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Declassified documents by the United States government.-
FBI Report on Directorate of National Intelligence (DINA)       21 January 1982
Pinochet and Contreras dealings with the italian maffia in Madrid in 1975
The murder of general Carlos Prats and wife
Attempting murder of Bernardo Leighton and wife
January 21, 1982

DIRECCION DE INTELIGENCIA NACIONAL (DIRECTORATE OF NATIONAL INTELLIGENCE) (DINA)

DINA was the name of the Chilean Intelligence Service until late 1977, when it was renamed the Centro Nacional de Informaciones (National Information Center) (CNI).

Former Assistant United States Attorney Eugene M. Propper, the chief prosecutor in the Orlando Letelier assassination case, and author Taylor Branch are collaborating in writing a book detailing the United States investigation of the assassination of Orlando Letelier, the former Chilean Ambassador to the United States, who was killed on September 21, 1976, in Washington, D.C. Propper and Branch advised that during their research they secured a number of letters which were sent from the United States by self-admitted DINA agent, Michael Vernon Townley, to Gustavo Etchepare, his DINA/CNI "cut-out" in Chile. They made copies of these letters available to the Federal Bureau of Investigation (FBI) in September, 1981. In many instances the letters were extremely cryptic and Townley utilized code words and code names throughout. The subject matter of the letters, among other topics, covered DINA activities circa 1974-1976.

Set forth below is a topical summary of information in Townley's letters:

This document contains neither recommendations nor conclusions of the FBI. It is de property of the FBI, and is loaned to your agency; it and its contents are not to be distributed outside your agency.

TOPICAL SUMMARY OF INFORMATION

I. Disinformation Forwarded to Chile by Townley:

Throughout his letters, Townley furnished the recipients numerous items of disinformation which, for the most part, were self-serving. Townley obviously has attempted to minimize damage to his and his families interests as a result of information furnished by him to the U.S. Government concerning DINA operations. In some instances, it appears that Townley may have knowingly lied.

II. Transmittal of Documents to CNI by Townley:

In several letters, Townley made veiled references to unspecified documents, which he apparently removed from the U.S. Attorneys Office, Washington, D.C., and forwarded to Chile. Specific examples of such communications are an undated letter from Townley to Chilean President Pinochet and a letter to Gustavo Etchepare dated 6/24/78. Townley was interviewed at FBIHQ on 10/20/81 by SAs L. Carter Cornick, Jr., and Robert W. Scherrer and was specifically asked to identify the documents he removed from the U.S. Attorneys Office, Washington, D.C., and forwarded to CNI in Chile. Townley claimed he could not specifically recall which documents he forwarded to Chile; however, he did admit that he forwarded the text of a declaration executed by U.S. Ambassador to Chile George W. Landau to CNI. Ambassador Landau's declaration was incorporated into the U.S. Government's extradition request to the Chilean Government for General Contreras, Colonel Espinosa and Captain Fernandez and became part of the public Chilean court record.

III. Visit of Virgilio Paz to Chile during 1976:

In addition to information previously furnished by Townley during 1978 concerning Paz's visit to Chile, Townley, during interview on 10/20/81, advised that when Paz arrived in Chile in Spring of 1976 he brought with him a Colt .45 caliber automatic pistol, which was a special competition model. Townley advised that Paz claimed that this weapon had recently been used by the Cuban Nationalist Movement in a "hit" and that his purpose in bringing the weapon to Chile was to dispose of same. Townley advised that he witnessed Paz break the weapon into pieces with a sledge hammer and indicated that Paz subsequently disposed of the broken parts in Santiago. Townley claimed he had not furnished this information previously since he had completely forgotten the incident.

IV. Withholding of Potential Evidence by Townley:

In a letter dated 11/24/78 to General Orozco in Chile, Townley claimed that during August, 1978, when his attorney, Seymour Glanzer, turned over to the U.S. Government officials in Washington, D.C., Townley's false U.S. passport in the name of Kenneth Enyart, which Townley's wife had brought from Chile to the United States along with other documentation, Townley was able to remove a second unidentified passport and avoid having it turned over to the U.S. Government as evidence.

V. Interception of Townley' Mail in Chile:

In several of his letters, Townley expressed concern that someone was intercepting his mail in Chile. Specific references in this regard are contained in Townley's letter to his wife dated 6/18/78 and in letters dated 3/17/79 and 6/29/79 to Gustavo Etchepare. In the latter communication, Townley informed Etchepare that his Chilean attorney, Manual Acuna, informed him that General Contreras was responsible for the interception of Townley's mail in Chile and that Contreras still had contacts in the Chilean Post Office who were in positions to continue intercepting Townley's mail. Townley's letters, which were intercepted by Contreras and subsequently utilized by him in the response to the U.S. Government's extradition requests, are identified below:

5/25/78 letter to his wife, 6/15/78 and 6/18/78 letters to Etchepare.

VI. Townley's Concern Regarding the Prosin Limited Checking Account at the Southeast First National Bank, Miami Florida:

The above account was maintained at the Southeast First National Bank by Townley in order to transact DINA business. In the following letters from Townley to his contacts in Chile, Townley expresses concern that the U.S. Government will uncover damaging information (not further specified) against him and DINA:

12/14/78 letter to Manual Acuna, his 6/29/79, 8/23/79, 9/7/79 and 9/10/79 letters to Gustavo Etchepare.

In his 12/14/78 letter to Acuna, Townley suggested that someone in Chile be officially named as an agent for Prosin Limited. Townley added "It would be best if this person appear one day and thereafter disappear forever." Townley's reason for the foregoing suggestion was not clear.                                                                         -2-

In the other letters to Etchepare, listed above, Townley indicated that the Prosin Limited account would disclose checks reflecting payments to fugitive Virgilio Paz's wife. In addition, Townley also claimed that information contained in the Prosin Limited account might lead to the discovery of the whereabouts of fugitives Virgilio Paz and Jose Dionioso Suarez. Townley also expressed concern that information in the Prosin Limited account would lead to the discovery of details regarding "Project Andrea."

Records of the Prosin Limited account were subpoenaed through the U.S. Attorneys Office, Washington, D.C. in September, 1979. A thorough review of transactions in the account contained absolutely no information indicating payments to Paz's wife or any information that would assist in establishing the whereabouts of fugitives Paz and Suarez. The account contained no information related to "Project Andrea."

VII. Visit of Chilean President Pinochet to Spain During November, 1975, with General Contreras Where They Met with "ALFA," an Italian Terrorist:

According to former Assistant U.S. Attorney Eugene M. Propper and author Taylor Branch, ALFA is identical with an Italian terrorist whose true name is Stefano Delle Chiaie.

Townley made reference to ALFA, although he did not disclose his true identity, in the following communications to Gustavo Etchepare:

Letters dated 4/26/79, 6/11/79, 6/16/79, 8/23/79, 8/29/79 and 9/2/79.

In his 4/26/79 letter to Etchepare, Townley, speaking of General Contreras, stated "There were meetings between him (Contreras), his Excellency (President Pinochet) and the Italians in Spain after Franco died. Also the Italians carried out numerous acts of military espionage against the Peruvians and Argentines not only in Europe, but also in Peru and Argentina."

In his 8/23/79 letter to Etchepare, Townley stated "I haven't spoken about the Italians. I have no idea where they are nor where they have been nor do I care to know! ALFA got mixed up with various people to do business in Argentina. Some of them had very bad backgrounds whom Argentine law enforcement agencies were seeking. Among other                                                                     -3-

things they tried to cash a check from Luis Felipe for $25,000, also they owed several thousand dollars including a $40,000 debt to Daniel, also he was mixed up in dirty deals in Spain...." "The problem with the Italians is serious, very serious! Mamo got married to them some time back and he married them in a manner much more indissolvable than with the Cubans. For your information, Pinochet had a meeting with Mamo and ALFA in Spain some time back. ALFA can be much more embarrassing for Mamo and the government in the long run than perhaps the Cubans. One thing obviously is that ALFA doesn't have anywhere to go and you know that as well as I do. Ask Chico or Don Cristian who ran ALFA about it."

Propper and Branch identified "Daniel" as Albert Spaggiari, a French master criminal who is a member of the OAS and also active in fascist activities in France. According to Propper and Branch, Spaggiari was arrested for the July, 1976, $10 million robbery of the Societe Generale Bank in Nice, France.

In Townley's 8/29/79 letter to Etchepare, Townley indicated that he was attaching a clipping from a local Denver, Colorado, area newspaper (the actual newspaper clipping was not attached to the copy of Townley's letter provided to the FBI by Propper and Branch). In his letter, Townley commented as follows: "I ask the question is it or is it not? This is the style of Daniel...." "I am very sorry about ALFA, whatever happened happened and the reasons which brought him problems. Sometime back he told me how much he wanted to get out of everything. He wanted to find himself an island or some other sanctuary without having to worry about his responsibilities toward his people."

Propper and Branch made available a copy of an article which appeared in the 8/21/79 issue of the "Rocky Mountain News" captioned "Tunnel Builders 'Robbed' of Rich Haul in France," which they claimed was the article attached to Townley's 8/29/79 letter. The article described the arrest by French law enforcement authorities of a group of bank robbers who were tunneling into the Left Bank branch of the Societe Generale in France. The article compared this attempted bank robbery with the 1976 robbery of the Societe Generale branch in Nice, which was masterminded by Albert Spaggiari.

Townley made reference to "Daniel" in one additional communication, presumably to Etchepare, which was undated and bore the heading "SIGO CON COMPUTACION." In this                                                                                         -4-

communication, Townley requested information as to what happened to "Daniel."

In another communication, Townley informed Etchepare that Enrique Arrancibia traveled from Buenos Aires, Argentina, to California during the Fall of 1977 on banking business for ALFA.

According to Propper and Branch, both ALFA and "Daniel" conducted operations on behalf of DINA.

VIII. Internal DINA Intrigues:

Based on the content of several of Townley's letters, it appears that CNI requested Townley and his wife to provide any derogatory information that could be used against General Contreras. Townley expressed his reluctance to provide such information and provided Etchepare with the identities of former DINA personnel who had detailed personal knowledge of irregularities and illegalities committed by Contreras and other DINA officials. In his 4/26/79 letter to Etchepare, Townley provided the following such individuals:

Lima I                               Garza
Hermes                             Claudio
Halcon

In the above letter, Townley informed Etchepare that Colonel Valdivieso stole money from DINA accounts. Townley also informed Etchepare that Sonia, last name not mentioned, Valdivieso's DINA secretary, helped him to organize a network of secretaries within DINA who reported everything coming to their knowledge to Valdivieso. In the same communication to Etchepare, Townley also suggested that Valdivieso and Contreras were involved in extorting money from ITT in Chile, as well as the Racal Company in England in connection with contacts participated in by these companies for the purchase of equipment at the "Blogueo de Maipu."

IX. Townley's Concern Regarding the Assassination of Chilean Army General Carlos Prats and his Wife, Carmen, in Buenos Aires, Argentina on 9/30/74 and the Attempted Assassination of Former Chilean Vice President Bernardo Leighton and his Wife, Anita, in Rome, Italy, on 10/6/75:

Retired Chilean Army General Carlos Prats Gonzalez and his wife, Carmen, were assassinated in Buenos Aires on 9/30/74, when a bomb was detonated underneath their car as they approached their residence. At the time of his assassination, General Prats had been critical of the Pinochet Government for interfering in the Chilean                                                                                                    -5-

constitutional process and allegedly he was writing a book documenting his criticisms.

Former Chilean Vice President Bernardo Leighton and his wife, Anita, were shot several times in a downtown Rome street on 10/6/75, as they approached their residence on foot. Leighton is a prominent member of the Chilean Christian Democratic Party and at the time of his attempted assassination in 1975, was an outspoken critic of the Pinochet Government.

In numerous communications, which are listed below, Townley expressed concern that the "Italians" and the "Argentines" would submit Letters Rogatory seeking information from him concerning the Prats assassinations and the attempted assassination of the Leightons. Townley expressed fear that the "Italians," specifically ALPHA, and General Contreras would provide information concerning the attempted assassination of the Leightons which would contradict what Townley might say in responding to Letters Rogatory from the Italian Government, thereby placing Townley in the position of perjuring himself. Townley expressed similar concern that unidentified elements of one of the Argentine security services and Enrique Arrancibia would furnish information concerning the Prats assassination, which would contradict what Townley might say in responding to Letters Rogatory from the Argentine Government, thereby placing Townley in the position of perjuring himself. Townley concluded that the solution to his dilemma would be to take the Fifth Amendment in responding to Letters Rogatory from the Italian and Argentine Governments. However, Townley noted that by taking the Fifth Amendment, guilt on his part would be implied.

The letters in which Townley mentioned his concern over Letters Rogatory from the Italian and Argentine Governments concerning the Leighton and Prats matters are listed below:

Letters to Gustavo Etchepare dated 6/23/78, 11/25/78, 4/18/79, 4/26/79, 6/4/79, 6/16/79, 6/22/79, 7/5/79, 8/13/79 and 8/23/79. Letter to General Hector Orozco dated 11/24/78.

With regard to Enrique Arrancibia, this individual is a former DINA agent, who resided in unofficial exile in Buenos Aires as a result of his participation in the assassination of Chilean Army Chief of Staff, Rene Schneider. He was arrested by members of the Argentine Intelligence Service                                                                          -6-

shortly after Townley's expulsion from Chile to the United States in 1978 and charged with espionage against the Argentine Government.

X. "Project Andrea"

Refer to FBI letter to the Administrator, Federal Aviation Administration (FAA), dated 12/9/81, and accompanying memorandum for complete details. Supplemental data follows.

In his letters, Townley suggested to Etchepare that the gas storage cylinders, which had been rented by DINA from a company in the United States, be purchased outright in order to avoid any additional problems involving the payment of rental charges to the company in the United States. Townley requested Etchepare to secure the serial numbers from the gas storage cylinders in Chile in order that the rental company in the United States might be provided this information, since the rental company had requested this data. Townley informed Etchepare that his father, J. Vernon Townley, should be provided with the serial numbers of the gas storage cylinders and that Townley's father, in turn, would provide this information to the rental company in the United States.

Townley mentions "Project Andrea" and matters related thereto in the following communications:

Letters to Gustavo Etchepare dated 4/26/79, 5/9/79, 5/29/79, 6/4/79, 6/29/79, 8/13/79 and 9/2/79.

XI. Activities of Virgilio Paz in Northern Ireland during 1975

In an undated letter to Chilean President Pinochet, Townley advised that photographs of British concentration camps in Northern Ireland were taken by Virgilio Paz as part of a DINA assignment.

According to Propper and Branch, the photographs taken by Paz in 1975 were to have been utilized by the Chilean Government at the United Nations in the United States in order to discredit the British Government for its alleged violation of human rights in Northern Ireland. Propper and Branch advised that the photographs taken by Paz arrived too late to be utilized by the Chilean Government at the United Nations and the photographs subsequently appeared in an article in "El Mercurio," a Spanish language daily newspaper published in Santiago, Chile.                                                                                  -7-

XII. Visit by Guillermo Novo Sampol to Chile in 1976

Based on information provided by Propper and Branch concerning an alleged planned kidnapping to be carried out in Buenos Aires, Argentina, during the Summer of 1976 in which the Cuban Nationalist Movement was to play a role, Townley was interviewed concerning this allegation on 10/20/81 by SAs Cornick and Scherrer. Townley previously furnished information during 1978 which indicated that Novo Sampol had visited Chile during the Summer of 1976; however, Townley stated that Novo's visit was not related to the Letelier assassination and did not involve a violation of United States law.

During interview with Townley on 10/20/81, he advised that Novo Sampol visited Santiago, Chile while Virgilio Paz was in Chile during June or July, 1976. Townley advised that Novo Sampol agreed to commit the Cuban Nationalist Movement to participate in the kidnapping of an unrecalled President of a Dutch bank in Buenos Aires, Argentina. According to Townley, civilian members of the State Secretariat for Information (SIDE), one of the Argentine intelligence services, had developed the Dutch banker's secretary as a source and utilized information provided by her to make tentative plans to kidnap the Dutch banker and hold him for ransom. Townley explained that the Dutch banker and his secretary were having an affair and customarily spent several hours during weekday afternoons together at the same hotel, thereby assuring the civilian members of SIDE of a definite location from which the Dutch banker could be kidnapped. Townley reported that the SIDE civilian members believed it would be necessary to assassinate the Dutch banker's driver, who customarily waited for his employer at the hotel where the assignation customarily took place. Townley advised that Novo Sampol provided $6,000 from the Cuban Nationalist Movement, which was forwarded to the civilian members of SIDE in Argentina as the Cuban Nationalist Movement's share toward the operational expenses for the kidnapping operation. Townley stated that Novo Sampol, after returning to the United States, forwarded a stock of paper to Townley in Chile, which was utilized to print pamphlets in the name of "Grupo Rojo" (Red Group), a nonexistent Argentine Marxist terrorist organization which the civilian members of SIDE created in order to utilize this group to claim credit for the kidnapping of the Dutch banker. Townley advised that the "Grupo Rojo" pamphlets were printed in Chile and forwarded to the civilian members of SIDE in Argentina, where they were subsequently distributed in Mendoza and Cordoba                                                     -8-

in connection with bombings carried out by the SIDE civilian members. Townley noted that the purpose of utilizing the "Grupo Rojo" pamphlets in claiming credit for the bombings in Mendoza and Cordoba was to create the impression that the "Grupo Rojo" was a viable Marxist terrorist organization. Townley stated that Novo Sampol agreed to arrange for the pickup of the ransom for the Dutch banker in Europe and dispatched two unidentified Cuban Nationalist Movement members to establish necessary contacts in Europe to receive the ransom. Townley recalled that the ransom for the Dutch banker was to be paid in diamonds. Townley advised that the SIDE civilian members procrastinated in carrying out the kidnapping and indicated that the kidnapping never took place. Townley recalled that Novo Sampol traveled to Chile on a Braniff International Airways flight and returned to the United States via LAN-Chile. Townley advised that Novo Sampol utilized his true name to perform this travel; however, Townley arranged that Novo Sampol's entry into Chile and his departure not be entered into the records of the Chilean International Police in order to avoid the existence of documentation of Novo Sampol's travel.

XIII. Interview with Michael Vernon Townley by Special Agents of the Federal Bureau of Investigation in Washington, D.C., on 10/20/81:

During the interview with Townley by Special Agents of the FBI on 10/20/81 in Washington, D.C., Townley refused to provide any information concerning DINA operations, sources or methods that were mentioned in his letters, which were provided by Propper and Branch. Townley cited his agreement with the United States Government dated April 17, 1978, which required that he only furnish information to the United States Government relevant to violations of United States law or offenses committed in United States jurisdiction. Townley noted that he refused to answer any questions concerning DINA operations, sources or methods during the trial of the three Cuban defendants in the Letelier assassination, which took place in U.S. District Court, Washington, D.C., during early 1979, based on his agreement with the United States Government. Townley noted that his position was upheld by the presiding Judge and that he was not required to provide such information.                                                                                    -9-

INDEX

El Gerente -- CNI Director General Odlanier Mena.

El Indio -- CNI official Colonel Jeronimo Pantoja Henriquez.

Garza -- Former DINA agent Jose Fernandez Schilling.

GAT -- Grupo de Amigos de Townley (Code name for CNI financial support to Townley and his family).

Caballero -- Former DINA Director General Juan Manuel Contreras Sepulveda.

Andrea -- Code word for Chilean Government's nerve gas project.

Frank G. -- Francisco (Frank) Gutay, U.S. citizen of Uruguayan origin. Owner of the American Business System Company in Georgia. He was an associate of Townley's in a computer company.

Mamo -- General Contreras.

Tavo -- Gustavo Etchepare.

Gustavo -- Gustavo Etchepare.

Victor-Victor -- Former DINA official Colonel Vaniel Valdivieso.

Los Picas or El Pica -- Attorneys.

Contacto Regular -- Term for Townley's DINA "cut-out" Gustavo Etchepare.

Ximena or Jimena -- Secretary of Townley's U.S. Attorney Seymour Glanzer.

Roxana -- Townley's former DINA Secretary Maria Rosa Alejandra Damiani Serrano.

Walter -- Damiani's boyfriend or husband.

El Chico -- Former DINA official Colonel Raul Iturriaga Neuman.

Franco -- Generalissimo Francisco Franco, former ruler of Spain who died in 1975.

Sam -- Townley's dog.

Luis Felipe -- Former DINA Agent Enrique Arrancibia Clavel.

Pato -- Townley's son-in-law.

Susie -- Townley's step-daughter Susana Earnst.

La Flaca -- Etchepare's wife.

ALFA -- Italian terrorist Stefano Delle Chiaie, aka Alfredo di Stefano.

Daniel -- Corsican terrorist and OAS member Albert Spaggiari.

Esteban -- Townley's DINA driver and aide.

Hermes or H. -- Eugenio Berrios, a chemical engineer who worked with Townley on Project Andrea and was also engaged in a parallel project for the Chilean Army.

Cuviches or Cubiches -- Members of the Cuban Nationalist Movement.

City of Martin -- Buenos Aires, Argentina.

Ches -- Argentines.

Los viudos -- Letelier's widow Isabel Letelier and Ronni Moffitt's widower Michael Moffitt.

mi viejo -- Townley's father, J. Vernon Townley.

El Servicio -- DINA or CNI.

El Fiscal -- Former Assistant U.S. Attorney Eugene M. Propper.

Manuel or Manuel A. -- Townley's Chilean Attorney Manuel Acuna.

Javier -- Virgilio Paz Romero.

Pinocho -- Chilean President Pinochet.

Cacho Acevedo -- Possibly identical to former DINA officer Captain Hugo Acevedo Godoy.

Sonia -- Secretary to Former DINA official Colonel Vaniel Valdivieso. Sonia apparently ran a network of secretaries within DINA and assisted Valdivieso in gathering data on other DINA officials.                                                                                                               -2-

Miranda C. -- Sergio Miranda Carrington, General Contreras' attorney.

la pelota del otro lado -- Former Legat, Buenos Aires, Calvin C. Clegg.

Fernando -- Fernando Cruchaga, former LAN-Chile Station Manager, New York City.

Los vecinos -- The Argentine Government.

Cafe rojo punto verde kilo or cafe rojo verde kilo (CR VK) -- Secret support fund for the Townley family in Chile.

Chris -- Townley's son.

Brian -- Townley's son.

Armando -- Former DINA officer Captain Armando Fernandez Larios.

Enrique A. -- Former DINA agent Enrique Arrancibia Clavel.

Weck -- James Weck, an attorney and family friend of the Townleys.

Pros. or Pro. -- Prosin Limited bank account maintained by Townley at the Southeast First National Bank, Miami, Florida.

Ken -- Kenneth Enyart - alias of Townley.

Andres W. -- Andres Wilson - alias of Townley.

Los Gringos -- The Americans.

Alfa echo -- Alfredo Etcheberry, Chilean attorney representing U.S. Government in Chile.

The identity of the following individuals and the meaning of the following code names and code words were unknown to Propper and Branch and are being listed for reference purposes only.

Canario -- Identity unknown. Apparently involved in a computer business in Santiago, Chile at the University of Chile with Townley.                                                                                                                      -3-

Gaviota -- Identity unknown. Apparently involved in a computer business in Santiago, Chile at the University of Chile with Townley.

Lobo -- Identity unknown. An apparent DINA agent who had contact with Anital Lipthay, another DINA agent.

Roberto Smith or Roberto S. -- Identity unknown. Appears to be connected with CNI and telephonically contacted Townley's sister in Westchester County, New York during 1979.

Honorato -- Identity unknown. Possibly was a TV reporter.

DAS -- Identity unknown. Possibly was a DINA agent.

Eugenio -- A DINA agent who was a contact of ALFA.

Freddy -- Identity unknown. Was a DINA agent who apparently was aware of details of bank accounts maintained in the U.S. by General Contreras.

Don Cristian -- Identity unknown. Was the DINA control officer at DINA Headquarters who ran ALFA.

LIMA I -- Identity unknown. Was a DINA agent who was aware of irregularities in the operation of DINA committed by General Contreras.

Elias -- Identity unknown. May possibly have been a DINA agent. Apparently the investigation of Chilean Military Prosecutor Hector Orozco was damaging to his interests.

There are numerous other code names, code words and phrases in Townley's letters to which it was impossible to render any interpretation or meaning.                                                                                       -4-

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