Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

184. Action Memorandum From the Assistant Secretary of State for Inter-American Affairs (Rogers), the Director of the Bureau of Politico-Military Affairs (Vest), and the Assistant Secretary of State for Congressional Relations (McCloskey) to Secretary of State Kissinger¹

Washington, March 4, 1975.

U.S. Military Sales to Chile

The Problem

Section 25 of the Foreign Assistance Act of 1974 denies the use of funds for military assistance to Chile in FY 1975. It also defines military assistance to include “sales, credits and guaranties,” thus raising the question of whether FMS cash sales may be made. The legislative history of this provision suggests that cash sales are not prohibited, so long as no U.S. funds are involved. Nevertheless, congressional opponents of U.S. cooperation with the present Government of Chile (including Senator Kennedy, the sponsor of Section 25) may take the position that this section was intended to cut off cash sales as well as other forms of military assistance. The Legal Adviser has construed the statute as permitting cash sales (Tab A), but has counseled in the strongest terms that no action be taken on the basis of this construction without prior congressional consultation.

The GOC has requested us to supply, on an FMS cash sales basis, spare parts difficult or impossible otherwise to obtain. A variety of options are available. We can go ahead with cash sales or decline to make sales. If it is decided to make cash sales, we can consult with the Congress before making such sales, afterwards, or not at all. There are problems and risks in each of the available choices.

Background/Discussion

Section 25 of the FAA states:

“Notwithstanding any other provision of law, the total amount of assistance for Chile under the Foreign Assistance Act of 1961, and the Foreign Military Sales Act during Fiscal Year 1975, may not exceed dollars 25,000,000, none of which may be made available for the purpose of providing military assistance (including security supporting assistance, sales, credit sales, or guarantees, or the furnishing by any means of excess defense articles or items from stockpiles of the Department of Defense).”

It is not clear whether the foregoing language is meant to be a prohibition on the use of funds for military “assistance” (defined so as to include cash sales), or a substantive prohibition on such “assistance” altogether. Under the latter interpretation, no new contracts could be signed and contracts already entered into in FY 1975 will have to be canceled or implemented but without assurance of delivery, i.e. contractual arrangements already negotiated would be continued to retain production priority standing and cost quotations, but no deliveries would be made prior to the lifting of the Congressional restriction. (A list of pending FMS sales actions is attached at Tab B.)

The Chileans are particularly concerned by two amendments signed in FY 1975 to contracts which were signed in FY 1974. These are amendments, signed on November 16 and December 23, to the FMS sales contract for 18 F–5E aircraft purchased on May 15, 1974. The first amendment would change three of the eighteen aircraft from the fighter to the trainer model; the second would add on the sale of the Sidewinder missile, the aircraft’s principal armament. The Chileans assumed that standard weaponry for the aircraft they had purchased would be made available. It was not included in the original contract; hence the amendment of December 23. The Chileans are also greatly concerned by a sales contract signed October 24, 1974, for the sale of spare parts required to keep operational a number of naval vessels purchased from the U.S., including two surplus destroyers transferred on January 8, 1974.

The Chileans contend that it makes no sense to deny essential items without which equipment already purchased is of little or no use. They argue that these post-July 1 amendments are not contracts for new items but add-ons to the original contracts, and that in any case the FAA should correctly be interpreted to permit FMS cash purchases. They do not understand what they regard as an unnecessary reluctance on our part to interpret and implement the legislation in a manner as favorable as possible to Chile’s needs.

As you will recall, we had proposed delivering to Chile a minimal defense package of M–48 tanks, APC’s and the TOW anti-tank system. The FAA amendment ruled out that package, adding to Chilean frustration and fear of growing Peruvian military superiority. (The evidence of serious internal conflict in Peru may reduce this latter pressure somewhat.) There is likely to be a substantial impact on our relations with the Junta if we are perceived to be less than forthcoming on these critical add-ons and spares.

In light of the ambiguity of the statute, and the apparent strong hostility on the part of some members of Congress to U.S. military cooperation with the present Government of Chile, a policy decision is required. Although cash sales are possible as a matter of law, as explained in the Legal Adviser’s opinion at Tab A, proceeding with such sales in the absence of a fundamental change of GOC policy and practice with regard to human rights could provoke Congressional charges that the intent of Congress had been circumvented. This, in turn, could increase the likelihood of continued, and perhaps even more stringent, legislative restrictions with respect to Chile.

If we were to defer action on further cash sales until after June 30, section 25 will expire (except for further obligations of U.S. funds under a continuing resolution) and the risk of Congressional antagonism to cash sales would be diminished accordingly.

The Options

1. Without prior Congressional sanction or consultation, proceed with the following FMS procedures:

a. Cash sale and delivery of add-ons to existing contracts (i.e. Sidewinder missile and change of three aircraft from fighter to trainer model).

b. Cash sale and delivery of naval spare parts contracted prior to enactment of Section 25 of the FAA.

c. Implementation short of delivery of all other FMS cash sales contracted prior to enactment of Section 25 of the FAA, in order to allow the GOC to continue applicable payment procedures, retain production line priorities and existing quotations, until the congressional restriction is lifted.

Pros:

—Would confirm to GOC our commitment to be supportive.

—Would enhance Chile’s defensive capability and thus contribute to regional peace and stability.

—Would reduce GOC temptation to make costly, desperation purchases from other sources.

Cons:

—Could arouse strong congressional disagreement with our interpretation and application of the law, which could adversely affect future assistance to Chile and other Administration programs.

—Could reduce pressure on GOC to enact human rights reforms.

—Could encourage the Chileans to request additional FMS cash sales.

2. Without prior congressional sanction, but rapidly informing key Congressmen of our action, proceed with the following FMS procedures:

a. Cash sale and delivery of add-ons to existing contracts (i.e. Sidewinder missile and change of three aircraft from fighter to trainer model).

b. Cash sale and delivery of naval spare parts contracted prior to enactment of Section 25 of the FAA.

c. Implementation short of delivery of all other FMS cash sales contracted prior to enactment of Section 25 of the FAA, in order to allow the GOC to continue applicable payment procedures, retain production line priorities and existing quotations, until the congressional restriction is lifted.

Pros:

—Would confirm to GOC our commitment to be supportive.

—Assuming Congress did not call a halt, would enhance Chile’s defensive capability and thus contribute to regional peace and stability.

—Assuming Congress did not call a halt, would reduce GOC temptation to make costly, desperation purchases from other sources.

Cons:

—Would arouse strong congressional disagreement which could adversely affect future assistance to Chile and other Administration programs.

—Could reduce pressure on GOC to enact human rights reforms.

—Assuming Congress did not call a halt, could make it more difficult to resist Chilean requests for additional FMS cash sales.

3. Take no action to implement particular sales without prior consultation with key congressional leaders. Seek to confirm political acceptability of our interpretation, and cite progress already made on human rights and need to offer incentive to Chileans for additional and fundamental changes.

Pros:

—Would be helpful in assuring GOC that we still wish to be supportive.

—Would reduce risk of adverse congressional reaction.

Cons:

—Could result in congressional rejection of this interpretation, thereby effectively blocking further military sales during fiscal year.

—Would continue to keep GOC dangling on issue of vital importance to it.

4. Put aside issue of whether pending FMS cash sales remain permissible. Make no deliveries on any pending FMS contracts. However, allow GOC, if it chooses, to continue applicable payment procedures to retain production line priorities and existing cost quotations but make no deliveries until congressional restriction is lifted. Carry out above without congressional consultation.

Pros:

—Would indicate some flexibility on our part on Chile’s behalf.

—Would at least assure present production line priorities and costs if and when restriction is lifted.

—Reduce risk of adverse congressional reaction.

Cons:

—Would still not give Chile anything now.

—Could be misleading and even more damaging to bilateral relations than outright cancellation if GOC continues to make payments on contracts and restriction is not lifted.

5. Treat legislative restrictions as if they were applicable to FMS cash sales. Offer GOC option to cancel or continue implementation of post-July 1 FMS cash sales cases with understanding that delivery cannot be made prior to lifting of restriction. Couple this action with strong démarche on human rights.

Pros:

—Would be best received by Congress and Chile critics.

—Would put maximum pressure on GOC to enact basic human rights reforms.

Cons:

—Would do damage to our current and longer range bilateral relations by demonstrating an apparent indifference to Chile’s perception of its vital national interests.

—Would increase GOC’s sense of isolation, and might strengthen hardline elements who argue for a go-it-alone policy.

—Would increase likelihood of costly, desperation buys of equipment wherever possible with adverse effects on acute balance of payments problem.

6. Take no action on the FMS cash sales issue at this time. If progress on human rights reforms continues and major changes are effected we can revert to more permissive options.

Pros:

—Would avoid adverse congressional reaction.

—Could provide incentive to the GOC to make basic human rights reforms.

Cons:

—Would tend to confirm GOC fears that USG is indifferent to its fate.

—Would continue to keep GOC dangling on this crucial issue and could risk hardening of its position on human rights.

—Would continue risk of costly, desperation military purchases from other sources with concurrent repercussions on balance of payments.

Probable Other Agency Views:

DOD has been looking to State for policy guidance on how to handle FMS cash sales cases.

Recommendations:

That you approve, without prior congressional sanction or consultation: a) sale and delivery of add-ons to existing contracts; b) sale and delivery of naval spare parts contracted prior to enactment of Section 25, FAA; and c) implementation short of delivery on all other FMS cash sales contracted prior to enactment of Section 25, FAA (Option 1). Supported by ARA. L does not concur in this recommendation.

ALTERNATIVELY, that you approve, without prior congressional sanction, but rapidly informing key Congressmen: a) sale and delivery of add-ons to existing contracts; b) sale and delivery of naval spare parts contracted prior to enactment of Section 25, FAA; and c) implementation short of delivery on all other FMS cash sales contracted prior to enactment of Section 25, FAA (Option 2). Supported by PM.

ALTERNATIVELY, that you approve consultations with key congressional leaders in order to confirm acceptability of cash sales limited to spare parts and add-ons (Option 3). Supported by L and H.

L and H believe that any decision to permit cash sales to Chile which is not first found to be acceptable to the Congress would be exceptionally inadvisable in light of the text of the statute, strong congressional interest in Chile, and the apparent intent of many members of the Congress to prohibit all military sales to that country. These factors would make a policy of reliance on a permissive interpretation of the law exceedingly difficult to defend in the absence of congressional acquiescence and would risk more restrictive legislation. Accordingly, both L and H strongly recommend prior congressional consultations in order to determine whether, in fact, such an interpretation would be politically acceptable.

ALTERNATIVELY, that we put aside issue of whether pending FMS cash sales remain permissible and allow GOC if it chooses, to continue applicable payment procedures on the clear understanding that no deliveries can be made until the congressional restriction is lifted (Option 4).

ALTERNATIVELY, that we decline to consider further FMS cash sales to Chile and so inform the GOC, coupled with a strong démarche on human rights (Option 5).

ALTERNATIVELY, that we take no action until there is clear and public evidence of major human rights reforms following which we can pursue Options 1, 2 or 3 (Option 6).

Attachments:

Tab A—Legal Adviser’s Opinion.

Tab B—List of pending FMS sales actions.

1. Summary: Rogers, Vest, and McCloskey outlined options for Kissinger for FMS sales to Chile in light of Congress’s prohibition on military assistance.

   Source: National Archives, RG 59, Central Foreign Policy File, P830133–2615. Secret; Exdis. Drafted by Karkashian and Michel on March 3. Sent through Maw. Gantz, Richardson, and Stern concurred. A notation at the top of the memorandum indicates that Kissinger “approved 1st recommendation” in telegram Secto 77, March 7. On the first page of the memorandum, the phrase, “as permitting cash sales,” is underlined, and a notation in the margin reads, “DOD does not concur, see Tab A supp[lement].” A notation next to the first recommendation reads, “with respect to new items, consult Congress.” The two tabs are not published. Tab A is a March 4 memorandum from Leigh to Maw providing a legal opinion on the President’s authority to sell defense articles and services to Chile. Tab B is a January 3 memorandum from Foreman to Fish transmitting an undated list of pending FMS actions. Telegram 42/Secto 77 from Aswan, March 7, containing Kissinger’s approval and his instruction that Congress be consulted regarding new items, is ibid., P850014–1285. In a March 8 memorandum, Springsteen informed Rogers, Vest, and McCloskey of Kissinger’s decision. (Ibid., P830113–1174)