The Chilean Connection

In the early summer of 1976, Col. Manuel Contreras, head of DINA, Chile's secret police, launched an operation to assassinate exiled Chilean leader Orlando Letelier. It has now been learned that within a few days of setting that plot in motion, Contreras made a secret visit to Washington DC, where he met with officials of the Central Intelligence Agency and also negotiated the purchase of illegal weapons and electronic spying equipment with a firm run by former CIA officers Edwin Wilson and Frank Terpil. Wilson and Terpil gained notoriety after a Federal grand jury accused them of exporting terrorist goods and services to Col. Muammar el-Qaddafi of Libya, whose regime is high on the Reagan Administration's enemies list. By 1978, the Federal Bureau of Investigation had established that DINA agents killed Letelier on US territory. That evidence, combined with the newly revealed materials showing that former CIA officials cooperated with other DINA covert operations in the United States, would seem to compromise the Administration's efforts to rehabilitate Chile's military dictatorship as an anti-Communist ally. The information about DINA's dealings with the Wilson-Terpil firm is based on the accounts of one of those present at the meeting with Contreras in early July 1976, and on sales documents obtained by Federal investigators. This report will examine DINA's purchase of weapons and sophisticated electronic equipment at that meeting in violation of a Congressional ban on such sales to Chile.

The new information can be placed with startling results into the complex framework of evidence already compiled by the FBI in the five-year-old Letelier case, and it helps explain many previously unresolved questions, especially those regarding the CIA's behavior. Earlier evidence of DINA's operations, supplemented by this new information about the three months preceding Letelier's murder on September 21, 1976, amounts to a compelling case that the CIA was involved in arranging Wilson and Terpil's arms and equipment sales to DINA. Furthermore, involving the agency in the violations of US laws may have made it possible for DINA to graymail the CIA into withholding incriminating information that could have helped solve the crime. The evidence leading to a breakthrough in the Letelier case will be the subject of a future Nation article.

Colonel Contreras' meeting with Terpil was described to us by Kevin Mulcahy, a former CIA employee who was working for Wilson and Terpil and who was in attendance. Mulcahy's account of the arms transactions was confirmed by documents drawn up by one of Wilson and Terpil's companies. The purchaser was identified as a DINA front organization based in Santiago, Chile.

At the time of the Contreras-Terpil meeting in Washington, Mulcagy was president of Inter-Technology Inc., and arms trading firm established by Wilson and Terpil. It was Frank's meeting, Mulcahy recalled, and it took place on a rainy Friday afternoon in early July. Terpil directed Mulcahy and another American, a former Navy intelligence officer who was in charge of Latin American operations for Wilson, to a nondescript two-story residence on the 1700 block of R Street in northwest Washington. It looked like a typical CIA safe house, Mulcahy said. There, in a second-floor office, Terpil introduced Mulcahy to two Chileans. One of them was a heavy-set man in his mid-40s with drooping eyelids and a kind of benevolent look on his face known as Manny Contreras, Mulcahy recalled. Although he was wearing civilian clothes, the DINA chief nevertheless exuded a clearly military aura. The other Chilean, whose name Mulcahy has forgotten, served as an interpreter. Mulcahy said that Terpil was deferential toward Contreras: I had seen Frank slap heads of state on the back, but with this guy he was downright respectful, and kept his voice back. Contreras' reputation had obviously preceded him. To both his enemies and fellow intelligence officers Contreras was known as the most efficient and ruthless secret police chief in the Americas. He had, within the space of two years, virtually eliminated political opposition to Chile's military dictator, Gen. Augusto Pinochet. Mulcahy recalled that after Terpil opened the meeting, we talked with Contreras about the details of an integrated security system. (Mulcahy described this to us as a variety of devices that might be ised to secure an embassy or a like facility.) The system included card readers, pinhole cameras, telephone tapping equipment, digital scanners to monitor telex traffic and other sophisticated electronic gear. Contreras purchased some of this equipment. The purchase orders shown to us by investigators list transceivers, wireless inductor earphones and micro-mini microphones.

The next item on the agenda was a large quantity of Colt Cobras, which Contreras had expressed interest in buying. The Cobra, a .38-caliber handgun, is used by many police agencies because it is a standardized weapon with interchangeable parts that has proven both durable and efficient. A document dated July 8, 1976, names the parties to the sale as International Representatives Inc. and Renato Sepulveda R. of the Universal Export Company in Santiago. The document names Mulcahy as president of Inter-Technology, and it calls for the delivery of 1,059 Colt Cobras and 1 million rounds of ammunition within thirty to sixty days. The invoice also gives the terms of payment, specifying that the letters of credit should be issued to Inter-Technology by a Washington DC bank. The price of the Colt revolvers was $366,646.50; the bill for the electronics equipment came to $66,089. Justice Department officials have confirmed that the invoices are genuine and that a Chilean known as Renato Sepulveda R. told an American businessman acting as an intermediary between Terpil and the Chileans that he was with the Chilean National Police. The same officials told us that Sepulveda worked for DINA and that Universal Export is believed to be a front operation run by the Chilean intelligence agency.

Another topic at Contreras' meeting with Terpil was an item known in the clandestine arms trade as Parker. This is a device disguised as a ball-point pen that fires a single .22-caliber bullet. The projectile can be made more lethal by filling it with a cyanide compound or a material that explodes after piercing the skin. The Parker's innocuous appearance, of course, makes it an obvious assassination device. Mulcahy recalled that when the meeting ended, he shared a cab with Terpil and the former Navy intelligence officer to Wilson's K Street office. During the ride they commented on Conteras' having interrupted the discussion to ask questions in fluent English, even though he had relied on a translator much of the time. After they arrived at Wilson's office, Mulcahy and Terpil were debriefed by Wilson, who mentioned that Contreras would also be attending a casual social occasion in honor of Gen. Vernon Walters, Deputy Director of Central Intelligence, who was retiring. In September 1976, Mulcahy, who had developed pangs of conscience, informed a CIA official of Wilson and Terpil's illicit activities. Mulcahy will be a principal government witness against the pair, who were indicted last year by a Federal grand jury for sales of arms and explosives to Libya, but he contends that in July 1976, when the meeting with Terpil and Contreras occurred, he believed that the CIA was involved as a silent partner. Although he knew the arms transactions he was arranging for Wilson and Terpil were illegal, Mulcahy says he thought that the agency had approved them. If Mulcahy thought this, it seems likely that DINA's chief, Colonel Contreras, would have assumed the same thing.

Certainly an enterprise such as the one Wilson and Terpil were engaged in might have been useful to the CIA. Wilson and Terpil (and others like them) could supply goods and services that pariah countries could not legally acquire because of the ban on US arms sales to nations with a record of serious human rights violations. That high-level CIA officials were kept abreast of Wilson's transcations with Libya has been established in other published accounts of the Wilson-Terpil case, notably by Seymour Hersh in The New York Times Magazine. So it is a fair assumption that Wilson also informed the CIA of his dealings with Chile's DINA. The case for direct CIA complicity in this illegal transaction, however, emerges from FBI evidence about events the same month leading up to Letelier's assassination. The new information about Contreras' visit to Washington pus that earlier, still unrevealed evidence in a new light. The earlier evidence indicates that a close working relationship existed between the CIA and DINA during this period, and there are explicit references to the CIA helping the Chilean intelligence agency arrange illegal arms sales - the details of which coincide remarkably with the transaction we have documented above.

Its primary significance, however, is in breaking new ground in the Letelier case, and it will be the subject of a subsequent article in The Nation. The Wilson-Terpil affair is growing into a scandal that involves intelligence abuses of the same magnitude as those unearthed during the Senate hearings presided over by Frank Church in 1975. The House Intelligence Committee is looking into Wilson and Terpil's activities, although only as they pertain to their Libyan operations. Obviously, the investigation must broaden and probe Wilson and Terpil's connection to the United States' new authoritarian friends in Latin America.

Copyright 1981 The Nation