In the 1970 presidential election, Senator Salvador Allende Gossens won a plurality of votes in a three-way contest. He was a Marxist physician and member of Chile's Socialist Party, who headed the "Popular Unity" (UP or "Unidad Popular") coalition of the Socialist, Communist, Radical, and Social-Democratic Parties, along with dissident Christian Democrats, the Popular Unitary Action Movement (MAPU), and the Independent Popular Action. Allende had two main competitors in the election Radomiro Tomic, representing the incumbent Christian Democratic party, who ran a left-wing campaign with much the same theme as Allende's, and the right-wing former president Jorge Alessandri. In the end, Allende received a plurality of the votes cast, getting 36% of the vote against Alessandri's 34% and Tomic's 27%.
Despite pressure from the government of the United States, the Chilean Congress, keeping with tradition, conducted a runoff vote between the leading candidates, Allende and former president Jorge Alessandri. This procedure had previously been a near-formality, yet became quite fraught in 1970. After assurances of legality on Allende's part, the murder of the Army Commander-in-Chief, General Renι Schneider and Frei's refusal to form an alliance with Alessandri to oppose Allende on the grounds that the Christian Democrats were a workers' party and could not make common cause with the oligarchs Allende was chosen by a vote of 153 to 35.
The Popular Unity platform included the nationalization of U.S. interests in Chile's major copper mines, the advancement of workers' rights, implementation of land reform, reorganization of the national economy into socialized, mixed, and private sectors, a foreign policy of "international solidarity" and national independence and a new institutional order (the "people's state" or "poder popular"), including the institution of a unicameral congress. Immediately after the election, the United States expressed its disapproval and raised a number of economic sanctions against Chile. In addition, the CIA's website reports that the agency aided three different Chilean opposition groups during that time period and "sought to instigate a coup to prevent Allende from taking office". The action plans to prevent Allende from coming to power were known as Track I and Track II. At the same time, indigenous and peasant forces across the country violently started to take control of agricultural lands, forcibly fulfilling Allende's land redistribution promises.
In the first year of Allende's term, the short-term economic results of Economics Minister Pedro Vuskovic's expansive monetary policy were unambiguously favorable: 12% industrial growth and an 8.6% increase in GDP, accompanied by major declines in inflation (down from 34.9% to 22.1%) and unemployment (down to 3.8%). Allende adopted measures including price freezes, wage increases, and tax reforms, which had the effect of increasing consumer spending and redistributing income downward. Joint public-private public works projects helped reduce unemployment. Much of the banking sector was nationalized. Many enterprises within the copper, coal, iron, nitrate, and steel industries were expropriated, nationalized, or subjected to state intervention. Industrial output increased sharply and unemployment fell during the administration's first year. However, these results were not sustainable and in 1972 the Chilean escudo had runaway inflation of 140%. An economic depression that had begun in 1967 peaked in 1972, exacerbated by capital flight, plummeting private investment, and withdrawal of bank deposits in response to Allende's socialist program. Production fell and unemployment rose. The combination of inflation and government-mandated price-fixing led to the rise of black markets in rice, beans, sugar, and flour, and a "disappearance" of such basic commodities from supermarket shelves.
The Cuban packages scandal revealed arms smuggling from the Communist Cuba to Chile; Allende surrounded by KGB advisors had turned Chile into a center for Soviet operations in Latin America. Salvador Allende now had a personal KGB adviser. According to Allende's KGB file, Allende "was made to understand the necessity of reorganising Chile's army and intelligence services, and of setting up a relationship between Chile's and the USSR's intelligence services". The nationalization of U.S. and other foreign-owned companies led to increased tensions with the United States. As a result, the Richard Nixon administration organized and inserted secret operatives in Chile, in order to quickly destabilize Allende's government. In addition, Nixon gave instructions to make the Chilean economy scream, and international financial pressure restricted economic credit to Chile. Simultaneously, the CIA funded opposition media, politicians, and organizations, helping to accelerate a campaign of domestic destabilization. By 1972, the economic progress of Allende's first year had been reversed, and the economy was in crisis. Political polarization increased, and large mobilizations of both pro- and anti-government groups became frequent, often leading to clashes.
By 1973, Chilean society had grown highly polarized, between strong opponents and equally strong supporters of Salvador Allende and his government. Military actions and movements, separate from the civilian authority, began to manifest in the countryside. A failed military coup was attempted against Allende in June 1973.
In its "Agreement", on August 22, 1973, the Chamber of Deputies of Chile asserted that Chilean democracy had broken down and called for "redirecting government activity", to restore constitutional rule. Less than a month later, on September 11, 1973, the Chilean military deposed Allende, who apparently shot himself in the head to avoid capture as the Presidential Palace was surrounded and bombed. Subsequently, rather than restore governmental authority to the civilian legislature, Augusto Pinochet exploited his role as Commander of the Army to seize total power and to establish himself at the head of a junta.
Controversy surrounds alleged CIA involvement in the coup. As early as the Church Committee Report (1975), publicly available documents have indicated that the CIA attempted to prevent Allende from taking office after he was elected in 1970; the CIA itself released documents in 2000 acknowledging this and that Pinochet was one of their favored alternatives to take power.
According to the Vasili Mitrokhin and Christopher Andrew, the KGB and the Cuban Intelligence Directorate launched a campaign known as Operation TOUCAN. For instance, in 1976, the New York Times published 66 articles on alleged human rights abuses in Chile and only 4 on Cambodia, where the communist Khmer Rouge killed some 1.5 million people of 7.5 million people in the country.