generated editorial comment through AVBUZZ-1 exposing the Congress as an example of classic communist united front tactics. In fact the Congress isn't the same as a united front political mechanism, but our fear is that it might turn into one and be used as such in next year's elections. Through AVBUZZ-1 we also printed a black handbill signed by the Congress and calling on the Uruguayan people to launch an insurrectional strike with immediate occupation of their places of work. Thousands of the leaflets were distributed today, provoking angry denials from the Congress organizers. More editorial comment and articles against the Congress will follow in this campaign to dissuade non-communists from participating.

One of the campaigns of the Congress of the People is for resistance to the stabilization programmes imposed by the International Monetary Fund, because these measures hurt the low-and middle-income groups harder than the rich. Right now a high-level group of Uruguayan political leaders is in New York trying to get new loans in order to refinance the bankrupt Bank of the Republic (Uruguay's central bank). The New York bankers, however, are insisting on new financial reforms that will meet IMF approval as a condition to granting the new loans -- which may be as high as 150-200 million dollars.

At the NCG meeting last night, as the whole country awaited news from the refinancing mission in New York, it was revealed that two days ago an urgent confidential message from the mission arrived in Montevideo in the Uruguayan diplomatic pouch. No one can explain why, but the pouch, which for most countries is the government's most closely guarded system of communications, wasn't retrieved at the airport. It got sent back to New York on the next flight, and the NCG must wait until it's found and sent again before they can make their decisions.

The Blancos continue to fight among themselves over how to finance government employees. Yesterday the Acting Minister of the Treasury advised the NCG that salaries for this month simply cannot be paid without new resources, and he insisted on greater currency emission. Right now the deficit for this year is set at 6.3 billion pesos, and coins of five and ten centavos are disappearing because they're worth more as melted metal than as money.

Montevideo 27 August 1965

One of Holman's last requests to the Minister of the Interior, Adolfo Tejera, was to find a way to expel the North Korean trade mission that has been here for almost a year. I have followed up with queries to the police on the Koreans but without adequate reply. As an enticement to cooperate I've taken the unusual step of obtaining support from the Miami station, and perhaps others, in order to follow the movements of an aircraft that loaded up in Miami with transistor radios and television sets for smuggling into Uruguay. Information on this contraband ring was obtained by the police through the AVENGEFUL telephone-tapping operation, but Colonel Ramirez, Chief of the Metropolitan Guard, asked me if the aircraft's movements in Miami could be watched. Ramirez and his colleagues were anxious to snare this shipment because under the law they get the value of all contraband they seize. The Miami station advised when it left, as did Panama, Lima and Santiago where technical stops were made. A few nights ago the aircraft made a secret landing on an interior airfield, unloaded arid took off again. The Metropolitan Guard, however, intercepted the two truckloads of television sets and transistor radios -- initial value is set at 10 million pesos. Still no action on the Koreans but we will remind the police chief on our next visit; he doesn't often get such valuable help as we have just given him.

Uruguayan Air Force Base No 1 has just been the scene of the delivery of the first of eight new aircraft as part of our military aid programme. Ambassador Hoyt made the presentation to the Uruguayan delegation composed of the Minister of Defense, Commanding General of the Air Force, Chief of Staff and other dignitaries. In his speech the Ambassador recalled that that day was the fourth anniversary of the signing of the Charter of Punta del Este beginning the Alliance for Progress. He cited President Johnson's declaration that the Alliance for Progress constitutes a change not only in the history of the free world but also in the long history of liberty. After the Dominican invasion one has to wonder. The photographs in the press yesterday show the Ambassador, the Minister and the others -- they practically block from view the little four-seat Cessna that was the object of the ceremony.

Montevideo 10 September 1965

Strike activity is in full swing again after more than a month of relative calm. The financing mission is back from New York. They got only 55 million dollars, enough to pay the 38 million dollars already overdue, but gold will have to be shipped as collateral. New credit will be needed soon, however, in order to prevent the Bank of the Republic from defaulting again, and conditions imposed by the 1M F will surely include cutbacks on internal spending such as salaries to government employees and subsidies. There is much pessimism, with general agreement that even harder times lie ahead. The peso is down to 68.

Internal struggle among the Blancos has paralysed the naming of the new board of directors of the Bank of the Republic. So much so that yesterday the Minister and Sub-Secretary of the Treasury resigned -- only to withdraw their irrevocable resignations today. At issue is which Blanco factions will get seats on the board of directors. Rationing of electricity continues although the drought earlier this year has now turned to serious flooding and hundreds of families have had to be evacuated along the Uruguay river. We're also in the midst of a rabies epidemic - a disease believed to have been eradicated from Uruguay several years ago. In the past year some 4000 people have been bitten by dogs in Montevideo even though 10,000 stray dogs were picked up. Malaise everywhere.

New rumblings from Brazil and Argentina on possible intervention in Uruguay have provoked sharp reaction. During Brazilian Army Week the Minister of War made a public statement widely publicized here which praised the historic mission of the Brazilian Army: 'defense of democratic institutions, not only within our frontiers but also in whatever part of America we believe menaced by international communism'. A few days later the Argentine Army Commander, General Juan Carlos Ongania, said on returning from a trip to Brazil that the Argentine and Brazilian armies have jointly agreed to combat communism in South America, particularly of that of Cuban origin. Although he did not mention Uruguay by name his statement comes at a time of continuing public comment in Argentina and Brazil over economic and social problems in Uruguay. Ongania later denied the press version of his speech, but here the original version sticks. Protests by Uruguayan military officers have caused cancellation of an invitation to the Brazilian military commander of the border zone, while the Uruguayan Navy has withdrawn from joint exercises with US and Argentine units. A conference to have been given in Montevideo by an Argentine military leader was also boycotted by Uruguayan officers. The Foreign Ministry, moreover, has issued a statement in the name of the NCG rejecting any tutelary role in Uruguay by foreign-armed forces.

I can't seem to avoid getting sucked further into Soviet operations. Besides Borisov (whom I continue to see occasionally) and Semenov (a First Secretary whose intelligence affiliation, if any, is unknown) and the Commercial Office chauffeur, we have a new lead involving the new KGB chief, Khalturin. Through AVENGEFUL we learned that Khalturin was searching for an apartment -- any Soviet who lives outside the community compounds is surely an intelligence officer because all the rest must live under controlled circumstances. The apartment Khalturin wanted is owned by Carlos Salguero, ‡ the head of Latin American sales for the Philip Morris Co. and a naturalized American of Colombian origin. Salguero lives in a large mansion in Carrasco where he moved with his family just before I took over his previous house. Salguero's apartment, which is an investment property, is located in a modern building overlooking the beach in Pocitos. Conolly asked me to speak to Salguero about the possibility of obtaining access to his apartment before Khalturin moved in.

Khalturin took the apartment, and at a 'recruitment luncheon' at the golf-club, Salguero agreed to give us access prior to Khalturin's moving in. I turned Salguero over to Conolly, the Soviet operations officer, who will organize the audio installation with Frank Sheroo, the technician stationed in Buenos Aires.

One reason for this audio operation is that Khalturin seems to be having a love-affair with Nina Borisova, the wife of my friend the Consul -- also a KGB officer. Borisova works in the Embassy, possibly with classified documents, and might have interesting discussions with Khalturin if he takes her to the apartment. So far Khalturin's wife hasn't arrived although he has said on the telephone that he expects her soon. There is also a chance that Khalturin might use the apartment for entertainment of prospective agents or even for agent meetings.

Montevideo 23 September 1965

Strikes intensifying: municipal workers, state banks, autonomous agencies and decentralized services. Yesterday the Blanco NCG Councillors and Directors of state enterprises decided to use police to eject employees of the state banks which have been paralysed by work to rule for the past ten days. Any employees who fail to respond to calls to work will be dismissed -- harsh measures by Uruguayan standards. Today work to rule continues but the Bank of the Republic and the State Mortgage Bank closed in lock-outs, while workers in the private banks are stopping for thirty minutes in the morning and thirty in the afternoon in solidarity with the state bank employees.

Blanco NCG Councillors and Directors of state enterprises meeting today decided to grant only 25 per cent increases for workers in all the autonomous agencies and decentralized services and without negotiations. Unions, however, persist in demanding 48 per cent increases for 1966, citing the government's own statistics for January-August inflation: 33.8 per cent. Blanco leaders are determined to hold the line, however, because of the critical need for IMF backing. This will require suppressing the bank workers, who also opened the floodgates for overall government salary increases at this time last year.

There are no signs of relenting on the union side. The peso is now down to 74. The Minister and Sub-Secretary of the Treasury resigned again, this time accepted by the NCG.

The 20 September resolution by the House of Representatives in Washington is causing an outrage here and in other parts of Latin America. The resolution attributes to the US or any other American state the right to unilateral military intervention in other American states if necessary to keep communism out of the Western Hemisphere. Here the resolution is viewed as an encouragement to the interventionist-minded in Brazil and Argentina. If this resolution is meant to be a show of support for the Dominican invasion, as it seems to be, I can only wonder how so many US political leaders could have been convinced that fifty-eight trained communists took over the Bosch movement.

Montevideo 27 September 1965

We've had a visit from John Hart, the new Deputy Chief of WH Division for Cuban Affairs. He's a former Chief of Station in Bangkok and in Rabat and is an old friend of Horton's. As the officer in' charge of operations against the Cubans I spent a lot of time with him briefing him on our operations and listening to his plea for more work against the Cubans.

Hart said that the Agency has practically no agent sources reporting from inside Cuba (although technical coverage through electronic collection and aerial surveillance is adequate) and he is pushing recruitment of agents by mail. The system is to monitor mail from Cuba very closely in order to watch for signs of discontent. If records at headquarters and the JMWAVE station in Miami do not rule out the disaffected writer as a prospective agent, the station concerned or another WH station can write back a letter on an innocuous subject to the Cuban, with instructions to save the letter. If the Cuban replies to the given accommodation address, a second letter will be written instructing him how to develop secret writing contained on the first letter. The developed message will be a recruitment proposal and, if answered, secret-writing carbon sheets can be sent to the Cuban and regular correspondence established. Here in Montevideo we would use the AVIDITY intercept operation to monitor mail for possible agents.

Although I nodded politely and tried to show enthusiasm for this search for needles in a haystack, I thought to myself that this man must be mad to think we have time for such games. I can scarcely make a quick scan of letters from Cuba, much less begin a recruitment campaign with all that implies.

Hart's other pet project is to find Che Guevara. Guevara disappeared about six months ago and although there were signs of him in Africa nobody knows where he is right now. Hart thinks he may be in a hospital in the Soviet Union with a mental breakdown caused by spoilage of asthma medicine kept unrefrigerated. He asked us to watch passenger lists closely and promised to send a photograph now being prepared of how Guevara would look without his beard -- an artist's conception because no photos of a beardless Guevara have been found. Hart also asked that we continue the campaign already underway to generate unfavourable press speculation over Guevara's disappearance, in the hope that he'll reappear to end it. Other stations are doing the same.

Hart's visit came at an opportune time for me because he liked the work I'm doing against the Cubans and in six months I'm going to be looking for a job in headquarters, if indeed I don't resign from the Agency. Right now I'm not sure exactly what I'll do but I told Horton that I plan to return to headquarters in March when my two years here are finished.

There are two problems, I suppose, and each seems to reinforce the other. At home the situation is worse than ever: no common interests except the children, no conversation, increasing resentment at being trapped in loneliness. I told Janet that I'm leaving when we get back to Washington -- she seems not to believe me -- and in fact would have insisted that she return some time ago but for being separated from the children which is a prospect I can't accept. This is a hellish situation and no good for anyone.

The other problem is even worse. The Dominican invasion started me thinking about what we are really doing here in Latin America. On the one hand the spread of the Cuban revolution has been stopped and the counter-insurgency programmes are successful in most places. Communist subversion at least is being controlled. But the other side, the positive side of reforming the injustices that make communism attractive, just isn't making progress. Here the problem is a small number of landholders who produce for export and whose interests clash with those of most of the rest of the country. Until Uruguay has a land reform there can be no fair distribution of either the benefits or the burdens of the country's production. There will be no encouragement to the landholders to produce and export legally. Even if export prices were to rise dramatically the benefits would mostly go to the same handful of people who have the land -- the same handful who are suffering the least during these hard times. For certain the landholders will resist, here as in other countries, but somehow the Alliance for Progress will have to stimulate land reform if other reforms are to be successful.

The more I think about the Dominican invasion the more I wonder whether the politicians in Washington really want to see reforms in Latin America. Maybe participation by the communists wouldn't be such a bad thing because that way they could be controlled better. But to think that fifty-eight trained communists participating in a popular movement for liberal reform can take control is to show so little confidence in reform itself. The worst of this is that the more we work to build up the security forces like the police and military, particularly the intelligence services, the less urgency, it seems, attaches to the reforms. What's the benefit in eliminating subversion if the injustices continue? 1don't think the Alliance for Progress is working, and I think I may not have chosen the right career after all.

I'll need to keep working when I separate from Janet after we return to Washington because she'll need money for the children and she probably won't want to work. The object would be to find another job without a period of seriously reduced income or none at all. I told Hart I'd like to work in Cuban affairs when I get back. Maybe Riefe's kind of cynicism is the best way to stay with the Agency and assuage one's conscience.

Montevideo 1 October 1965

The bugging of Khalturiri's apartment was successful -- transmitters inside the bed and inside a sofa. The batteries will last for six months or more because the transmitters have radio-operated switches. Now Conolly must find a listening post close enough for operating the switches and for recording. Then an L p operator and a transcriber. These audio operations are messy.

Montevideo 3 October 1965

Strikes by the government employees, particularly the bank workers, continue and there are strong rumours circulating that the government is going to declare a state of siege in order to break the strikes. So far the only government action has been lock-outs at the banks and threats to impose economic sanctions against any employees engaging in new strikes. However, the unions of the autonomous agencies and decentralized services, which just completed a two-day walk-out, have announced a three-day walk-out for 13-15 October.

Colonel Ventura Rodriguez, ‡ Chief of the Montevideo Police and the country's top security official, had gone to Miami for the US police chiefs' convention, but he was recalled suddenly. Although the reasons for his recall were not related to the current strikes, his return created new rumours. Nevertheless, he told us that the decision on a state of siege hasn't yet been made. Headquarters is getting nervous and has asked for continuous reporting on the situation.

In Peru the state of siege was finally lifted. The MIR guerrilla movement is defeated and only mopping up remains. A recent visitor who went through Lima told me that the station there opened an outpost in the mountain village where the Peruvian military command had been set up. During the crucial months of July-September the outpost served for intelligence collection on successes and failures of the military campaign and for passing intelligence to the Peruvian military obtained from Lima station sources. During the roll-up of the MIR urban organization, the main penetration agent, Enrique Amaya Quintana, ‡ was arrested and during police interrogation he revealed his work for us. Eventually the station got him released and now he's been resettled in Mexico with, I'm sure, a generous retirement bonus.

Suppression of the MIR will be regarded as a classic case of counter-insurgency effectiveness when good intelligence is collected during the crucial period of organization and training prior to commencement of guerrilla operations. Given their large numbers and training in Cuba, suppression would have been difficult and lengthy without a penetration agent like Amaya.

Montevideo 7 October 1965

This afternoon the NCG voted to enact a state of siege (six Blancos in favour, three Colorados opposed) which in Uruguayan law is called 'prompt security measures'. Adolfo Tejera, the Minister of the Interior, made the proposal which he justified on the need to end labour unrest. The decree prohibits all strikes and all meetings for the promotion of strikes and related propaganda. Enforcement of the state of siege was given to the Ministers of I the Interior and Defense.

This had in fact been decided secretly yesterday, because the whole country is on strike, in the government banks, judiciary and other key areas -- the main issues being salaries, inflation, sanctions, fringe benefits. The police and Army have been paid their September salaries in preparation for action. Colonel Ventura Rodriguez, who had gone to the US police chiefs' convention in Miami, has been recalled, and Commissioner Otero and Inspector Piriz have been to tell me that the police have been some days at the ready. Headquarters wants daily reports on strikes and violence while the siege is on.

Nobody was surprised -- yesterday's 'secret' decision by the Blancos was in this morning's newspapers -- but the CNT went ahead with its plans for a street rally and march this afternoon from the Legislative Palace to Independence Plaza. At the moment of the NCG voting the demonstrators were massed in the Plaza in front of the NCG offices, but as soon as the vote was taken police moved in to break up the demonstration. So far tonight thirty-four workers have been arrested, all from the electric company, except two who are leaders of the bank employees' union.

Montevideo 8 October 1965

Arrests have risen to over one hundred but practically all the important union leaders are in hiding. This afternoon sit-down strikes in the government banks continued but ejections and arrests followed. Lightning street demonstrations against the state of siege have been occurring in different parts of the city.

As required by the Constitution the decree imposing the state of siege was sent to the Legislature for approval. The Blancos, however, knowing that the Colorados and splinter groups will try to repeal it, are staying away in order to prevent a quorum.

The CNT has called a general strike for 13 October and the autonomous agencies and decentralized services will begin that day a three-day walk-out. The government is in trouble.

Montevideo 15 October 1965

The police are no match for the well-organized unions. The general strike was a big success with over 200,000 government workers and most of the private organized workers out. Newspapers, public transport, wool, textiles, public health, schools, practically every activity stopped. Today is the last of the three-day strike in the autonomous agencies and decentralized services. Lightning street demonstrations have been frequent with much pro-strike wall-painting and hand bill distribution.

Police have made several hundred more arrests but the important leaders are still free. The PCU radio outlet, Radio Nacional, was closed for seventy-two hours for broadcasting strike news while an entire issue of Epoca, a leftist daily newspaper, was confiscated yesterday. In protest, however, the press association and press unions struck again and no newspapers appeared today. Tejera ‡ has publicly blamed the communist leadership of the government employees' unions for the state of unrest, and Blanco leaders are hardening. The directors of the four government banks announced the firing of eighteen employees for strike leadership, while the autonomous agencies and decentralized services have announced sanctions of wage discounts equalling two days for the first day of the current strike, three days for yesterday and five days for today. Dismissals will follow if strikes continue. Final arrangements are being made for the arbitrary 25 per cent salary increases although the unions are still insisting on 48 per cent and inflation for this year is now up to 50 per cent.

The PCU, according to our agents, plans to continue the street demonstrations and other agitation in order to force the government to back down on the firings and sanctions. Two of our agents, AVCAVE-1 and AVOIDANCE-9, are on the highly secret PCU 'self-defence' squads engaged in the lightning demonstrations and propaganda distribution. Their reporting has been excellent but they've been unable to get to know the hiding-places of certain of the union leaders which, if we knew, we would inform the police for arrests.

The police, in fact, may have given the communists and others a convenient victim for their campaign against the government. The story is out today of the torture of a young waterworks engineer, Julio Arizaga, who was arrested several days ago. Today he went berserk in his cell at AVALANCHE headquarters and had to be taken to the military hospital. There he attacked his guard and managed to wound the guard with the guard's own weapon. He was subdued, however, and his conduct is being attributed to torture by the police. I'll check with Commissioner Otero on this because usually the police don't engage in torture of political prisoners.

Arizaga is a member of the pro-Chinese Movement of the Revolutionary Left (MIR) and former member of the PCU. He is also a former leader of the FEUU, but he has never been very active in union activity. In recent months Riefe has been guiding AVCAVE-1 as close to the MIR as possible while retaining good standing in the PCU. However, because the MIR favours rural action, including guerrillas, over trade-union organizing, AVCAVE-1 may be instructed to leave the PCU altogether and join the MIR. Meanwhile he is reporting good intelligence from former PCU colleagues like Arizaga who have joined the MIR, as well as information on the PCU.

Montevideo 19 October 1965

Yesterday the NCG (Colorados abstaining) adopted an economic stabilization programme that will enable the government to obtain an IMF stand-by credit which in turn will open the door to new private and official loans. Most observers agree that the state of siege was enacted not only to break the strikes but also to preclude violent opposition to these new economic measures that will be unpopular with the unions.

Latest problem: the Ministry of the Treasury has assigned one million pesos to the Ministry of the Interior for expenses relating to the stage of siege, but there's a severe shortage of banknotes. The British firm that prints Uruguayan money is holding up delivery because the Bank of the Republic can't pay for it -- arrears amount to £100,000.
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Re: Inside the Company: CIA Diary, by Philip Agee

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Montevideo 22 October 1965

Commissioner Otero was vague about the torture of Julio Arizaga, the MIR activist and waterworks engineer, which was his way of confirming the story. On Monday Arizaga was taken before a judge for a hearing on the shooting of his guard, and his condition was so bad and the torture so evident that the judge ordered him to be freed. The police refused and he was returned to the military hospital where he is still incommunicado.

I asked Inspector Antonio Piriz about the case and he said Inspector Juan Jose Braga, ‡ Sub-Director of Investigations, was the officer who ordered and supervised the torture. The purpose was to obtain information on the MIR and on the Tupamaros, whose identity and organizational structure are still unknown. He explained that the torture room is on the same corridor as the AVENGEFUL listening post in the isolated section above the offices of the Chief and the Deputy Chief of Police. I noticed the other rooms down the hall when I visited the LP, but I was told that those rooms are only used by Colonel Rodriguez and Colonel Martin during rest periods. Usually, according to Antonio, the subject of the interrogation is hooded and tied to a bed with the picana ( a hand-cranked electric generator is attached to his genitals. Since Tom Flores's ‡ counter-terrorist operations with police ended, and General Aguerrondo ‡ was replaced as Chief of Police, torture of political prisoners has been rare. However, the picana was still used on criminals (which is why thieves and robbers so often been rare. However, the picana was still used on criminals (which is why thieves and robbers so often wound themselves before surrender -- so that their first days under arrest will be in hospitals), and perhaps torture of Arizaga was an exception because of Braga's frustration over the inability to stop the Tupamaro bombings.

Montevideo 28 October 1965

Until today the Blanco leadership was firm in resisting union demands on salary increases and sanctions, but the union leaders began cultivating support from Colorado legislators on the sanctions issue. Today the Blancos, fearing political gains by the Colorados, announced that only half the sanctions will be discounted from October salaries with the other half coming in November. They also let it be known that pay and benefits increases beyond 25 per cent may be possible but not until next June.

The security situation has eased so strikingly that it is difficult to imagine we're still in a state of siege. Practically all those arrested during the early days have been released, and the CNT even held a mass rally on the no-sanctions issue without interference from police. The only strike still in effect is the municipal workers' walk-out and today the Army began collecting garbage that's been piling up in the streets for the past week.

The only reason the state of siege hasn't been lifted is that Arizaga's condition is still too bad -- if he were released the torture would be obvious. Blanco leaders are thus being forced to retain the state of siege in order to protect the Chief of Police, Ventura Rodriguez and the Minister of the Interior, Adolfo Tejera. The Arizaga case, in fact, is causing serious friction between the two, and the Colorados have seized it as a political issue. Tejera is conducting an in-house 'investigation'.

Through the Public Safety mission I've put in Commissioner Otero, Chief of Police Intelligence, for an International Police Academy course beginning in January in Washington. After about twelve weeks at the Academy, Otero will be given special training in intelligence operations by headquarters. I've asked that the Office of Training concentrate on physical surveillance and on penetration operations against communist parties -- targeting, spotting, recruitments, agent-handling. Maybe with enough training for officers like Otero the police will be able to recruit agents and pay for information instead of having to resort to torture.

God knows he needs this training. He's been bogged down in the Cukurs case since March (the kidnapping of an ex-Nazi that went awry) for the sake of publicity and a little travel. Cukurs was finally cremated and a few days ago Otero turned his ashes over to his son together with a dental bridge. The son and the Cukurs family dentist, however, told reporters that the dead man never wore a bridge so now Otero's looking for another body.

Montevideo 4 November 1965

Today the state of siege was lifted -- Arizaga's condition improved enough for him to be released. The Colorados continue to attack the government over torture but Tejera claims the Ministry is continuing the investigation. Nothing will come of it, of course, because the Chief of Police won't allow it. If pushed he can summon support from the Army command and the Blancos don't want to lose power to the military over a sordid case of torture. Neither do the Colorados so there's no danger to the torturers.

Throughout the state of siege the Blanco senators and deputies, by staying away from sessions called to consider the emergency decree, were able to prevent a quorum and a Colorado vote to lift the siege. On the negotiations, however, the Colorados are forcing the Blancos into a more compromising position. Yesterday the Colorado-dominated Senate passed an amnesty bill annulling all firings and sanctions against workers engaged in strikes. Similar action is expected in Deputies.

Montevideo 10 November 1965

Negotiations have broken down, strikes are again under way and the state of siege may be reinstated. Although municipal workers throughout the country struck again, and the Montevideo transport system is striking for October salaries, the main attack now is back with the central administration unions. They rejected the proposed salary increases for next July and are striking for forty-eight hours today and tomorrow, seventy-two hours next week and an indefinite period the week after. Negotiations between the government and the unions of the autonomous agencies and decentralized services continue but without progress. The Chamber of Deputies passed the amnesty bill today, in spite of the strikes, and it now goes to the NCG, where anything less than a veto would indicate complete collapse of the dominant Blanco faction. The amnesty bill must have constitutional incongruities if strikes by government employees are illegal; but everything here seems so incongruous that an unconstitutional law would only be normal.

The Colorados are also taking up the Arizaga case in the Chamber of Deputies -- certain of them want to make political gain by feigning shock and surprise -- but a Deputies investigation stands no more chance of making headway in AVALANCHE than the Minister's investigation.

Montevideo 16 November 1965

Otero and the police in general have pulled off another stunning bungle. Secretary of State Rusk is here on an official visit and this morning he laid a wreath at the monument to Jose Artigas, the father of Uruguayan independence, in Independence Plaza. For a week I've been insisting with Otero, who is in charge of security preparations, that all precautions be taken to avoid any incidents related to Rusk's visit. This morning Otero and about 300 other policemen were forming a cordon around the wreath-laying site when suddenly a young man slipped through the cordon and ran all the way up to Rusk, expelling an enormous wad of spittle in the Secretary's face. Otero was standing right next to Rusk in a stupor, but he recovered and with other police carried off the attacker while Rusk wiped his face dry and laid the wreath. Tonight Colonel Rodriguez ‡ and other government officials formally called on the Embassy to apologize. The attacker, a member of the PCU youth organization, is in the hospital where he was taken after a police beating and is reported to be in a coma.

Montevideo 19 November 1965

Several days ago an important student conference began here under sponsorship of the FEUU and the Prague-based International Union of Students. The conference is called the Seminar on Latin American Social and Economic Integration and has drawn about sixty student delegations from all over the hemisphere. Through AVBUZZ-1 we have put out adverse editorial comment in the Montevideo press, exposing the Seminar as organized, financed and directed by the Soviets through the IUS front and through PCU control of the FEUU. We also arranged for handbills on the same theme to be distributed, as well as a humorous facsimile of an Uruguayan 100-peso note labelled as the roubles with which the Soviets are financing the Seminar. We have also ordered from TSD copies of official letterhead stationery of the Seminar with the signature of the Seminar's Secretary for Foreign Affairs, Daniel Waksman, reproduced at various levels in order to coincide with whatever length of letter we decide to attribute to Waksman. If it comes soon we will have a black letter to add to the other propaganda against the Seminar. Waksman is a leader of the FEUU.

The breakthrough with the Bank of the Republic union failed and new strikes are spreading in protest against the NCG'S veto of the amnesty bill. The central administration has been joined by government banks, the Clinics Hospital, primary and secondary schools, the University and the judicial system. Today and tomorrow the civil aviation workers are closing the airports. Other strikes to follow.

Only a week remains until the constitutional deadline for increasing government employees' salaries because elections are scheduled for 27 November 1966. As no increases can be granted during the year before elections, the coming week is sure to be agitated.

Montevideo 27 November 1965

The past week stands as another large question-mark for Uruguayan democracy. Beginning with the civil aviation strike on 19-20 November and ending with the passage by Congress of the bill for salary increases last night, not a day has passed without an important strike by government employees. Schools, banks, the University, the postal and telecommunications systems, printers, port workers, the central administration and others struck with increasing intensity until the entire country was paralysed on 25 November by a CNT-organized general strike. The port of Montevideo was closed, the airports closed again, and no newspapers appeared on 25 or 26 November. Street marches and other demonstrations by thousands of workers were almost daily occurrences, usually ending at the Legislative Palace for speeches demanding benefits to offset inflation. Yesterday, the final day for salary increases for a year, the demonstrations culminated.

With the magic hour at midnight, the NCG convened at 7 p.m. while all the Blanco ministers were called to Government House and told to wait in an office adjacent to the NCG meeting-room. At 7:20 the seventy-two-page document consisting of 195 articles arrived at the NCG from the Chamber of Deputies. (The bill contains many provisions on government finances in addition to salary increases.) After a swift review it was approved. The Colorado Councillors were forced to vote for it without even having seen the text, and the Blanco ministers who also had not seen it (except the Treasury Minister) were also required to approve and sign it. At 8:55 the Minister of the Treasury arrived with the document back at the Chamber of Deputies where it was debated until finally approved at 11:34. Waiting just outside the Deputies' Chamber was the elderly President of the Senate who rushed the document over to the Senate, arriving at seventeen minutes before midnight. Although several Senators took the floor, there was no time even to read the document and at one minute to midnight the Senate voted approval.

The bill provides for significant salary increases for government employees, although not all that was demanded, together with new taxes on agricultural and livestock activities, wool exporters and the banking system. Even so the opposition has already denounced the bill as very inflationary. Today almost all the strikers have returned to work -- the waterworks being the notable exception. Conflicts, however, haven't ended because the sanctions issue persists. Since the NCG veto of the amnesty bill, the Blanco legislators have prevented a quorum, and the Blanco NCG Counsellors are calling for new sanctions for the most recent strikes. Peace between the government and its workers is still remote.

Montevideo 3 December 1965

For the Khalturin audio operation an apartment just above and to the side of the Salguero apartment was obtained for a listening post. My secretary was glad to move in for the time being, but the problem of an LP keeper hasn't been solved. According to the AVENGEFUL telephone tap on the Soviet Embassy Khalturin regularly spends Saturday afternoons at the apartment. His liaison with Borisova continues, but now his wife has arrived -- although she is not happy and has hinted she may soon return to the Soviet Union.

Until a full-time LP keeper can be obtained this operation will be only marginal, although Conolly, the Soviet operations officer, goes to the LP on Saturdays and sometimes on Sundays to switch on the transmitters and, if Khalturin is there, to record what is said. Last Saturday I went with him after lunch. The transmitters for the switches are housed in grey Samsonite suitcases of the two-suit size. After opening them flat and setting up the antenna, taking care that it points in the direction of Khalturin's apartment, the operator pushes the transmitter button for five seconds. If the switch doesn't work the process is repeated until it does, though not too often because the transmitter can overheat. Included in the suitcase is a lead apron so that operators can avoid unwanted sterilization. Maybe Khalturin would like an apron, too, but Conolly didn't take my point. Another grey Samsonite suitcase contains the receiver-recorder and is similarly opened flat with special antenna raised. These technical operations are boring -- no decent production from this one yet.

Montevideo 6 December 1965

The Blancos on the NCG insist the sanctions remain and be increased with any new strike activity. Discounts from salary payments are to be made at the rate of four days per month until all sanctions are collected which in some cases now total eighteen days. Partial work stoppages have already started in the autonomous agencies and decentralized services and in the Ministry of the Treasury the union called for the Minister's resignation. The income tax collection office of the same Ministry paid him a similar compliment in declaring him persona non grata. The central administration employees joined the others in announcing new strikes and staged a march to the Ministry of the Treasury demanding a dialogue with the Minister on sanctions. Police broke up the march with considerable force.

The state of siege is going back into effect tomorrow. I've had calls both from Antonio Piriz and from Alejandro Otero advising that police tonight will start rounding up as many important labour leaders as possible. They are hoping that they will catch a number of important leaders by starting tonight instead of waiting until the NCG votes to reinstate the state of siege tomorrow.

According to the same police agents the Blanco leaders want to arrest the government union leaders before word gets around of the new stage of siege -- wishful thinking the way secrets are spread in this country. Nevertheless the Minister of the Treasury announced tonight that the latest plan by central administration employees for easing the sanctions had been rejected by the NCG -- while he inferred that negotiations will continue tomorrow. Odds are good that the union leaders have already gone back into hiding.

Montevideo 7 December 1965

As expected, practically all the government workers union leaders learned of the new state of siege and evaded police arrest. This morning, just as the street march by the central administration employees reached Independence Plaza in front of Government House, the Blanco NCG Councillors voted to reimpose the state of siege. Adolfo Tejera, Minister of the Interior, made the request on the grounds of preventing subversion of the national economy by organized labour. The decree was passed to the Legislature but again the Blancos are staying away from the meetings in order to prevent a quorum.

The police, especially Otero's department, looked pretty bad, although the demonstration outside the NCG offices this morning was broken up without violence. Only fifteen arrests have been made in spite of their early start, and already the PCU 'self-defence' squads are back in action distributing propaganda and generally defying the state of siege. In order to help Otero and the police to save face, Horton agreed that I should pass to Otero the name and address of one of the leaders of the 'self-defence' squads, Oscar Bonaudi, for preventive detention. As there are only three squads, AVCAVE-1 being on one and AVOIDANCE-9 being on another, the arrest of Bonaudi will cause a spy scare, and probably make the PCU decide to curb the squads' propaganda activities for a while. Riefe doesn't want Bonaudi arrested because he's afraid his agents will be jeopardized, but Horton wants to help the police, particularly Otero, to improve their image.

Montevideo 10 December 1965

Big news! Alberto Heber, the Blanco NCG Councillor who will take over as NCG President in March, today proposed that Uruguay break diplomatic relations with the Soviet Union because of Soviet interference in Uruguayan labour troubles. We don't have direct access to Heber but can check with Colonel Rodriguez. I have no means of seeing the Soviet chauffeur until next week to discover their reaction, but Conolly is concentrating on the AVENGEFUL tapes. Headquarters is delighted and confirms that we should support the break in any way we can. Already Lee Smith, ‡ the new covert-action operations officer, who recently, replaced Alex Zeffer, is preparing a black letter linking the Soviet cultural attache with leftist student activities. Lee is using the stationery with the letterhead of the Seminar on Latin American Social and Economic Integration that the TSD prepared for us last month.

My police are looking better than ever. Yesterday the newspaper printers' union had just voted not to strike when police broke into the union hall and arrested over 100 people. These were later released, however, but another vote was taken, this time the strike was on, and today and tomorrow Montevideo has no newspapers.

Montevideo 11 December 1965

We have worked all day preparing a report for NCG Councillor Alberto Heber that will justify both a break in diplomatic relations with the Soviets and the outlawing of the PCU. We began the project last night when John Cassidy, ‡ who replaced O'Grady as Deputy Chief of Station, got an urgent call from one of his contacts in the Uruguayan military intelligence service. They had been asked by Heber earlier yesterday for a report on the Soviets, but since they had nothing, they called on the station for assistance.

This morning all the station officers met to discuss the problems of trying to write the Heber report. After we decided to write it on a crash basis, Conolly chose the names of four Russians to be in charge of their labour operations, and then went through his files to find concrete information to give weight to this fantasy report. Similarly Riefe selected certain key CNT and government union leaders as the Uruguayan counterparts of the Soviets, together with appropriate true background information that could be sprinkled into the report, such as trips by PCU leaders to Prague and Moscow in recent months. Cassidy, Conolly, Riefe and I then wrote the final version which Cassidy and I translated into Spanish. Tonight Cassidy took it out to AYBUZZ-1 for correction and improvement of the Spanish, and tomorrow he'll turn it over to the military intelligence service (cryptonym AVBALSA). For a one-day job the twenty-page report is not bad. Certainly it includes enough information that can be confirmed to make the entire report appear plausible.

We prepared this report with media operations in mind, apart from justifying the break with the Soviets and outlawing the PCU. Heber has already said publicly that he has strong evidence to support the break, though without the details which he hasn't yet got, but if the break is not made we can publish the report anyway and attribute it to Heber -- he is unlikely to deny it. In that case it will cause a sensation and prepare the way for the later decisions we want, and also provide material for putting to the media by other stations, such as Buenos Aires and Rio de Janeiro. According to Heber, the Blanco NCG Councillors will meet tomorrow (Sunday) to decide on the break, and formal NCG action will follow on Monday or Tuesday. The Minister of Defense, meanwhile, has suggested outlawing the PCU and closing propaganda outlets such as El Popular.

The black letter connecting the Soviet cultural attache with the Seminar on Social and Economic Integration will be put out in El Plata, the afternoon daily belonging to the Blanco faction led by the N CG President. The letter is a statement of appreciation for technical advice, and refers to instructions relating to the Seminar and brought by a colleague who recently returned to Montevideo. Thanks are also given for 'other assistance'. Although the letter is vague, Soviet financing and control of the Seminar is easily inferred. The forged signature is that of Daniel Waksman, the Seminar Secretary for Foreign Relations.

Tension on the labour front is higher than ever with mass arrests of workers (over 200 arrested at the Bank of the Republic and over 200 more at a tyre company), and a call by the CNT for another general strike on 14 December. Lightning street demonstrations against the government continue and several residences of government leaders and political clubs of the traditional parties have been bombed. Our estimate is that if the new general strike is not called off, the Blancos will break relations with the Soviets, to be followed by strong measures against the PCU and leftist labour leaders.

Montevideo 12 December 1965

This morning before Cassidy turned over the Heber report to military intelligence, Horton decided first to show it to Colonel Ventura Rodriguez, the Chief of Police, as the top military officer in public security. We took it over to Rodriguez's office, where we sat around the conference table with Rodriguez and Colonel Roberto Ramirez, Chief of the Guardia Metropolitana, who was listening to a soccer game on his little transistor radio.

As Rodriguez read the report, I began to hear a strange low sound which, as it gradually became louder, I recognized as the moan of a human voice. I thought it might be a street vendor trying to sell something, until Rodriguez told Ramirez to turn up the radio. The moaning grew in intensity, turning into screams, while several more times Rodriguez told Ramirez to turn up the soccer game. By then I knew we were listening to someone being tortured in the rooms next to the AVENGEFUL listening post above Rodriguez's office. Rodriguez at last finished reading the report, told us he thought it would be effective and Horton and I headed back for the Embassy.

On the way back Horton agreed that we had been listening to a torture session and I explained to him the location of the torture room with relation to the AVENGEFUL LP and Rodriguez's office. I wondered out loud if the victim could be Bonaudi, whose name I had given to Otero for preventive detention. Tomorrow I'll ask Otero, and if it was Bonaudi I'm not sure what I'll do. I don't know what to do about these police anyway -- they're so crude and ineffectual. I ought to have known not to give any names to the police after the Arizaga case last month, without a full discussion, with the Chief if necessary, of what action the police would take.

Hearing that voice, whoever it was, made me feel terrified and helpless. All I wanted to do was to get away from the voice and away from the police headquarters. Why didn't Horton or I say anything to Rodriguez? We just sat there embarrassed and shocked. I'm going to be hearing that voice for a long time.

Back at the Embassy the Ambassador told Horton that the NCG President had just this morning asked him if he had any information that might be used to justify breaking relations with the Soviets. Horton showed him the Heber report and the Ambassador suggested he should give it to Washington Beltran, the NCG President. The Ambassador took the original out to Beltran's house while a copy went to the military intelligence service, with the warning that if it were passed to Heber he should be advised that Beltran already has a copy.

Giving the report to the Ambassador for Beltran has certain advantages but Heber may be reluctant to use it now. Too bad, because Heber is the councillor who convinced the others to reinstate the state of siege, the one who suggested the break, and will moreover be the NCG President in less than three months' time.

Montevideo 13 December 1965

The impasse is broken and the break with the Soviets is off for the time being. Last night the government and bank unions reached agreement that the firings of previous months would be cancelled and that sanctions against strikers will be spread out over many months as painlessly as possible. The agreement was followed last night by the release of all the bank workers who had been arrested late last week. Early this morning similar agreements were reached with central administration unions. Communist and other militant leaders of the CNT had no choice, as the government unions accepted these solutions, but to cancel the general strike scheduled for tomorrow.

With the general strike broken and agreements with unions being made, the government has dropped the threat of breaking relations with the Soviets. The report prepared for Heber will not be brought out by the government for the time being - we can do so later. The state of siege will continue until firm agreements with all the government unions are reached. The leftist daily Epoca is still closed for inflammatory propaganda, and almost 300 are still under arrest.

Somewhat anti-climatic but useful, our black-letter operation against the FEUU and the Soviet cultural attache caused a sensation when it was published by El Plata this afternoon. Banner headlines announce' Documents for the Break with Russia' and similar treatment will be given in tomorrow morning's papers. Denials from Daniel Waksman, the FEUU leader to whom the letter is attributed, were immediate, but they will be given scant coverage except in the extreme-leftist press. AVBUZZ-1 has arranged for Alberto Roca, publisher of the station-financed student newspaper Combate, to take responsibility for the black letter in order to relieve El Plata of liability.

Through AVBUZZ-1 we'll place new propaganda, in the form of editorial comment, using the unions' 'capitulation' to avoid the break with the Soviets as proof of Soviet influence over the unions (although in fact the government conceded quite a lot more than the unions).

Montevideo 14 December 1965

More unexpected developments. Adolfo Tejera, the Minister of the Interior, tried to manoeuvre Colonel Rodriguez, the Chief of Police, into a position where the Chief would be forced to resign. The ploy backfired, forcing the Minister to offer his resignation, as yet unaccepted, to the NCG. It's all so complicated and bizarre that not even after explanations by Otero and Piriz am I completely sure of what happened.

The episode began not long after midnight when Otero called to advise me that the Ministry of the Interior had just announced that certain union leaders were in the Soviet Embassy and that the Embassy was surrounded by police to prevent their escape. Otero said the report about union leaders having taken refuge in the Embassy is false, although police had indeed been ordered to surround the Embassy. We arranged to meet this morning for clarification.

This morning the sensational story of the union leaders' refuge in the Soviet Embassy is carried in the press. According to the Director-General of the Ministry of the Interior, who released the story to the press just before Otero's call last night, police had followed certain union leaders who are on their arrest list after a negotiating session between them and the Minister. The police reported that the union leaders had entered the Soviet Embassy which was then surrounded by police.

This morning Otero told me that police had not followed the union leaders after their meeting with the Minister, but that the Director-General of the Ministry had followed them. The Director-General lost them in the general vicinity of the Soviet Embassy and later, probably in consultation with the Minister, decided to order police to surround the Embassy and attribute the report of their being there to the police. The Director-General gave the order to the precinct involved rather than through the police headquarters, in order to have the Embassy surrounded before the story was checked. The purpose of the manoeuvre was to make the police look ridiculous, because Colonel Rodriguez has protested within his Blanco faction that the Minister has been negotiating directly with union leaders who are on the police arrest list.

Later today the police department issued a statement, authorized by Rodriguez, denying that the police gave any report to the Ministry of the Interior about persons seeking refuge in the Soviet Embassy, and also denying that police had followed union leaders after a meeting with the Minister. Also later today the police arrested one of the union leaders in question even though the Minister ordered that he be left alone, and only the intervention of two NCG Councillors obtained his release.

Otero told me the screams Horton and I heard were indeed Bonaudi's. Braga, ‡ the Deputy Chief of Investigations, ordered the torture, which lasted for three days during which Bonaudi refused to answer any questions. Otero said Braga and others were surprised at Bonaudi's resistance. That's the last name I pass to the police as long as Braga remains.

Montevideo 16 December 1965

The Blancos have accepted the resignations of both the Minister and the Chief of Police. The Ministry of the Interior now passes to the Blanco faction led by Alberto Heber, who is due to become NCG President in March. The new Minister is Nicolas Storace, ‡ and the new Police Chief is Rogelio Ubach, ‡ another Army colonel who is currently Uruguayan military attache in Asuncion, Paraguay.

For some time yesterday it seemed as if the solidarity with Rodriguez expressed by senior military officers would result in only Tejera's dismissal, but first reports on Ubach from the Embassy military attache office are favourable. Horton and I will call on him officially after he takes over, probably next week. Station files also reflect favourable information on Storace from a previous period as Minister of the Interior in the early 1960s. Next week we will also call on Storace, and in the meantime perhaps the police department will come out of the paralysis of the past three days and get on with enforcing the state of siege.

Besides Rodriguez, the rest of the military officers who form the police hierarchy have also resigned or will resign shortly -- meaning we will have a new Chief of the Guardia Metropolitana as police supervisor for AVENGEFUL telephone tapping. There are no indications that problems will arise over continuing this operation.

We have had a short visit from the new Deputy Chief of WH Division, Jake Esterline. ‡ He has replaced Ray Herbert who is retiring. He told me that I won't be able to return to Washington in three months as I had planned because my replacement will be delayed some six months. A disappointment as the situation at home is difficult, but I agreed to stay on as long as necessary.

Horton gave a buffet supper for Esterline and all the station personnel. During a heated conversation on why Holman was sent to a trouble-spot like Guatemala, Esterline admitted that he had tried to change Holman's assignment because news of Holman's incompetence in Montevideo had gradually gotten back to headquarters. However, Des FitzGerald who took over as DDP from Helms, was reluctant to change the assignment because agreement had already been obtained from the State Department. Esterline added, however, that he and the new Chief of WH Division, Bill Broe, ‡ are making sure that Holman's criticism of station officers is offset by special memoranda for the personnel files.

I would have liked to talk to Esterline about matters of principle related to counter-insurgency -- such as how we can justify our operations to support the police and beat down the PCU, FEUU and other leftists when this only serves to strengthen this miserable, corrupt and ineffectual Uruguayan government. If we in the CIA, and the other US programmes as well, seek to strengthen this and other similarly clique-serving governments only because they are anti-communists, then we're reduced to promoting one type of injustice in order to avoid another.

I didn't mention this to Jake for the same reason, I suppose, that none of us in the station discusses the problem really seriously, although cynicism and ridicule of the Blancos, Colorados, police, Army and others whom we support is stronger than ever in the station halls -- ample proof that we all see the dilemma. But serious questioning of principles could imply ideological weakening and a whole train of problems with polygraphs, security clearance, career, personal security. For all of us the discussions remain at the level of irony.

Montevideo 24 December 1965

Yesterday the state of siege was lifted by the NCG while the Bank of the Republic began delivering 500 million pesos to the various government offices for payment of Christmas bonuses. Today seven of the bankers imprisoned for the frauds discovered in April were released -- not exactly harsh punishment considering all the savings lost.

Media promotion of the break with the Soviets continues through AVBUZZ-1 in the form of announcements by real and fictitious organizations backing the break. One typical announcement was made a few days ago by the National Feminist Movement for the Defense of Liberty ‡ which tied the break in relations with 'the great work of national recuperation'.

The break is off for the foreseeable future, nevertheless, as Storace, the new Minister of the Interior, told Horton and me on our first visit. He is anxious to keep AVENGEFUL going and has so instructed the new Chief of Police. Storace is the government's chief negotiator with the unions. In order to keep up closely with the new Immigration Director, Luis Vargas Garmendia, ‡ who is developing a new plan relating to communist diplomatic missions in Montevideo. Horton asked me to be in charge of working with Vargas whom we met at our second meeting with Storace.

Horton and I have also called on the new Chief of Police, Rogelio Ubach, ‡ who presented us to Lieutenant-Colonel Amaury Prantl, ‡ the new Chief of the Metropolitan Guard and supervisor of the AVENGEFUL listening post. Ubach wants to continue and expand the AID Public Safety programme which is just now completing its first year. Emphasis is still on communications systems but special attention is now being given to the Metropolitan Guard, the anti-riot shock troops, for whom tear-gas, ammunition, helmets and gas-masks have been provided. In addition to training by Public Safety AID officers in Montevideo, ten police officers have been sent to the International Police Academy in Washington. Cost so far: about 300,000 dollars.

Another important weapons robbery occurred the other night -- possibly the work of the Tupamaros. They got away with eighty-six revolvers, forty-seven shotguns, five rifles and ammunition, all taken from a Montevideo gun shop. Commissioner Otero leaves in three weeks for Washington. Headquarters decided to train him at the International Police Services School, ‡ which is a headquarters training facility under commercial cover, instead of at the AID-administered International Police Academy. AID cover for the training, however, is retained.

Montevideo 3 January 1966

Principal labour unrest since the general strike was broken last month has been in the Montevideo transport system. That dispute was solved but inflation is worse than ever which guarantees more labour trouble. According to government figures the cost of living went up 16.6 per cent in December alone, while inflation for all of 1965 was 85.5 per cent -- twice the rate for 1964. The School of Economics of the University of the Republic, however, puts 1965 inflation at 99.6 per cent. No wonder the U I put the Uruguayan social and economic crisis among the ten most important news stories of the year.

The main reason for the jump in inflation in November and December was the economic reforms adopted in October, particularly the freeing of the peso for imports which caused it to go from the old official rate of 24 up to about 60. These reforms were necessary for the Bank of the Republic to obtain refinancing, and cleared the way for the interim credit of 48 million dollars signed on 1 December. But more reforms will be needed for the IMF stamp of approval because another 50 million dollars' credit will be needed this year. Without IMF backing, credit can't be obtained except under shady or usurious conditions. Already the Minister of the Treasury has made another trip to Washington for meetings with the IMF. Trouble is that while the IMF-imposed reforms are supposed to stimulate exports, the immediate impact of stabilization falls on the lower middle class and the poor who can least cope.

For the Blancos this means trouble in this year's elections. Because of opposition by rural producers, mainly the sheep and wool ranchers, the new taxes created in November are inadequate to cover the salary and benefits increases for government employees. This means still more deficit and more inflation, and although rural producers were the most favoured by the October measures, contraband exports to Brazil are expected to continue.

Salvation for the Blancos may be in constitutional reform, the movement for which continued to grow all last year. The Ruralistas are still leading the reform movement (today Juan Jose Gari ‡ resigned as President of the State Mortgage Bank in protest over failure of his allied Blanco faction to declare for reform) but the movement is growing both in Blanco and Colorado circles. Chief among reforms would be the return to a one-man executive in order to facilitate decision-making. The ominous sign in the reform movement, however, is the predominance therein of rural producers. A Colorado newspaper in a recent editorial against return to the one-man presidency pointed out that practically all of the 200 families that own 75-80 per cent of Uruguay's rural lands are in favour of a one-man executive. It seems that if better decision-making is attained, land reform will only get further away. Happily for me, Horton agreed that I could drop the political-contact work altogether.

Stations all over the hemisphere are engaged in a propaganda campaign against the Tri-Continental Conference that opened yesterday in Havana. It's a meeting of over 500 delegates from seventy-seven countries -- some delegates represent governments and some represent extreme-left political organizations. Themes of the Conference are not surprising: anti-imperialism; anti-colonialism; anti-neo-colonialism; solidarity with the struggles in Vietnam, Dominican Republic and Rhodesia; promotion of solidarity on the economic, social and cultural levels. It is a major event of the communist bloc and is supposed to last until 12 January.

For some months headquarters has been preparing the propaganda campaign and asked long ago for stations to try to place agents in the delegations. We had no agent in a position to go to the Conference, but AVBUZZ-1 is turning out plenty of material for the media. Our themes are two: exposure of the Conference as an instrument of Soviet subversion controlled by the KGB, and frank admission that the danger posed by the Conference calls for political, diplomatic and military counter-measures.

Since the purpose of the Conference is to create unity among the different dis-united revolutionary organizations, propaganda operations are also being directed at these organizations -- mainly capitalizing on resistance to dominance by the Soviet line and Soviet-lining parties. The more we can promote independence and splits among revolutionary organizations the weaker they'll be, easier to penetrate, easier to defeat.

Luis Vargas, ‡ the Director of Immigration, has agreed to review the case of the North Koreans who came temporarily and have been here for almost a year-and-a-half. For months we thought Tejera might take action, but nothing ever happened. Hopefully Vargas and Storace, ‡ the Minister of the Interior, will now be willing to ask them to leave.

Montevideo 7 January 1966

The Soviets at the Tri-Continental Conference have given our propaganda operations perfect ammunition in a speech yesterday by S. P. Rashidov, Chief of the Soviet delegation who is a member of the Presidium and Vice-Prime Minister. Rashidov affirmed the resolution of the Soviet Union to give maximum support in money, arms and munitions to insurrectional movements organized to promote social revolution. He said that right now the Soviets are backing liberation movements in Guatemala, Peru, the Dominican Republic, Puerto Rico, Guyana and Venezuela.

The speech is carried by the wire services and headquarters wants prominent display in local newspapers. In countries maintaining diplomatic relations with the Soviet Union we are to make sure appropriate government officials get copies or resumes of the Rashidov speech, and editorial comment is to be produced calling for re-examination of relations with the Soviets in the light of the Rashidov admissions.

Khalturin's wife has decided to return to the Soviet Union because she can't stand the summer heat here. Although Dick Conolly, ‡ the Soviet operations officer, has been able to monitor the audio installation in Khalturin's apartment only sporadically, he has come up with several meetings and occasional visits to the apartment by Nina Borisova. Because of transcribing difficulties the tapes are being pouched to headquarters and so far I've heard of no startling information. Khalturin, meanwhile, has begun to show interest in the wife of Carlos Salguero, ‡ the owner of his apartment, and Conolly is working closely with them as access agents to Khalturin.

After thinking over how I might use my acquaintance with Borisov, the Soviet Consul and husband of Borisova, to exploit the triangle, I proposed to Conolly and Horton that I tell Borisov of his wife's infidelity more or less 'as one man to another'. The purpose would be to place Borisov in the difficult position of either not reporting something important that I tell him -- dishonesty in reporting might be-a first step to defection -- or reporting that a CIA officer has told him that his wife is sleeping with his chief. Although sexual behaviour is fairly relaxed among Soviets, the fact that the CIA is monitoring a liaison within the KGB office might make reporting difficult for Khalturin as well as Borisov. Possibly, if an honest report went to Moscow, either Borisov or Khalturin or both might be recalled with the attendant disruption and possible reluctance of either to return under a cloud. At Horton's instruction I made the proposal in writing to headquarters -- both he and Conolly think it's a good idea.

Montevideo 13 January 1966

Otero left today for training at the International Police Services School in Washington. Horton and I went to police headquarters to bid farewell and we took advantage of the meeting with Colonel Ubach, ‡ the Chief of Police, to propose bringing down one of our officers to work full-time with police intelligence, using the AID Public Safety mission as cover. Ubach isn't terribly quick mentally, but he agreed, as he does to everything else we propose. Now we'll get approval from Storace, the Minister of the Interior, and advise headquarters to select someone. Once this matter is settled we'll begin working on the Minister, the Chief, and others in order to take the intelligence department out of the Investigations Division, preferably on an equal bureaucratic level as Investigations or at least with some autonomy. If approved we'll try to manoeuvre Inspector Piriz in as Intelligence Chief because he's much more experienced, mature and capable than Otero who suffers from impatience and is disliked by colleagues. Piriz, moreover, has already been on the payroll for some years and his loyalty and spirit of cooperation are excellent. While Otero is away I'll work closely with his deputy, Sub-Commissioner Pablo Fontana. ‡

Montevideo 20 January 1966

AVBUZZ-1 has been pounding away at the Tri-Continental Conference, which ended a few days ago, but he may have overplayed his hand a little. He arranged for a statement to be published in the name of an organization he calls the Plenary of Democratic Civic Organizations of Uruguay. The statement was perfect because it tied the Tri-Continental with the Congress of the People, the CNT and the waves of strikes during late last year. The problem was his vivid imagination in naming signatory organizations to demonstrate mass backing: the National Feminist Movement for the Defense of Liberty, ‡ the Uruguayan Committee for Free Determination of Peoples, ‡ the Sentinels of Liberty, ‡ the Association of Friends of Venezuela, ‡ the Uruguayan Committee for the Liberation of Cuba, ‡ the Anti-Totalitarian Youth Movement, ‡ the Labor Committee for Democratic Action, ‡ the National Board for the Defense of Sovereignty and Continental Solidarity, ‡ the Anti-Totalitarian Board of Solidarity with the People of Vietnam, ‡ the Alliance for Anti-Totalitarian Education, ‡ the Anti-Communist Liberation Movement, ‡ the Free Africa Organization of Colored People, ‡ the Student Movement for Democratic Action, ‡ the Movement for Integral University Action. ‡

Vargas, the Director of Immigration, is very excited about promoting action against communist bloc diplomatic and commercial missions in Montevideo. He showed me the Heber report of last month, without telling me how he got it -- probably from Heber himself, and asked if I would use it and any other information we have in order to justify the expulsion of key Soviets instead of a break in diplomatic relations. He and Storace (and presumably Heber) now want us to prepare a report naming whichever Soviets we want as those responsible for meddling in Uruguayan labour and student organizations. At the appropriate moment the report will be used for declaring those Soviets persona non grata. Conolly, Riefe, Cassidy and I have already started on this new report. We will have to work fast to take advantage of the resentment caused by the Rashidov speech and the Tri- Continental and of Heber's clear intention to use expulsions and the threat of expulsions as a tool against: the unions. Vargas is also going to begin action against the non-diplomatic personnel of communist missions, especially those who are here as officials of the commercial missions, which would include Soviets, Czechs, East Germans and the North Koreans. He's going to start with the North Koreans. He has discovered several ways in which he is going to prepare expulsions of Soviet bloc diplomatic and commercial officers. These expulsions will be mainly on technicalities he has found in the 1947 immigration law that forbids entry to persons who advocate the violent overthrow of the government, on irregularities in the issue of visas, and on interpretations of the status of Soviet bloc commercial officers. Little by little he hopes to cut down the official communist representation here by expelling the Koreans, East Germans and certain Czechs and Soviets -- none of whom have diplomatic status -- and by the persona non grata procedure where diplomatic officials are concerned.

I am encouraging Vargas to bring the approval authority for all visas to diplomats and others representing communist countries under his control. According to the current regulations he is supposed to have power of approval over all visas except diplomatic ones, but in recent years the Director of Immigration's office hasn't exercised this function. In order to obtain control of diplomatic visas, Vargas will prepare an instruction which Storace will get approved by the NCG. All this will take time but at least we're beginning to move. Our purpose is to get prior advice on visa requests and to give Vargas information about persons for whom the visas are requested. We will be able to delay the visas and to, get visas refused where desirable -- all of which will help to cut back the size of the communist missions, the numbers of intelligence officers in them, and the damage. they can do.

In Havana yesterday it was announced that a new organization is being formed to coordinate revolutionary activities in Latin America. It will be a 'solidarity' organization to channel assistance to liberation movements, and in the announcement Castro was quoted as praising the leadership of the revolutionary movement in Uruguay. Ambassador Hoyt asked us to prepare a report on these latest developments as well as on the Rashidov speech and other matters related to the Tri-Continental. He plans to give this material to the Foreign Minister because he says the NCG is going to take some kind of action.

Montevideo 29 January 1966

Our use of the Rashidov speech and the Tri-Continental propaganda has produced a surprising show of strength by the Uruguayan government. Today the Foreign Minister called in Soviet Ambassador Kolosovsky and asked for an explanation of Soviet participation in the Conference, since Conference speeches and documents are flagrant violations of the principles of self-determination and non-intervention as expressed in the UN Charter. The Foreign Minister pointedly asked Kolosovsky if Rashidov, as Chief of the Soviet delegation, had been speaking on his own account or as a representative of the Soviet government. Kolosovsky answered that he will request clarification from Moscow. These exchanges have been reported in the media, especially Kolosovsky's failure to respond. Cables have gone to other WH stations for replay.

Other diplomatic moves include a statement by Venezuela that it will examine its diplomatic relations with countries represented at the Conference. In the OAS, Peru presented a resolution condemning the Conference, and ORIT headquarters in Mexico, together with member organizations in various countries, have sent telegrams to the OAS backing the Peruvian resolution. The US representative in the OAS, speaking for the Peruvian resolution, said that the Alliance for Progress will make Latin America a lost cause for communism -- he can't have spent much time in Latin America lately.

Manuel Pio Correa, ‡ the Brazilian Ambassador sent by the military government to suppress exile plotting, returned permanently to Brazil last week. He has been rewarded for his work here by appointment as Secretary-General of the Brazilian Foreign Ministry -- the number two post, equivalent to Under-Secretary. After he got back, a spokesman for the Brazilian Foreign Ministry commented that when Pio Correa made his final call at the Foreign Ministry here to bid farewell, he failed to deliver another protest note over the exiles.

Before leaving Montevideo Pio Correa told Horton that if things in Uruguay don't improve, sooner or later Brazil will intervene -- perhaps not militarily but in whatever way is necessary to prevent its weak neighbour from falling victim to communist subversion. Well, at least we won't have to send troops as we did ~with the Dominican Republic -- the Brazilians will take care of those fifty-eight trained Uruguayan communists when the time comes.
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Re: Inside the Company: CIA Diary, by Philip Agee

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Montevideo 2 February 1966

Expulsion of the North Koreans was approved yesterday by Storace ‡ and will be ordered by Vargas in a matter of hours. Vargas's investigation revealed that former Interior Minister Tejera had ordered them to detail their commercial activities in August last year, but the Koreans refused and Tejera asked in November for a report from the Bank of the Republic which was never made. Vargas's new query to the Bank of the Republic brought a reply that the North Koreans' only transaction since they arrived in 1964 was a small purchase of hides about a year ago. As their tourist visas expired long ago and they are making no commercial transactions, expulsion will provoke little opposition. What the North Koreans were doing all this time is a mystery; most likely intelligence support for the Soviets.

The Blanco NCG Councillors are keeping up the heat against the Soviets over the Tri-Continental and Rashidov's speech. In a well-publicized meeting yesterday they received from the Foreign Minister a group of documents on the Tri-Continental, including those we prepared for the Ambassador. A copy of Rashidov's speech was one of the documents and we are trying to get a recording of the speech to pass to the Foreign Minister through the Ambassador -- hopefully the Miami station monitored the speech if it was broadcast: Although no decisions were reached, the meeting served to stimulate new speculation about a possible break in relations. This week-end the Argentine Foreign Minister will be in Punta del Este, and we are also creating press speculation that he and the Uruguayan Foreign Minister will be discussing the significance of Soviet diplomatic presence in the River Plate in the light of the Tri-Continental.

Today we helped to increase the tension even more by getting the military intelligence service to inspect a shipment of some thirty crates that recently arrived in the port from the Soviet Union. Through the AVENGEFUL telephone tap we learned about the crates and when the Army opened them today the Soviets protested loudly. They contained only tractors and parts but the incident contributed nicely to the current propaganda campaign.

Other propaganda on the Soviets and the Tri-Continental consists largely of press replay of significant articles published elsewhere -- right now, in fact, stations all over the hemisphere are putting out a coordinated campaign to demonstrate that the channel for communist subversion begins in Moscow with the KGB and flows out through the Cubans and organizations like the Tri-Continental to the local organizations. Central to this campaign is a Le Monde article of 20 January on formation of the Latin American solidarity organization. Cleverer, perhaps, is the publication of a 'secret' document through agents of the Caracas station in the Accion Democratica Party. The document, supposedly obtained at the Tri-Continental, purports to detail the formation of a Latin American solidarity organization and is being put out by various stations. Here we decided to use A. Fernandez Chavez, ‡ one of our media agents and also the representative of ANSA, the Italian press service. In Fernandez's version the programme of the solidarity organization is said to have been elaborated at a series of meetings in Montevideo, Rivera (on the Brazilian border) and Porto Alegre (capital of the Brazilian state bordering Uruguay). Officers of the Uruguayan-Soviet Cultural Institute were said to have participated.

Montevideo 4 February 1966

The NCG President has raised suddenly the spectre of a move against the Soviet mission again. Today he told newsmen at Government House that the Minister of the Interior, Storace, is preparing a new report on infiltration by communist diplomats in Uruguayan labour and student organizations. He also said that from what his own sources tell him, and from what Storace told him orally, there can be no doubt of illegal intervention by communist diplomats. He added that Storace's report will be presented to the NCG next week and will lead to an announcement of great moment.

The 'Storace report' is the one we wrote for Storace and Vargas two weeks ago to justify the expulsion of eight Soviet and two Czech diplomats. This report is already in Storace's hands and if all goes well we should have some sensational expulsions next week. The Soviets were selected very carefully in order to produce the desired effects. Both Khalturin, the KGB chief, and Borisov, the Consul and a KGB officer, were left off the expulsion list, so that we can continue to monitor the liaison between Khalturin and Borisova. We included on the list, however, Khalturin's most effective and hard-working subordinates, including the cultural attache whom we made trouble for in the spurious Waksman letter last year, so that Khalturin will have to take on an even greater work load. Reports from Salgueros ‡ and from the AVBLIMP observation post reveal that Khalturin is working extremely long hours and appears to be under severe strain. By forcing still more work on him we might trigger some kind of breakdown. We also included the Embassy zavhoz (administrative officer) because his departure will cause irritating problems in the Soviet mission's housekeeping function. I added the two Czechs in order to demonstrate KGB use of satellite diplomats for their own operations and in order to get rid of the most active Czech intelligence officers.

Closely related to the new move against the Soviets was the decision by the NCG yesterday to instruct the Uruguayan mission at the OAS to support the Peruvian motion condemning the Tri-Continental and Soviet participation in it. The motion has passed the OAS and will be sent now to the UN Security Council. The Soviets know what's coming, because AVAILABLE-1 my Soviet chauffeur, told me the whole mission is waiting under great tension to see how many and who are sent home.

Montevideo 11 February 1966

The North Koreans are out but the Soviet expulsion is postponed. Vargas couldn't get the Koreans to go to his office to be advised, so he sent police to bring them in by force. The three officials and their families left today. Expulsion of the Soviets is postponed for the time being because Washington Beltran, the outgoing NCG President, wants Alberto Heber, who comes in as NCG President on 1 March, to make the expulsion. Storace's presentation of our report to the NCG is also postponed but Vargas assured me that action will be taken sooner or later. At the moment he is going to proceed with progressive harassment and expulsion -- if politically acceptable -- of the East German trade mission, the Czech commercial office and the Soviet commercial office. Because officials of these offices haven't got diplomatic status, Vargas can assert control without interference from the Foreign Ministry. He is also proceeding on the new decree granting the Ministry of the Interior and the Immigration Department equal voice with the Foreign Ministry for approval of all visas, diplomatic included, for communist country nationals.

Too bad about the expulsions because today Soviet Ambassador Kolosovsky replied to the Foreign Minister on the Rashidov speech. He said Rashidov was speaking at the Tri-Continental in the name of certain Soviet social organizations and not in the name of the Soviet government. Appropriate media coverage is following in order to ridicule Kolosovsky's answer and to applaud the North Korean expulsion.

Montevideo 17 February 1966

Station labour operations continue to be centred on the Uruguayan Institute of Trade Union Education, ‡ which is the Montevideo office of the AIFLD. Jack Goodwyn, ‡ Director of the Institute, is working closely with Lee Smith, ‡ the station covert-action officer, in order to develop a pool of anti-CNT labour leaders through the training programmes of the Institute. The most effective programme, of course, is the one in which trainees are paid a generous salary by the Institute for nine months after completion of the training course, during which time they work exclusively in union-organizing under Goodwyn's direction. It is this organizational work that is the real purpose of the AIFLD, so that eventually our trade unions can take national leadership away from the CNT. Goodwyn's job, in addition to the training programme, is to watch carefully for prospective agents who can be recruited by Smith under arrangements that will protect Goodwyn.

The goals will take a long time to reach and progress often seems very slow. Nevertheless Goodwyn has already achieved several notable successes in the social projects field, which are showcase public-relations projects such as housing and consumer cooperatives. Using a four-million-dollar housing loan offer from the AFL-CIO, to be guaranteed by AID, Goodwyn has brought together a small number of unions to form the Labor Unity Committee for Housing. Some of these same unions have also formed what they call the Permanent Confederation, which is the embryo of a future national labour centre that will affiliate with ORIT and the ICFTU. ‡ Another housing project, also for about four million dollars, is being negotiated with the National Association of Public Functionaries - one of the two large unions of central administration employees. Goodwyn has also formed a consumer cooperative for sugar workers in Bella Union -- the same region where the important revolutionary socialist leader, Raul Sendic, gets his support.

Station propaganda operations are now high-lighting the recent imprisonment by the Soviets of dissident writers Yuli Daniel and Andrei Sinyavsky as well as the Tri-Continental. Today the NCG discussed the Daniel and Sinyavsky cases and instructed the Foreign Minister to make a formal protest in UNESCO. NCG Councillors also harshly criticized Kolosovsky's reply that Rashidov was not speaking at the Tri-Continental for the Soviet government.

Montevideo 25 February 1966

My little technical operation against the codes of the UAR Embassy is beginning to monopolize my time. For over a week two Division D technical officers, Donald Schroeder ‡ and Alvin Benefield, ‡ have been here planning the installation, and I've had to take them from shop to shop buying special glues, masking-tape and other hard-to-find items. Schroeder was here late last year for a short visit and at his request I sent the electric company inspector who is part of the AVENIN surveillance team into the Embassy for an inside casing. After his visit there was no doubt where the code-room is located -- right over the office of Frank Stuart, ‡ the Director of AID.

Some time ago Stuart received an instruction from AID headquarters in Washington to lend whatever cooperation is necessary to the station -- although he doesn't seem to know exactly what is to happen. He's just nervous that some heavy instrument will come crashing down on his desk through the modern, hanging, acoustic-tile ceiling of the AID offices. I have arranged with him to get the keys to AID and for him to send away his watchman when we make the entry a few nights from now.

The installation will consist of two special contact microphones (' contact' meaning it is made to pick up direct vibrations instead of air vibrations, as in the case of a normal voice microphone) connected to small FM transmitters powered by batteries. Schroeder and Benefield will install the equipment right against the ceiling, as close as possible to the spot where the UAR code clerk has his desk. From my Embassy office which is across the street from the UAR Embassy and the AID offices, we will monitor the transmitter in order to record vibrations from the machine.

The UAR uses a portable Swiss-built encrypting machine which is like a combination typewriter and adding machine. Inside it has a number of discs that are specially set every two or three months. The code clerk, in order to encrypt a secret message, writes the message into the machine in clear text in five letter groups. Each time he completes five letters he pulls a crank which sets the inner discs whirling. When they stop the jumbled letters that appear represent the encrypted group. When the whole message is encoded the resulting five letter groups are sent via commercial telegraph facilities to Cairo.

The National Security Agency cannot break this code system mathematically but they can do so if sensitive recordings can be obtained of the vibrations of the encrypting machine when the discs clack to a stop. The recordings are processed through an oscilloscope and other machines which reveal the disc settings. Knowing the settings, NSA can put the encoded messages, which are intercepted through the commercial companies, into their own identical machines with identical settings, and the clear text message comes out. Although the Swiss manufacturer when selling the machine emphasizes the need to use it inside a sound-proof room on a table isolated by foam rubber, we hope this particular code .clerk is careless. If we can discover the settings on this machine in Montevideo, NSA will be able to read the encrypted UAR messages on the entire circuit to which their Montevideo Embassy pertains. This circuit includes London and Moscow, which is why we have been pressured to get the operation going here. If successful, we will record vibrations from the machine every time the settings are changed in future. By reading these secret UAR messages, policymakers in Washington will be able to anticipate UAR diplomatic and military moves, and also to obtain an accurate reaction to US initiatives.

In another day or two Schroeder and Benefield will have all their equipment ready. Our plan is to drive up Paraguay Street about 9 p.m. and enter normally through the front door of the AID offices, using Stuart's key. After checking security and closing blinds, I'll park the car just down Paraguay Street from AID for emergency getaway. While Schroeder and Benefield make the installation, I'll go up to my office in our Embassy and watch over the UAR Embassy and the AID office from my window. Horton also plans to be in the station when we make the installation. We'll have handie-talkies for communication between Schroeder and Benefield and Horton and me in the station. Very little risk in this one but plenty of advantage.

Montevideo 1 March 1966

The technical installation under the UAR code-room took most of the night -- Horton told Schroeder and Benefield that no matter what happens that equipment must not come loose and fall on to Stuart's desk. So they took their time and made it safe. Already we have recordings of the machine and after playing them through the oscilloscope of our communications room, Schroeder and Benefield are certain they will work. We pouched the tapes to headquarters for passage to NSA, who will advise on whether they can be used.

The sensitivity of the microphones is remarkable. Every time a toilet flushes, or the elevator goes up or down, even the structural creaks -- every sound in this twelve-storey building is picked up.

Montevideo 7 March 1966

Alberto Heber took over as President of the NCG and was greeted by the CNT with a call for another general strike for 16 March, in protest against continuing inflation and unemployment. The Montevideo transport strike is now three weeks old. Storace continues as chief government negotiator with the unions, and, with elections only nine months away, labour peace must be bought even at the price of still more concessions.

So today he settled the Montevideo transport strike. He also put to rest the sanctions issue. The unions of the autonomous agencies and decentralized services accepted his formula whereby all sanctions discounted for last year's strikes will be repaid to the workers and all other sanctions cancelled.

The CNT then announced that the general strike called for 16 March is postponed until 31 March. Our PCU penetration agents believe this was part of the bargain with Storace over sanctions and that the strike will probably not be held at all.

Montevideo 12 March 1966

Luis Vargas, the Director of Immigration, has a new plan for reducing the numbers of commercial officers from the communist countries. These officers are more vulnerable than their colleagues with diplomatic status (although cover in the commercial departments is frequently used for intelligence officers) because Uruguayan law does not recognize 'official' status for foreigners not having diplomatic passports. As almost all the Soviet, Czech and other communist trade officers carry service or special passports, which for them is between ordinary and diplomatic status, Vargas is going to apply the law which requires that foreigners who have completed the temporary residence period for purposes of commerce must solicit permanent residence in order to remain in Uruguay. As the request for permanent residence includes a statement of intention to become an Uruguayan citizen, Vargas is certain, as am I, that those officers affected will have to be transferred. By long delays of approval of visa requests for replacements, the numbers of officers in the commercial missions can be considerably reduced without outright expulsion. The first communist mission to feel this new procedure will be the East Germans whose four-man trade mission is functioning just like an embassy. Our Ambassador, in fact, is often embarrassed at diplomatic functions when the chief of the East German mission is present, and some time ago he asked us to see what could be done to get them thrown out.

Although I've also been trying to keep up pressure on Vargas and Storace for the expulsion operation against the Soviet officers, they have both said they want to hold this move in reserve to use when the unions start trouble again. Meanwhile, Vargas is proceeding with the special decree giving him and Storace approval power for all visas, including diplomatic, for nationals of the communist countries. The Foreign Ministry is opposed to giving the Interior Ministry a veto power on diplomatic visas, but Storace and Vargas, as men in Heber's confidence, are going to win.

Headquarters tell us that NSA is able to determine the code-machine settings with the tapes. We're going to leave the installation in place and when the settings are changed we will be advised and I will make some recordings in my office to be forwarded by pouch. At last I'll have these two Division D friends off my back. Benefield now goes to Africa for an operation against a newly-established Communist Chinese mission and Schroeder goes to Mexico City where he has been working for some time on an operation against the French code system.

Montevideo 20 March 1966

Work with the police continues but with little real progress. Storace approved bringing down one of our officers under Public Safety cover and headquarters finally located an officer for the assignment: Bill Cantrell, ‡ formerly with the Secret Service then in the Far East Division after coming with the Agency. Unfortunately Cantrell will not arrive until September because he has to study Spanish, so I suppose I'll be working with police intelligence until I leave -- with luck at the end of August.

Our efforts to convince Colonel Ubach to establish an intelligence division on a par with, or apart from, the ordinary Criminal Investigations Division haven't been successful. Horton, however, is determined to turn police intelligence into a British-style 'special branch' like the one he dealt with in Hong Kong. I'm not sure whether he thinks this is needed because it will work better or because it's the British way -- he seems even more anglophile than before: country walks, bird-watching, tennis, tea-time and quantities of well-worn tweeds that he wears in the hottest weather.

Establishing an autonomous 'special branch' under Inspector Piriz wouldn't be possible just now in any case because Piriz is still working on fraud cases and the other financial crimes that have continued since the first bank failures in April of last year. Heber on taking over as NCG President established a special Treasury Pblice under Storace with representation from the Bank of the Republic, the Ministry of the Treasury and the Montevideo Police Department. Piriz is the senior police officer in this new unit and it would be difficult to pry him away because his work on these cases has been excellent. As he is rather isolated from police headquarters his value as an intelligence source has come down, but I'm continuing his salary, in fact I've given him several rises to keep up with inflation, because of his long-range potential.

Frank Sherno, the regional technical officer stationed in Buenos Aires, sent us a portable Recordak document-copying machine which I hope to set up at the Montevideo airport as part of an improved travel-control operation. With this machine we can photograph all the passports from communist countries and that of anyone else on our watch list. Recently I've begun to work on this with Jaureguiza, ‡ another Police Commissioner who is in charge of general travel control and the Montevideo non-domiciled population. Jaureguiza has agreed to obtain a convenient room at the Montevideo airport near the immigration counters to install the machine. When this is settled Sherno will come to set it up and train the operators. Hopefully we can get this done before Otero gets back from his training in Washington because he'll want to control it and his abrasive personality would hinder getting it started. By now he has finished the police training course at the International Police Services School and is undergoing special intelligence training by headquarters' OTR officers.

No wonder this passport photography has taken so long. Yesterday the Metropolitan Guard seized a large quantity of contraband at the airport and customs officers were revealed to be running a lucrative trade. Smuggling in fact is the reason why I've been delayed so often, because Piriz tells me the airport police are also in the business. Any tighter controls out there threaten their livelihood.

Montevideo 30 March 1966

Headquarters thinks the operation against the UAR codes is so important that they asked that we buy or take a long lease on the apartment above the UAR Embassy. The reasoning is that in a couple of years we will be moving into the new Embassy now under construction on the Rambla and AID will also probably move at that time. As this operation could go on for many years, headquarters wants to be assured of access to the building and close proximity for a listening post. Bad news. Now I'll have to find someone to buy the apartment from the elderly couple living there, then someone to live in it as LP keeper. The apartment is enormous, as there is only one per floor in this building, so I'll need a family with some ostensible affluence.

Rio de Janeiro 6 April 1966

Even from travel posters it's impossible to imagine the beauty of this city -- mountains right in the middle of town, sparkling bays, wide, sandy beaches. The combination is simply spectacular.

All the case officers in charge of Cuban operations at the South American stations are here for a conference. The purpose is to stimulate new interest in recruiting agents who can go to Cuba to live, in recruitment operations against Cuban government officials who travel abroad, and in operations to penetrate Cuban intelligence activities in our countries of assignment. Tom Flores, ‡ former Chief of Station in Montevideo, is now in charge of all Cuban affairs in headquarters and is running the conference -- he held another one last week in Mexico City for Cuban operations officers in Central America, the Caribbean and Mexico.

In his introductory remarks, Flores lamented that the Agency still has practically no living agents reporting from within Cuba. Technical coverage from electronics and communications intercept ships like the USS Oxford, and from satellites and aerial reconnaissance, is good but not enough. Not surprisingly he carried on with the old theme of recruitment by secret writing through the mails. Then we had a full day on the structure and function of the Cuban intelligence service -- more of the same information sent almost two years ago after the defection in Canada. Very boring.

Yesterday and today each of us has had a turn at describing our local operations against the Cubans -- mine are still bogged down in following up the interminable leads on the counterintelligence cases and in trying to get the government to take action against the Montevideo Prensa Latina office.

It was interesting, though, to hear of operations in Quito and Caracas. Fred Morehouse, ‡ the former chief of the ZRBEACH communications monitoring team in Montevideo was transferred to Caracas and there he managed to locate and identify two people who were operating clandestine radio communications circuits with Cuba. It wasn't said whether either of them was recruited, but in any case both circuits were neutralized.

Representing the Quito station is none other than old boss Warren Dean -- the conference is for operations officers, but Dean wanted a few days' vacation in Rio. He explained that Rafael Echeverria went to Cuba after the military junta took over in 1963 and there he had an operation for a brain tumour. After recovery he was trained as a Cuban intelligence agent and he returned to Quito and was unmolested by the junta. Through Mario Cardenas, the Quito PCE penetration agent, Echeverria was discovered to have a secret-writing system for sending messages to Cuba and a radio signal plan for receiving them. The Office of Communications installed a transmitter in the radio Echeverria used to receive short-wave messages from Cuba, so that the station could record the messages in the apartment across the street where I had placed Luis Sandoval under commercial photography cover before Arosemena was overthrown. The station also copied Echeverria's cryptographic pads and thus was able to monitor his communications with the Cuban service in Havana. The Quito station's best new recruitment is Jorge Arellano Gallegos, ‡ a PCE leader from years back on whom vulnerability data for recruitment has been collected for a long time.

We'll have another day or two here before the conference ends. Nobody is very excited except Cuban operations officers from headquarters such as Flores -- the rest of us are increasingly absent at the beaches. When we finish I'll take a week off for fishing in the Caribbean with my father -- then back to Montevideo to wait for my replacement. I am still uncertain about resigning when I return to Washington. I'll definitely separate from Janet but I'll have to find another job before resigning from the CIA.

Montevideo 18 April 1966

The movement for constitutional reform has picked up surprising strength in recent months. The Ruralistas still are the most important group pushing for a strong, one-man executive but important Blancos and Colorados are joining the campaign. Some people, however, believe the problem of decision-making can be solved by retention of the collegiate executive but with all members from the same party. A one-man executive, many fear, would inevitably degenerate into some variety of dictatorship, as so much of Uruguayan and Latin American history suggests.

The PCU, through its political front, FIDEL, is conducting its own reform campaign -- not for the one-man presidency because they know they'll be the first group suppressed when it degenerates. Their signature campaign is for a constitutional reform that would retain the weak executive, but provide for land reform and the nationalization of banking, foreign commerce, and the important industries still in private hands. They have no chance of winning, of course, but land reform is still the most important need in Uruguay. In the last census it was revealed that of the total rural population of 390,000 only about 3000 -- less than 1 per cent -- own some 70 per cent of the lands. If the rich ranchers pushing the Ruralista reform are successful, land reform will be as far away as ever under a one-man executive.

The Blancos' main problem is still inflation (13.6 per cent in January-March) and the ever-worsening economy. More IMF-dictated stabilization measures are coming up soon which will be unpopular and hurt the Blancos' electoral chances.

I have just finished one of the more disagreeable operations of my short career as a spy. Several months ago headquarters replied to one of my reports on the Yugoslav mission here -- I had sent up to date information on all the mission personnel from the Foreign Ministry files -- by proposing a recruitment. One of the attaches in the Yugoslav Embassy is an old personal acquaintance of DMHAMMER-1, a high-level defector of some years ago. The defector, now in his sixties, was the equivalent to the chief of administration in the Yugoslav Foreign Ministry and had provided excellent intelligence. In recent years he has been shuttled around the world making recruitment approaches to former colleagues -- not all of them unsuccessful. Soon headquarters is going to retire him to pasture, but it was desired that he come to Montevideo for one last recruitment approach because the attache is the code clerk.

Horton agreed and the headquarters' officer in charge came down to plan the approach with me. The AVENIN surveillance team established our target's daily routine, which involved a walk of several blocks from his apartment to the Embassy. He makes this walk in the morning, to home and back at lunchtime, and then again in the evening. The headquarters' officer brought the defector, a tall, handsome man with flowing white mane, over from Buenos Aires for the 'chance' street encounter which would be on Boulevard Espana just a few blocks towards the beach from the Soviet Embassy.

As good fortune would have it, our target appeared right on time and the encounter, although lasting only about fifteen minutes, was very warm and animated. Our defector told the target that he was visiting Montevideo and Buenos Aires on a business trip from Paris where he now lives, and he invited the target to dinner the same day or the next. The attache accepted the invitation for the following day, and we thought we might have a hit. We decided to use the same security precautions as on the first day, i.e. the headquarters officer and I on counter-surveillance in the street with Tito Musso, ‡ the AVENIN team chief, near by in an escape vehicle.

The defector went to the elegant Aguila Restaurant the following night as agreed, but the attache failed to appear. Although we suspected that the target had decided not to see our friend again -- since the defector's unsuccessful recruitments are undoubtedly known to the Yugoslav service -- we decided to arrange anther street encounter just in case. This time the target simply told our defector that he understood and wanted nothing of the plan. He refused to speak more and continued on his way.

It was sad, almost pitiful, to see this very distinguished man lurking in the streets before pouncing on our target. The headquarters officer told me they have nothing more for him to do, and at his age he can scarcely learn another job, but they'll have to terminate his salary soon. He's now a US citizen and will get some social security, but his last years are going to be difficult. No wonder most defectors either become alcoholics or suffer mental illness or both. Once they've been milked for all they're worth to us they're thrown away like old rags.

Montevideo 25 April 1966

The Director of Immigration, Luis Vargas, has landed a blow on the East German commercial mission. He gave them the choice of requesting permanent residence or leaving with thirty days to decide. After a violent verbal encounter with the chief of the mission, Von Saher, he threw him out of his office and was about to start deportation proceedings when suddenly Von Saher and another officer of the mission, Spinder, returned to East Germany. The other two East Germans, Kuhne and Vogler, have surprisingly requested permanent residence. They are still on their temporary permission, however, and as soon as that expires in a few months Vargas will deny the request for permanent residence.

One of my former agents has suddenly made much publicity in the newspapers. It's Anibal Mercader, ‡ formerly AVBASK-1, who worked for us as a penetration agent of the Uruguayan Revolutionary Movement (MRO). Only a month or two after I arrived in Montevideo Mercader moved to Miami where he was employed in a bank. Now, two years later, he has disappeared with 240,000 dollars and is believed to be hiding in Buenos Aires with his wife, children and the money. This is a novel way to raise funds for the revolution, but maybe he was on the MRO'S side all along. The FBI can figure this one out -- we don't know him.

Montevideo 12 May 1966

The PCU signature campaign on constitutional reform has been achieving considerable success -- largely because the Party has drawn the CNT into the campaign. Through AVBUZZ-1, we have been trying to expose PCU use of organized labour for political ends. Yesterday his Plenary of Democratic Civic Organizations issued a 'press statement' in which the leftist labour movement in Uruguay is denounced as an agent of international communism and the foreign conspiracy that has thrown itself into the political field in a confrontation, as equals, with the traditional democratic political parties over the constitutional reform issue. Because communists have been allowed to dominate the labour movement, the statement concludes, they have become a power among the powers of the state in a situation of 'total subversion'. I suppose AVBUZZ-1 knows his audience but sometimes he's embarrassing.

Commissioner Otero is back from the training course and is more enthusiastic than I've ever seen him. Reports from headquarters on his performance are very favourable. I was just able to get the airport photography operation started before he returned, but Otero is going to take care of the developing and printing work. As soon as possible Frank Sherno ‡ will come back and will rearrange the police intelligence darkroom and order new equipment. I'm not sure how soon that will be because Sherno is spending almost all his time these days in Santiago, Chile where he and Larry Martin ‡ are honeycombing a new building of the Soviet Mission with listening devices.

At the airport Sherno spent four days training the police officers who work with the immigration inspectors. Normally it takes a couple of hours to learn how to use this machine, but these men are special. I also arranged for a police courier to take the exposed film to Otero's office, and for the negatives and our prints to be sent over with the daily couriers from police headquarters. Such efficiency has its price, of course, and I've started monthly' expense' payments to the airport crew calculated on the numbers of passports and other travel documents photographed. It's as close to piecework incentive as I can get without calling it that, but without it the Recordak would just sit out there collecting dust. I also set up a travel watch list -- simple at first to get them used to it -- consisting of general categories of documents to photograph like the Soviets and satellites. Finally, I gave each of them a personal copy of the beardless Che Guevara photograph and asked that they imprint that face as deeply in their heads as possible. That won't be very deep, I'm afraid -- these guys wouldn't recognize Che if he walked through with beard, beret, fatigues and automatic rifle.

The new police radio communications network is beginning to operate. Gradually the Public Safety mission technicians will expand it to the interior departments. The other day I got the frequencies from the Public Safety chief and we're getting our own receivers so that we can monitor the police frequencies.

Next week I'll give Otero a generous salary increase. While he was away I hooked Fontana, ‡ his deputy, on the payroll but he doesn't want Otero to know -- nor do I. From now on these people have got to concentrate on penetrating the Tupamaros, who seem to be the only organization following the 'armed struggle' line right now. This would be like the Echeverria group in Quito, much more dangerous than the Soviet-line PCU, though nobody else in the station agrees with me on this. Otero, however, agrees to concentrate on the Tupamaros and somehow I've got to get him started on agent recruitments for intelligence so that the police won't have to resort to torture.

Montevideo 19 May 1966

Headquarters turned down the suggestion that I speak to Borisov about the relationship between his wife and his chief. The affair goes on, however, and several times Horton has written nasty cables asking for reconsideration. The matter came to a head this week with the visit of the Chief of the Soviet Bloc Division, Dave Murphy, ‡ and his deputy, Pete Bagley. ‡ They're making the rounds of stations where there are Soviet missions. Between Conolly, the Soviet operations officer here, and Bagley the bad blood goes back many years and naturally there was a terrible scene of tempers. Although there were threats to get Conolly transferred back to headquarters, he's probably safe because Murphy and Bagley are already looking for a new Soviet operations officer for the Buenos Aires station. They were over there before coming here, and when they asked the Soviet operations officer to take them on a drive by the Soviet Embassy he couldn't find it. That was enough for his transfer.

Murphy wouldn't relent on the Borisov proposal. He's afraid Borisov would get violent and doesn't think a quick escape-route to avoid a fight is possible. I suppose he should know -- he had beer thrown in his face a few years ago by a Soviet he was trying to recruit, and he still hasn't lived down the scandal.

Montevideo 9 June 1966

Vargas has turned his attention to the Czech commercial mission and the Soviet Tass correspondent who is a KGB officer. When he called in the Czech commercial officers, the Consul, Franktisek Ludwig, came instead -- insisting that the commercial officers belong to the Embassy mission and are subject to the Foreign Ministry rather than the Ministry of the Interior. Vargas would have none of it and told Ludwig that he would send the police for the commercial officers just as he had with the North Koreans if they refuse to appear. Ludwig protested, another violent argument followed, and afterwards Vargas began expulsion proceedings against Ludwig in the Foreign Ministry. Ludwig, however, returned quickly to Czechoslovakia before being ordered out. Perhaps he will return, perhaps not, but he was one of the two Czechs I put on the list for expulsion with the Soviets. I know him well from the diplomatic association. The commercial officers finally came to Vargas's office and requested permanent residence -- to be denied by Vargas in due course.

Vargas insists that the Soviet diplomatic officers will be expelled as planned, but Heber wants to proceed slowly and save the Soviet expulsions for use against the unions. Meanwhile Vargas has required the Tass representative to seek permanent residence, but has allowed him a delay for decision.

We doubt if the Tass correspondent will seek permanent residence because he has been here for over five years and should be transferring home shortly. Even so, Vargas will deny the request if it is made.

Jack Goodwyn ‡ has arranged for one of his AIFLD people to be named as the Uruguayan representative at the conference this month of the International Labor Organization in Geneva. The prestige appointment was made by the government, and Goodwyn's man is going as representative of the Uruguayan Labor Confederation ‡ (CSU). The PCU and other leftists are squealing because the CSU is completely defunct and the CNT in any case represents 90-95 per cent of organized labour. The appointment is indicative of how the government increasingly sees the advantage of cooperation and even promotion of the AIFLD and related trade-union programmes. Private industry is similarly well disposed.

In Washington the Agency has arranged with Joseph Beirne, ‡ President of the Communications Workers of America ‡ (CWA), to have the CWA's training school at Front Royal, Virginia turned over to the AIFLD. This school has been used for years as the main centre of the Post, Telegraph and Telephone, Workers' International ‡ (PTTI) for training labour leaders from other countries. Now the school will be the home for the AIFLD courses which until now have been held in Washington. Not a bad arrangement: seventy-six acres on the Shenandoah River where the isolation and control will allow for really close assessment of the students for future use in Agency labour operations. Also this year the AIFLD is starting a year-long university-level course in 'labour economics' which will be given at Loyola University in New Orleans. AIFLD hasn't been exactly cheap: this year its cumulative cost will pass the 15 million dollar mark with almost 90 per cent paid by the US government through AID and the rest from US labour organizations and US business. Since 1962 the annual AIFLD budget has grown from 640,000 dollars to almost 5 million dollars while the ORIT budget has remained at about 325,000 dollars per year. Millions more have been channelled through A I FL D in the form of loans for its housing programmes and other social projects.

Montevideo 24 June 1966

Vargas and Storace finally got the new procedure for issuing visas to nationals of communist countries approved by Heber and sent by the Foreign Ministry to all consular posts. The new procedure requires prior approval of all visas requested by citizens of communist countries. Approval procedure requires the Immigration Department and the Ministry of the Interior to check traces on the applicants with appropriate security offices -- police and military intelligence -- and none can be approved by the Foreign Ministry without prior approval in Immigration and Interior.

This is a very considerable victory because it opens the door to denials, delays and manoeuvres that will harass and disrupt the Soviet and other communist missions here. In addition we will have plenty of time to get reports on visa applicants from headquarters and other stations, and we can influence decisions by preparing false reports. In order to protect himself Vargas asked me to channel our reports through military intelligence where he will initiate requests - he knows we are in regular contact with Colonel Zipitria. ‡

Montevideo 30 June 1966

I brought over Fred Houser ‡ from the Buenos Aires station to serve as purchasing agent for the UAR code-room operation. As luck would have it the elderly couple had been thinking for some time of selling, and after a little negotiation we agreed on the equivalent of 35,000 dollars. The apartment is owned by a dummy corporation called Diner, S.A., and Houser simply purchased all the bearer shares of this company and the apartment was ours. I've got the shares locked up in my safe where they'll probably stay until the UAR gets another Embassy. Houser was perfect for the task because he has both US and Argentine citizenship and easily passed as an Argentine in the purchasing operation. Now we are going to move in Derek Jones ‡ and his family for cover. Jones is an old friend of Cassidy's ‡ and has British as well as Uruguayan citizenship. As soon as they move in and our access is assured, Schroeder and Benefield will return to make a permanent installation of the microphone -- possibly in the AID offices with a wire to the apartment but more probably directly from the apartment.

Montevideo 3 July 1966

Yesterday the President of the Bank of the Republic and his re-financing team returned 'from the US with a bundle of new sweets: postponement until December 1967 of payments totalling 47 million dollars that had been due to private New York banks before the end of this year; a new credit line of 22 million dollars from New York banks; a US government stabilization loan of 7.5 million dollars; a 3-million-dollar loan for fertilizer from AID; a 1.5-million-dollar loan from the Inter-American Development Bank for economic development studies.

Thanks to the latest stabilization measures adopted, as a result of pressure from the IMF, in May, inflation in June was 14 per cent for a total cost-of-living increase during January-June of 36.3 per cent. As expected, the unions are making ever-more-ominous threats of new strikes while the Blancos are offering only the minimal increases provided for in the budget exercise of last year. Storace continues to be the government's chief negotiator but chances for averting another round of crippling strikes are very slight without substantial new benefits for the workers.

The PCU Congress is going to be held about the middle of next month and we have started a major propaganda campaign against it. The Party Congress, held only every few years, is the PCU's big event this year and they've invited a fraternal delegation from the Communist Party of the Soviet Union. Through Vargas I am trying to have the visas denied, but if this is impossible, as it now appears, we will hammer away at Soviet participation in the Congress as interference in Uruguayan politics.

Montevideo 14 July 1966

Dominant factions of both the Colorados and the Blancos are now committed to a constitutional reform to return the country to the one-man presidency, although significant opposition continues in certain circles of both parties. Proponents of reform in the two parties are meeting regularly in order to agree on one constitutional reform project that will be approved in the Legislature and presented to the country by referendum. By agreeing on a joint reform pact the traditional parties will ensure that their version of reform will be the only one with a chance for adoption. Thus if voters reject the joint Colorado-Blanco project, which is unlikely, Uruguay will remain with the current collegiate system. The effect is to completely eliminate any possibility that the PCU reform project might be adopted, and the CNT has already denounced the Blanco-Colorado pact establishing a strong executive.

Meanwhile strikes are beginning again. The government employees' unions are asking for new benefits in the form of' loans' -- in order to circumvent the constitutional prohibition of government salary increases before elections.

Montevideo 27 July 1966

Storace was able to get a postponement of a government employees strike set for 21 July and of another strike in the Montevideo transport system that would have occurred today. Nevertheless municipal workers continue one-hour sitdowns per shift and tension is increasing over the 'loans' and how the government can finance them.

In a secret meeting our proposals to deny visas to the Soviet fraternal delegation to the PCU Congress next month were discussed by Storace and the Blanco NCG Councillors. It was decided, rightly I think, not to deny the visas but to use Soviet participation in the Congress as justification for action against the Soviet mission afterwards. Additionally, the government right now is studying a Soviet credit offer of 20 million dollars for purchase of Soviet machinery which can be repaid in nontraditional Uruguayan exports.

Don Schroeder and Al Benefield are back to improve the technical operation against the UAR code-room. By chance their trip has coincided with another change of the settings on the machine. From behind a screen they had built in our new apartment in the room above, and across a light well from the code-room, they were able to watch the code clerk making the new settings and to photograph him in the act. They don't even need the recordings now. The code clerk doesn't draw curtains or lower the blind. He couldn't make it much easier for us.

Montevideo 10 August 1966

At last my replacement is here and I'll be able to leave by the end of the month. He is Juan Noriega, ‡ a former Navy pilot, who recently finished his first tour at the Managua station where he was responsible for training the bodyguards for the President and the Somoza family.

Noriega got here just in time to see Uruguayan democracy hit another new low. All last week President Heber was out on his own protest strike -- not against inflation but against his fellow Blanco NCG Councillors who were blocking certain of his military assignments. Several key assignments of strong military leaders by Heber, including the designation in June of General Aguerrondo ‡ as Commander of the First Military Zone (Montevideo), had provoked rumours and speculation that Heber is planning a coup against his own government if the one-man executive is not adopted. We have no substantive reports to support this view, but Heber is definitely advancing strong, anticommunist officers into important positions. The NCG functioned without him until today, when he ended his strike and went on television to explain his actions.

Montevideo 24 August 1966

I've turned over all my operations to Noriega and in a few days will be flying home. In two and a half years our station budget has gone up to almost a million and a half dollars while several new additions have been made to the station case officer complement. In a couple of weeks Bill Cantrell ‡ arrives to work full-time with Otero's police intelligence department. Also due to arrive shortly is another non-official cover officer for operations against the PCU and related revolutionary organizations. This officer has been long-delayed in arriving -- his cover was arranged by Holman with Alex Perry, ‡ one of Holman's golfing companions, who is General Manager of the Uruguayan Portland Cement Co. ‡ a subsidiary of Lone Star Cement Corporation. ‡ Approval from Lone Star headquarters was obtained last year also but many delays followed in finding the officer to fill the slot. Still another non-official cover officer is programmed for Soviet operations.

What sharp contrast I feel on leaving compared to the excitement, optimism and confidence of that Sunday of arrival, watching the Pocitos crowd from O'Grady's apartment. While here, I've had another promotion and good fitness reports, but my sense of identification with the work and people of the CIA has certainly faded.

Holman's attitude and my deteriorating domestic situation have caused some hardening, perhaps even embitterment, but the more I see of this government the more urgent become the questions of whether and why we support such things.

Consider the new buses and trolleys for the Montevideo municipal transport system. When I went to the port to receive my car a few weeks after I arrived, I noticed a very large number of bright new blue and red vehicles parked ready to leave the port for service in the city's very crowded and over-taxed transport system. There were 124 of the buses and trolleys ordered in 1960 by Nardone, then NCG President, from Italy at a cost of several million dollars. They arrived at the end of 1963 but the Colorado-controlled municipal government was unable to pay the exorbitant unloading and customs costs levied by the Blanco-controlled port authority and customs administration. Because the Blancos resisted the political gain that would accrue to the Colorados when the buses and trolleys were put into service, even though they had been purchased by a Blanco administration, they sat in the port for seventeen months until the first group of four buses was released in May 1965. During that time they were sitting out of doors, deteriorating from the salt air and frequently stripped of parts and trimmings by vandals. Because of slow payment by the Blanco national government of the Montevideo transport subsidy with which the customs and unloading charges would be paid, together with other red tape and slow paper-work, 104 of these units are still rusting in the port right now. Such subordination of the public interest to partisan political goals is not at all inconsistent with the rest of Colorado-Blanco governing in recent years. Uruguay, the model for enlightened democratic reforms, is the model of corruption and incapacity.



1. See Chart 6.
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Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:30 am


Part Four

Washington DC 15 September 1966

My assignment in headquarters is to the Mexico branch as officer in charge of support for operations against the Soviets in Mexico City,. This first week, however, I'm making visits to arrange cover and other details. I'm keeping State Department cover, incidentally, and will ostensibly be assigned to the Research Assignments Office of the Bureau of Intelligence and Research. Central Cover Division still has that telephone system for cover calls and they gave me the usual two names that I'll use as my immediate superiors. The telephone number starts with DU-3, as all State Department numbers, but it rings in central cover in Langley.

I asked Jake Esterline, ‡ the Deputy Division Chief, what the possibilities are that I'll be sent to Vietnam since all the divisions are being forced to meet a quota every three months for Vietnam officers. Jake said not to worry about it and he confirmed indirectly the general belief that most divisions are sending 'expendables' to Vietnam. I wonder if I'd go if asked. With the special allowances most officers can save practically all their salary, and when the tour is up in eighteen months I'd have a little bundle to last until I find a new job. No, I've had all the counter-insurgency I want.

The Clandestine Services Career Panel also called me in for an interview. They told me I've been accepted in the Agency's new retirement programme -- meaning I can retire at age fifty with a handsome annuity. At thirty-one that seems like a long way off but it's nice to know you're in the most generous programme. Yet not even this retirement programme can keep me doing this same work for nineteen more years.

The officer I'm replacing on the Mexico branch is the same person who replaced me when I left Quito. He's being allowed to resign under a cloud because on the polygraph he wasn't able to resolve certain questions about finances in Quito. It's pretty sad because he's in his forties with a family to support and no job to enter. It makes me realize I'd better be careful about whom I discuss my doubts with -- and I'd better get another job lined up before I start talking about anything.

Washington DC 4 October 1966

The headquarters organization of WH Division hasn't changed much from six years ago. In the executive offices, in addition to Bill Broe, ‡ the Division Chief, and Jake Esterline, there are support officers for personnel, training, security and records. We have a Foreign Intelligence staff consisting of five officers, headed by Tom Polgar, ‡ and a Covert-Action staff of four officers, headed by Jerry Droller, the famous 'Mr. Bender' of the Bay of Pigs invasion. These staffs review projects and other documents from field stations that require division approval for funds and operational decisions. They also coordinate such matters with other headquarters offices outside WH Division.

The regional branches consist of the large Cuban branch with about thirty officers headed by Tom Flores, and smaller branches for Mexico, Central America, the Caribbean, the Bolivarian countries, Brazil, and the cono sur (Uruguay, Paraguay, Argentina and Chile). Altogether we have about 100 officers of the division at headquarters as opposed to a little over 200 officers at the stations. The division budget is about 37 million dollars for the financial year 1967 -- 5.5 million dollars being spent in Mexico.

In the Mexico branch (WH/1) we are responsible for headquarters support to the vast and complicated operations of the Mexico City station. Our Chief, Walter J. Kaufman, ‡ and our Deputy Chief, Joe Fisher, ‡ head a team of about ten officers, each with responsibility for a different operational function at the station. Because of certain DDP office shifts in headquarters, our branch and the Cuban branch are temporarily being housed in the Ames building, one of several of the new high-rise office buildings in Rosslyn occupied by the Agency. Working just across the Potomac from Washington in many ways is more convenient than out in Langley, but the traffic coming and going is a disaster.

Joe Fisher, gave me a briefing on the operations of the Mexico City station and I can understand why this station has the dubious reputation of too much bone and too little muscle. Operations are heavily weighted towards liaison (which rests on the unusually close relationship between Gustavo Diaz Ordaz, ‡ the President of Mexico and Winston Scott, ‡ the Chief of Station) and operational support (surveillance, observation posts, travel control, postal intercepts, telephone tapping). Badly lacking are good agent penetrations of the station's main targets: the Soviets, Cubans, local revolutionary organizations, and the Mexican government and political structure. The operations are dull because there are almost no political operations such as those we have in Ecuador and most Latin American countries. The reason is that the Mexican security services are so effective in stamping out the extreme left that we don't have to worry. If the government were less effective we would, of course, get going to promote repression.

My duties in support of the station Soviet/satellite section are to coordinate and process cases, which comes down to just keeping the paper moving. In some cases I have the action responsibility which I coordinate with the Soviet Bloc Division, and in others the SB Division has action responsibility and they coordinate with me. The operations leading into the target missions, but not dealing with an actual penetration or recruitment of target personnel, are generally my responsibility, whereas recruitments, provocations and more sensitive operations get SB Division action. In all cases we coordinate with each other. Telephone tapping, observation posts, surveillance teams, travel control, access agents and double-agent cases are my responsibility, but any operations to recruit or defect a Soviet would be handled by the Operations Branch, Western Hemisphere Office of Soviet Bloc Division (SB/O/WH). Satellite branches, e.g. SB/Poland, SB/Czechoslovakia, are the action or coordinating SB office for their particular countries. Happily for me, the SB Division people are responsible for compilation and updating of the SPR's (Soviet Personality Records) which is the very detailed analysis maintained on every Soviet of interest. Usually the information for the SPR is obtained over long periods of observation while the Soviet is assigned to a foreign mission. It includes his work habits, leisure activities, friends, personality, likes and dislikes, wife and family, health, vulnerabilities.

In the Mexico branch all the liaison and most of the support operations are under Charlotte Bustos ‡ who has been in the branch for ten years and knows every detail of these complicated activities. Thus I only have to have a peripheral interest in these operations, even though they are targeted against the Soviets and satellites, because they are often used against many other targets. Nevertheless I look after the requirements related to the three observation posts overlooking the Soviet Embassy, together with the five or six houses we own on property next to it. There are also fifteen or twenty access agents, Mexicans and foreigners living in Mexico, who maintain personal relationships with the Soviets under one or another pretext, for whom I process operational approvals, name checks and other paper-work.

License-plate numbers of vehicles from the U.S., together with photographs of their occupants, are taken by the observation posts at the Soviet, satellite and Cuban embassies and forwarded to headquarters for additional investigation. The Office of Security obtains the names and other data from state office registration files and we forward to the FBI memoranda when the information involves U.S. citizens or foreigners resident in the U.S..

There are also a number of counter-intelligence cases involving U.S. citizens with known or suspected connections to Soviet or satellite intelligence operations in Mexico City. In some cases U.S. citizens were recruited while travelling in the Soviet Union and were given instructions for contact in Mexico City or some other city in Mexico. Usually in these cases the participants are considered to be under the control of the Soviets, or the satellite intelligence service as the case may be, as opposed to double-agent cases where control is supposed to be ours. One particularly complicated and lurid case came very close to home because it involved a sensitive experiment in cover.

About two years ago when Des FitzGerald was Chief of WH Division, he decided to make an experiment to see just how productive a group of CIA officers could be if they worked from a commercial cover office with very little direct contact with the CIA station under State cover in the Embassy. The experiment could have had a profound influence on the future of CIA use of State cover, which is the main type of cover used in countries where large U.S. military installations do not exist. Because the problem with non-official cover is that officers under official cover in embassies so often have to devote inordinate amounts of time to support of the non-official cover officers (security, communications, finance, reporting, name checks, etc.), non-official cover tends to be counter-productive. The experiment in Mexico City was to establish several officers under commercial cover with direct communication to headquarters and as little burden on the station as possible.

The LILINK ‡ office -- cryptonyms for Mexico begin with LI -- was set up for three operations officers under cover as import representatives. The Office of Communications designed a special cryptographic machine that looks like an ordinary teletype and that transmits and receives encoded messages via a line-of-sight infra-red beam,. The LILINK office is located in an office building that provides line-of-sight to a station office in the Embassy where similar transmitting and receiving gear is located. Secure communications exist without the need for personal meetings between the inside and outside officers. The LILINK office can also be hooked into the regular station communications system for direct communication with headquarters. Thus support duties for officers inside the Embassy have been reduced to the absolute minimum.

The experiment has been only partially successful. Our officers have had difficulties getting sufficient commercial representations to justify their cover, on the one hand, while station support for them has not been reduced as much as had been thought possible. The counter-intelligence case that I have inherited involved one of the officers of the LILINK office and led to the recent decision to close the office completely.

The officer in question has a serious drinking problem and was engaged in a liaison with a girl who was a clerk in the U.S. Embassy communications and records unit -- not the station but the regular State Department unit. It was discovered that they had taken photographs and films of themselves and other couples in pornographic scenes, sometimes with the use of animals. One of the participants was a character of doubtful nationality who was connected with a combined Soviet-Polish espionage case in the U.S. several years ago but who had dropped out of sight.

When the photographs and films became known, along with the participation of the Soviet-Polish agent, headquarters decided to allow the officer to resign -- a decision also taken by the State Department when advised of participation by their communications and records clerk. The other party -- the ringer -- again disappeared and the station has been vainly trying to locate him and the films. Neither our LILINK officer nor the girl were willing to discuss the matter prior to resignation and they have apparently floated off together to California. My job is now to coordinate the station investigation with the headquarters CI staff which handles the case with State Department security. No one has determined yet whether the Polish-Soviet agent recruited our officer or the girl -- which is the main reason why LILINK is being closed. Already Arthur Ladenburg, ‡ the junior officer under LILINK cover, has returned to headquarters.

In my dealings with the Counter-Intelligence staff on these sensitive cases I have discovered the solution to a seldom-discussed mystery in headquarters. During the weeks of study of the headquarters bureaucracy during formal training in 1959, there was never any mention of an Israeli branch or desk in the Near East Division. When someone once asked about this the instructor gave one of those evasive answers that suggests the question was indiscreet. Now I find that the Israeli branch is tucked away within the Counter-Intelligence staff so that its secrets are more secure from Israeli intelligence than they would be if the branch were in 'open' view in the Near East Division. One of my CI staff contacts said that this is unfortunately necessary because of possible divided loyalties of Jewish employees of the Agency.

Washington DC 5 October 1966

At last I've found a small apartment and moved away from Janet. The strain of the moment of leaving the children was even worse than I'd expected -- but I'll be going to see them regularly. With Janet I think I'm in for a long and bitter struggle. Leaving the children with her is going to take all the emotional control that I can muster -- there simply is no way that I could obtain their custody in the face of tradition. Moreover, I don't want to create the kind of domestic fuss that will cause headquarters' security and cover people to worry. Better that I sacrifice some equity for the time being.

Washington DC 6 October 1966

This headquarters work is deadly -- all I do is route paper for people to initial. But the truth is that it's not just boredom. Sooner or later things are bound to get worse. If I resign now I'll have to find a job in this wretched city, if only to be able to see my sons - and now Janet tells me she wants to wait a year or even longer for the divorce. What I would really like to do is go back to California to work, but then I would almost never see the children. If I don't resign I'll just stay bogged down in miserable work -- and eventually I'll be assigned back to Latin America and be separated from the boys. Any way I look at it I get bad news.

But I'm going to resign from the CIA. I no longer believe in what the Agency does. I'm going to finish writing the resume, advise Jake or Broe that I'm looking for another job, and then quit when something decent appears. I won't say exactly why I'm quitting, because if the truth were known my security clearance would be cancelled and I would simply be released. I'll give 'personal' reasons and relate them to my domestic situation. Otherwise I won't have an income while I look for another job.

The question is not whether, but when, to resign. I wonder what the reaction would be if I wrote out a resignation telling them what I really think. Something like this:

Dear Mr. Helms, ‡

I respectfully submit my resignation from the Central Intelligence Agency for the following reasons:

I joined the Agency because I thought I would be protecting the security of my country by fighting against communism and Soviet expansion while at the same time helping other countries to preserve their freedom. Six years in Latin America have taught me that the injustices forced by small ruling minorities on the mass of the people cannot be eased sufficiently by reform movements such as the Alliance for Progress. The ruling class will never willingly give up its special privileges and comforts. This is class warfare and is the reason why communism appeals to the masses in the first place. We call this the 'free world'; but the only freedom under these circumstances is the rich people's freedom to exploit the poor.

Economic growth in Latin America might broaden the benefits in some countries but in most places the structural contradictions and population growth preclude meaningful increased income for most of the people. Worse still, the value of private investment and loans and everything else sent by the U.S. into Latin America is far exceeded year after year by what is taken out -- profits, interest, royalties, loan repayments -- all sent back to the U.S.. The income left over in Latin America is sucked up by the ruling minority who are determined to live by our standards of wealth.

Agency operations cannot be separated from these conditions. Our training and support for police and military forces, particularly the intelligence services, combined with other U.S. support through military assistance missions and Public Safety programmes, give the ruling minorities ever stronger tools to keep themselves in power and to retain their disproportionate share of the national income. Our operations to penetrate and suppress the extreme left also serve to strengthen the ruling minorities by eliminating the main danger to their power.

American business and government are bound up with the ruling minorities in Latin America -- with the rural and industrial property holders. Our interests and their interests -- stability, return on investment -- are the same. Meanwhile the masses of the people keep on suffering because they lack even minimal educational facilities, healthcare, housing, and diet. They could have these benefits if national income were not so unevenly distributed.

To me what is important is to see that what little there is to go around goes around fairly. A communist hospital can cure just like a capitalist hospital and if communism is the likely alternative to what I've seen in Latin America, then it's up to the Latin Americans to decide. Our only alternatives are to continue supporting injustice or to withdraw and let the cards fall by themselves.

And the Soviets? Does KGB terror come packaged of necessity with socialism and communism? Perhaps so, perhaps not, but for most of the people in Latin America the situation couldn't be much worse -- they've got more pressing matters than the opportunity to read dissident writers. For them it's a question of day-by-day survival.

No, I can't answer the dilemma of Soviet expansion, their pledge to 'bury' us, and socialism in Latin America. Uruguay, however, is proof enough that conventional reform does not work, and to me it is clear that the only real solutions are those advocated by the communists and others of the extreme left. The trouble is that they're on the Soviet side, or the Chinese side or the Cuban side -- all our enemies.

I could go on with this letter but it's no use. The only real alternative to injustice in Latin America is socialism and no matter which shade of red a revolutionary wears, he's allied with forces that want to destroy the United States. What I have to do is to look out for myself first and put questions of principle to rest. I'll finish the resume and find another job before saying what I really think.

Washington DC 7 October 1966

This morning at the Uruguay desk there was a celebration. The government at last expelled some Soviets -- four left yesterday -- and now the Montevideo press is speculating on whether the NCG will cancel a recent invitation to Gromyko to visit Uruguay. The expulsions are the result of Luis Vargas's ‡ persistence -- when I said farewell he told me that when the government unions started agitating again before the elections, the Soviets would suffer. (Before leaving Montevideo I wrote a memorandum recommending that Vargas be given a tourist trip to the U.S. as a reward if he finally got any thrown out, and it'll be small compensation since I never paid him a salary.)

The expulsion order was based on the same false report we prepared for Storace ‡ last January, with minor updating, and it accuses the Soviets of meddling in Uruguayan labour, cultural and student affairs. Only four Soviets are being expelled right now because the cultural attache and one other on the original list are on home leave in Moscow and their visa renewals can be stopped by Vargas. The other two not included in the expulsion are commercial officers and they will be expelled, according to Vargas, as soon as these four with diplomatic status leave.

The Montevideo station and others will be using the expulsions for a new media campaign against the Soviets. Our report for Storace ties the most recent wave of strikes to the PCU Congress in August and to the Soviet participation therein, together with the usual allegations of Soviet-directed subversion through the KGB, GRU and local communist parties. Proof of the authenticity of the subversion plan outlined in the report, according to Storace, are the eleven different strikes occurring in Uruguay at this moment. The Soviets were given forty-eight hours to leave Uruguay. Recently, too, the decree expelling the two remaining East Germans, Vogler and Kuhne, was approved. They were given thirty days to clear out. The gambit on Soviet expulsions may have worked against the unions last year but not this time. Strikes are spreading and the station reports street fighting between police and the strikers. Yesterday the Montevideo transport system, the banking system and many government offices were struck, while the CNT described Storace's report as an insult to the trade-union movement and pledged to continue the struggle against the government's economic policies -- mainly the IMF-pressured reforms of the past year.

The pressure is showing again on President Heber. Last night in the NCG meeting he exchanged words with one of the Colorado Councillors who left the meeting but returned shortly to challenge Heber to a duel. The NCG meeting broke up as seconds were named, but later agreement was reached that the honour of neither man had been wounded. The seconds signed a document to that effect and the duel was cancelled. What provoked the challenge was Heber's loss of temper when the Colorado Counsellor reminded him that last year, two days before the first bank failed, Heber withdrew some 800,000 pesos from it.

Washington 15 October 1966

A curious cable from the Mexico City station started me thinking again. Kaufman gave me the action -- it has the RYBAT indicator for special sensitivity -- because it is a proposal for a CIA officer to be named as the U.S. Embassy Olympic attache for the Games in 1968.

For some time the station has been reporting on the increasing number of coaches from communist countries contracted by the Mexican Olympic Committee to help prepare Mexican athletes for the Games. Six coaches from the U.S. were also contracted but they are outnumbered by the fourteen or fifteen communists -- all of whom come from the Eastern European satellites. A little cold war is going on between several of the Americans and their communist colleagues, particularly in track and field, but the cold war chauvinism is really a degeneration of professional rivalry. The Embassy in Mexico City is involved because the USIS cultural section has given Specialist Grants to the Americans under the Educational Exchange Programme. These grants supplement their salaries from the Mexican Olympic Committee and in several cases have been used as incentives to keep several coaches there who otherwise would have quit.

The station has also been reporting on the assignment of intelligence officers from the communist embassies to handle duties relating to preparations for the Olympics. These activities bring them into contact with a wide range of Mexican officialdom working on the Olympic Committee and the sports federations preparing the Mexican teams, and with an even larger number of people in the Olympic Games Organizing Committee preparing the Games themselves. The attraction to the communist intelligence services in using the Olympic Games as a vehicle for expanding operational potential among such a large group of government, business, professional and cultural leaders is obvious.

The cable from the Mexico City station describes a recent suggestion by the Ambassador, Fulton Freeman, that the CIA provide an officer to fulfil the duties as U.S. Embassy Olympic attache. Such an assignment, the Ambassador reasons, would be logical since the CIA officer could keep an eye on the communist intelligence officers through the regular meetings of Olympic attaches -- some of whom are private citizens resident in Mexico City while others are officers of diplomatic missions. The CIA officer would also be able to watch the communist Olympic attaches because his work with the Mexican Olympic Committee and the Organizing Committee would overlap with the communists. If the Agency is unable to provide an appropriate officer as Olympic attache, the Ambassador will choose from among several possibilities he already has in mind, because increasing requests from the Mexicans to the Embassy on Olympic-related matters, together with the expected large influx of Americans for the Games, justifies an officer working full-time in the Olympics.

The Chief of Station, Win Scott, ‡ comments in the cable that assigning an officer to this job would be advantageous to the station for a number of reasons. First, the station is handicapped because only three of its fifteen or twenty officers under Embassy cover are allowed to be placed on the diplomatic list. Such exclusion, a policy of successive Ambassadors, limits the mobility of station officers among the Diplomatic Corps, the governing (and only important) Mexican political party, the Foreign Ministry and other government offices, and professional organizations -- all of which are important station targets for penetration and covert-action operations. An officer under Olympic cover would have ready access to these targets for spotting, assessment and recruitment of new agent assets in all these fields through his Olympic cover duties. Secondly, the officer would be close enough to monitor at least some of the communist Olympic attaches' more interesting developmental contacts as well as engaging them in direct personal relationships -- right now practically no station officer has any direct personal relationship with communist counterparts. Thirdly, the station Olympics officer would be able to obtain information on the communist coaches training Mexican athletes, through the American coaches who already are beholden to the Embassy because of their Specialist Grants. The Chief of Station adds in the cable that the Olympic officer will have a separate office in the Embassy and will operate as an extension of the Ambassador's office -- having of necessity a very discreet contact with the station.

I've ordered the files on past Olympics from Records Integration. It would be an exciting job.

Washington DC 25 October 1966

I've reviewed the files on operations connected with past Olympics -- we've been in every Olympics since the Soviets appeared in Helsinki in 1952. Melbourne, Rome, Tokyo -- and now Mexico City. Provocations, defections, propaganda, recruitment of American athletes for Olympic Village operations, Winter Games and Summer Games -- all the way with CIA.

I've written a memorandum to Bill Broe ‡ and to Dave Murphy, t Chief of the Soviet Bloc Division, recommending approval of the Mexico City station's proposal. In my memorandum I said I might qualify to be the Ambassador's Olympic attache as I have always been a great athlete -- albeit in fantasy. I was only half serious and I thought they would laugh, but Murphy is interested. Broe was Chief of Station in Tokyo during the Olympics in 1964 and he's not too enthusiastic. But I sent another cable back to Mexico City, telling them that the proposal is approved in principle and that headquarters will discuss with the State Department and look for a candidate. Kaufman says I've got better than a fifty-fifty chance of going. I think I'll postpone that resignation -- maybe in the Olympics I could make a connection for a new job. Tonight I'll do some push-ups and maybe run around the block. They say Mexico City is a great place to live.

The other day a RYBAT cable arrived from Mexico City showing how the system works there. The Chief of Station advised that Luis Echeverria, ‡ the Minister of Government (internal security), told him he has just been secretly selected as the next Mexican President. Echeverria is now the famous tapado (covered one) whom the top inner circle of the ruling party, the Revolutionary Institutional Party (PRI), select well in advance to be the next president. Although Echeverria said it in a somewhat indirect manner, the Chief of Station has no doubt that he was intentionally being let in on the secret -- even though the elections won't be held until 1970.

The information in the cable is extremely sensitive, not so much because it's a secret but because presidential succession in Mexico is supposedly a decision made by a broad representation within the PRI. For years leaders of the PRI have been denying that presidential succession is determined secretly by the incumbent, ex-presidents, and a few other PRI leaders -- they even have a nominating convention and all the appearances of mass participation. The Mexico branch Reports Officer sent a 'blue stripe' report (very limited distribution) over to the White House and the State Department on Echeverria's good news.
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Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:30 am


Washington DC 1 December 1966

In last Sunday's elections in Uruguay the Blanco-Colorado constitutional- reform pact was adopted, and the Colorados won the presidency -- it'll be General Gestido who resigned from the NCG last April to campaign for reform. The Colorados will also control the legislature so there will be no more excuses for lack of action. The PCU political front, FIDEL, made considerable gains. They won six seats in the legislature on 70,000 votes (5.7 per cent of the total) reflecting a gain from 41,000 votes (3.5 per cent) in 1962 and 27,000 votes (2.6 per cent) in 1958 when the Blancos took over. During these eight years the PCU has more than doubled its percentage of the vote and tripled its representation in the legislature.

Heber and Storace didn't fare very well. They were running together, Heber for President and Storace for Vice-President, and among Blanco lists they came in a distant third with only 83,000 of the over one million votes cast. Yesterday Heber decided to take a two-month vacation -- his term as NCG President has only three months left -- and Luis Vargas resigned as Director of Immigration.

It is unlikely that any additional action against the Soviets, East Germans or others will be taken, but the record for expulsions during the eleven months since we started working with Storace and Vargas is impressive: six Soviets, three North Koreans, two East Germans, and one Czech.

Washington DC 5 December 1966

My assignment to the Mexico City station under Olympic cover is still hopeful although there have been several delays caused by consultations between the station and the Ambassador and between headquarters and the department. Meanwhile I've embarked on a reading programme that reveals Mexico to be just as interesting as Ecuador and Uruguay -- perhaps more so because of the terrible failures of its violent movements for social justice.

As in Ecuador and other Latin American countries, Mexico had its 'liberal revolution' during the nineteenth century, but here too it served mainly to curtail power of the Catholic Church. By the time the Revolution broke out in 1910, ending thirty-five years of dictatorship, over three-quarters of total investment in Mexico was in foreign hands, with U.S.-owned capital valued at close to one billion dollars. Not surprisingly, then, the two main forces in the 1910-20 Revolution were agrarian reform and economic nationalism, the latter of increasing importance after U.S. military occupation of Veracruz in support of the side seeking a return to pre-1910 conditions. However, struggles over the degree and immediacy of implementing the Revolution's goals produced a civil war that claimed over a million lives, perhaps two million, by the time it ended in the 1920s. Many of the Revolution's leaders were among its victims.

Most of the nationalist and agrarian ideals of the Mexican Revolution are embodied in the 1917 Constitution which is still in effect today. Specific implementation of the Constitution's principles, however, was left for later state and federal laws -- what amounted to a gradualist approach that would allow for postponement and negotiations in the short run and major change in emphasis in the long run.

From the beginning of the Revolution, agrarian reform was considered as the basis for all other social and economic change, although there was plenty of disagreement over the degree and speed of land redistribution. The dominant theme was backward looking: revindication for land deprivation of peasants caused by prior patterns of concentration. Possession of the land by peasants, it was thought; would increase production and above all would lead to dignity, the rural dignity that would serve as the foundation for the new sense of nationality, as the Revolution reversed the habit of exhalting foreign things while denigrating things Mexican. Although private landholdings rose in number after redistribution began, the dominant institutional pattern for agrarian reform was the ejido: the communal lands owned by a village and divided among the peasants who could alienate their parcels only with great difficulty. The ejido, then, was in theory a return to the pre-Reform a tenure that was eliminated by the Constitution of 1857.

Agrarian reform proceeded slowly at first, restricted mainly to the 'legitimizing' of land seizures made during the years of civil war. But in the late 1920s expropriations and redistribution accelerated, reaching a zenith during the presidency of Lazaro Cardenas (1934-40) who distributed over forty million acres that affected more than two million people. Presidents who followed Cardenas continued to redistribute land, although on a reduced level, while persistent mass rural poverty provoked criticism and allegations of failure in this most fundamental of the Revolution's programmes.

In addition to being the high point for land redistribution, the Cardenas regime is also considered to be the culmination of the Revolution's goal to recover industry and natural resources from foreign control. Nationalization of the American and British-owned petroleum industry in 1938 is the best-known of Cardenas's applications of the 1917 Constitution's provisions for nationalist economic policies. World War II brought Mexico and the U.S. closer together again, and for many observers the original agrarian and nationalist drives ended during this period.

During the government of Miguel Aleman in 1946-52 foreign capital was invited back to Mexico and has been increasing steadily in spite of a 'mexicanization' programme requiring 51 per cent Mexican ownership of important firms. Aleman and the governments that followed channelled new investment into major mining and manufacturing industries as well as agriculture, irrigation, electric power and tourism. By 1965 foreign investment in Mexico had grown to 1.75 billion dollars, 80 per cent of which pertained to the hundreds of U.S. companies operating there. Also, since World War II, the Mexican government has constructed thousands of miles of roads, hundreds of new schools, and many social overhead projects such as potable water systems. By 1965 the coefficient of investment was up to 18.9 per cent following an average GDP growth rate during 1961-65 of 6.6 per cent, equivalent to 3 per cent per capita. Mexico's diversified exports (coffee, cotton, sugar, wheat, corn, fruits, sulphur, precious metals) rose in value an average of 8.5 per cent annually during the same period.

At first glance this would appear to be an optimistic situation with the land in the hands of the peasants and high agricultural and industrial growth rates. Surely the faster industry grows, the more resources will become available for investment in rural projects like irrigation and transportation, and in social overhead like education, housing and medical services. But a closer examination reveals the uneven nature of post-World War II developments in Mexico and lends credence to the view that the original goals of social justice and equitable distribution of income disappeared following the Cardenas regime.

The central problem is similar to much of the rest of Latin American development: the emergence of a capital-intensive modern sector that provides employment for only a relatively small portion of the labour force -- in the case of Mexico about 15 per cent. In spite of rapid expansion the modern sector seems unable to absorb a greater portion of the workers, leaving the vast majority bogged down in the primitive sector of unemployed and marginally employed, subsistence farming and menial services. Perhaps the best illustration of Mexico's uneven growth is found in the way its average per capita income of 475 dollars -- slightly higher than the general Latin American average -- is distributed. According to the Inter-American Development Bank the poorer half of Mexico's population receives only about 15 per cent of the total personal income -- averaging about twelve dollars per person per month.

According to the United Nations Economic Commission for Latin America, [1] the 15 per cent of national income received by the lower-income 50 per cent of the population is less than is received by the same group in almost all the other countries of Latin America. In Mexico the poorest 20 per cent of the population receives only 3.6 per cent of total national income -- lower than the comparable amount for El Salvador, Costa Rica and Colombia. The poorest 10 per cent of the Mexican population, who number some 4.2 million persons receive an average income of only about five dollars per month. Moreover, both the shares of the poorest 20 per cent and the lower 50 per cent of the population have declined between 1950 and 1965 -- and the absolute value of the income of the poorest 20 per cent has also declined. Clearly the poor in Mexico have been getting poorer despite near-boom conditions in agriculture and industry.

What groups, then, has the Mexican government favoured during the period since World War II? According to the same ECLA data, the high 5 per cent of the Mexican income scale receives almost 26 per cent of the national income -- although the share of this group has fallen from about 33 per cent since 1950. The other 45 per cent of the top half of the population has increased its share and is now receiving about 55 per cent of the national income. In conclusion, ECLA reports that there is little indication of change in Mexican income distribution since 1950 except that the poor are somewhat worse off and the high 5 per cent has yielded some of its share while retaining over a quarter of the national income.

What to think about this disproportionate income distribution -- an average per capita annual income of 475 dollars yet with half the population receiving only about 150 dollars a year. Or put another way, the richest 20 per cent of the Mexican population receives about 55 per cent of national income whereas the poorest 20 per cent receives less than 4 per cent. Never mind material incentives and creation of internal markets -- the Mexican Revolution, if it ever moved towards social justice, is clearly serving minority interests today.

Washington DC 10 December 1966

The more I learn of Mexico, the more the Mexican Revolution appears as empty rhetoric, or, at best, a badly deformed movement taken over by entrepreneurs and bureaucrats. For the decisions that have allowed such grossly out of proportion income distribution to develop have been brought about by the single political organization that evolved on the winning side during the Revolution and that became the umbrella for attracting the diverse sectors of Mexican society into the 'revolutionary process'. This party, now called the Revolutionary Institutional Party (PRI), has exercised a one-party dictatorship since the 1920s.

The PRI is a curious institution both because of its long monopoly of power and because of its heterogeneous composition. Theoretically it consists of three sectors, each embodied in a mass organization: the peasant sector in the National Campesino Confederation (CNC), the workers' sector in the Mexican Workers' Confederation (CTM) and the popular (middle class) sector in the National Confederation of Popular Organizations (CNOP). Each of the mass organizations has its own national, state and local bureaucratic structures that participate in the corresponding national, state and local PRI bureaucracy, lobbying for political decisions favourable to its interests. In reality, however, decisions of importance, including the naming of candidates for office, are usually made by the PRI headquarters in Mexico City, which is headed by a seven-man executive committee, often with participation by the Ministry of Government (internal security) or the Presidency. Lobbying by the mass organizations and the local PRI organizations assists in the decision-making process, but the direction of the process is clearly from the top down.

The PRI's effective use of its three mass organizations and its internal system of democratic centralism has enabled it to make good its claim to a monopoly on interpreting the goals and executing the programmes of the Revolution. Advantages accruing from this success are political stability since the 1920s and the attractive climate for foreign investment since World War II. Efficiency has also been high inasmuch as the legislature and the judiciary are subordinate to the executive and under PRI control anyway. Suppression of the political opposition, especially communists and other Marxists, has been easy and effective whenever necessary.

Such political opposition that appears from time to time is still treated by the PRI in the traditional manner. First, an attempt is made to bring the opposition group into some form of inclusion or cooperation with the PRI itself. If this fails a close watch is maintained until the right moment arrives for repression. One recent example of the first method was the straying by former President Cardenas in 1961 when he became a leader of the newly-formed and extreme-left National Liberation Movement (MLN). By 1964, after public attacks against him by PRI leaders, Cardenas returned to the fold and supported the official PRI candidate for President -- causing a serious split in the MLN . Another example was the Independent Campesino Confederation (CCI) set up in the early 1960s as a rival to the PRI's CNC. The CCI was led by Alfonso Garzon, a former CNC leader, and had a strong following with a radical agrarian programme. A combination of government repression of the CCI and overtures to Garzon to return to the PRI succeeded in obtaining renewed support for the PRI by Garzon. Meanwhile Garzon caused a split in the CCI by trying to expel its communist leaders, who nevertheless continued active in the branch of the CCI they controlled.

Because the challenge to the PRI's leadership of the Revolution must obviously come from the left, both ideologically and in terms of specific social and economic programmes, the PRI shows the least tolerance towards leftist groups that refuse to cooperate. Repression is regular and punishment is severe. A recent example is the jailing in 1964 of Ramon Danzos Palomino, leader of the pro-communist branch of the CCI, who campaigned for the presidency that year even though his communist-backed electoral organization was not allowed to be officially registered. His effectiveness in creating a following, however, led to the PRI decision to put him away for a while. Usually, the offence for undesirable opposition political activities is 'social dissolution' of one kind or another.

The PRI, then, has its own version of democratic centralism and transmission belts through mass organizations. Political opposition that can be controlled or co-opted is tolerated, in fact encouraged, while adamant opposition is kept well in check through heavy-handed repression. Civil liberties are commensurate with toleration of dissent, variable from time to time, and public-information media are well trained in self-censorship. Prudence suggests working within the system in Mexico, and PRI slogans, not surprisingly, are coined on the themes of 'social peace' and 'national unity'.

The seemingly simple questions cannot be avoided: if the PRI represents the campesinos, workers and popular classes as its mass organizations and propaganda would have them believe, how then has it allowed the business, industrial and professional leaders to corner such an inordinate share of the national income? Can it be that the PRI leaders themselves aspire to enter that top 5 per cent through their political activities? Or, perhaps more accurately, is not the PRI -- and the revolutionary process earlier -- simply the instrument of the industrial, professional and business communities and the servant of the top 5 per cent? Why, finally, are the supposed beneficiaries of the Mexican Revolution still the most deprived some fifty years after the fighting ended in victory?

Washington DC 15 December 1966

The Mexico and Cuba branches have returned to headquarters from the Ames building, which makes meetings with colleagues from the Soviet Bloc Division easier, but the daily routine involved in keeping paper moving is heavy and uninspiring. Reading the intelligence reports and the daily cable and dispatch correspondence between headquarters and the Mexico City station, and the operational files as well, reveals the same basic counter-insurgency approach as in Montevideo, Quito and other WH stations. We prop up the good guys, our friends, while we monitor carefully the bad guys, our enemies, and beat them down as often as possible.

In Mexico the government keeps our common enemy rather well controlled with our help -- and what the government fails to do, the station can usually do by itself. The operational environment, then, is friendly even though the enemy is considerable in size, dangerous in intent and sensitive in its close proximity to the United States. The enemy in Mexico:

The Popular Socialist Party (PPS)

The largest of several extreme-left political groups is the PPS with an estimate membership of about 40,000. Founded in the late 1940s by Vicente Lombardo Toledano, who had reorganized Mexican labour into the Mexican Workers' Confederation (CTM) during the Cardenas presidency, the PPS is the only communist party recognized by the Mexican government. During the transitional government following Cardenas and preceding Aleman -- the World War II years -- Lombardo was eased aside as leader of the PRI labour sector, and during the years that followed he built the PPS into one of the largest Marxist parties in the Western Hemisphere. He was also the President of the Latin American Labor Confederation (CTAL), the regional affiliate of the Prague-based World Federation of Trade Unions (WFTU), until the CTAL was disbanded in 1964.

Although for CIA purposes the PPS sis considered a communist party, it is unorthodox because of its local character and autonomy, both features resulting from the forceful, caudillo-like personality of Lombardo. Nevertheless, it supports Soviet foreign policy and Marxist solutions to national problems while disdaining violent revolution for gradualist, peaceful tactics. It is strongly opposed to U.S. investment in Mexico and to the close ties between the Mexican and the U.S. governments.

The odd PPS autonomy in the international context is confused by its cooperative, though limited, support for the PRI at home. Thus the PPS is perhaps the best example of the PRI policy of allowing a controlled opposition to operate in order for dissidents to be attracted to the submissive opposition instead of to the uncompromising groups. Since the 1958 elections, for example, the PPS has publically supported the PRI presidential candidates while running its own congressional candidates.

The PPS receives corresponding support from the PRI in several ways, apart from simply being allowed to operate. Mexican law requires 75,000 signatures for a political party to be registered officially for elections. Although the PPS membership is far below the required number, the PRI allows the fiction to exist that the PPS is entitled to registration. As a result, in the 1964 elections the PPS increased its representation in the Chamber of Deputies from one to ten, taking advantage of the new electoral law providing for special deputies seats for minority parties. These ten seats of the PPS constitute 5 per cent of the Chamber's seats although the PPS polled less than 1 per cent of the votes. It is common belief, moreover, that the PPS receives a direct financial subsidy from the PRI although good intelligence on the subject is lacking.

The PPS has a youth wing, Juventud Popular, which has two to three thousand members and exerts some influence in the two main Mexican student organizations: The National Federation of Technical Students (FNET) and the University Student Federation (FEU). The PPS has supported the frequent student demonstrations this year although with care not to promote revolutionary violence.

The principal front work of the PPS is concentrated in the General Union of Workers and Peasants (UGOCM) formed by Jacinto Lopez, former leader of the CNC which is the PRI campesino front. The UGOCM has an estimated membership of 20,000, mostly campesinos, and is affiliated with the WFTU. With major strength in the state of Sonora, the UGOCM has sponsored land invasions by peasants but with little government repression -- an indication of PRI tolerance and use of its controlled opposition. Lopez himself, although a defector from the PRI, was elected to the Chamber of Deputies in 1964 and is generally considered to be the PPS number-two man. He too is a gradualist and clear beneficiary of working-within-the-system.

In spite of its tactical successes the PPS is considerably troubled by factionalism on the left. Recently a 'leftist' PPS group led by Rafael Estrada Villa split from the PPS and took the name National Revolutionary Directorate (DNR). Estrada continues as a PPS Deputy although the DNR leans towards the more militant Chinese line.

The PPS, then, is the approved watering-hole on the left for those who find the PRI too moderate. Its voter attraction is slight, almost negligible, and in the PRI's eyes its function is tolerable as long as the PPS follows the rules. The PRI makes a few rewards available to keep the PPS leadership bought off -- like the ten Deputies' seats -- and the only danger is in the PPS's condition of unwilling gestator of dangerous factions such as the Estrada group.

The Communist Party of Mexico (PCM )

Although operating in Mexico since the 1920s, the PCM has never been able to attract a numerous membership -- now estimated at about 5000, mostly from rural and urban lower middle and lower classes. The PCM also includes some professionals, intellectuals and cultural leaders, most notably the muralist David Alfaro Siqueiros, but for lack of members the PCM has never been able to register officially for elections.

The PCM closely follows the Soviet line with main emphasis on the legal struggle, leaving armed action for specific tactical purposes. Its domestic programmes are founded on anti-U.S. nationalism while its foreign policy supports positions of the Soviet Union and defence of the Cuban revolution. Although party activities are seriously hampered by a lack of funds, the PCM manages to keep open a bookstore and to publish a weekly newspaper, La Voz de Mexico.

The party's youth wing, the Communist Youth of Mexico, has only about 500 members but exerts considerable influence in the important student organization, the National Center of Democratic Students (CNEO), and in the colleges of law, political science and economics of the National University in Mexico City. Like the PPS, the PCM has supported the student protest demonstrations this year but is careful not to advocate violent revolutionary solutions publically.

Until recently the PCM has been fairly successful in penetrating the petroleum workers', railway workers' and teachers' unions. However, PRI repression through the government of the PCM leaders of the petroleum and railway workers' strikes in 1958 has removed much of their influence from these two important unions. The party's influence in the National Union of Education Workers (SNET), an affiliate of the WFTU, remains.

In peasants' organizations the PCM has also been successful. In 1963 the party, together with the MLN and a peasant organization led by ex-PRI leader Alfonso Garzon, formed the Independent Campesino Confederation (CCI). When Garzon broke with the PCM later, the PCM leaders of the CCI under Ramon Danzos Palomino retained control of one CCI faction.

Also in 1963 the PCM, with the CCI and the faction of the MLN it controlled, formed the People's Electoral Front (FEP) in order to run candidates in the 1964 elections. The PRI, however, did not allow the FEP to register but Danzos obtained about 20,000 write-in votes in spite of the FEP ban. Not long after the elections, Danzos, who was uncompromising and hostile to the PRI, was arrested and he remains in jail today. Government repression of the PCM, the FEP and the PCM -controlled faction of the CCI continues, and the movement is kept well in hand. The repression itself, however, is indicative of PRI worry over PCM influence among the poverty-bound peasant masses.

The National Liberation Movement (MLN )

The MLN was formed at the Latin American Conference for National Sovereignty, Economic Emancipation and Peace held in Mexico City in 1961. Former President Lazaro Cardenas, who headed the Conference, also became one of the leaders of the MLN . The idea behind the MLN was to form a political movement dedicated to extreme-left causes that would transcend the ideological differences then separating the established parties, like the PPS and the PCM, and independents.

Under Cardenas the MLN had considerable initial success in uniting Marxists of many shades in its programme of promoting Mexican nationalism, support for the Cuban revolution, denunciation of U.S. imperialism, freedom for political prisoners, redistribution of wealth, socialization of the land and similar causes. But in 1962 Vicente Lombardo Toledano, unable to control the MLN in his accustomed manner, withdrew the PPS from the MLN . Then in 1964 Cardenas himself withered under PRI attacks and that year supported the PRI presidential candidate instead of Danzos Palomino who was running the 'illegal' campaign of the People's Electoral Front with PCM and MLN support. Dissention over the FEP electoral campaign started a decline in the MLN although the Mexican delegation to the Tri-Continental Conference in Havana was headed by an MLN leader.

The semi-official journal of the MLN, Politica, continues to be published under the direction of Manuel Marcue Pardinas, formerly one of the intellectual leaders of the PPS. Partly because of Cardenas's participation in the MLN, the PRI has not yet mounted really serious measures against it. Nevertheless, some MLN leaders come under regular fire from the PRI as a result of government repression against the PCM, FEP and CCI.

The Bolshevik Communist Party of Mexico (PCBM)

Some four splinter communist parties follow the Chinese line of which the PCBM is the most important. However, it is not thought to have more than a few hundred members.

The People's Revolutionary Movement (MRP)

Of three Trotskyist groups, the MRP is the most important although several of its leaders, including Victor Rico Galan, have been jailed this year for agitating in peasant communities. With Rico Galan out of action the MRP has started to decline.

The Soviet Mission

The Soviets have their largest mission in Latin America (not counting Cuba) in Mexico City with twenty-five diplomatic officials and about an equal number serving in administrative. trade, press and other non-diplomatic capacities. Of these approximately fifty officers, some thirty-five are known or suspected intelligence officers (about twenty-five KGB to ten GRU) which is a rather higher ratio of intelligence officers than the Latin American average for the Soviets. Both the KGB and the GRU missions are believed to have multiple-purpose programmes, including penetration of the U.S. Embassy and the CIA station and intelligence collection on U.S. military installations in the south-west and western us. An unusual number of Soviet intelligence officers in Mexico City have served in the Soviet missions in Washington or New York prior to their Mexican assignments, and they are thought to be continuing to work against U.S. targets from their new vantage-points.

Additionally, the Soviet intelligence missions are also thought to be active in penetration operations against the PRI and the Mexican government through their 'agents of influence' programmes, in liaison and support for Mexican and Central American communist parties, propaganda, and the usual friendship and cultural societies.

The Czechoslovakian Mission

There are eight Czech diplomats and four or five others, of whom three are known and two are suspected intelligence officers. This intelligence mission is also thought to be targeted against the U.S. Embassy and against objectives in the U.S. proper. As elsewhere they are considered to be an auxiliary service of the Soviets, even though they engage in operations of their own peculiar interest such as the cultural exchange and friendship society programmes.

The Polish Mission

The Poles have six diplomats and five non-diplomatic personnel. About half are known or suspected intelligence officers, and their functions are similar to the Soviet and Czech officers although they seem to be more active among Polish emigres and other foreigners resident in Mexico City.

The Yugoslav Mission

There are also six Yugoslav diplomats and several additional officials. Three intelligence officers are in the mission and their operations, which are independent of the other communist intelligence services, are directed towards penetration of the local Yugoslav emigre community. U.S. targets are also on their list as are the Soviets, Poles and Czechs.

The Cuban Mission

The only Cuban diplomatic mission in Latin America is in Mexico City. They have thirteen diplomatic officials and an equal number of non-diplomatic personnel. Over half the officers in the mission are known or suspected intelligence officers. The main Cuban target is penetration of the Cuban exile communities in Mexico and Central America, but they also have operations in Mexico City designed to penetrate the exile communities in the U.S., particularly Miami.

Other Cuban intelligence operations are for propaganda and support to the revolutionary organizations of their liking in Mexico and Central America. Traditionally, moreover, the Cuban mission in Mexico City supports the travel of revolutionaries from all over Latin America and the U.S. through the frequent Cubana Airlines flights between Mexico City and Havana.

The New China News Agency (NCNA)

The Chinese communists have had an NCNA office in Mexico City for several years. However, last month the three Chinese officials were expelled through station liaison operations on the grounds that they were engaged in political activities. The Chinese had, in fact, been using the NCNA office for propaganda and support to pro-Chinese revolutionary organizations in Mexico and Central America.

Central American Exiles

Mexico has traditionally been a haven for political exiles from Central American countries including communists and other extreme leftists. Several Central American parties, including the Guatemalans, maintain liaison sections in Mexico City in order to keep lines open to the Soviets, Cubans and others. They operate semi-clandestinely for the most part in order to avoid repression from the Mexican government.
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Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:31 am


Washington DC 20 December 1966

Because of the strategic importance of Mexico to the U.S., its size and proximity, and the abundance of enemy activities, the Mexico City station is the largest in the hemisphere. Altogether the station has some fifteen operations officers under State Department cover in the Embassy political section, plus about twelve more officers under assorted non-official covers outside the Embassy. In addition, a sizeable support staff of communications officers, technical services, intelligence assistants, records clerks and secretaries bring the overall station personnel total to around fifty.

Liaison Operations

Dominating the station operational programme is the LITEMPO ‡ project which is administered by Winston Scott, ‡ the Chief of Station in Mexico City since 1956, with the assistance of Annie Goodpasture, ‡ a case officer who has also been at the station for some years. This project embraces a complicated series of operational support programmes to the various Mexican civilian security forces for the purpose of intelligence exchange, joint operations and constant upgrading of Mexican internal intelligence collection and public security functions.

At the top of the LITEMPO operation is the Mexican President, Gustavo Diaz Ordaz, ‡ who has worked extremely closely with the station since he became Minister of Government in the previous administration of Adolfo Lopez Mateos ‡ (1958-64) with whom Scott had developed a very close working relationship. Scott has problems, however, with Luis Echeverria, the current Minister of Government, who is generally unenthusiastic and reluctant in the relationship with the station. Scott fears that Echeverria is following Diaz Ordaz's orders to maintain joint operations with the station only under protest and that the current happy situation may end when Echeverria becomes President in 1970.

Scott's chummy relationship with Diaz Ordaz none the less has its problems. In 1964 Fulton Freeman went to Mexico City as Ambassador to crown a, Foreign Service career that had started in the same Embassy in the 1939s. He is expected to retire after the 1968 Olympic Games. At the time of his assignment to Mexico City Freeman's expectations of meaningful diplomatic relations with Diaz Ordaz collided with the President's preference for dealing with Scott, and Freeman was relegated to protocol contacts with the President while his diplomatic talents focused on the Foreign Minister. The problem of who would deal with the President was confused somewhat by the Ambassador's insistence, not long after arrival, on a detailed briefing about the station operational programme, which Scott refused. Eventually both Scott and the Ambassador visited the White House, where President Johnson settled matters according to the wishes of the Agency and of his friend Diaz Ordaz. Scott continued, of course, to work with the President and the Ambassador never got the full briefing he had demanded. Since then the relations between Scott and the Ambassador have warmed, but the Ambassador forbids any station operations directed against the Mexican Foreign Ministry.

While Scott frequently meets the President and the Minister of Government, two non-official cover case officers handle the day-to- day contact with the chiefs of the security services subordinate to Echeverria. One of these officers is a former FBI agent who worked in the legal attache's office in the Mexico City Embassy -- the legal attache is usually the FBI office in an American embassy. The FBI officer had left the FBI to come with the station, but pains have been taken to conceal his CIA employment in order to avoid the bad blood that would result from the CIA's 'stealing' of an FBI officer. The two non-official cover officers are the equivalent of an AID Public Safety mission but in Mexico this function is performed secretly by the station in deference to Mexican nationalist sensitivities -- as is the case in Argentina. Through the LITEMPO project we are currently providing advice and equipment for a new secret communications network to function between Diaz Ordaz's office and principal cities in the rest of the country. Other joint operations with the Mexican security services include travel control, telephone tapping and repressive action.

The station also prepares a daily intelligence summary for Diaz Ordaz with a section on activities of Mexican revolutionary organizations and communist diplomatic missions and a section on international developments based on information from headquarters. Other reports, often relating to a single subject, are passed to Diaz Ordaz, Echeverria and top security officials. These reports, like the daily round-up, include information from station unilateral penetration agents with due camouflaging to protect the identity of the sources. The station is much better than are the Mexican services, and is thus of great assistance to the authorities in planning for raids, arrests and other repressive action.

Liaison between Scott and the Mexican military intelligence services consists mainly of exchange of information, in order to keep a foot in the door for future eventualities. The U.S. military attaches, moreover, are in constant contact with their Mexican military intelligence counterparts and their reports are received regularly by the station.

Stan Watson, ‡ the Mexico City Deputy Chief of Station, has been meeting with a South Korean CIA officer who was recently sent under diplomatic cover to monitor North Korean soundings for establishment of missions in Mexico and Central America.

Communist Party Operations

The station CP section consists of two case officers, Wade Thomas ‡ and Ben Ramirez, ‡ both under Embassy cover, plus two case officers outside the station under non-official cover: Bob Driscoll, ‡ a retired operations officer now working under contract, and Julian Zambianco who was transferred from Guayaquil to Mexico City about a year ago. These officers are in charge of agent and technical penetrations against the revolutionary organizations of importance. The quality of this intelligence is high, although not as high as it was before 1963. In late 1962 Carlos Manuel Pellecer, ‡ the station's most important communist party penetration-agent, broke openly with communism by publishing a book. He was a leader of the Guatemalan Communist Party (PGT) arid had been Minister of Labor in the Arbenz government during the 1950s. However, after the Agency-sponsored overthrow of the Arbenz government Pellecer made his way to Mexico City where for years he was the station's best source (cryptonym LINLUCK) on all the revolutionary organizations in Mexico, not just the Guatemalan exiles. His book, of course, was financed by the station and distributed by the Agency all over Latin America. Pellecer is still being used by the Mexico City station as a propaganda agent, as with other former penetration agents who formally break with communism without revealing their years of work as spies -- Eudocio Ravines, ‡ the well-known Peruvian defector from communism is a parallel case. Another book by Pellecer, also financed by the station, has just appeared. This book is a continuation of CIA exploitation of the Marcos Rodriguez and Joaquin Ordoqui cases in Cuba, and is aimed at denigration of the Cuhan revolution.

The station also collects information about communists from the U.S. living in Mexico. Many of them arrived during the McCarthy period and some have subsequently become Mexican citizens. Information about them is mainly of interest to the FBI, which calls them the American Communist Group in Mexico City (ACGMC). Information collected about them includes that obtained through the LIENVOY telephone-tapping operation described below.

The station also receives copies of reports from FBI penetration operations against Mexican revolutionary organizations. Mexico is the only country in Latin America, except Puerto Rico, where the FBI continued operations against the local left when the CIA took over in 1947. The FBI intelligence is of high quality.

Soviet/ Satellite Operations

The largest section in the station is that covering Soviet/satellite operations. It has four case officers, three intelligence assistants and a secretary, all under Embassy cover, and four case officers under non-official cover. It is headed by Paul Dillon ‡ and the other official cover case officers are Donald Vogel, ‡ Cynthia Hausman ‡ and Robert Steele. ‡ A number of sensitive operations are underway.

The station has two observation posts in front of the Soviet Embassy, which cover the entrances, plus a third observation post in the back of the Embassy to provide coverage of the gardens. The LICALL A observation post in the back is the closest of five houses bordering the Embassy property -- all five are owned by the station. Several years ago films were made of Soviets conversing in the garden, but attempts by Russian lip-readers to discover their conversations were unsuccessful. From one of the front OP's, radio contact is maintained with the LIEMBRACE surveillance team for signalling when a particular Soviet surveillance target leaves the Embassy, his route and other data. Photos are regularly taken from all the OP's of Soviets and their families and all visitors to the Embassy. When visitors use vehicles, photographs are taken of their license plates for tracing. Occasionally the LICALLA OP is used for electronic monitoring, since it is close to the Embassy, but so far attempts to pick up radiations from Soviet cryptographic equipment have been unsuccessful.

In addition to the LIEMBRACE surveillance team, several other support operations include coverage of the Soviets. Through the LIENVOY operation, Soviet telephones are constantly monitored, and through the LIFIRE travel-control operation photographs of travel documents are obtained along with data on arrivals and departures. Monitoring of Mexican diplomatic communications reveals requests for Mexican visas by Soviet officials, including the diplomatic couriers. In addition, NSA is also monitoring several communications systems involving' burst' transmissions from the USSR to as yet unidentified agents believed to be in Mexico -- possibly Soviet intelligence officers assigned abroad as 'illegals', with false identity and non-official cover.

The station runs between fifteen and twenty access agents against the Soviets with varying degrees of effectiveness and reliability. Several of these agents are suspected of having been recruited by the Soviets for use as double agents against the station. Twp of the most important of the current access-agents are Katherine Manjarrez, ‡ Secretary of the Foreign Press Association, and her husband - both of whom are targeted against the Soviet press attache and the Tass correspondent. Others are LICOWL-1 ‡ and LIOVAL-1. ‡

LICOWL-1 is the owner of a tiny grocery store situated in front of the Soviet Embassy where the Soviets buy odds and ends including their soft drinks -- TSD is studying ways of bugging a wooden soft-drink case or the bottles themselves. More important, LICOWL-1 is involved at the moment in an operation against the Embassy zavhoz (administrative officer), who spends considerable time chatting with the agent. Because Silnikov, the zavhoz, has been on the prowl for a lover -- or so he said to LICOWL-1 -- the station decided to recruit a young Mexican girl as bait. An appropriate girl was obtained through BESABER, ‡ an agent who is normally targeted against Polish intelligence officers and who runs a ceramics business specializing in souvenirs. By loitering at LICOWL-1's store the girl attracted Silnikov's attention, and a hot necking session in a back room at the store led to several serious afternoon sessions at the girl's apartment nearby -- obtained especially for this operation. Silnikov's virility is astonishing both the girl and the station, which is recording and photographing the sessions without the knowledge of the girl. Although promiscuity among Soviets is not abnormal, relationships with local girls are forbidden. Eventually it will be decided whether to try blackmail against Silnikov or to provoke disruption by sending tapes and photos to the Embassy if the blackmail is refused.

LIOVAL-1 is not as interesting a case but is more important. The agent is an American who teaches English in Mexico City and is an ardent fisherman. Through fishing he became acquainted with Pavel Yatskov, the Soviet Consul and a known senior KGB officer -- possibly the Mexico City rezident (KGB chief). Yatskov and the agent spend one or two week-ends per month off in the mountains fishing and have developed a very close friendship. When Yatskov is transferred back to Moscow -- he has already been in Mexico for some years -- we shall decide whether to try to defect him through LIOVAL-1. There is some talk of offering him $500,000 to defect. The Company is also willing to set him up with an elaborate cover as the owner of an income-producing fishing lodge in Canada. Recently Peter Deriabin, ‡ the well-known KGB defector from the 1950s who is now a U.S. citizen and fulltime CIA employee, went to Mexico City to study the voluminous reports on Yatskov written by LIOVAL-1. He concluded that there is a strong possibility that LIOVAL-l has been recruited by Yatskov and is reporting on Paul Dillon, the station officer in charge of this case. Nevertheless, the operation continues while the counterintelligence aspects are studied further.

The station double-agent cases against the Soviets, LICOZY-1, ‡ LICOZY-3 ‡ and LICOZY-5, ‡ are all being wound up for lack of productivity or problems of control. One of these agents, LICOZY-3, is an American living in Philadelphia who was recruited by the Soviets while a student in Mexico, but who reported the recruitment and worked for the Mexico City station. He worked for the FBI after returning to the U.S. -- the Soviet case officer was a UN official at one time -- but recently Soviet interest in him has fallen off and the FBI turned the case back over to the Agency for termination.

Against the Czechs and the Poles many of the same types of operation are targeted. Access agents, observation posts, telephone tapping, surveillance and travel control are continuous although with somewhat less intensity than against the Soviets. In the Yugoslav Embassy the code clerk has been recruited by the CIA as has one of the Embassy's secretaries.

Until the New China News Agency (NCNA) office was closed last month by the Mexican government, the Soviet/satellite section of the station was responsible for following the movements of the Chinese communists. Telephone intercepts through LIENVOY and occasional surveillance by the LIRICE team were directed against them, but the most important intelligence collected against them was from the bugging of their offices. The audio operation was supported by the Far East Division in headquarters, who sent an operations officer and transcribers to Mexico City. Now that the NCNA offices are closed, the audio equipment will be removed and the station will continue to follow up the many leads coming from the bugging operation.

Cuban Operations

The Cuban operations section consists of two case officers, Francis Sherry ‡ and Joe Piccolo, ‡ and a secretary under Embassy cover and one case officer under non-official cover. An observation post for photographic coverage and radio contact with the LIEMBRACE surveillance team is functioning, as well as LIENVOY telephone monitoring and LIFIRE airport travel control. Through the LIFIRE team the station obtains regular clandestine access to the Prensa Latina pouch from Havana, and copies of correspondence between PL headquarters in Havana and its correspondents throughout the hemisphere are forwarded to the stations concerned.

Through the L1TEMPO liaison operation the Mexican immigration service provides special coverage of all travellers to and from Havana on the frequent Cubana flights. Each traveller is photographed and his passport is stamped with arrival or departure cachets indicating Havana travel. The purpose is to frustrate the Cuban practice of issuing visas on separate slips of paper instead of in the passport so as to obscure travel. Prior to each Cubana departure the station is notified of all passengers so that name checks can be made. In the case of U.S. citizens, the Mexican service obliges by preventing departure when requested by the station.

The most important current operation targeted against the Cuban mission is an attempted audio penetration using the telephone system. Telephone company engineers working in the LIDENY tapping operation will eventually install new wall-boxes for the Embassy telephones in which sub-miniature transmitters with switches will have been cast by TSD. At the moment, however, the engineers are causing deliberate interference in Embassy telephones by technical means in the exchange. Each time the Embassy calls the telephone company to complain of interference on the lines, the engineers report back that everything in the exchange is in order. Eventually, as the interference continues, the engineers will check street connections and finally arrive to check the instruments in the Embassy. They will find the wall-boxes 'defective' and will replace them with the bugged boxes cast by TSD. Right now, however, this operation (cryptonym: LISAMPAN) is still in the 'interference-complaint-testing' stage.

Another important operation directed against the Cubans is a sophisticated provocation that won the CIA Intelligence Medal for Stan Archenhold, ‡ the case officer who conceived it. The operation consisted of a series of letters sent to the Cuban intelligence service in their Mexico City Embassy from a person who purported to be a CIA officer trying to help them. The letters purport to implicate Joaquin Ordoqui, a respected, old-guard leader of the Cuban Communist Party and a high-ranking military leader, as a CIA agent. I haven't learned all the details of this operation, but my impression is that Ordoqui may have been an informant during the 1950's when exiled in Mexico, but that he refused to continue and was subsequently 'burned' by the Agency to the Cubans. The letters continue to be sent to Cuban intelligence although Ordoqui was arrested in 1964, and the desired controversy and dissension in the Cuban revolutionary leadership followed.

As the cover of Sherry, the chief of the Cuban operations section, is in the Embassy consular section, he has been able to meet several of the Cuban consular officers directly. However, his main agent for direct assessment of the Cubans is Leander Vourvoulias, ‡ Consul of Greece and President of the Consular Corps.

Support Operations

The support operations must also be detailed. The joint operation for telephone tapping, LIENVOY, is effected in cooperation with the Mexican authorities and has a capacity for about forty lines. The station provides the equipment, the technical assistance, couriers and transcribers, while the Mexicans make the connections in the exchanges and maintain the listening posts. In addition to monitoring the lines of the communist diplomatic missions and those of Mexican revolutionary groups, LIENVOY also covers special cases. For years the telephones of ex-President Cardenas and his daughter have been tapped, and recently tapping has started on that of Luis Quintanilla, a Mexican intellectual who is planning a trip to Hanoi with the publisher of the Miami News and with a fellow of the Center for the Study of Democratic Institutions in Santa Barbara. Reports on plans for this trip are sent immediately to the White House.

The station also has its own unilateral telephone-tapping operation which is limited to special cases where the involvement of the Mexicans is thought to be undesirable. Connections for this operation are made outside the exchanges by telephone company engineers who work as station agents, as in the case of the bugging of the Cuban Embassy (LISAMPAN). However this is restricted as far as possible in order to avoid damaging relations with the Mexicans in the event of discovery.

Travel control, general investigations and occasional surveillance are the duties of a six-man team called LIFIRE. They obtain flight-travel lists from the airport, which are passed daily to the station and take photographs of passengers to and from communist countries and of their passports as they pass through immigration.

Another eight-man surveillance team, known as LIEMBRACE, has vehicles (including a Volkswagen photo-van) and radio-communications equipment and is mainly concerned with Soviet/ satellite and Cuban targets. It is administered by Jim Anderson, ‡ who also controls another eight-man team (LIRICE), similarly equipped, which deals with the Mexican revolutionaries and other miscellaneous targets.

Postal interception is mainly directed towards the mail from communist countries, but can occasionally be used to get correspondence from selected Mexican addresses.

As in every station, a variety of people assist in support tasks which they perform in the course of their ordinary jobs. For processing the immigration papers for station non-official cover personnel, for example, Judd Austin, ‡ one of the U.S. lawyers in Goodrich, Dalton, Little and Riquelme (the principal law firm serving American subsidiaries) is used. The Executive Vice-President of the American Chamber of Commerce in Mexico City, Al Wichtrich, ‡ channels political information to the station that he picks up in his normal work with American and Mexican businessmen. For technical support the station has an officer of TSD under Embassy cover with a workshop and qualifications in audio, flaps and seals, and photography.

Covert-Action Operations

The station covert-action operations section consists of Stanley Watson, ‡ the Deputy Chief of Station, and two case officers under Embassy cover plus one case officer under non-official cover. Operations underway provide for placing propaganda in the major Mexico City dailies, several magazines and television. Student operations are centred mostly in the National University of Mexico (UNAM), while labour operations are concentrated on support for and guidance of the Mexico City headquarters of ORIT. ‡ Station labour operations also include agents at the new ORIT school in Cuernavaca (built with CIA funds) for spotting and assessment of trainees for use in labour operations after they return to their country of origin. The Mexico programmes of the American Institute for Free Labor Development ‡ (AIFLD) are also under station direction.

Although the LITEMPO operation and others provide constant political intelligence on the Mexican situation, the station has one official cover case officer, Bob Feldman, ‡ working full-time on LICOBRA, which is the operation for penetrating the PRI and the Mexican government. This officer works closely with the legitimate political section of the Embassy and is currently cultivating several PRI legislators for recruitment. Another LICOBRA target is an office in the Ministry of Government called the Department of Political and Social Investigations. This office, although part of a government ministry, is the main repository of the PRI for information on political officialdom (PRI and opposition) throughout the country. Still another LICOBRA target is the Foreign Ministry, where operations are now stalled because of the Ambassador's insistence that the station refrain from operations against this Ministry. It is in LICOBRA operations that the station and headquarters believe the Olympic attache cover would be especially useful. By a determined effort at recruitment of unilateral penetrations of the PRI and the Mexican government, a better balance can be obtained between the excellent liaison operations and controlled agent sources. Rafael Fusoni, ‡ an agent who has been in the LICOBRA programme for some time, is already working as an agent in the Olympic Organizing Committee, as Assistant Director of Public Relations.

The Mexico City station, in spite of its wide-ranging operational activities and numerous personnel, is well known for its excellent administration. Two administrative officers and a secretary handle finances and property, but Win Scott, the Chief of Station, is exceptional in his attention to administrative details as well as to operations. Each officer in the station is required on leaving to advise the receptionist where he is going and when he will be back. Morning tardiness is not tolerated, cables and dispatches are answered promptly, and project renewals and operational progress reports are expected to be submitted on time. Considered altogether, the Mexico City station is a tight operation -- it has to be with fifty employees and a budget of 5.5 million dollars.

The station also has a reports section that consists of one senior reports officer and an assistant. This office processes all information received by the station that can possibly be of interest to headquarters customers or other stations, writes the reports, and keeps appropriate files.

The records section is the largest and most efficient of any station in the hemisphere and is said to be Scott's pride. It contains detailed personality files on thousands of Mexicans and foreigners resident in Mexico, in addition to intelligence subject files, project files and extensive index files. The records section is administered by a qualified records officer with two full-time assistants and four working wives.

Such a large station obviously cannot get many more than half the employees integrated as State Department employees. Some of the secretaries and intelligence assistants who work in the station go to Mexico ostensibly as tourists and are taken on the Embassy payroll as 'local hire'. Others work in the station without 'normalization' as Embassy employees. Still others, who do not work in the Embassy, use cover as tourists, public relations representatives, businessmen, even retired people. Adequate cover is a continuing problem but solutions can usually be found. The nearness of Mexico to the U.S., the exceptional relations between the station and the Mexican government, and abundant U.S. tourism allow thin solutions that would be impossible in other countries.

Washington DC 15 January 1967

Still more delay on whether and when I'll go to Mexico City under Olympic cover. For the time being, unfortunately, attention in WH Division has turned to the Montevideo station where preparations have started for the conference of OAS Presidents to be held in Punta del Este in April, to which President Johnson will be going. In WH Division a special group has been formed to assign additional personnel to Montevideo, to set up a special base in Punta del Este, and to establish special liaison procedures with the Secret Service White House Detail. John Hanke, ‡ the officer in charge of the headquarters task force, told me that the Montevideo station has asked that I go back to work with the police. Old bureaucrat Kaufman, however, doesn't want my desk empty any longer than necessary so he's going to delay my departure as long as he can. I'm not terribly cheered by the idea of working again with Otero and company but just getting back to Montevideo would be a joy compared with this headquarters work.

Before going I'll have to finish the paper-work on two new officers going to Mexico City under non-official cover to work on Soviet operations. One is a contract agent who formerly trained infiltration-exfiltration teams for maritime operations against Cuba - he ran a special base on an island not far from Miami. The other is Jack Kindschi, ‡ a staff officer who is being reassigned to Mexico City from the Stockholm station. Conveniently his cover as a public relations expert for the Robert Mullen Co. ‡ will be the same in Mexico as in Sweden. While I'm away, my work will be handled by Bruce Berckmans, ‡ a recent graduate of the Career Training Program, the new name given to the old JOT Program. Berckmans is an ex-Marine and will be going to Mexico City in a few months for communist party penetration-operations, which is his area of responsibility now in the branch. He'll have nonofficial cover as a marketing and agri-business consultant.

Montevideo 1 March 1967

If Johnson gets assassinated it won't be for lack of protection. Our task force here has grown to about sixty people from headquarters and from other WH stations. Every nook and cranny in the station offices is filled with a desk or typing table. In Punta del Este we've set up a base in a house not far from where Johnson will stay which is almost next to the hotel where the conference sessions will be held.

The Secret Service advance party has set up an office in the station for quick passage of intelligence reports, which we are receiving from many other stations as well as from our own sources here. The object is to follow up all the leads on possible assassination attempts that turn up here or in other countries -- all WH stations are reporting the travel of extreme-leftists or their sudden dropping out of sight. Two sections of the task force are doing most of the work in following up these leads and in other preparations with Uruguayan security people.

The station CP section under Bob Riefe is combing files on every important Uruguayan resident of far-left tendencies who might be involved in action against Johnson or other presidents. Taking pains to avoid passing information that might jeopardize sources, reports for police intelligence are being prepared along with a master check-list for use at the control points separating the different security zones that increase in intensity from Montevideo to Punta del Este. The Liaison section, in which I am working, is in charge of writing these reports in Spanish and getting them over to Otero at police headquarters. Under normal circumstances we would not pass information from unilateral sources of high quality to the police, because there is high probability that the reports will seep out to the enemy through poor police security, but we're taking chances given the high stakes. Argentines, Paraguayans, Brazilians and others not resident. in Uruguay but possible threats are included in this report procedure, and Otero's files are growing as never before. By the end of the month several hundred of these individual reports will have been passed along with many special leads from sources in Montevideo and other stations.

Montevideo 2 April 1967

Each day, it seems, another wild story reaches the station on a terrorist plan to assault, bomb, poison or simply hex the conference. Checking these stories out has brought me into the homes of an array of weird people, sometimes with an over-eager Secret Service agent anxious to try thumbscrews to get the whole truth. One story, however, couldn't be taken lightly and for the past week I've been spending day and night trying to resolve it.

The original report came from BIDAFFY-1, ‡ a penetration agent of the Buenos Aires station who is on the fringes of the terrorist group of John William Cooke. Cooke is a well-known extreme left-wing Peronist with close ties to Cuban intelligence. The report from BIDAFFY-1 alleged that Cooke and an unknown number of his followers are coming to Montevideo before the Conference in order to infiltrate the restricted Punta del Este area for bomb attacks and such other terrorism as they can mount. The agent does not know the names of persons to accompany Cooke but the plan is first to operate from an apartment owned by Cooke in the Rambla Hotel, a twenty-storey decaying building on the beachfront in Pocitos.

Rather than pass this data to the police, which might jeopardize BIDAFFY-1, we decided to try to verify the report and call in the police after Cooke is here. Through the AVENIN surveillance team I obtained a hotel room on the same floor as Cooke's apartment and called over Frank Sherno, the regional technical support officer stationed in Buenos Aires. For two long nights Sherno tried unsuccessfully to open the lock to Cooke's apartment, using the battery-operated handgun vibrator with assorted picks. Then he made a key for the door -- by the time it would work three more nights had passed. By this time our repeated trips between our room and the Cooke apartment had aroused the suspicions of the elevator operators, while the lobby employees were wondering out loud what three men were doing night after night in a room for two. My fear has been growing that the hotel manager might advise the police, which could reveal one or two of the AVENIN agents to Otero.

Last night, nevertheless, Sherno finally got Cooke's apartment open. On our first entry, after checking carefully for booby traps, we found a large wooden crate in the main room -- just about the right length for rifles or other shoulder weapons. It was nailed shut and banded but the panelling was broken towards one of the corners and inside I could see books, magazines and other printed matter -- possible filler or cover for more important objects underneath. I decided to leave the crate alone but we installed two battery-operated radio transmitters -- one in the bedsprings and one above a curtain box. In our room we left receivers and recording equipment for the AVENIN agents who will alternate on monitoring duties.

This morning a cable arrived from Buenos Aires with another BIDAFFY-1 report: Cooke's daughter is coming today and will probably stay at the apartment -- possibly others of the group will follow shortly. I discussed the crate with the Secret Service chief who offered to lend us a portable X-ray machine that the Service uses on gifts given to President Johnson. Tonight the Secret Service agent who operates the machine will accompany me with the machine to our hotel room where we will stand by for a surreptitious entry. This afternoon Cooke's daughter did indeed arrive -- with her lover. The AVENIN team will follow them when they leave the building and will advise us by radio when they begin to return. Meanwhile we will slip into the Cooke apartment and take X-ray pictures of the crate. I hope the elevator in the hotel will be able to lift this 'portable' machine, never mind our wrestling it clandestinely down the hall. Anybody who interferes with us gets enough radiation to fry his bone marrow.

Montevideo 4 April 1967

After a night and a morning of listening to regular concerts from the bedsprings, we finally heard Cooke's daughter and boyfriend leave the apartment. With great effort we got the X-ray machine into place, donned lead aprons and turned on the juice. With each picture -- we had to take several because the crate was much larger than the X-ray negative -- the lights dimmed and I thought we would blow the electrical system, but we were back in our room with the machine quite soon. The X-ray operator and I took the machine back to the station where he developed the film -- fortunately nothing showed up except nails. This afternoon the couple returned to Buenos Aires without having made one remark about other people coming or even of the conference. They had a quiet little visit, our monitors learned a new trick or two, and in my report I'll recommend BIDAFFY-1 for a special bonus on account of his imaginative reporting.

Getting the reports and check lists to the police security force has been consuming more time during this final period. Now we have started to organize the procedures for Johnson's security on arrival at the Montevideo airport and for the helicopter flight to Punta del Este. John Horton, ‡ the Chief of Station, will be at the aircraft parking site beside the terminal building with Secret Service agents while ten other CIA officers will be at strategic locations in the terminal building. Each of us will be responsible for watching certain windows and making certain that they are not opened. My post will be on the roof of the terminal building, just below the control tower. Each of us will have walkie-talkie communications with the rest of the airport team, and I will have a second, higher-powered walkie-talkie to report each detail to the station. Instantaneous reports will be sent by the station to Washington based on my indications of when Johnson's aircraft comes in sight, the moment of touch-down, parking, Johnson's descent and reception, his boarding of the helicopter, lift-off and disappearance. Other reports will follow from officers in cars on the highway to Punta del Este -- Johnson's helicopters, in fact, will never be out of sight of CIA officers from before landing in Montevideo to the helicopter pad in Punta del Este, seventy miles away. Once Johnson is in Punta del Este, security will be less of a problem because of zonal restriction of movement in that area, the use of special badges and other precautions. As Johnson will be one of the last presidents to arrive, we will be able to practice on his colleagues during the two days before he gets here.

Montevideo 14 April 1967

Both for Johnson's arrival three days ago and his departure today everything went perfectly. Back in the station during the party Horton handed me a cable from headquarters telling me that I should return immediately in order to prepare to go to Mexico City for the Olympic assignment. Tonight I'll try for a seat on one of the Air Force cargo planes flying back to Washington.

Results of the Conference? Well, they finally put to rest the original concerns of the Alliance for Progress for agrarian reform, income redistribution and social and economic integration. Just as well, I suppose, since none of the governments seem to have had a very serious concern for these matters anyway. Now the emphasis is on regional economic growth. Presumably economic growth alone will take care of the marginalized majority, and reform, in any case, will be easier to accept when there is more to spread around -- meaning the privileged will be able to avoid significant cuts in consumption. Foreign aid will be channelled principally to education and agriculture which, in the absence of agrarian reform, means the development of high-productivity commercial farm operations. Those of the modern sectors should rejoice, for their increasing share of national income is sure to continue increasing. Forget the reforms -- the pressure's off thanks to counter-insurgency.
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Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:31 am


Washington DC 30 April 1967

While I was in Montevideo several decisions on the Olympic cover job were made, both in the Agency and in the Department of State. Bill Broe, the WH Division Chief, had got lukewarm about sending me down because he had been Chief of Station in Tokyo during the 1964 Olympic Games and he believes the softening of political attitudes inherent in a cultural event like this will impede recruitments. Only if I stay on in the Mexico City station after the Games does Broe think I'll be able to justify the time spent between now and late next year on strictly Olympic cover matters. On the other hand Dave Murphy, Chief of the Soviet Bloc Division, believes that the bland political atmosphere will help me move in circles that might otherwise be closed to a U.S. government official. Besides, the Mexico City station has no contact operations under way between officers of the station and their Soviet counterparts. Since I am already known to the Soviets from Montevideo I'll be able to develop personal relationships with Soviet and satellite intelligence officers assigned to Olympic duties in their embassies. Murphy's opinion was shared by the Mexico City station which is anxious to use the Olympic job to develop agents for the LICOBRA targets: the PRI and the Mexican government.

The differences were resolved in my favour but then another problem arose. The Ambassador made it a condition of my assignment that I had never been exposed as a CIA officer to Latin American police officials. Kaufman, the Mexico Branch Chief, resolved this one by telling me to write a memorandum for Broe's signature assuring the State Department that I'm not known to any police. Kaufman reasoned that we could stretch the truth a little by claiming, if it's ever necessary, that any police officers who know me as a CIA officer are paid intelligence agents first and policemen second.

The most encouraging development is that the Ambassador has decided he wants two Olympic attaches -- the other one will be Dave Carrasco, former basketball coach at the American University and now head of the Peace Corps sports programme in Ecuador (who of course, has no connection whatsoever with the Agency). Ostensibly I'll be his assistant, which will help me considerably because he has really legitimate sports credentials. Moreover he was born on the Mexican border, and has had friends for many years in Mexican sports circles. Next month Carrasco will come to Washington for discussions at the Department and with Kaufman and me. Barring other delays we should be opening the Embassy Olympic Games office in June.

Luis Vargas, my old Immigration Director in Montevideo, is here now on a trip with his wife financed by the station. It's the reward I recommended last year for his help in the expulsions and other action against the Soviets, East Germans, Czechs and North Koreans. As headquarters control officer for the visit I've taken them over to Senator Montoya's office for a chat, then out to Raymond Warren's ‡ house for a cocktail party -- he's Chief of the WH branch that includes Uruguay -- then to the White House for a special tour conducted by Secret Service friends. In New York yesterday we watched the Loyalty Day Parade. Vargas was impressed at the magnitude of support demonstrated for the Vietnam War effort, as was I. If only these marchers knew the effects of counter-insurgency in Latin America.

Washington DC 5 June 1967

We have decided that Dave Carrasco should arrive in Mexico City a week or two before me, so while he arranges his personal affairs I have returned to paper shuffling at the Mexico branch. I have also just finished the Soviet Operations Course, a two-week full-time programme ostensibly under the Office of Training but in fact controlled by the Soviet Bloc Division. I was to have taken the course last year but was able to plead personnel shortages at the Mexico branch. This time there was no begging off.

SB Division has been notably successful in peddling this course -- they have, in fact, prevailed on the DDP to make the course compulsory for all Chiefs and Deputy Chiefs of Station being assigned to countries having Soviet missions, in addition to operations officers who will be engaging in Soviet operations. As I will probably be developing personal relationships with Soviet intelligence officers there was no way I could escape. However I was lucky because Jim Noland, my former Chief of Station in Quito, is back from an abbreviated tour in Santiago, Chile, and was also taking the course -= prior to taking over the SB Division office that coordinates Soviet matters with the Western Hemisphere Division.

The Soviet Operations Course is the last word in the Agency on recruitment and defection of Soviets. It is based largely on the opinions and theories of Dave Murphy, SB Division Chief, which are highly controversial because of the dogmatic attitudes of Murphy and his subordinates, and the lack of demonstrated success. The majority of the officers taking the course were from area divisions other than SB, but most of us simply refrained from public dissent, knowing that SB would take note of dissidents and, given SB's weight within the DDP, such heresy would sooner or later reflect back on us.

Notably absent from the course are lectures and readings on Marx, Lenin and other communist theoreticians and leaders, although a thick paperback history of Russia was placed in our course kits for retention. What this course deals with are contemporary Soviet realities and how to use them to our advantage -- how to get Soviets to commit treason by spying on their country.

But how to get to these Soviets, the most interesting of whom will be CPSU members? The most accessible and most vulnerable are those working in some capacity in the free world -- more than 25,000 of them and still others who travel abroad on temporary assignments. Usually the accessible ones are on the staff of diplomatic, trade and technical assistance missions, including military personnel, but of special importance are Soviet scientists who attend conferences and congresses abroad. Of the Soviets stationed in a mission abroad for several years, the diplomats and intelligence officers are the most accessible and of these the most desirable recruitment, after the Ambassador, is a GRU officer -- because of his military connections. Next in desirability would be a KGB officer because of his state security background.

The focus of the Soviet Operations Course, then, while taking into account the inestimable value of a recruitment of someone who is prepared to return to the Soviet Union, concentrates on the organization of Soviet communities in the non-communist countries and on the CIA operational programmes to discover the vulnerable and disaffected. The theory is that the pressures built into the rigidly conformist routine for Soviets abroad, largely for internal security reasons, generates a natural disaffection by serving as a contrast with the relatively greater freedom of thought, movement and association that they usually see about them. Somewhere, the theory goes, there are Soviets who are already along the road to defection, and the CIA goal is to identify them and bring it about. The longer such a person can be persuaded to keep working (before 'disappearing' and coming to the U.S.), best of all to return to the Soviet Union, the greater the possibilities for exploitation. But first to identify the candidates.

Most of the theory and doctrine for operations against Soviets has come from actual defectors as they have described their personal histories and the forces that brought them to defect. We studied, then, in considerable detail, the officially prescribed organization of both the professional and the leisure routines of the members of a Soviet mission. There usually is not much variation from one mission to another. First there is the overt diplomatic and administrative function of the mission, headed by the Ambassador, with sections dedicated to political, economic and cultural matters -- normal in all respects. The administrative section under the zavhoz (chief) and his komendants (assistants) performs the housekeeping chores and attends to Embassy reception and other security functions. The commercial offices include representatives of Soviet enterprises peddling books, films, machinery and other goods, while arranging for imports of the host country's products.

More important is the other level of functions -- the use of these overt positions as cover slots for KGB and GRU intelligence personnel. We reviewed the various techniques used to identify the rezident (intelligence chief) and his subordinates in each of the services. Of much interest also is the location of the restricted area where all classified documents are kept and where the cryptographic and radio communications activities take place. Identification of personnel in this section is obviously high priority. From the point of view of recruitment operations, however, prospects are limited because only designated persons in a Soviet mission are allowed to have personal relationships with foreigners, particularly non-communist foreigners, and each meeting with such people requires a full written report. Usually permission for such relationships is restricted to intelligence operations officers, diplomats and others such as the zavhoz who have legitimate need to deal with outsiders.

The restrictions on contact with the outside world by most members of Soviet missions require rigid internal organization. The Komsomol, or communist youth organization, usually operates under 'sports club' cover while the CPSU uses the cover of 'trade union organization'. The real trade-union organization is called the mestkom, or local committee, and the SK, or community security officer, is responsible for personnel security in each mission. Additionally, each mission has a club with a programme of games, films, political studies and lectures, and social affairs -- all centred around a designated clubroom. Participation in club activities is assigned and compulsory, and is designed to keep the group together and avoid wandering into temptations in the decadent bourgeois surroundings. Personal conflicts, gossiping, petty jealousies and backbiting are the usual product of such mental and emotional inbreeding as is, according to SB doctrine, the need to break out of it all.

Most CIA operations against the Soviet community abroad are designed to provide an orderly and complete body of working knowledge about the Soviet presence in the country of concern. Systematic organization is the theme, so that the extensive detail required can be effectively managed. Standard operations in the non-communist world are the kind we have in Mexico and Uruguay: travel control for arrivals and departures and for passport biographical data and photographs; observation posts for additional photographs, analysis of relationships within the community and support to surveillance teams; surveillance for discovery of overt and clandestine activities; telephone tapping for analysis of relationships and general information; audio penetrations for general information and secrets.

The better the access agent can cultivate a close personal relationship with the Soviet, the more the station can assess his vulnerability. Some of the best access agents are satellite officials serving in the same city as the target Soviet -- often recruited to work against the Soviets for nationalistic motives. Still others are third-country diplomats, local politicians and government officials, and persons having the same hobby as a Soviet. Double agents, while primarily used to reveal Soviet intelligence requirements and modus operandi, and to occupy their time, also reveal the identities of intelligence officers and provide data on their professional competence and personality.

The access agent programme is designed to provide disaffected Soviets with 'channels for defection' -- bridges to the other side -- that they can build little by little while making up their minds. Access agents are people a Soviet can confide in, assuming the internal pressures create such a need. After a while, hours, months or even years, the access agents can initiate political discussions. The first rule of this game is never to denigrate Russia or things Russian. The key is to distinguish in the target's mind between Russia the homeland and Russia the subjected territory of the CPSU -- to separate government from people and country. As most Soviet bureaucrats are thought to harbour some cynicism towards the CPSU bureaucracy, the good access agent can foment patriotic balances against the fostering of doubts towards the Party. One obvious and effective method is to combine praise for Russian cultural traditions with dismay over treatment of dissident writers and artists.

Covert-action operations against the Soviets are also varied: the Agency is deeply involved in the samizdat system of clandestine publishing in order to get dissident literature out of the Soviet Union for publication and to make books by banned writers available in the USSR. Major emphasis is also given to exposing Soviet subversive activities abroad and to circulating anti-Soviet propaganda to make them feel oppressed and disliked by the local community. Expulsions are constantly promoted in order to 'prove' the Soviets are subversives.

The course also included a review of the procedures for keeping the Defector Committee of the U.S. mission in readiness, together with the rules for handling defectors: first efforts to get the Soviet to continue in his job as if nothing had happened, in order to make audio installations and rifle files; pre-planned safe places for keeping him hidden before departure for the U.S.; anticipation of violent reaction by the Soviet mission, with charges that the defector stole the cash-box; anticipation of procedures for letting the defector be interviewed by Soviet mission officials; initial debriefing requirements; military aircraft evacuation procedures.

Most of us took the course with some scepticism because SB lecturers refused to state the number of Soviets who have been snared through this vast effort. Surely there is some truth to the old saying that nobody recruits a Soviet -- if they come over they recruit themselves, and this they can do without channels, bridges, OPS, surveillance teams, passport photography and insidious access agents.

And what happens when the dream agent comes along? Might not a Soviet so compromise their security that the CPSU would be obliged to take serious action? SB Division lecturers also avoided comment on how the recruitment of Colonel Oleg Penkovskiy ‡ might have been related to the Cuban missile crisis. Here was a man embittered against the CPSU leadership who passed on information of great value about Soviet missiles: numbers, locations, accuracy, megatonnage, readiness factors. The Agency got valuable intelligence, Penkovskiy eventually got the firing squad -- but did the Soviets send missiles to Cuba because they needed desperately to balance back from the damage caused by this intelligence breakthrough? Perhaps October 1962 was the price of that intelligence success.

If I were honest I would pull back from the Olympic cover assignment and ask for leave to find a new job. Working in the Olympics office with Carrasco, however, I'll be able to avoid close control by the station and concentrate on cover work. At the same time I'll also be watching for job opportunities after the Olympics -- almost a year and a half from now and a lot can happen. And Mexico is just too attractive to refuse. I'll drive down during the first week of July.

Mexico City 15 July 1967

This Olympics cover is extraordinary. Dave and I have been making the rounds together calling on the leaders of the different organizations involved in the Olympic preparations: the Organizing Committee, the Mexican Olympic Committee and its vast new training centre for Mexican athletes, the Mexican Sports Confederation and the individual sports federations. Each of these organizations seems to have some special needs that the U.S. Embassy Olympic Games office might help to fulfil. The Organizing Committee wants odds and ends related to putting on the sports events and major assistance in arranging for U.S. participation in the Olympic cultural programme. The Mexican Olympic Committee, which is responsible for preparing the Mexican teams, needs help in getting several more coaches and additional State Department Specialist Grants for American coaches already here. After only five days on the job, access to an exceedingly large and varied range of people has suddenly opened up.

The officers in the station, from Win Scott down, are all excited about how my Olympic entree can help them in their particular areas of responsibility. For his part, Scott told me first to concentrate on meeting as many people as possible and to establish my Olympic cover firmly. In the Soviet operations section, where I arranged for a desk and typewriter, the chief interest is on spotting and assessment of new access agents and on my establishing direct contact operations with the Soviet and satellite intelligence officers who are handling Olympic duties. The CP section wants me to spot possible recruitments for infiltration into revolutionary organizations, while the CA section wants assessment data on press officers of the Organizing Committee for use as media placement agents. The liaison section wants information on the Soviet and satellite Olympic attaches that can be passed to the Mexican services while the LICOBRA section wants me to spot possible agents for use in penetrating the PRI and the Mexican government. The Cuban operations section, probably the most destitute in agent material, wants personal data on the Cuban Olympic attache, on leftists within the Olympic milieu who might eventually travel to Cuba, and on anyone at all who might be of interest to the Cubans. All these officers see my Olympic cover as promising for their operational goals.

No way to deny that this job could be valuable to the station. General practice is to exchange calling cards with a new Olympic acquaintance, and so far a very high percentage of the people I've met have significant reports in station files. I've begun my own card file and am writing short memoranda on the people I meet. Perhaps if I keep producing memoranda to circulate among the different sections I can avoid making any recruitments for some considerable time -- possibly right up to the Olympics. No problem getting discreetly up to the station from the Olympic office on the second floor, because the station's entrance is just to the side of the elevator in the back of the Embassy and not many people go up to the top floor.

New York 13 December 1967

Events have taken several unexpected turns in recent months. Dave has assumed responsibility for Embassy support to the Olympic cultural programme, which the Mexicans hope will add a dimension almost equal in importance to the sports programme. The view in the Organizing Committee is that Mexico, in spite of sizeable efforts under way in recent years to prepare teams, will be far down the list in national medal accumulation. Partly to overcome this deficit, and partly to excel in a different area, the Organizing Committee is putting on an impressive year-long Cultural Programme of twenty events to correspond to the twenty sports events -- although non-competitive. Officially the Organizing Committee has invited all the national Olympic committees to participate in the events in the Cultural Programme, but many national committees, including the USOC, are not set up for such varied cultural activity. Response has therefore been slight, and the Organizing Committee has turned to the embassies in Mexico City to seek official support.

In our Embassy the cultural section has failed to become more than peripherally interested in the Cultural Programme, so the Organizing Committee appointed a special representative to work with Dave and me on promoting wider participation by the U.S., especially the U.S. government, in the Cultural Programme. I never thought I would be doing cultural attache's work but Dave asked me to take responsibility for the Cultural Programme, and since then I have been trying to generate interest in Washington and elsewhere for bringing participants to such events as a poets' encounter, theatre and the performing arts, a folk arts festival, a stamp collectors' exhibit, a monumental sculpture programme, a film festival, youth camp, atomic energy and space exploration exhibits, a children's painting festival, a popular arts and crafts exhibits, and other similar events.

I didn't like Dave asking me to work on the Cultural Programme because it can easily take up all one's time, but after checking the names of Cultural Programme officials in station files I immediately saw the advantage: the cultural section of the Organizing Committee is just loaded with people of established leftist credentials who would be very difficult for an American official to cultivate without suspicion. But in the Olympic atmosphere of peace and brotherhood, and given the Organizing Committee's dire need for U.S. government backing, I now have an open door to many more people of interest to different sections of the station. Moreover, by assuming these new, very time-consuming duties, I will have all the excuses needed for not making any recruitments. Up to now the station is very pleased, because I've also been regularly meeting Provorov and Belov, the Soviet Olympic officers (GRU and KGB, respectively) as well as the Czech, Pole and Yugoslav Olympic officers. My only problem is to keep away from DNNEBULA-1, ‡ the Korean CIA officer who is also handling Olympic duties, and who corners me at every meeting, Generally, though, I'm only keeping up appearances with the station because I have no interest in developing operations.

The other unexpected development is a serious and deepening relationship with a woman I met on the Organizing Committee. I took a chance and told her I had worked for the CIA before, but in spite of her strong reaction she agreed to keep seeing me. She iS one of the many leftists in the Cultural Programme and she believes, with great bitterness, as do many other people, that the Agency was responsible for Che Guevara's execution.

Mexico City 20 June 1968

One more CIA career comes to an end. It was a little earlier than I had expected, but Paul Dillon invited me for coffee the other day and told me Scott had asked him to make a proposal. He said that the station is very pleased with my work and that Scott would like me to transfer to the political section in the station after the Olympics, so that in the coming two or three years I will be able to make the recruitments and take part in other station operations for which I've been preparing since arrival last year. They especially want me to begin recruitments of some of the PRI bureaucrats I've met, such as Alejandro Ortega San Vicente, the Secretary- General of the Olympic Organizing Committee and former chief of the Ministry of Government's Department of Political and Social Investigations, which is really the PRI'S information centre on its own people. Scott said he will arrange for me to get another promotion and that the Ambassador has approved this plan.

I told Dillon that I appreciated the offer but that I planned to resign after the Olympics, to remarry, and remain in Mexico. He was startled, of course, because I hadn't mentioned this to anyone in the station yet. Later I spoke to Scott and wrote a memorandum for headquarters outlining my intentions. I was careful to cite my personal reasons as the only motive behind my decision, lest someone pounce on me as a security risk.

The sense of relief is very strong now that I have formally announced my intention to resign. Perhaps I should have done this on returning from Montevideo, because I have felt very strained beneath the surface since coming to Mexico -- like being dishonest in a dishonest situation, except that the two negatives don't make a positive. The truth is that Bill Brae was right: the Olympics aren't conducive to cold war politics. Working in the Cultural Programme, moreover, has driven still another wedge between the rationale for counter-insurgency and the reality of its effects. It isn't just 'them and us' but 'all of us'.

The cultural work has bridged many gaps; even though I've only been organizing rather than creating, the experience has been enough to ease the pains of increasing separation, of feeling a fraud, of isolation. Who knows if without it I could have given up all the security and comfort of continued CIA work. Headquarters and stations alike are peppered, as we all know, with officers who long ago ceased to believe in what they're doing - only to continue until retirement as cynical, bitter men anxious to avoid responsibilities and effort. I'll at least avoid joining them, no matter what happens.

Mexico City 1 August 1968

This past week has seen a sudden flare-up of confrontation between students and university leaders and the government. It began with some confusion on 26 July when a street demonstration celebrating the anniversary of the Cuban Revolution clashed with a rival demonstration and then turned into a protest against the Mexican government. Two days later police entered buildings of the National University of Mexico (UNAM), and next day there was rioting in the streets by students and severe police repression. Three days ago another violent confrontation occurred in the streets and yesterday rioting spread to provincial university towns of Villahermosa and Jalapa. Today in Mexico City a peaceful protest march numbered at least 50,000 and was headed by the Rector of UNAM.

The original confused issues have broadened into more basic political demands, led on the student side by a national strike committee strongly influenced by former leaders of the National Liberation Movement (MLN) and the National Center of Democratic Students (CNED) -- both influenced in turn by the Communist Party of, Mexico. Even so, the movement is a spontaneous popular demonstration against police violence with clear tendencies towards protest against the PRI'S power monopoly and traditional service to the privileged. Demands formulated by the strike committee are impossible for the government to meet but are nevertheless popular: resignation of the police chiefs, disbanding of the riot police, repeal of the crime of 'social dissolution' and compensation for the wounded and families of the dead -- since 26 July, at least eight students have been killed, 400 injured and over 1000 arrested.

The government for its part has had to call in military forces several times when police have been unable to cope. Luis Echeverria is responsible as Minister of Government for re-establishing order but so far he has only made matters worse. He has publically blamed the CNED and the PCM youth wing for the violence, which is only partly true -- other demonstrators and the police too are to blame -- while also claiming that five 'riot coaches' from France, and other communist agitators had plotted the insurrection from outside the country. No one believes such trash which makes the government look ridiculous and makes compromise more difficult. If Echeverria doesn't stop overreacting the situation will get even worse.

Last month I made a trip to Washington and New York for some final details on Cultural Programme participation sponsored by the State Department. In Washington, not only would Janet not agree that I bring the boys here for the Olympics, she also made my seeing them very difficult. I decided to bring them anyway and had my lawyer telephone her to advise after we were on the flight. An uproar followed between headquarters and the State Department and between the Ambassador and Scott -- all of whom have ordered me to send them back because Janet is threatening to expose me as a CIA officer. I have refused and told them to fire me if they want but that I believe I have a right to have my children in my home, whether in Mexico City or any other place. Besides, I'm sure the threat of exposure is only a bluff.

Mexico City 1 September 1968

Throughout the greater part of August the government had taken a fairly gentle line about the massive demonstrations taking place. Then on 27 August a huge demonstration of some 200,000 marchers turned out to protest against the cost of the Olympics to Mexico which will be at least 175 million dollars. The turning-point in government policy came early the following morning when the considerable concentration of demonstrators that remained in the main downtown plaza was forcibly broken up. On the 29th another 3000 demonstrators turned up and were driven off. Today Diaz Ordaz, in his annual message to the country, pledged the use of the armed forces to ensure that the Games will be held. However he also promised to consider changing the penal code on 'social dissolution'. The strike committee has added to its demands the release of all political prisoners, and in this speech Diaz Ordaz took the trouble to claim that in Mexico there are no political prisoners -- a claim so widely known to be false that it is ridiculous.

In the station the CP section is very busy getting information from agents on planning by the strike committee and on positions taken by the communists and other far-left groups. Highlights of this intelligence are being passed to Diaz Ordaz and Echeverria for use by the security forces. It's almost like being in Ecuador or Uruguay again -- but I'm glad I'm not working on the government's side this time.

Mexico City 19 September 1968

So far the only significant demonstration this month was a silent march of protest on the day that Diaz Ordaz opened the new Olympic sports installations. Protesters are increasingly saying that the police have burned the bodies of those students killed in repressive action and that the students' families have been frightened into silence. Student brigades have been going daily to factories, offices and homes to explain the student position and have been doing so with considerable effect. Last night, as a result of this activity, the government seized the National University in violation of the University's traditional autonomy. Echeverria justified this invasion by saying that the University has been used for political rather than for educational purposes.

Thousands of troops with tanks and armoured cars were employed in the takeover of the University and although hundreds of people were arrested, the student strike leaders all escaped. The student brigades exposing government policies to serve minority interests have now made their headquarters in the Polytechnic Institute, where a battle is now going on between students and police.

Two of the big exhibits for the Olympic Cultural Programme are being delayed because of the violence. At the National University we had a huge Jupiter Missile set up for the space exhibit, but it had to be taken down rather quickly before it got torn down by the demonstrators. The Organizing Committee is now looking for somewhere else to put it. Similarly the atomic energy exhibit at the Polytechnic has had to be put off while another site is found. The space exhibit was to be opened yesterday by Michael Collins, an Air Force astronaut, but I have had to cancel much of his programme.

Mexico City 25 September 1968

Each day since the UNAM was invaded has been filled with violence. Some ten to twenty more students have been killed and over 100 wounded in riots which have broken out in different parts of Mexico City but are now most frequent in the Plaza of the Three Cultures in the Tlatelolco section, where one of the main vocational schools of the Polytechnic Institute is located. Yesterday a pitched battle lasted about twelve hours as students defended the Polytechnic and the vocational school at the Plaza, but finally both were occupied by the Army and police. All street demonstrations are now being suppressed with much violence.

After a PRI campaign against him of several weeks, the Rector of UNAM resigned, but the professors association voted to resign with him if his resignation was accepted. Today the UNAM governing council refused the resignation and the Rector is expected to withdraw it. Increasingly the protest is turning towards the cost of the Olympic Games. Parents and teachers have joined the students, while vigilante groups controlled by the government have begun night raids on schools to intimidate the occupying students.

This afternoon I went up to the station offices to read the intelligence reports sent to headquarters over the past week. One report was on a meeting between Scott and President Diaz Ordaz in which Scott got the strong impression that the President is confused and disoriented, without a plan or decision on what to do next.

Mexico City 3 October 1968

In one savage display of firepower at the Plaza of the Three Cultures, the government wiped out the protest movement and probably several hundred lives. The massacre yesterday afternoon came as a surprise, because for almost a week both the government and the strike committee had been backing off from confrontation and nearly everyone believed the crisis was passing. The Army had even evacuated the UNAM and the Rector withdrew his resignation.

Nevertheless, yesterday about 5 p.m. some 3000 people -- students, teachers, parents and some workers and peasants -- gathered at the Plaza of the Three Cultures for a march in protest against continued government occupation of the Polytechnic Institute and several of its vocational schools.

The first speaker at the rally, however, called off the march because of a concentration of about 1000 troops with armoured vehicles and jeep-mounted machine-guns along the route. The rally continued peacefully but the military units surrounded the Plaza. Just after 6 p.m. the Army opened fire on the crowd and on the surrounding buildings believed to be sheltering sympathizers. Not until an hour later did the Army stop firing. Officially the toll . is set at twenty-eight dead and 200 wounded, but several hundred were probably killed and many more wounded. Over 1500 were taken prisoner. Today mass confusion reigned as thousands of parents and relatives sought to find the bodies -- already disappeared -- of those unable to be located in hospitals or jails.

This morning the International Olympic Committee under Avery Brundage held a secret emergency meeting on whether to call off the Games. The IOC decision, according to a U.S. Olympic Committee member, was only one vote short of cancellation. Afterwards Brundage announced that the Games will proceed as scheduled and that local student problems have no connection with the Olympics.

Mexico City 28 October 1968

Suddenly it's all over -- capped by the gushing of colour and sound from what must have been history's most spectacular display of fireworks. As of today we can all begin again to weigh whether this two-week circus was really worth all the bloodshed, and whether Mexico lost more prestige by killing protesters than it gained by putting on the Games.

My resignation will be effective early next year, although for practical purposes my service with the Agency is ending now. Perhaps I've been foolish dedicating all my time in recent months to the Olympics instead of finding a new job. But I have money saved that will allow time to find work although it won't be easy because combining two families and continuing to live like this will take a hefty income. My sons have asked to continue living here with me instead of returning to Washington, which didn't surprise me, so the legal measures I've taken will be useful. All the fuss by the Ambassador and Scott and headquarters was foolish because Janet's threat was only a bluff.

I try not to show it, but I feel unsure about finding satisfying work inside the same system I rejected long ago as a university student. The difficult admission is that I became the servant of the capitalism I rejected. I became one of its secret policemen. The CIA, after all, is nothing more than the secret police of American capitalism, plugging up leaks in the political dam night and day so that shareholders of U.S. companies operating in poor countries can continue enjoying the rip-off. The key to CIA success is the 2 or 3 per cent of the population in poor countries that get most of the cream -- that in most places get even more now than in 1960, while the marginalized 50, 60 or 70 per cent are getting a lesser share.

There is a contradiction in what I'm doing but I don't have much choice given the plans we have and our need for income. One has to take the realistic view: in order to fulfil responsibilities you have to compromise with the system knowing full well that the system doesn't work for everybody. This means everybody has to get what he can within decency's limits -- which can be stretched when needed to assure a little more security. What I have to do now is get mine, inside the system, and forget I ever worked for the CIA. No, there's no use trying to change the system. What happened at the Plaza of the Three Cultures is happening all over the world to people trying to change the system. Life is too short and has too many delights that might be missed. At thirty-three I've got half a lifetime to enjoy them.



1. La Distribucion del Ingreso en America Latina, Naciones Unidas, New York, 1910, based on official Mexican statistics of the mid-1960s.
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Re: Inside the Company: CIA Diary, by Philip Agee

Postby admin » Tue Jun 09, 2015 4:31 am


Part Five

Mexico City January 1970

I begin again after a year of great disappointment and sense of failure. My hopes for a new start and a future in Mexico were clouded with the failure of my marriage plans, and I am unsure of my direction. The reasons are a complex series of mistakes, perhaps even unrealistic hopes from the beginning, but with results too damaging to overcome. For now I continue to pick up the pieces and try to arrange them in a stable pattern.

I am also unsure of the work I chose although I had the good fortune of joining with a new company started by friends whom I met in the Olympics. From the point of view of finances I've had to retrench considerably, a distasteful process but one with definite blessings. The prospects in this new company, which processes and markets an entirely new product, are very encouraging and I've been given the opportunity to buy shares. My relationships with the owners and the general manager, who is my good friend, are excellent.

Working in commerce, however, is still as lacking in satisfaction as it was years ago, and I have decided to enter the National University of Mexico for an advanced degree. Perhaps I will return to the U.S. to seek a teaching career. Over the Christmas and New Year's break I also began working on an outline for a book on the CIA. This would have been impossible if my plans had succeeded, but the way is now clear and may well lead to my being forced to leave Mexico.

A book describing CIA operations might help to illustrate the principles of foreign policy that got us into Vietnam and may well get us into similar situations. Secret CIA operations constitute the usually unseen efforts to shore up unjust, unpopular, minority governments, always with the hope that overt military intervention (as in Vietnam and the Dominican Republic) will not be necessary. The more successful CIA operations are, the more remote overt intervention becomes -- and the more remote become reforms. Latin America in the 1960s is all the proof one needs.

A book on the CIA could also illustrate how the interests of the privileged minorities in poor countries lead back to, and are identified with, the interests of the rich and powerful who control the U.S. Counter-insurgency doctrine tries to blur these international class lines by appeals to nationalism and patriotism and by falsely relating movements against the capitalist minorities to Soviet expansionism. But what counter-insurgency really comes down to is the protection of the capitalists back in America, their property and their privileges. U.S. national security, as preached by U.S. leaders, is the security of the capitalist class in the U.S., not the security of the rest of the people -- certainly not the security of the poor except by way of reinforcing poverty. It is from the class interests in the U.S. that our counter-insurgency programmes flow, together with that most fundamental of American foreign policy principles; that any government, no matter how bad, is better than a communist one -- than a government of workers, peasants and ordinary people. Our government's support for corruption and injustice in Latin America flows directly from the determination of the rich and powerful in the U.S., the capitalists, to retain and expand these riches and power.

I must be careful to speak little of my ideas for the book. Jim Noland replaced Win Scott as Chief of Station here when Scott retired last September. Scott opened an office -- in his old profession as an actuary. I imagine that he continues to work for the Agency though now on contract, because his knowledge and experience in Mexico, and his vast range of friends, are too valuable to lose. This is not the time for the Agency to learn of my intentions.

Mexico City June 1970

Another failure which is difficult to understand. Last week I spoke to four editors in New York in the hope of getting a publishing contract and an advance to finish the book on the CIA. Unfortunately those editors mostly wanted a sensationalist expose approach -- divorced from the more difficult political and economic realities that give the operations meaning.

I'm not sure what to do now except begin again, reorganizing the material and-trying to write more clearly. Perhaps I should try more modestly with a magazine or newspaper article on our operations to keep Allende out of the Chilean Presidency in 1964 -- he's running again right now and maybe exposure of the 1964 operations could help him. The trouble is that people may not believe me -- in New York I felt the editors weren't really certain that I'm who I say I am.

The bad part of the New York trip is that I left copies of my material there, and despite assurances by the editors I'm afraid the Agency may learn of my plans for a book. One word by the station to the Mexican service and I get the one-way ride to Toluca -- except it's a lonely way to go, disappearing down one of those canyons. In a few weeks the classes at the National University begin and I'll just have to hope no one finds out about me -- neither the Agency nor the UNAM people. It's discouraging to be isolated like this but the renewed bombing in North Vietnam and the inability of the Nixon administration to admit defeat, coupled with the Cambodian invasion, have strengthened my determination to start again. The killings at Kent State and Jackson State show clearly enough that sooner or later our counter-insurgency methods would be applied at home.

Mexico City January 1971

Recent months have brought important decisions and perhaps at last I am finding the proper course. Behind these decisions have been the continuation of the Vietnam war and the Vietnamization programme. Now more than ever exposure of CIA methods could help American people understand how we got into Vietnam and how our other Vietnams are germinating wherever the CIA is at work.

I have resigned from my friends' company, and my sons are back in Washington -- although I continue at the University. I sent the children for Christmas only but feared Janet would go back on her agreement that they return. When she did just that I relented without much choice -- in any case they will have a better school and will learn English for a change. I, too, may leave Mexico if I can get financial support because my new plan for the book requires research materials unobtainable here.

I have decided now to name all the names and organizations connected with CIA operations and to reconstruct as accurately as possible the events in which I participated. No more hiding behind theory and hypothetical cases to protect the tools of CIA adventures. The problem now will be documentation. I have also decided to seek ways of getting useful information on the CIA to revolutionary organizations that could use it to defend themselves better.

The key to adopting increasingly radical views has been my fuller comprehension of the class divisions of capitalist society based on property or the lack of it. The divisions were always there, of course, for me to see, but until recently I simply failed to grasp their meaning and consequences: adversary relationships, exploitation, labour as a market-place commodity, etc. But by getting behind the liberal concept of society, that concept that attempts to paint out the irreconcilable class conflicts, I think I have grasped an understanding of why liberal reform programmes in Latin America have failed. At the same time I have seen more clearly the identity of interests of the classes in Latin America (and other underdeveloped areas) with the corresponding classes in the U.S. (and other developed areas).

The result of this class conception, of seeing that class identity comes before nationality, leads to rejection of liberal reform as the continuous renovating process leading step by step to the better society. Reform may indeed represent improvement, but it is fundamentally a manoeuvre by the ruling class in capitalist society, the capitalists, to allow exploitation to continue, to give a little in order to avoid losing everything. The Alliance for Progress was just this kind of fraud -- although it was heralded as a Marshall Plan for Latin America that would permit, indeed encourage, a Latin American New Deal to sweep through the region behind the leadership of liberals like Betancourt, Haya de la Torre, Kubichek and Munoz Marin.

But the Alliance for Progress failed as a social reform programme, and it failed also to stimulate sufficient per capita economic growth, partly because of high population growth and partly because of slow growth in the value of the region's exports. These two factors, combined with rising consumption by upper and middle classes, provided less for the investments on which growth must be founded.

Result? The division in Latin American society widened between the modern core, dependent largely on the external sector, and the marginalized majority. By 1969 over half the people in the labour market were unemployed or underemployed. Where progress occurred in education, health care and housing it accrued mostly to the core societies in cities. Flight to cities by rural unemployed continued with the cities unable to absorb them productively. The vicious circle of small internal markets and lack of internal growth momentum also continued.

Particularly in countries like Brazil, where economies have grown rapidly, wealth and income have tended to even greater concentration. Latest figures of the UN Economic Commission for Latin America (ECLA) show that the poorest 20 per cent of the Latin American population now receive only 3.1 per cent of total income and that the entire lower 50 per cent receives only 13.4 per cent of total income. The upper 5 per cent income bracket, on the other hand, receives 33.4 per cent of total income. The contrast between the high 5 per cent and the lower 50 per cent of the population according to ECLA rests on the dominance of the entrepreneurial class -- the capitalists -- in the upper 5 per cent whose extraordinary income results largely from distribution of profits which could be reinvested instead of being consumed. In Mexico, for example, 60 per cent of the income of the top 5 per cent is dividends, in El Salvador 80 per cent, in Argentina 85 per cent. Most important, income of the high 5 per cent is growing more rapidly than the middle- and lower-income levels -- thus aggravating income imbalance still more. The assumption, therefore, that economic growth under the Alliance for Progress would result in higher standards of living for the poorer half of the population is now demonstrated to have been false.

Land-reform programmes have also failed. During the 1960s virtually every country in Latin America began some programme to reform restrictive, precarious and uneconomical tenure systems -- long accepted as the most serious structural cause of imbalance in wealth and income. But with the exceptions of Cuba, Peru and Chile the impulse has been lost and little progress made where the bulk of the potential income-producing resources lies. Concentration continues: the upper 1.8 per cent of the rural income scale holds more than 50 per cent of the farmland while the small landholders who number 25 per cent of the farm population hold only 2.4 per cent of farmland.

During these past ten years, while Latin American countries failed to establish more equitable distribution of land, wealth and income, considerable success could be claimed in counterinsurgency -- including propaganda to attract people away from the Cuban solution as well as repression. As part of the counterinsurgency campaign, the Alliance for Progress in the short run did indeed raise many hopes and capture many imaginations in favour of the peaceful reform solutions that would not fundamentally jeopardize the dominance of the ruling capitalist minorities and their system. Since the 1960s however, as the psychological appeal of peaceful reform diminished in the face of failure, compensatory measures have been increasingly needed: repression and special programmes, as in the field of organized labour, to divide the victims and neutralize their leaders. These measures constitute the four most important counter-insurgency programmes through which the U.S. government strengthens the ruling minorities in Latin America: CIA operations, military assistance and training missions, AID Public Safety programmes to help police, and trade-union operations through ORIT, ‡ the International Trade Secretariats ‡ and the AIFLD ‡ -- all largely controlled by the CIA. Taken together these are the crutches given by the capitalist rulers of the U.S. to their counterparts in Latin America in order to obtain reciprocal support against threats to American capitalism. Never mind all those marginals -- what's good for capitalists in Latin America is good for capitalists in the USA.

A liberal reform programme like the Alliance for Progress is a safety-valve for capitalist injustice and exploitation -- as the frontier served for release and escape from oppression in American cities during the last century. Such a programme is only what the ruling-class will allow by way of redistribution during a time of danger to the system as a whole -- something that runs against the current and the inherent drive to concentrate wealth and political power in ever fewer hands. Once the sense of urgency and danger fades, so also the pressure on the safety-valve declines and the natural forces for accumulation recuperate, soon wiping out the relative gains that the exploited obtained through reform. Reforms are temporary palliatives that can never eliminate the exploitative relationship on which capitalism is based.

Increasingly, as the oppressed in capitalist society comprehend the myth of liberal reform, their ruling minorities have no choice but to increase repression in Order to avert socialist revolution. Eliminate CIA stations, U.S. military missions, AID Public Safety missions and the 'free' trade-union programmes and those minorities would disappear, faster perhaps, than they themselves would imagine.

My security situation is the same, although I am puzzled that the CIA does not seem to have discovered that I am writing, or if they know, why they haven't visited me. John Horton is now Chief of Station here, and others with whom I served at other stations have been assigned here although they have shown no interest in me. Through friends I have sent copies of my new outline to a publisher in Paris -- perhaps at last I will get some encouragement.

Mexico City March 1971

A quick trip to Montreal for conversations with a publisher's representative has given me new hope for both financial and research support. Although my outline and written material are acceptable, the problem remains where to find the information needed to reconstruct the events in which I participated in order to show precisely how the Agency operates. We discussed Paris or Brussels after agreeing that for security reasons anywhere in the U.S. would be unwise. We also discussed Cuba, where possibly the research materials could be found and even research assistance arranged.

I said I would be fearful of going to Cuba for several reasons: my past work against Cuba and communism, possible Soviet pressures, my reluctance to engage in sessions for counter-intelligence ploys, problems with the CIA afterwards. Mostly, I suppose, I am fearful that if the CIA learned that I had gone to Cuba they would begin a campaign to denigrate me as a traitor. As my hope is to return as quickly as possible to the U.S. after finishing, I would be increasing the odds for prosecution for publishing secrets if I had gone to Cuba.

There are some advantages, however, in going there. First, the security situation vis a vis CIA would be better and if the research materials are available I could work more calmly and faster. Moreover, in Havana I could arrange to get information on the CIA to interested Latin American revolutionary organizations through their representatives -- efficiently and securely. Then, too, I would have the chance to see first hand what the Cuban Revolution has meant to the people and what their problems are. Such a trip is something I thought would be possible only after I finished.

After sleeping on the idea I agreed that I would go to Cuba if the trip can be arranged. Presumably the book will have to be politically acceptable to the Cubans and the research materials available. If I do not go to Cuba I will go to Paris to finish so my security situation will be improved in any case. At present I will say nothing, and hope that the CIA doesn't get wind of these plans.

Paris August 1971

Great leaps of progress but so much work remains. In May I went to Havana to discuss the research materials needed, and they agreed to assist with what they have available -- which appears to be a good deal. They also invited me to stay there to finish as much as possible, which I accepted. However, as I was committed to visit my sons in Washington, I returned to Paris for conversations with the publisher and then went to the U.S. for two weeks with the boys. I have returned to check availability of research materials here and will proceed shortly to Havana.

While in Cuba I travelled for several weeks around the island visiting a variety of development projects in agriculture, livestock, housing, health and education. The sense of pride and purpose evident in the Cubans is impressive. My worries about going to Cuba were unfounded and were more than replaced by fears of returning to the U.S. to see my sons. I shouldn't have returned, because I had gone to Cuba openly, but strangely I must have eluded the travel control -- or the system failed to identify me in time. I wonder if my luck will make the Cubans suspicious.

Havana October 1971

I begin to wonder whether writing this book was such a good idea. I have found considerable material to refresh my memory and to reconstruct events, and I have written a respectable number of pages. Trouble is that I'm running far afield into matters that are peripheral to my CIA work. At the same time the material here is more limited than I had thought, and I may have to risk returning to Mexico and South America to continue the research. In any case I will return next month to Paris to continue there. My mood is gloomy as I feel disorganized and still quite far from having a presentable book. The events I want to describe get further into history each day -- and each day the sense of urgency to finish quickly gets stronger.

Aside from specific information for reconstructing events, I have found here a number of excellent economic reports and essays on Latin American problems and their roots in U.S. exploitation of the region. One report by the Organization of American States describes clearly how the real beneficiary of the Alliance for Progress was the U.S. economy rather than the Latin American economies. This report [1] recognizes the failure to make substantial beginnings in land reform and income redistribution -- similarly the failure of foreign aid and private investment to stimulate accelerated economic growth which the report projects as the key to integration of the masses.

The functioning of the external sectors of Latin American economies (excepting Venezuela as a special case) during these ten years demonstrates how these economies have supported the U.S. standard of living to the detriment of the Latin American people: Americans, in other words, can thank Latin American workers for having contributed to our ease and comfort. It is the external sector that counts because exports and foreign aid determine how much machinery and technology can be imported for economic growth, and during the past ten years the external sectors of Latin American economies failed to generate adequate growth.

From 1961 to 1970 Latin America paid out to other regions, mostly to the U.S., a little over 20 billion dollars, practically all in financial services (royalties, interest and repatriated profits to foreign capital). About 30 per cent of this potential deficit was offset by export surpluses, while the remaining 70 per cent was paid through new indebtedness, new private foreign investment and other capital movements. The new indebtedness, representing as it does new costs for financial services, raised still higher the proportion of export earnings required for repatriation of royalties, interest and profits to foreigners, mostly U.S., thus decreasing amounts available for investment.

During these ten years private foreign capital provided new investment of only 5.5 billion dollars while taking out 20 billion dollars. The lion's share went to U.S. investors whose investment, which averaged about 12 billion dollars in value, returned about 13 billion dollars to the U.S. Without the loans and grants from the U.S. under the Alliance for Progress, Latin America would have had to devote about 10 per cent more of its export earnings to the services account so that 'fair return' on investment could be satisfied. Otherwise a moratorium or some other extreme measure would have been necessary -- hardly conducive to new credit and investment.

The Alliance for Progress has been, in effect, a subsidy programme for U.S. exporters and private investors -- in many cases the same firms. For Latin America this has meant a deficit in the external sector of about 6 billion dollars that limited the importation of equipment and technology needed for faster economic growth -- the deficit compensated by new indebtedness. For the United States this has meant a return to private investors of about five dollars for every dollar sent from the U.S. to Latin America during the period, plus a favourable trade balance, plus billions of dollars in loans that are earning interest and will some day be repaid. In other words Latin America through the Alliance for Progress has contributed to the economic development of the United States and has gone into debt to do it. No wonder we prop up these governments and put down the revolutionaries.

In contrast to the myth of the Alliance for Progress, which ensures that the gap between the U.S. and Latin American economies will grow, the interesting alternative does not assume that economic growth is the determinant for integration of the marginalized majority. Based on a distinction between economic growth and social development, the revolutionary solution begins with integration. The Cuban position paper for this year's sessions of ECLA, entitled Latin America and the Second United Nations Decade for Development, views social integration through structural changes in institutions -- revolutionary change rather than reform -- as the condition for development. Economic growth alone, with benefits concentrated in the modern core minority, cannot be considered as national development because the whole society doesn't participate. Institutional change, social integration and economic growth is the revolutionary order of priorities rather than economic growth, reform and eventual extension of benefits to the marginals -- little by little so as not to affect the wealthy.

The institutional changes: first, the land tenure system must be altered to break the injustices and low productivity resulting from the latifundia-minifundia problem. Second, the foreign economic enterprises must be nationalized so that the product of labour is used for national development instead of being channelled to shareholders in a highly-developed, capital-exporting country. Third, the most important national economic activities must come under state control and be subjected to overall development planning with new criteria for marketing, expansion and general operations. Fourth, personal income must be redistributed in order to give purchasing power to the previously marginalized. Fifth, a real working union between government and people must be nurtured so that the sacrifices ahead can be endured and national unity strengthened.

During this early period of institutional change, attained with few exceptions, in the Cuban view, through armed struggle, the basic problems of priorities emerge: immediate development of social overhead projects in health and education v. expansion of consumption of the formerly marginalized v. investment in infrastructure. The redistribution of income, new costs of social projects, and increased internal consumption leave even less productive capacity for re-investment than before. High demand causes inflationary pressures and black markets, while rationing is necessary to assure equity in distribution.

The only source of relief to offset the investment deficit, according to the Cubans, is foreign aid. Aggravating the development problem is the exodus of managers and professionals who join the overthrown landed gentry and upper middle classes in seeking to avoid participation in national development by fleeing to 'free' countries. Another drain on investment is the obvious need to maintain oversized military forces to defeat domestic and foreign counter-revolutionary forces.

The romantic stage of the revolution ends, then, as the realities of the long struggle for national development take root. Internally the revolution calls for ever-greater productivity, particularly in exports, so that dependence on external financing can be kept as low as possible. Nevertheless, years will pass before economic growth will reach the point of decreasing reliance on foreign aid. Sacrifice and greater effort are the order of the day, and neither can possibly result if the producers -- the workers, peasants and others -- fail to identify in the closest union with the revolutionary government. Mistakes will be made, as every Cuban is quick to admit, but there can be no doubt that national development here is well underway and accelerating.

In Cuba the people have education, health care and adequate diet, while long strides are being made in housing. When one considers that over half the population of Latin America, over 150 million people, are still deprived of participation in these minimal benefits of modern culture and technology, it becomes clear that the only country that has really attained the social goals of the Alliance for Progress is Cuba.

I still have no indication that the CIA knows I am writing this book or that I have come to Cuba. During recent months I have tried to follow the growth of the Frente Amplio in Uruguay in preparation for the national elections next month. The situation is so ready for election operations by the Montevideo station that I have yielded to the compulsion to denounce this possibility. I wrote a letter to Marcha in Montevideo describing some of the standard covert-action operations and suggesting that the Agency may well be involved right now in operations against the Frente and in support of candidates of the traditional parties. If Marcha publishes even part of it, any doubts about my intentions on the part of the CIA must disappear.

Paris January 1972

The letter to Marcha was a mistake. A couple of days after Christmas, while resting before dinner with my sons -- they came for the vacation period -- we had a knock at the door and who should appear but Keith Gardiner, ‡ an old JOT and OCS colleague who spent some years in Brazil during the 1960s. I was unprepared for a visit from the CIA and I agreed, because my children live near him and play with his children, to accompany him to dinner. On leaving our hotel he disappeared for a few moments in order, he said, to release a colleague who was standing by in case I had received him in an unfriendly manner.

After dinner I agreed to speak privately to him. He surprised me with a machine copy of what Marcha had published of my letter, adding that Mr. Helms ‡ wants to know just what I think I am doing. Not yet knowing that my letter to Marcha has been published, I decided to develop a bluff that might convince the Agency that there is nothing they can do to stop publication of the book. I told Keith that I have completed an over-sized draft that I am now editing down to appropriate size -- the truth being that I have completed less than one-third of my research.

Gardiner admitted that the Paris station (Dave Murphy, former Chief of the Soviet Bloc Division, is Chief of Station here now) located me through the French liaison service. Pointedly suggesting that I am being manipulated by the Soviets through my publisher, he said the Agency's chief concern is exactly what I have revealed in material already submitted or discussed - which I refused to talk about. I assured Keith, however, that I will be making no damaging revelations and will submit the final draft for approval before publication. On the Marcha letter he denied that the Montevideo station had engaged in any election operation, but he said the Bordaberry campaign (Bordaberry, a former Ruralista leader, won, running as a Colorado) received large infusions of Brazilian money -- the role of the Brazilian military dictatorship as surrogate for U.S. imperialism in South America was also evident in the Bolivian rightist military coup a few months ago.

Gardiner told me that in September of this year he will enter the University of Wisconsin for a Master's Degree in Latin American studies -- the first time a DDP operations officer has been sent for higher university study that either of us can remember. Then, again pointedly, he asked if I might reveal his name so as to expose him at the university. I assured him I wouldn't and suggested that while studying he keep in mind the possibility of joining the fight against the CIA and American imperialism. After all, why be a secret policeman for U.S. capitalists when the system itself is disappearing?

Not knowing to what ends the French service will go to please the Agency, I feared after meeting Keith that I might be deported under some pretext on a flight having New York as its first stop. So the next day I took the boys to Spain for the final week before their return to school. Now I continue here, and I must be careful to avoid provocation while finishing as fast as I can. I don't know if my bluff will work or whether the French service or the Agency will take action against me. I shouldn't have written the letter to Marcha.

Paris August 1972

Events in the past three months have taken unfavourable turns, and I am fearful that the CIA is now closing in. My money has run out and I am living on small donations from friends, street surveillance has forced me to live in hiding, research still pending in Cuba was cancelled, I still cannot find the information I need, and people \Who have befriended me and on whom I am depending show frequent signs of being infiltrators.

In May I went to Havana again for discussions on research left from last year, and on additional needs that have arisen since. For reasons I fail to understand there is a lack of confidence in my intentions about the book's political content. As a result, research I left pending with them last year has not been done -- the same as cancellation if I have to do it myself. Very disappointing although understandable -- the Cubans wouldn't want to be embarrassed by a politically unacceptable book, and political content is something that must come at the end, after the research is finished.

In June my publisher's advance ran out, and in order to get another advance I would have had to amend the contract to allow for publication first in France. It may be chauvinism, but as I am seriously criticizing American institutions, I'm determined to make every effort for publication there first, or at least simultaneously with publication elsewhere. I couldn't accept the amendment and I am depending on a few friends for sustenance.

A few days after returning from Cuba I suddenly began to recognize street surveillances in Paris, which I suspect may be the French service -- possibly at CIA request. But being unsure of the sponsorship and purpose of the surveillance, I went to live secretly at the studio of a friend, Catherine, who agreed that I could stay there until the problem is resolved.

About the same time as the surveillance began I was befriended by several Americans, two of whom display excessive curiosity and other indications that suggest they may be CIA agents trying to get close to me for different purposes. One of these, a supposed freelance journalist named Sal Ferrera, ‡ claims to write for College Press Service, Alternative Features Service and other 'underground' organizations in the U.S. As a means to get some financial relief I agreed to an 'interview' with Salon my work in the CIA which he will try to sell. Meanwhile he gives me small loans and tries to find out where I am living.

With Sal I met Leslie Donegan ‡ who claims to be a Venezuelan heiress, graduate of Boston University and currently studying at the University of Geneva. At Sal's suggestion I discussed the book and my financial situation with Leslie and allowed her to keep copies of the manuscript to read over a week-end. She agreed to finance me until I finish -- right now I am rushing to prepare what I have written so far, for presentation to an American publisher who will be here in early October. Sal is also helping -- he obtained a typewriter for me when I had to turn in my hired one for the deposit. Strangely, he refused to tell me where he got it -- only that it's borrowed and that I may have to give it back quickly when the owner returns from London.

I shouldn't have allowed Leslie to read the manuscript, nor should I continue associating with either her or Sal. However, I need the' loans' they are giving me in order to survive until getting the contract with the American publisher in October. If indeed they are working for the CIA, relatively little harm is done because the cryptonyms and pseudonyms I have used will confuse, and I have assured them both that I do not intend to reveal true names -- just as I did with Gardiner. I have also hidden away copies and preserved my notes so that the unfinished portions could be finished by someone else.

Leslie tried to persuade me to accompany her to Spain, but I begged off in order to work with Therese -- another friend who is typing the manuscript for presentation to the American publisher, and who is being paid by Leslie. I certainly wouldn't go to Spain at Leslie's invitation. If she is working for the CIA they may have planned a dope plant with the cooperation of the Spanish service to get me put on ice for a few years. Under Spanish-style justice prisoners can probably be kept from writing books. If my suspicions about these two are ever confirmed, it will be ironic that the CIA, while trying to follow my writing and set a trap, actually financed me through the most difficult period.

Of all these recent problems the worst is that I haven't had the money for the boys to come for the summer. By Christmas, when they have their next vacation, a year will have passed without seeing them. Nevertheless, I'm sure that in October I'll get new financial support so that they can come in December. On no account can I return to the U.S. until I finish. After meeting with the publisher in October I'll go to London for final research at the British Museum newspaper library -- they have all the newspapers from Quito, Montevideo and Mexico City for the periods when I was at those stations, and I will be able to reconstruct the most important operational episodes accurately.

These weeks are black. I am very unsure of what may happen.

Paris 6 October 1972

How is it possible? I cannot believe that somewhere in the five or six hundred pages I've written, this editor couldn't see a book. Or if he could, perhaps he thinks I'm a bad risk. What he wants is drama, romance and glorification of what I did. When he left two days ago for Orly he barely showed any interest.

One can force a positive attitude at times, but to hit a new low after three years has its effects. Nevertheless I continue. Yesterday I began to record on tape the essential information that I can remember on what remains of the book in this version. These are descriptions of operations that I knew of or participated in and that will serve as illustrations. This is easily the most important part and will include eighty to ninety episodes that I will reconstruct from press reports in London, adding our role. By the end of next week the tapes will be finished, and I'll store copies in a safe place. The following week I'll go to Brussels for a short visit with my father who will be running through, and from there to London.

The CIA has been active in recent months trying to bring pressure. In September the General Counsel visited my father in Florida, and also Janet, to express Helms's concern over the book and my trips to Cuba. He also left copies of the recent court decision holding former CIA employees to the secrecy agreement and requiring submission of manuscripts for approval prior to publication. Sorry, but the national security for me lies in socialism, not in protection of CIA operations and agents.

Just after the General Counsel's visit to Janet I received a letter from my oldest son -- almost eleven now -- telling me of the visit:


I wanted to tell you that a man from the government came to talk to mom about you, but she did not say anything except your address. What they told her is that they wanted to pay you money to stop and that they would offer another job (the job I'm not certain about).

I went to a telephone at the University of Paris where everyone calls overseas without paying -- my son told me he had overheard the conversation while hiding after having been told to go away. The address doesn't matter because it's Sal's -- he's been getting my mail since May so that I can keep Catherine's studio secret.

In order to keep money coming from Leslie and Sal during these final weeks I have kept up the fiction of following through with a team effort in London. They have both agreed to accompany me there -- Sal will transcribe the tapes and Leslie will help with newspaper research at the British Museum. If I can get support in London I'll break with them completely but meanwhile I need their help. Today at a previously arranged meeting Leslie brought me a used typewriter that she bought only minutes before to replace the one Salient me last July. Apparently the owner of the borrowed typewriter called at Sal's and angrily demanded the immediate return of his machine. So I had to rush back to Catherine's studio for the borrowed typewriter which I returned right away to Sal. I don't need the one Leslie bought because I'm making the recordings, so I left it at Therese's apartment there in the Latin Quarter where Leslie gave it to me.

Little things about Sal and Leslie keep me suspicious. Often after pre-planned meetings with them I pick up surveillance and they continue to press me about where I'm living. I must hurry to finish the tapes -- anyone would be able to use them to finish the research and the book. Things can only get better from now on.
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