Chile: A Synarchist Showcase

by Dennis Small and Cynthia Rush

If President George W. Bush and his controllers have their way, the United States will soon be following in Chile's footsteps—straight into hell. Bush himself has been explicit. In Santiago, Chile for a Nov. 19-21, 2004 summit of APEC, he stated that "Chile provides a great example for Social Security reform."

They may not have told the President yet, but it is more than Social Security privatization that his synarchist controllers seek to replicate from the Chilean model. Chile is their test-tube case for:

  1. The untramelled looting of the country's physical economy and labor force, under three decades of the lunatic doctrine of free trade, as concocted by the notorious "Chicago Boys" disciples of George Shultz and Milton Friedman.
  2. The bankruptcy meltdown of the national banking system under a mushroom cloud of financial speculation, and its resurrection based principally on a gigantic captive income stream, coming from the privatization of Social Security.
  3. The use of cold, political terror and police-state repression against all potential opposition to these measures, including "the formation of special teams from member countries who are to travel anywhere in the world to non-member countries to carry out sanctions—up to assassination—against terrorists or supporters of terrorist organizations."

These are the words used in a declassified 1976 FBI memo, to describe the functioning of the assassination squads that had been set up by Chile's Pinochet dictatorship, along with five other South American governments, under the code name Operation Condor. If reading this quote made you nervous, because it sounds just like one of Vice President Dick Cheney's latest press conferences or a recent Donald Rumsfeld rant, then you are starting to get our point:

These are the same synarchist forces, intent on carrying out the same fascist policies, in order to defend the same bankrupt economic system. Chile isn't "over there"; it's here.

1. Social Security: 'But It Worked in Chile...'

No, Social Security privatization did not work in Chile—except for the foreign bankers who stole the money.

Social Security was privatized in Chile in 1981, as per the specifications of Harvard-trained economist and Mont Pelerinite ideologue José Piñera, who had been Labor Minister for Pinochet from 1978-80. After 23 years in operation, the Chilean system is such a flop that almost all political forces in the country—labor, business, government, thinktanks—now agree that it has to be jettisoned, and some sort of an alternative devised. In fact, in early 2005 the Chilean Congress will be reviewing a government proposal on how to revamp the bankrupt system—at exactly the point that the Bush Administration is trying to sell the same lemon to the U.S. Congress!

Here's the real story of Chile's social security privatization.

In 1973, at the time of the Pinochet coup, Chile had a U.S.-style "pay-as-you-go" social security system, to which both the worker and his employer contributed, and which covered about 78% of the labor force.

Through a splashy multimillion-dollar propaganda campaign, Piñera and Gen. Pinochet's "Chicago Boys" told Chilean workers the same thing that Bush is telling Americans today. A large number of funds (run by banks, insurance companies, and other financial vultures) would offer workers an array of "choices" on how and where to invest their money, without government meddling. They promised workers a high rate of return and a secure future, if they would switch from the government to the private funds.

The only thing that "enrollees" would have to do, is allow a mandatory 12.5% of their monthly paycheck to be deducted and deposited into the Pension Fund Administrator (or AFP, as they are known in Chile) of their choice, who would then "wisely" invest the money. Unlike the old system, employers would make no contribution at all.

One million Chilean workers did switch to the new system in 1981. They were offered incentives and rewards, including an initial wage increase. "Most of the Chilean workforce was, in fact, forced to join the new system, including all those workers hired since 1981, who were given no choice at all," according to the Chilean economist and U.N. researcher Manuel Riesco, a member of the board of CENDA (Center of National Studies of Alternative Development).

Where are those workers now? Again Riesco:

"If two co-workers reach retirement age in Chile today, both with the same salary and the same number of years paying into social security, one of whom remained in the old pay-as-you-go system and the other who changed to the AFP system back in 1981, the latter will receive less than one half of the pension of the former."

How is that possible?

Consider Fig. 1, which gives the breakdown of social security coverage for the Chilean labor force of 6.1 million workes today (the total population is about 16 million). For starters, there is about 10% official unemployment; and another 26% (or 1.6 million) are (mis)employed in the so-called "informal economy"—i.e., that vast portion of the economy of every Ibero-American nation that ranges from the semi-legal to the outright illegal, off-the-books activities. Street hawkers and beggars are the classic cases of such informal "employment." None of them pays into the system; none of them gets anything out. In terms of physical-economic reality, these are also de facto unemployed.

At least another million workers (or 16% of the labor force) are under-employed, with seasonal jobs which may last anywhere from a few months to under a year. Half of all such jobs last less than four months. This kind of job insecurity and labor recycling is so widespread in Chile, that many analysts put the number at much more than 1 million. According to the Chilean research institute Terram, 93% of recent employees won't last more than a year in their new jobs. Such workers almost never qualify for social security—because under Piñera's fascist law a worker has to pay in for 20 years, in order to receive benefits upon retirement.

That's already 52% of the labor force who get nothing from the privatized social security system. The remaining 48% do pay into the system with some regularity, but 28% of the labor force, or 1.7 million workers, will not qualify for even the minimum pension of $110 a month, which is the state-guaranteed minimum. In other words, their "investment" in their AFP yields less than $110 per month—and the Chilean government has to pony up the difference to that amount, out of the federal budget. But most people in this situation don't even apply for this "assistance pension" offered by the state, which today comes to about $50 a month and which, in any event, is subject to a quota ceiling of 300,000 such grants—and there is a long waiting list. To even qualify for such aid, a worker has to prove that he is "indigent"—just like the fascist Hartz IV reforms in Germany. Their only other recourse is to withdraw the meager funds accumulated in their individual pension accounts, once they retire—assuming it hasn't been lost to derivatives speculation by their AFP.

When all is said and done, only 1.2 million Chilean workers—a mere 20% of the country's labor force—qualify for more than the minimum pension of $110 per month.

Enron Had Nothing on Chile's AFPs

The truth is that Chile's private pension system is a gigantic Enron-style swindle. The financial sharks who set it up never intended it to be anything other than a mechanism to loot the workforce and the physical economy, while they and their allied financial predators reaped huge profits.

For starters, the AFPs charge gigantic commissions for their services. The official Superintendent of Pension Fund Administrators (SAFP) estimated that, as of March 2002, some 25-32% of each mandatory deduction went to payment of AFP "commissions." A May 2002 report by the United Nations Development Plan (UNDP), written in conjunction with Chilean experts, found that this adds up to about $500 million in commissions annually. Between 1981 and December 2000, commissions totalled $6.2 billion. This compares handsomely with the $35.5 billion in Assets Under Management (AUM) by the AFPs, as of the end of 2001: it's close to 20% of the total

According to the same report, the owners of the AFPs had an average profit rate of 33.8% in 2001, and 50.1% in 2002 (a year of economic recession in Chile). One of the largest funds attained a profit rate of 209.8% that year! From 1997 to 2004, the average annual profit rate was a cool 50%. Chilean law professor Juan Gumucio aptly remarked that AFP managers "make more money than drug traffickers selling white powder."

CENDA concludes that the country's privatized pension system is the "most protected industry in Chile's history, created by those who criticized our earlier protection of industry." Shultz's Chicago Boys aren't averse to protectionism—so long as they are the beneficiaries.

While the AFPs made out like bandits, not so their enrollees. Where did their money go? In 1981, the total Assets Under Management by the AFPs were about $22 billion. A 1997 World Bank report documented that, although individuals' average rate of return on invested funds started out at 12.7% in 1982, it dropped progressively over the next decade. According to a study prepared by The Century Foundation, by 1994 more than half of the AFPs were incurring losses. In 1995, about two-thirds of what was then a $25-billion national pension fund was invested in highly speculative paper linked to the international derivatives bubble. In September 1995, the funds lost $1.5 billion of their total value, and had negative real returns of @ms2.5% for that year.

A study by a Chilean brokerage firm, CB Capitales, found that the real rate of return on the individual accounts in the AFPs has averaged only 5.1% since 1982.

Today, 33% of AFP funds, which total $36 billion, are invested in Chilean government debt which, under current conditions of a dollar collapse and global financial upheaval, can hardly be called stable. Current regulations permit up to 12% of the funds to be invested overseas (and there is pressure to increase that allowed percentage), and this share is particularly likely to end up in shaky global derivatives markets. The rest goes into unstable mortgage securities, bank CDs, or corporate debt.

The Synarchist Owners

Who are the real owners of the Chilean AFPs? After starting out with 18 funds in 1981, today there are only six left—and five of them are foreign controlled, accounting for 94% of the total Assets Under Management (see Table 1). In other words, Shultz's Chicago Boys handed over some $36 billion belonging to Chilean workers, to his synarchist international banker pals—not a bad heist.

Take the case of Spain's BBVA, which controls almost a third of the Chilean pension system. Banco Bilbao Vizcaya Argentaria has historic links into dirty-money-laundering circles, and—along with Banco Santander—has been the driving force of Spain's imperial re-colonization of Ibero-America's entire financial system, on behalf of British interests. Banco Santander, which controls one of Chile's major AFPs, is also the single largest foreign bank in Ibero-America, controlling 9% of the continent's banking assets.

Banco Santander is a real piece of work. It is an old, oligarchic Spanish banking house, dating back to 1857, whose current owner, Emilio Botin, is considered the richest man in Spain. Under Botin, Santander established a "strategic alliance" in 1987 with none other than the Royal Bank of Scotland (RBS), which is at the center of the British royal family financial apparatus. One of the leading members of the board of RBS, the Earl of Airlie, was until 1984 president of Schroeders plc, the British merchant banking house which, with its German corresponding bank, helped finance Hitler's rise to power in the 1930s.

In 1999, Santander signed a second strategic alliance with another hard-core synarchist financial institution: Assicurazioni Generali, the infamous and ultra-powerful Venetian insurance house, which helped put Mussolini in power in Italy.

Where Chile led on privatizing social security, the rest of Ibero-America followed (see Table 2). The only major countries that have not yet followed suit, are Brazil and Venezuela. Of the five main privatized systems, Chile's is by far the largest. As Table 2 also indicates, the level of foreign control in those five countries is a dramatic 89%—which surpasses even the level of foreign banking control in those countries, averaging some 62%.

But it is the same foreign synarchist banks which control both the AFPs and the commercial banks: BBVA, Santander, and Citibank (see Table 3).

Is this what Bush means when he says the U.S. should follow the Chilean model of Social Security reform? Do you really want your pension in the hands of the same synarchist bankers who put Hitler and Mussolini in power?

2. The Economy: Resurrecting a Corpse

Now we turn our attention to the broader economic process of which Chile's Social Security privatization was a part—i.e., the other features of the Chilean model which Bush et al. also intend to copy here. For this, we rely on a study first published by Executive Intelligence Review magazine in its July 21, 1995 issue, which revealed the fraud behind the promotion of the so-called "Chilean economic miracle."

On Sept. 11, 1973, Gen. Augusto Pinochet led a military coup which overthrew the socialist government of Salvador Allende. Chile under Pinochet became the first country in the world to adopt the economic quackery of 1976 Nobel Economics Prize winner Milton Friedman of the University of Chicago, where George Shultz was the leading economics light. From the outset, all of Pinochet's key economic advisors were "Chicago Boys," seconded directly by Friedman.

As the London Economist wrote in its June 3, 1995 issue, "For 25 years Chile has been a laboratory for radical political and economic experiments, a social-scientific guinea pig."

These fanatics quickly transformed Chile into a free-market showcase. Over the next decade, tariffs were slashed; the currency was left to float; most of the large state sector was privatized, sold off for a song; government spending, especially on social welfare items, plummeted; wages and employment went into free fall. And a speculative bubble of impressive proportions was fostered.

The labor component of the policy was particularly brutal. According to the 1996 book "Chile: The Great Transformation," by Javier Martinez and Alvaro Diz, labor policy between 1973 and 1979 was characterized by "savage deregulation." Unions were dissolved, and index-linked wage increases, state contributions to unions, and collective bargaining were all eliminated. One of the key features of the labor reform package introduced in 1979 by Pinochet's Labor Minister, José Piñera—the future architect of social security privatization—was the abolition of the minimum wage.

Trade-union federations were initially allowed only an advisory role, but by 1981 they were abolished altogether. The right to strike was permitted, but only for a maximum of 60 days, after which employers could declare a lockout, shut down the company, fire workers, etc. Workers could be fired without cause. By 1980, the number of unionized workers fell to below 10% of the work force. The average size of unions was reduced by a third.

By 1989, the average worker was worse off than in 1970, and the poverty rate stood at 41.2%. Where in 1970, the poorest 40% of the population consumed 2,019 calories in their daily diet, by 1980 this had fallen to 1,751 calories, and to 1,629 calories by 1990. Between 1972 and 1988, the percentage of Chileans without adequate housing increased from 27% to 40%. There was inordinate growth of slums in the area around Santiago as well as in other major cities, where the poor ate mostly in soup kitchens.

In 1975, the unemployment rate stood at 18.7% of the labor force, and it registered an average of 15.7% over the following ten years. At one point in 1983, unemployment was 34.6%.

Today, 77% of the labor force has not finished high school. Some 72% are considered unskilled or semi-skilled. According to an ILO study, only 30% of all jobs can be classified as "decent" in Chile—decent being defined as a job in which there is a labor contract, and in which a fair wage is paid, allowing for the worker's dignity.

And under these inhuman conditions, 83% of all Chilean workers work an average of 11 hours per day—the legal limit is 10 hours per day—according to the official Labor Directorate.

In short, in the three decades since British free-market policies were imposed on Chile, most aspects of Chile's physical economy—which should not be confused with misleading monetary parameters such as Gross National Product (GNP)—fell in per-capita and per-household terms. Yet during this period, the speculative bubble of foreign debt grew many times over, while interest on that debt was religiously paid to the creditor banks and the International Monetary Fund.

These policies plunged the country into national bankruptcy in late 1982, but then were continued in a somewhat modified form from 1983 until the present. By imposing a new package of drastic, forced savings—including the groundbreaking privatization of the national pension fund—the bankers managed to keep looting the economy in order to pay the foreign debt.

For the international financial elite, Chile is thus an experiment in showing how a country can be looted to the point of breakdown, and then looted again. As the London Economist was quick to reassure its readers, "The 1982 crash did not, however, provoke any fundamental shift away from the basic aims of trade liberalization and a shrinking state sector." Instead, Chile slightly retreaded the same neo-liberal policies, got monetary inflation under control, and established a new, more "stable" basis for continued debt looting. As the June 6, 1995 Washington Post explained the matter, what Chile shows is that the "fallen can rise again ... after the country's spectacular economic collapse in 1982."

The Myth Dispelled

Look at the performance of Chile's physical economy from 1970 to the early 1990s, as measured in per-capita, per household, and per-square-kilometer physical units (tons, megawatt-hours, and so forth). Then look at Chile's physical-economic trends in juxtaposition to the growth of the country's foreign debt bubble over the past decades.

Figure 2 looks at the production of market baskets of basic consumer, producer, and infrastructure goods in Chile, as measured principally in per-capita terms in EIR's 1995 study. The first curve to look at is the production of consumer goods. Note that this is not an index of consumption—that would have to take imports and exports into consideration as well—but of the Chilean economy's ability to produce its own consumer goods. Although the items included in the index (grain, meat, milk, pulses, fruits; and vegetables, autos, and television sets) are by no means comprehensive, they are nonetheless sufficient to indicate the trend and the magnitude of changes involved overall.

As Fig. 2 shows, Chile's production of consumer goods was already skidding downhill under Allende from 1970-73, and then it plummeted another 13% (from an index of 100 to 87) in the first nine years of the reign of the "Chicago Boys." Although there has been a marginal recovery since 1982, the level in 1992 was still 6% below what it was in 1973. In other words, after two decades of free-trade dogma, Chile's physical economy was even less capable today of producing its own population's consumption needs, than it was when the "Chicago Boys" took over. Within this category, the production of food items performed relatively better than that of manufactured consumer goods.

Figure 2 also shows an index of per-household production of a market basket of nine producer goods, which fared only marginally better than the consumer goods. After a decade of stagnation, the index rose to a level of merely 135 in 1991. If we look back over the period since 1973, this averages out to a growth rate of less than 1.7% per year. Although this is certainly better than a decline, such a growth rate is pathetic when compared to actually successful cases of economic development, such as South Korea or Japan, which often displayed real growth rates of upwards of 10% per year in such categories.

It should further be noted that the category of producer goods includes both manufactured items and mining output and other raw materials production. When you look at the fine print, it turns out that the manufacturing component of the index grew far more slowly than the average; in other words, most of Chile's post-1982 growth in producer goods came from raw materials such as copper. Copper output per household grew by 79% between 1973 and 1993, which comes out to an average annual rate of 3%, nearly twice as fast as the producer goods category as a whole. The production of copper, like that of other raw materials, was geared for export rather than domestic consumption. What this points to is the fact that the few areas in which Chile's physical economy did grow, were principally those that benefit exportation in order to service the foreign debt, and not the kind of industrial production that develops the internal economy.

Figure 2 also shows the behavior of an index of production of infrastructural goods. This includes both "hard infrastructure" items, such as freight shipments by railroad and installed electrical capacity per household, and "soft infrastructure" indicators, including the number of hospital beds and school enrollment figures per capita. It is here that we see the most far-reaching impact of Chile's Conservative Revolution-style cutbacks in government spending, since infrastructure tends to depend more heavily on the direct role of the state than does the producer or consumer goods category. As the graph shows, infrastructure was devastated in the first decade of "Chicago Boys" wrecking, and it continued to decay in the second decade. Over that 20-year period, Chile lost more than a quarter of its infrastructure capability.

This is a physical-economic catastrophe. Infrastructure development plays a crucial role in a viable economy, by improving overall labor productivity. A 26% collapse of infrastructure thus implies dramatically decreased efficiency and rising social costs of production in all areas of the economy.

Compare this to the geometric growth of Chile's cancerous foreign debt, from 1973 to the present (see Fig. 3). While the country's physical economy was decaying, a gigantic speculative foreign debt bubble was built up by the "Chicago Boys" and their international sponsors. From a mere $3 billion in 1973, it edged upwards for a few years, and then in 1977, took off like a rocket. Within three years it had more than doubled, from $6 to $12 billion, and by 1982 it had gone past the $17 billion mark. Today it stands at $43 billion. As Fig. 3 shows, there has been an increase of more than tenfold in Chile's foreign debt over the last three decades.

As Fig. 4 shows, in 1980 the foreign debt was $12 billion, and over the next 23 years a total of $42 billion was paid by Chile as cumulative interest payments on that debt. Yet, despite the fact that three and one-half times the amount initially owed was paid in interest alone over that period, by 2003 the foreign debt had risen from $12 billion to $43 billion. In other words, 12@ms42 = 43, it would appear. That is what can be called "bankers' arithmetic."

Such systematic servicing of its foreign debt at the expense of the physical economy, placed Chile at the head of the pack of Ibero-American nations in its per-capita interest payments (see Fig. 5), with a cumulative total per capita of $1,615 paid between 1981 and 1993. Only oil-rich Venezuela paid more than that, on a per-capita basis.

Chile was able to do this because, especially from 1982 onwards, the entire economy was gutted to drastically curtail domestic consumption, and instead channel an ever-larger share of national production into exports, in order to earn dollars with which to pay the debt.

Is that the policy that you want Shultz and Bush to now re-import back into the United States?

3. Political Terror: The Operation Condor Murder Machine

George Shultz is fond of protesting that he is only for the economic policy of the Chilean model, and not for its "political excesses." For example, in an October 2000 interview with PBS-TV, he argued that Chile "had the only decent economy in South America in the mid-80s and on," but that the Pinochet dictatorship "no doubt did some unnecessarily brutal things in the process." Social Security privatization czar José Piñera also likes to wring his hands in public about the "human rights violations" of the government he himself served in for years!

But there is a simple fact which both Shultz and Piñera know perfectly well: The political terror, repression, kidnappings, murder, and outright genocide of the Pinochet years, were the cf2>sine qua non of the "success" of the Chilean economic model. They were part and parcel of the Nazi-like looting of the Chilean labor force and physical economy.

First, the bloody Pinochet coup of Sept. 11, 1973 was orchestrated by synarchist hitmen George Shultz and Henry Kissinger, from inside the Nixon Administration—as is widely known.

Second, throughout his 1973-90 regime, Pinochet silenced dissent with the jackboot. The aging dictator is currently facing indictment for a number of such cases, including the kidnapping of nine dissidents, and the murder of one of them, during his regime. Since Chilean Judge Juan Guzman found on Dec. 13 that the 89-year-old Pinochet was "mentally competent to face a criminal trial in Chile," the case is expected to proceed, and will probably be joined by further charges related to $8 million (out of a reported net worth of $15 million) that Pinochet placed in secret accounts in Riggs Bank in Washington, D.C.

Pinochet's financial advisor Oscar Aitken has told interviewers that Riggs president Joseph Albritton personally managed Pinochet's accounts in that bank, and that he was "Pinochet's biggest admirer in the banking world." According to Aitken, Albritton "promised, and delivered, rates of return that doubled Gen. Pinochet's capital every three years."

The Chilean Congress is also probing the business activities of 38 Pinochet relatives, in connection with money-laundering and tax evasion. It is revealing that Pinochet's son-in-law, Julio Cesar Ponce Lerou, became president of the government agency that supervised the privatization of all state-owned companies during the dictatorship.

Operations Condor and Gladio

But the top-down, international synarchist control of the terror apparatus associated with the Pinochet dictatorship, is best seen in the Operation Condor apparatus, under which Chilean military and intelligence forces worked with their counterparts from five other South American countries—Argentina, Bolivia, Brazil, Paraguay, and Uruguay—from the mid-1970s into the early 1980s.

Lyndon LaRouche described it in the following terms, in a mid-December 2004 discussion with Australian youth:

"The Pinochet Administration and the coup that brought Pinochet to power in 1973, was part of what was called Operation Condor. Operation Condor was really a Gestapo SS-type of murder operation, using people as a core who had been exiled from Nazi Germany via Spain, into the Americas. They were part of what was called the 'ratline' of Nazis, wanted Nazis who had successfully found niches for their existence, in Bolivia (such as the case of Della Chiaie, from Italy, who was a Nazi), in Chile, and in Argentina.

"From the early 1970s, there were thousands of deaths, of disappeared people, under a torture and murder operation, run by these Nazis, called Operation Condor.

"In Operation Condor, then-dictator of Chile Pinochet was a key figure. Also a key figure was, of course, Henry Kissinger, who was then Secretary of State; and also, more significant than Kissinger, was George Shultz, who is the key figure of what was called the 'Chicago Boys,' who set up the whole package, including the Pinochet dictatorship and the Pinochet launching of the social security system in Chile."

Like NATO's Operation Gladio in Europe, with its "stay behind" units, Condor included former SS and Nazi war criminals, who escaped Europe after World War II through the so-called "ratlines," plus second-generation fascists. For example, one of Operation Condor's reported activities was its support for the 1980 "cocaine coup" orchestrated in Bolivia by Nazi emigré Klaus Barbie.

The leadership of Operation Condor came out of the synarchist factions of the region's Armed Forces, which coordinated with the neo-fascist networks behind Europe's Operation Gladio and the "strategy of tension" it spawned, especially in Italy. These Operation Condor synarchists killed, tortured, and "disappeared" thousands of Ibero-Americans, so that Shultz and his Chicago Boys could implement their policies not only in Chile, but also in other countries of the region, such as Argentina. In that country, a military coup in 1976 put the British-trained oligarch José Martinez de Hoz in charge of the country's economy, as Finance Minister. His policies closely resembled those of Chile's Chicago Boys.

Shultz, Kissinger et al. oversaw the South American-wide project from the top. On the ground, the terrorism unleashed by left-wing synarchists fuelled Operation Condor's military barbarism, ultimately engulfing the region in a "dirty war" which caught thousands of innocents in the crossfire. Exemplary of this is the way in which Argentina's secretive Tacuara Group, a synarchist-run organization of the 1950s, split in the 1960s into the left-terrorist Montoneros, on the one side, and the right-terrorist Tacuara, on the other. These two groups then helped instigate the dirty war of the 1970s, in which left and right massacred each other, and the shattered nation of Argentina was left helpless in the grip of the evil Martinez de Hoz policies.

A declassified FBI memo from 1976 gives a frightening, first-hand report of how the Operation Condor assassination squads worked. Written by FBI "attaché" Robert Scherer, who was posted in Buenos Aires, the Sept. 28, 1976 memo reports that Operation Condor was set up to monitor and carry out joint operations "against terrorist targets in member countries."

Scherer describes the international scope of Operation Condor, when he reports on its "phase three." This involved "the formation of special teams from member countries who are to travel anywhere in the world to non-member countries to carry out sanctions—up to assassination—against terrorists or supporters of terrorist organizations from Operation Condor member countries." Were a "terrorist supporter" from an Operation Condor member country to be located in Europe, a special team would be sent to the named country to "locate and surveil" the target; a second team would then be deployed to carry out "the actual sanction" against the target. France and Portugal were identified as the European countries mentioned "for possible operations under the third phase of Operation Condor."

The likelihood that the 1976 assassination in Washington, D.C. of Chile's former Foreign Minister, Orlando Letelier, was executed by an Operation Condor team, was also discussed in the 1976 FBI memo: "It is not beyond the realm of possibility that the recent assassination of Orlando Letelier in Washington may have been carried out as a third phase action of Operation Condor." U.S. citizen Michael Townley, subsequently convicted of organizing the Letelier assassination, was not only a member of the Chilean secret police DINA, but also reportedly worked with Italian fascists linked to Operation Gladio.

Even more direct coordination between Operations Condor and Gladio is suggested by the facts surrounding the attempted murder of former Chilean Vice President Bernardo Leighton, while visiting Rome in October of 1975. Two Italian neo-fascists, Pier Luigi Concutelli and Salvatore Falabella, allies of the notorious Nazi Stefano delle Chiaie, shot Leighton and his wife as they returned to their apartment. Both survived the attack.

Augusto Pinochet and Gen. Manuel Contreras (head of the DINA secret police) reportedly met with the two Italian hitmen when they attended the funeral of Spanish fascist Francisco Franco in Madrid in 1975. Contreras is said to have maintained an ongoing relationship with Della Chiaie.

These, then, are the Nazi enforcers of Chilean-style privatization of Social Security. Are you willing to have them run the United States as well?

Next: Theft Plans for the United States

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