George Shultz and the 1987 Pivot on Pinochet

By Theo Marchetti · September 10, 2026

A secret memorandum kept from view for decades shows how the State Department used a defector's testimony to force Reagan to stop backing a dictator who bombed Washington

Orlando Letelier and Ronni Karpen Moffitt were killed by a car bomb in the heart of the American capital. Their deaths bought a decade of silence for a foreign dictator and exposed a hole in the security of the city where the world's most powerful men sleep.

Orlando Letelier, a Marxist diplomat and former ambassador for Chile who became a leading voice against the military regime from his exile in the U.S., was the primary target. Ronni Karpen Moffitt, a researcher at the Institute for Policy Studies—a Washington-based think tank that analyzed foreign policy and employed Letelier during his exile—was killed in the blast beside him. According to the public record, the hit was carried out in 1976 by agents of the Dirección de Inteligencia Nacional (DINA), the secret police of the Pinochet regime that specialized in the torture and disappearance of political dissidents. They operated in Washington, D.C., the federal capital of the United States, with a brazenness that suggested they felt protected by a silent partner in the American government.

This column is based on a curated archival description of a Secret memorandum rather than the original pages. The memorandum, dated October 6, 1987, is a communication from George Shultz, the Secretary of State and former economist who sought to pivot U.S. foreign policy toward a more diplomatic posture, to President Reagan.

"Personally Ordered"

By 1987, the American government's relationship with Augusto Pinochet, the army officer who overthrew the government of Salvador Allende in 1973 to establish a military dictatorship in Chile, the southernmost nation in South America, was a liability. The memorandum establishes that a new catalyst had entered the frame: the defection of Armando Fernandez Larios, a defecting agent of the DINA who broke ranks to provide testimony against his former superiors.

Larios did more than provide a lead; he implicated Pinochet in an act of international terrorism on U.S. soil. The record shows that Shultz seized this moment. He did not simply pass the information along; he instructed the CIA to review its intelligence files to see if the agency's internal data backed the defector's claims. When the CIA returned its findings, the result was a hammer. The memorandum quotes the CIA's conclusion that Pinochet had "personally ordered" the Letelier-Moffitt assassination.

Shultz used this conclusion as "ammunition" to convince Reagan that the United States had to abandon its support for the dictatorship and push for a return to democracy in Chile. The record is explicit about the political calculation: Shultz reported to the President that Larios' revelations had created such a storm within Chile that Pinochet would be "unable to satisfy the military's concern" regarding the damage done to the reputation of the armed forces.

Document imagery from nsarchive.gwu.edu From the files: nsarchive.gwu.edu

The Larios Defection

The connection between Larios and the policy shift is the only reason this memorandum exists. For years, the public record showed a pattern of plausible deniability. The U.S. knew the DINA was responsible for the bombing, but the link to the man at the top—Pinochet—remained a matter of intelligence "belief" rather than a formal, presented conclusion. Larios provided the external verification that allowed Shultz to move the argument from the realm of suspicion to the realm of recorded fact.

There is a sharp irony in the sequence of events. The CIA had the evidence for years, but it took a defector and a determined Secretary of State to force that evidence into a memo on the President's desk. The memorandum admits that "some in the USG had previously believed that Pinochet had ordered the murders" and that there were "strong signs that he was involved in the cover-up." Yet, the record clarifies that the CIA had "never before drawn and presented its conclusion" that such strong evidence of Pinochet's leadership role existed.

This gap—the distance between having "strong signs" and presenting a formal conclusion—is where the real story lives. The CIA did not lack the information; it lacked the will to weaponize it until Shultz demanded it.

The Military's Reputation

Shultz's strategy was not based on the moral horror of the 1976 bombing, but on the fragility of Pinochet's power. He highlighted the fact that the Chilean military was beginning to view Pinochet as a liability. The record suggests that the U.S. government was less concerned with the act of terrorism itself than with the stability of the regime. When the military's own reputation was threatened by Pinochet's personal fingerprints on a diplomatic murder, the asset became a burden.

This shift in 1987 did not happen in a vacuum. The public record shows that by the late eighties, the Reagan administration was under immense pressure regarding its clandestine activities. In July 1987, only three months before Shultz wrote this memorandum, Oliver North gave congressional testimony regarding the Iran-Contra affair, revealing a shadow government operating outside the law to fund anti-communist rebels.

The pattern suggests that the pivot toward Chilean democracy was a liability-management exercise. If the administration were caught continuing to support a man whom the CIA had formally concluded ordered a bombing in Washington, D.C., it would have been a political catastrophe during the height of the Iran-Contra scandal. The desk's reading is that Shultz was not leading a moral crusade for democracy, but was scrubbing the administration's portfolio of a dictator who had become too loud and too toxic to defend.

The Desk's Reading

The most damning admission in the memorandum is the CIA's long-term silence. The record's admission that the agency had "strong signs" of Pinochet's involvement in the cover-up, yet never formally presented its conclusion, proves a deliberate suppression. The desk's reading is that the CIA intentionally buried the definitive link between Pinochet and the Letelier murder to protect a strategic Cold War asset. In the binary logic of the era, a murderer who kept the communists out of Santiago was more valuable than the sovereignty of the streets of Washington.

If this file is shaped the way it looks, the still-withheld pages of the CIA's review would show exactly who in the agency knew about Pinochet's role in 1976 and why they chose to keep that knowledge in the shadows for eleven years. The US government's passive facilitation of the cover-up implies that the "strong signs" were treated as secrets to be guarded rather than crimes to be prosecuted.

The shift in policy was not a catalyst of conscience, but a reaction to a change in the wind. The administration only stopped backing the butcher when the butcher's own generals decided he was bad for business. The cost of this calculation was a decade of impunity for a regime that killed with total confidence, knowing that the intelligence services of the United States would see the evidence and say nothing.

George Shultz and the 1987 Pivot on Pinochet

"Personally Ordered"

The Larios Defection

The Military's Reputation

The Desk's Reading

Sources