INDIANAPOLIS, AUG. 11 -- The U.S. State Department today denied a visa to a Chilean athlete whom it described as a member of the secret police, but Chile remained at the Pan American Games despite a threatened walkout.

Chilean officials said last week the team would withdraw from the Games unless a visa was granted to Daniel Zuniga, a member of the skeet-shooting team. Chilean athletic officials could not be reached for comment today, but U.S. Olympic Committee President Robert Helmick said Chile would continue to compete, and officials were present at a meeting of the Pan American Sports Organization Congress, where the visa issue was debated at length.

Zuniga was denied entry because to give him a visa would be "prejudicial to the public interest," according to State Department spokesman Charles E. Redman.

"He's been personally linked to a number of acts of political violence of the most extreme kind, including murder," Redman asserted. "As a consequence, his entry into the U.S. would be prejudicial to U.S. human rights and anti-terrorism policies."

Helmick said Undersecretary of State Ed Derwinski was coming to Indianapolis Wednesday to more fully explain the decision to officials of PASO.

On learning of the decision, the PASO Congress this morning adopted a resolution supporting the proposition that "wherever there is a major athletic competition, governments should set aside the usual visa restrictions and allow all athletes to participate," Helmick said.

Helmick said afterward that the State Department's investigation and verdict were "tremendously embarrassing" to amateur sports organizations in this country and could harm prospects of hosting other international events.