ITT

NAMED INTERNATIONAL Telephone & Telegraph as a ploy to guarantee confusion with the larger and more established American Telephone & Telegraph (AT&T), ITT embarked on a career of international misdeeds that culminated in bribing the Richard Nixon administration and conspiring to undermine the government of Chile.

Founded by enigmatic Sosthenes Behn as an international equivalent to AT&T, ITT reputedly funneled information from the United States to Nazi Germany as the price of retaining its businesses in Nazi-occupied territory. Although ITT had been accused of harboring spies behind the Iron Curtain throughout the Cold War, any espionage efforts did not prevent communist and socialist governments from expropriating ITT's regional telephone companies.

The real era of ITT diplomacy began when Harold Geneen became chief executive officer in 1959, shortly before Fidel Castro nationalized the Cuban phone company that had been ITT's first business. Determined to shift ITT away from reliance on revenues from outside the United States, Geneen developed a two-fold management philosophy: the company must grow at all costs, and the managers must get results by any means. ITT embarked on a rampage of acquisitions, making it one of the first conglomerates with tight centralized management of companies in dramatically different industries.

By the late 1960s, ITT had 400,000 employees worldwide, employed in industries as diverse as car rental (Avis), hotels (Sheraton), and food production (Continental Bakeries). ITT's May 1970 attempt to acquire the Hartford Insurance Group attracted the interest of the U.S. Department of Justice, which began to investigate whether ITT's piecemeal mergers and ability to direct business to its various subsidiaries constituted a violation of antitrust law.

[Page 454]In June 1971, the antitrust case was abruptly settled, allowing ITT to keep The Hartford at the cost of divesting three smaller and less appealing companies. Seven months later, columnist Jack Anderson printed a memo, attributed to ITT lobbyist Dita Beard, that strongly suggested ITT had gained the settlement by bribing the Nixon administration with $400,000 to be used to bring the Republican nominating convention to San Diego, California, a personal goal of Nixon.

As flamboyant political networker Beard denied writing the memo, tried to explain away the incriminating portions, and retired to a hospital with a heart attack, the scandal became absorbed into the Watergate hearings that led to Nixon's resignation. The Watergate tapes, released in 1997, include a conversation in which the president discloses a “hush-hush” deal with ITT to aides H.R. Haldeman and John Erlichman.

The $400,000 for the San Diego convention was not ITT's only foray into buying government cooperation, as Anderson revealed in April 1972. Starting in 1970, ITT siphoned money into Chile to oppose the election of Marxist candidate Salvador Allende. ITT opposed Allende because the company feared, correctly, that he would nationalize ITT's Chilean telephone company. As well as meeting with U.S. government and Central Intelligence Agency (CIA) officials to discuss collaboration in opposing Allende, ITT spent a reported $1 million on anti-Allende activities. The company was, however, unable to block Allende's election or prevent expropriation of their subsidiary.

How closely ITT was tied to the 1973 coup that assassinated Allende and replaced him with right-wing General Auguste Pinochet is unclear. Writer Anthony Sampson, who had access to ITT's internal documents for his book, The Sovereign State of ITT, reports that Latin American public relations specialist Robert Berellez promised ITT leadership that there would be “undercover work” to fuel violence by wrecking the Chilean economy. Sampson refers to a memo sent to ITT Senior Vice-President Edward Gerrity, outlining a plan to bring down Allende. ITT leadership is also rumored to have offered direct funding to the CIA. Berellez and Gerrity denied all rumors in 1973 hearings, as did CIA Director Richard Helms.

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