A push is on for electric cars, which are copper-intensive. As such, copper, largely from Chile, is the next big thing. Will this boom benefit the Chilean population? The public in Chile currently owns the world’s largest copper deposits – the Chuquicamata mine and two others – through a state company, Codelco. However, Chile’s wealthy right wing wants private companies to gain control of this massive asset – by buying Codelco.
To this end, Chile’s right currently drafted a new constitution that likely will call for “privatizing” public mines. Rightists hold the majority of political power now in Chile.[1] They stood to increase that power had their
There are no sources in the current document.didn’t, but North American investment advisors still accuse Chile, with its public copper company, of being still insufficiently friendly to foreign investment in copper. Thus still stands a palpable tension around opportunity for US interests to regain control of the Chuquicamata deposit, a prize fought over for decades.
From around 1920, US companies owned the Chuquicamata copper reserve as Chile licensed mining by Anaconda Copper[2] – a deal that held until 1971. With this ownership came immense political power in Chile. The Montana Historical Society, a booster of Anaconda, writes,
“Maximizing. its opportunities whenever it could, Anaconda Copper developed and exploited its mining and political interest….The result was…a (50-year) corporate reign (over Chile).”[3]
Chile’s government considered expropriating Anaconda’s mine in the early 1950s. The US government brought pressure. It forced Chile to pass a new law, in 1955, “keeping the mines private, and in service of US needs.” As one scholar described this “new deal” for Anaconda,[4]
“The Nuevo Trato represented a triumph for rightists in Chilean politics and the failure of Chilean efforts to challenge the U.S. government and copper companies.”[5]
Eventually, Chile did expropriate Anaconda’s holdings, in 1971, intending for that copper to benefit the public. But instead, the US helped install a dictatorship, that of General Agosto Pinochet, who instead funneled copper profits to his army – through a newly founded Codelco company. Also under Pinochet, Chile installed an American-influenced “neoliberal” economic model – practically unrestrained capitalism. Pinochet didn’t reinvest profits in Codelco to keep the company healthy.
As a result, today Codelco is ailing financially. Leftist president Gabriel Boric acknowledges the fact. This is grist for the Chilean right to mount fresh calls for “privatization” – control by private capital – of the world’s largest copper asset, the Chuquicamata mine. The Chilean right has used dirty tricks in the past to try to end public copper ownership.
Coppergate
In 1993, a scandal broke around Codelco management. It made worldwide financial news. In the US, the scandal was called “Coppergate.” It was of vital interest to US copper investors. In this context, it is not surprising that Coppergate had CIA earmarks.
Investigators discovered bribery of a Codelco copper trader, Juan Pablo Davila, whose trades lost Codelco millions of dollars – enough to create weakness in Codelco’s balance sheet. This weakness was quickly noted by pro-privatization critics. The Los Angeles Times wrote
“Juan Pablo Davila’s secret gambling spree losses have raised doubts about the Chilean government’s ability to manage Codelco, the biggest copper company in the world.”[6]
Standard and Poor’s Journal of Commerce wrote,
“The Codelco-Chile metals futures scandal has strengthened the hand of those (mining and banking interests in Chile and in the US) who wish to see some form of privatization of the state-owned copper corporation, a source close to government mining policy said.”[7]
How could have occurred this perfect storm for privatization? Just from one bungling trader? Initially, that was the media’s story, which created a storm of right-wing calls for Codelco to be privatized. Codelco bent but did not break.
Investigators’ findings emerged, in court records, showing Juan Pablo Davila was in fact bribed. Broker Wolfgang Becker bribed Davila while Becker was with German brokerage MG; soon, Becker moved to Merrill Lynch,[8] which since 1987 had been an apparent a CIA asset. On September 25, 1987, Merrill Lynch: heard from the CIA. The agency wrote as follows to Merrill exec De Wayne Peterson:
“Dear Mr. Peterson: We are…arranging (a) meeting between senior executives from the CIA and private industry on December 11th, 1987. Please let me know if you would be able to join us in discussing the future of our (CIA) information systems.”
Sincerely, Edward J. Maloney, Director of Information Technology[9]
Quite possibly at the CIA’s request, Davila’s bribes came through a Caribbean shell-company network that routinely is used by the CIA, to shift money secretly, as publicized in The Pandora Papers.[10]
The CIA was also involved, indirectly, when Chile under Pinochet adopted the rightist constitution that today still destabilizes Chile’s politico-economic situation.
With CIA funding, according to witnesses for the US House Committee on Intelligence,[11] University of Chicago scholars – “the Chicago Boys” –around 1970 invented the so-called “neoliberal” economic model – practically, unregulated capitalism – and installed it in Chile under a constitution authorized by dictator Pinochet.[12] Time Magazine wrote,
Many Chileans blame the constitution—which follows a ‘neoliberal’ model—for causing Chile to become one of the most unequal countries in the world. Hundreds of thousands of non-wealthy rural residents marched in Santiago against inequality (in October 2019), and this spurred drafting of a left-wing constitution. The 2019 protests— Estallido Social (“social explosion”) – signaled public rejection of Chile’s decades-long neoliberalism.
‘If Chile was the cradle of neoliberalism, it will also be its grave,’ said leftist president Gabriel Boric in July 2021. At the time of the 2019 protests, half of all Chilean workers earned less than $550 per month. Chile’s constitution, which favors privatization and has hindered reform efforts, has become a major target of popular unrest. Pinochet dramatically minimized the state’s role during his 17-year-rule, cutting budgets for public housing, education and social security, and selling off state-owned companies. Although the dictatorship ended in 1990, the so-called neoliberal legacy lives on in large part because of the constitution.”[13]
Reflecting this, nearly 80 percent of Chileans voted in 2020 to draft a new, popular-based constitution that among other things would protect public copper assets from privatization. However, in 2022, this draft was defeated, largely by an aggressive “bot” campaign on all major Internet media. It is widely reported that the bots spread falsehoods. This bot strategy was extremely effective. It practically reversed previous voter opinion. The final ballot stood at 62 percent rejecting the proposed constitution. YahooNews London wrote,
“This has effectively halted Gabriel Boric’s agenda for reform.”[14]
A 2022 survey found that 66 percent of “Reject” voters said “social networks” were their source of information. It found that 58 percent of all Chileans had been exposed to misinformation on Facebook, Twitter, et al, where the bots were broadcasting. This ploy of course reminds of the US 2016 presidential election, where bots from an unidentified source are widely agreed to have influenced voters.[15]
Concerning this 2022 vote, the New York Times wrote,
“The months-long campaign to turn down the new Chilean Constitution gained a foothold and never slipped. A barrage of misinformation spread through WhatsApp and social media, and outsize political donations and murky spending gave a financial advantage to the rejection campaign, which no doubt had an effect on voters. The effort was brutal, and brutally effective, in its aim to mislead Chileans to believe that the new Constitution would, among other horribles, spell the end of homeownership and allow abortions up to the moment of birth.”[16]
Today, a boom market is beginning for Chilean copper – because of electric cars – and the same “brutal, and brutally effective” actors as described above remain interested in privatizing Chile’s public copper. US media are again reporting that Codelco is weak. Clearly implied in these reports, I believe, is that unless private capital, some of it American, gains control of Chile’s public copper, the US cannot have its coveted electric cars.
In March 2023, Bloomberg headlined,
“Giant Chile Mines are Struggling Just as World Needs More Copper,”[17] and wrote,
“State-owned behemoth Codelco said its output woes of 2022 will only get worse…intensifying fears of a looming shortage given copper is a key material in the energy transition.”
In July 2023, likely on advice from past board members Henry Kissinger and Godfrey Rockefeller (grand-nephew of John D. Rockefeller), US copper company Freeport-McMoRan said it will put further Chile investment on hold “due to political uncertainty.”[18] In August 2023, a right-wing Chilean congressional committee began “an investigation to review Codelco’s corporate structure and project delays.” Six weeks later, in October 2023, the US’s Moody’s Investors Service downgraded Codelco’s credit rating.[19] Also in October 2023, Standard and Poor threatened to lower Codelco’s rating.
“We could lower our ratings on Chile over the next 24 months if, following the conclusion of the constitutional redrafting process, political impasses persist,” S&P said previous to the referendum.[20]
Sure enough, the day after the referendum, the Fitch’s investment-rating agency said of Chile,
“Political uncertainty will continue to weigh on investment in key sectors.”[21]
President Gabriel Boric has said he will work with Chile’s right-wing Congress, but congressional leader Antonio Kast has not said he will work with Boric. As such, the record suggests the time remains ripe for another dirty trick such as the Davila stunt, toward forcing a sell-off of Codelco and likely resultant economic chaos in Chile. The record shows that a particular group of rogue intelligence agents both specializes in such dirty tricks and prizes chaos in foreign economies that makes them easier to manipulate.[22] A modus operandi of this group is detailed in my book “Not Exactly the CIA: A Revised History of Modern American Disasters.”
Time will tell.[23]
[1] The power of left-wing president Gabriel Boric is markedly limited now by the pending constitutional issue and others. Former congressman Pepe Auth opined in October 2023 that “at the moment “(Boric) is cornered (and)on the defensive.”
[2] For nearly fifty years Chilean copper was the source of two-thirds to three-fourths of the Anaconda Company’s profits.
[3] Montana Historical Society, December 21, 2015.
[4] And for fellow US company Kennecott Copper.
[5] Diplomatic History, Volume 47, Issue 2, April 2023. Largely, these political rightists were wealthy via investment in copper mining.
[6] Los Angeles Times, February 12, 1994
[7] Standard and Poor Journal of Commerce, February 2, 1994
[8] Weekly News Update on the Americas, May 13, 1996. Investigators found Merrill negligent but not a briber in the case.
[9] STAT OIT (25 Sep 87) Distribution: Orig – addressee 2 – OIT Registry 1 – ISB File Declassified in Part – Sanitized Copy Approved for Release 2012/08/23: CIA-RDP90G00993R000300390001-1
[10] Ibid. to 8
[11] NearShoreAmericas Web site, October 29, 2013At that time the US Senate Select Committee on Intelligence disclosed that CIA collaboratorshelped plan the economic measures that Chile’s junta enacted immediately after seizing power, even though those in command barely understood how to practically apply the theories. Chilean US ambassador Orlando Letelier recounted that “Committee witnesses maintain that some of the Chicago boysreceived CIA funds. Letelier was killed by CIA-trained assassins on September 21, 1976. CIA-released reprint of news story by Wilmington News Journal, February 24, 1980
[12] These were “The Chicago Boys,” Chilean exchange students of economist Milton Friedman at University of Chicago.
[13] Time, July 5, 2022
[14] YahooNews London, September 13, 2022
[15] My research indicated most likely a Ukrainian source, run by assets of an international group of rogue intelligence agents that I dubbed “Not Exactly the CIA.” See this site’s blurb on my book, “Not Exactly the CIA: A Revised History of Modern American Disasters, TrineDay, 2021.
[16] New York Times, September 11, 2022. Television, the most popular news medium in Chile, was used as well. During a televised campaign in 2021, a rightwing party falsely claimed that the new constitution would change Chile’s national anthem, flag – and even the name of the country. Activists on the fringe right have copied the tactics of the far-right leaders Donald Trump and Jair Bolsonaro, attacking Chile’s electoral service and hinting that they may not accept the result of the referendum. The Guardian, August 31, 2022
[17] Bloomberg, March 31, 202
[18] Reuters, July 13, 2023
[19] Reuters, October 4, 2023 Evidence exists that Moody’s ratings can be manipulated – by “big banks and repeat customers.” in the lead-up to the 2008 financial crisis Moody’s gave in to pressure from Wall Street investment banks that paid Moody’s millions of dollars to rate securities the banks offered. Moody’s assigned high credit ratings to toxic assets
[20] Reuters, November 7, 2023
[21] Reuters, December 18, 2023
[22] According to handwritten notes of then CIA Director Richard Helms, just more than a week after socialist Salvador Allende’s victory in Chile, on September 15, 1970, President Richard Nixon ordered director Helms to “make the economy scream” in Chile to “prevent Allende from coming to power or to unseat him.”
[23] President Biden hosted Boric on November 2, 2023, but the pair kept to generalities on “a green transition.”