293. Memorandum From the Deputy Assistant Secretary of State for European and Canadian Affairs (Lowenstein) to the Deputy Under Secretary of State for Management (Eagleburger)1
SUBJECT
- Church MNC Subcommittee—Further Developments
REFERENCE
- My Memorandum of October 3
Dave Anderson met with Jack Blum of the Church MNC Subcommittee staff on October 7 to hear about most recent developments. These are:
1. The Subcommittee met in executive session October 6 to hear the ex-OSS and ex-CIA agent, Hauser, now resident in Phoenix explain his ties with Strauss and the CSU and the latter’s ties to Lockheed. Hauser bore out what he had previously told Blum, but he did provide some embellishment and more precise dates and information under examination in the closed session.
2. Hauser reconfirmed the kidnapping story of late 1962, when an FRG auditor was removed from the Lockheed plant at Burbank by FRG [Page 904] agents, put aboard an FRG military aircraft and returned to Germany, where he was put in a mental institution for six months (not one year as originally reported). The auditor was allowed to go free after he signed documents stating that he had been blackmailing Strauss. The auditor’s wife had been unaware of her husband’s forced departure. When she learned of it, she asked Lockheed to be in touch with the FBI. This was apparently done, then the matter was covered up and the wife told that he had to return to the FRG unexpectedly. There are apparently sources in California that can corroborate this strange tale, according to Blum.
3. Hauser also spoke to the Subcommittee frankly about Prince Bernhard’s dealings with Lockheed. He described the manner of payment and the bagman, a U.S. citizen named Maeuser resident in St. Moritz.
4. There is also apparently evidence of MacDonnell-Douglas having paid off the CSU in the matter of the sales of the F–5 to the FRG. CSU Treasurer (and close friend of Strauss) Zimmermann was named repeatedly by Hauser as the man who accepted the money. Apparently the CSU rakeoff was two percent of the total deal. There are also indications that FRG General Steinhoff, formerly the NATO MC Chief, was on the take from MacDonnell-Douglas.
5. Pressing Blum, I found him uneasy about actually proving that Strauss could be shown to have received money—although the CSU certainly was in there. On the other names (except Steinhoff), Blum was far more certain.
6. Next Moves. Blum said the Subcommittee members were astounded at what they were uncovering. They want to have an open hearing but before doing so, wish the staff to track down some of Hauser’s leads. The staff investigators will go first to California, to Lockheed’s Burbank headquarters, probably next week. After that, Blum wants to return to Germany. He wants to offer the German authorities a summary computer record of the Lockheed and other documents in exchange for some German documents of interest to the Subcommittee.
Blum said that Hauser’s testimony yesterday was being treated as super-secret and was on an extremely tight hold. He worried that some leak might develop, however. He asked that everything he was telling me be protected most strictly. I gave the necessary assurances.
- Summary:
Lowenstein reported
findings of the Church Multinational Subcommittee staff
concerning West Germany.
Source: National Archives, RG 59, Records of Secretary of State Henry Kissinger, Entry 5403, Box 24, Classified “C” Material. Secret; Eyes Only. Drafted by David Anderson in EUR/CE. Forwarded to Kissinger, with an October 3 memorandum from Lowenstein to Eagleburger and Document 292, under cover of an October 7 note from Eagleburger. Kissinger wrote on the bottom of Eagleburger’s note, “Want to take up tomorrow with President.” (Ibid.) On October 8, Kissinger told Ford: “We have a potentially embarrassing problem. Bribes to Prince Berhanrd and Franz Josef Strauss of the CSU from Lockheed. We must do everything possible to keep this quiet. If the CSU is destroyed in Germany it will really shake Germany and strengthen the left.” Ford replied, “You are saying we have to keep that from getting into print. How much is involved?” Kissinger responded, “Yes. It runs into millions. It involved the F–104.” (Memorandum of conversation, October 8; Ford Library, National Security Adviser, Memoranda of Conversation, Box 15)
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