176. Memorandum From the Deputy Assistant Secretary of Defense for International Security Affairs (Hoopes) to Secretary of Defense McNamara1
SUBJECT
- US Military Sales to Iran—Status Report
This memorandum is for information.
You will recall that in early August, as a result of a decision reached at the Tuesday lunch with the President,2 I traveled to Iran to reinforce and amplify the President’s letter of 20 July,3 to make clear to the Shah the dangers to US-Iran relations if Iran should purchase “major, sophisticated and sensitive” military equipment from the Soviet bloc, and to make further proposals regarding F–4s and Hawks. Tab A4 is the cable of instruction governing my mission. Tab B is a copy of my remarks to the Shah. Tab C is the reporting cable on the conversation with the Shah. Tab D is the President’s letter of 20 July.
[Page 319]At the conclusion of the conversation, the Shah said that a purchase of sophisticated equipment from the Soviet bloc was “improbable.” A week later we were able to obtain categorical assurances that Iran would make no purchases of Soviet SAMs or other sophisticated equipment. Also, in the course of the conversation, the Shah decided that Iran required only one Hawk battalion instead of two; subsequently, he told Ambassador Meyer that he intends to purchase no Hawks, but to base his air defense on an early warning radar system, fast-reaction interceptor aircraft (F–4 and F–5), and simpler, less expensive antiaircraft guns. As a face-saving gesture in view of his overtures to the Soviets, the Shah restated that he would probably buy a few “lorries, APC’s and ack-ack guns” from U.S.S.R.
Agreement was also reached during the conversation on the major components of a sales program for FY 67. This would total $110 million (comprising $60 million from the original 1964 credit and the first $50 million of the new $200 million credit). The agreed elements of this tranche are: Blue Shark radar system, one F–4 squadron, four C–130s, additional air force war reserve, and about 100 M–60 tanks. Draft Letters of Offer have been prepared on these items and will be carried to Iran by an ILN team for negotiations beginning on 19 September.
We now have evidence that Iran has just about concluded the purchase of a naval package from the U.K., including 4 Corvettes, 6 hovercraft (fast patrol boats), and a refitted (but not modernized) WW II destroyer. In addition to the naval items, the package includes 18 additional Tiger Cat antiaircraft missile launchers and appropriate missiles. The total cost is estimated at $60 million. This purchase has been anticipated. It will confront the US Government over the coming months with the need to determine the extent to which this third country purchase by Iran will affect the total of the new US credit. The FY 67 tranche will not however be affected.
On balance, we believe the situation is now well in hand.
- Source: Washington National Records Center, RG 330, OSD Files: FRC 70 A 4443, Iran 091.3 MAP 13 Sep 66. Secret.↩
- See Document 167.↩
- See Document 158.↩
- All of the tabs were attached to the source text; Tab A is Document 170.↩