THE PRESIDENT'S DAILY BRIEF 22 OCTOBER 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006014934
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: October 22, 1975

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The President's Daily Brief
October 22, 1975
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Exempt from general
declassification schedule of CO. 11652
exemption category 5111(1),(2),(31
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
October 22, 1975
Table of Contents
Spain: As General Franco lingers near death, Span-
ish officials are preparing to transfer power
to Prince Juan Carlos. (Page 1)
Syria-Israel: Several Syrian military moves appear
aimed at raising tension in connection with
the renewal of the UN observer force mandate
on the Golan Heights. (Page 6)
Lebanon: Violence continued in Beirut yesterday.
(Page 8)
Portugal: The government and its communist and
far-left antagonists appear to be bolstering
their own positions in preparation for a resump-
tion of confrontations which could come later
this week. (Page 10)
Vietnam: The Vietnamese communists are attempting
to exploit the refugees now en route from Guam
to Vietnam as an issue to embarrass Washington.
(Page 12)
Yugoslavia: President Tito may soon move decisively
against his domestic opponents, with pro-Soviet,
Stalinist elements as his principal target.
(Page 15)
Notes: USSR; Bank for International Settlements;
Israel (Pages 16 and 17)
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SPAIN
General Francisco Franco lingered
near death this morning; Spanish offi-
cials, including Prime Minister Arias,
said last night they believe he has
less than 24 hours to live.
Spanish government spokesmen continue to re-
port that Franco is recovering, keeping from the
public the gravity of Franco's illness as they did
in 1974.
Franco's death--or complete incapacitation--
will come at a time when the deep divisions within
Spain are more evident than ever.
For the moment at least, the shock of the
event--although certainly not unexpected--plus the
Spanish sense of propriety and pride will probably
overcome the divisions in the country sufficiently
to permit the carefully planned transition to be
effected largely as intended.
The succession law of 1969 stipulates that
Prince Juan Carlos will become chief of state (king)
within eight days after Franco dies or is declared
incapacitated. In the interim, power will be as-
sumed in Juan Carlos' name by a Regency Council com-
posed of a senior member of parliament, a church
official, and a military man.
(continued)
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Juan Carlos also will inherit Franco's position
as supreme commander of the armed forces, but in the
king's case, exercise of this function is expected
to be symbolic.
Juan Carlos will have neither the personal
prestige nor the legal foundation to exercise the
absolute power Franco has wielded for almost four
decades. An annex to the Organic Law of 1967--one
of seven Fundamental Laws which as a group comprise
the constitution--prescribes that Franco's special
powers will lapse with the implementation of the
Law of Succession.
Unlike Franco, Juan Carlos must share power
with others in the government, particularly the
Prime Minister or "President of the Government."
The Organic Law states that all decisions of
the head of state must be countersigned either by
the Prime Minister, another minister whose office is
involved in the decision, the president of the Cortes
(the legislature), or the president of the Council
of the Realm, a 17-member senior advisory body.
Despite such limitations, Juan Carlos will have
more power than any other Western constitutional
monarch.
The term of Prime Minister Arias does not ex-
pire until January 1979.
A Divided Establishment
A majority of highly placed Spaniards recognize
that their society needs to be freer, but they are
divided over how free it should be, and at what pace
freedom should be introduced. Differences on these
matters are spread unevenly over the main sectors of
the Spanish establishment.
The church, for example, has been in the van-
guard of those seeking to promote social and polit-
ical change, so much so in fact that the Spanish
episcopate barely qualifies any longer as part of
the establishment.
(continued)
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The great bulk of the officer corps is conserv-
ative; a small percentage is ultraconservative.
Most reports portray the military as interested pri-
marily in maintaining order. There are indications,
however, that some junior officers are talking more
openly than heretofore about the merits of a sound
democratic system.
Organized political
tary is banned, but
junior officers who favor rapid
for Spain and are interested in
ample.
activity within the mili-
liberal social change
the Portuguese ex-
Spanish political figures, who make up another
important segment of the establishment, have had
very little experience in organizing in such a way
as to appeal to a constituency. They have concen-
trated on developing close ties to Franco, the
source of all power.
Politics have been changing slowly since the
authorization of political associations (quasi-
parties) in January 1975. Two of the more signifi-
cant associations are the Spanish Democratic Union,
a moderate Catholic-oriented group under former
cabinet minister Federico Silva Munoz, and the Union
of Spanish People, a rightist group under the head
of Franco's National Movement, Jose Solis Ruiz.
All members of the establishment, including
bureaucrats, financiers, and industrialists, will
want to maintain their privileges. They will all
cooperate, therefore, with Juan Carlos and Arias to
arrange an orderly transition.
Such people will soon disagree over what parts
of Franco's system should be preserved and what
should be liberalized. Their disagreements may
make it easier for the illegal opposition to enter
politics openly. The various political groups that
make up the illegal opposition are more interested
in dismantling Franco's system than in altering it.
The Illegal Opposition
The absence of free political activity--elec-
tions, rallies, mass meetings--makes it difficult
to estimate popular support for the parties that
have existed illegally. It is apparent that
(continued)
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they have some appeal among Spanish youth, intellec-
tuals, and workers. It is also clear that the par-
ties are divided. There are, for example, two na-
tional and three regional Christian Democratic
parties and at least three rival Socialist parties.
The Spanish Communist Party, in organizational
terms if not in numbers, is the strongest party in
the illegal opposition. It exercises considerable
influence in the labor movement because of its con-
trol of the Workers' Commissions. It has support
in the universities and is said to have good connec-
tions in the media.
The Communists have tried without much success
to form a popular front of political parties, but
they probably will renew their efforts.
The Spanish Communist Party has been led for
many years by Santiago Carrillo, who makes his head-
quarters in Paris. He has maintained considerable
independence from Moscow and, like the Italian Com-
munists, strongly criticized the Soviet invasion of
Czechoslovakia.
These positions have caused considerable hos-
tility between Carrillo and his Portuguese counter-
parts, who have always supported Moscow's policies.
Regionalism
It is reasonable to assume that pressures for
regional self-rule will rise in the post-Franco
period. The Basque people, who occupy four prov-
inces in the north, and the Catalan, who live in
four provinces in the northeast, will press hard for
a greater voice in running their own affairs.
The populations of both areas feel discrimi-
nated against culturally and economically, but this
sentiment is especially strong--and better organ-
ized--in the Basque country.
Most Basques would be satisfied with greater
autonomy rather than a complete break with Madrid.
The Basque terrorist organization wants immediate
and complete independence from Madrid, and it has
used and will continue to use violence to achieve
this goal.
(continued)
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Basque terrorists, together with members of
the Antifascist Patriotic Revolutionary Front who
are committed to the violent overthrow of the govern-
ment, will be as serious a problem for Juan Carlos
as they were for Franco during the last days of his
rule.
Foreign Relations
Although Spanish officials will be concerned
primarily with the orderly transfer of power and
the domestic effects of Franco's death, Spain's
foreign relations cannot be ignored for even a short
period of time.
Madrid, for example, must still complete nego-
tiations on the future of US bases in the country.
Some Spaniards may be tempted to hold out for terms
more advantageous to Spain, but the majority will
not want to alienate the US at such a time.
Franco's death probably will not change Madrid's
decision to withdraw from Spanish Sahara peacefully,
if it can. Spanish officials probably will reinforce
this point with Rabat to avoid any rash action on the
part of these Moroccans who believe that Spain is
preoccupied with the transfer of power.
Madrid's effort to pursue closer ties with
Western Europe, which was set back sharply by the
recent anti-Franco demonstrations abroad, is likely
to meet with greater success. Most of Europe will
be anxious to give Spain's new leaders a chance.
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SYRIA-ISRAEL
Syria has made several military moves
that appear to be aimed at raising tension
in connection with the renewal of the UN
observer force mandate on the Golan Heights.
Late last week,
seeing large numbers of Syrian
troops moving rrom north of Damascus to an area
about 25 miles south of the capital. Some of these
movements may have been units returning to home
bases from the Iraqi border, but those observed
south of Damascus may have indicated an adjustment
of forces on the Golan front.
The Syrians almost certainly are trying to in-
crease tension on the Golan Heights, but it is also
possible that the reported troop movements could be
part of Syrian preparations for a limited operation
to seize and hold a portion of Israeli territory
along the disengagement line. A local news corre-
spondent told the US embassy in Damascus last week-
end that such an operation is in the works.
Whether posturing for effect or preparing for
an operation, the Syrians can be expected to take
certain steps such as holding military exercises
near the front and calling up some reservists. The
proximity of their forces to the disengagement line
means there would be very little warning if the
Syrians decided to launch an attack after such
initial preparations.
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Despite Tel Aviv's low-key reaction to the
Syrian moves, it may have instructed Israeli forces
on the Golan to adopt a more aggressive posture to
signal Damascus that it is fully alert to the pos-
sibility of renewed fighting.
yesterday that
Israeli forces have initiated a number of minor but
provocative incidents in the vicinity of the disen-
gagement line during the past few weeks.
In one such incident Israeli soldiers in an
armored personnel carrier sprayed the UN buffer
zone with heavy machine-gun fire.
the two Syrian shepherds who
Israeli troops last week were in the UN buffer zone
when they were shot.
were killed by
The potential for future incidents in this area
is high because the Is-
raelis dispute the disengagement line there with the
UN and the Syrians.
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Beirut, Lebanon
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LEBANON
Violence continued in Beirut yester-
day. All roads were declared unsafe be-
cause both sides were using mobile road-
blocks in order to kidnap members of the
opposition.
Ambassador Godley reported this morning that
two US Information Agency employees were kidnaped
at a roadblock on their way to work.
Efforts to find a political solution to the
crisis seem to be faltering. Phalangist leader
Jumayyil has threatened to pull his right-wing or-
ganization out of the National Dialogue Committee,
charging that attacks on Christian areas of Beirut
were attempts to pressure the Christians into mak-
ing concessions to the Muslims. Meanwhile, Saib
Salam, a former prime minister and a moderate Mus-
lim leader, has warned that if reforms are not
forthcoming, "the whole system will be swept away."
Kamal Jumblatt and other Lebanese leftists met
in Damascus yesterday with Palestine Liberation Or-
ganization leader Arafat, Saiqa chief Zuhayr Muhsin,
and the leader of the Popular Democratic Front for
the Liberation of Palestine, Nayif Hawatmah. They
were reported to have discussed the Phalangist ef-
forts to "internationalize" the conflict. Jumblatt
also was scheduled to meet with Syrian President
Asad.
The continued fighting is rapidly causing Bei-
rut to lose its status, at least temporarily, as
the regional business center of the Middle East.
Some firms have already pulled up stakes--McDonnell
Douglas has relocated in Rome, and the Bechtel Cor-
poration has moved its regional headquarters to
Kuwait. Other foreign business and financial com-
panies, including Bank of America, First National
City Bank, and General Motors, have temporarily
evacuated employees and their families, in most
cases to Athens. No major firms, to our knowledge,
are currently operating out of Beirut at full
strength.
(continued)
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A definitive cessation of hostilities probably
would bring back most of the evacuated firms inas-
much as there is no presently viable alternative
to the Lebanese capital as a regional center.
Athens is too far from the Middle East, and Cairo's
facilities are already overtaxed and over-bureau-
cratized. While Jordan, Kuwait, and other Gulf
states would like to replace Beirut as a regional
center, none yet can match its communication net-
work, highly trained work force, and housing and
educational facilities.
On the other hand, prolonged fighting in Leba-
non will increase the chances that many firms will
disperse their Mideast activities. Some companies
reportedly are considering controlling operations
from outside the region. Supersonic airline serv-
ice between Western Europe and Middle East, together
with rapidly improving infrastructure in much of
the Gulf region where most of the lucrative markets
are located, may eventually make it feasible to by-
pass Beirut altogether.
The impact of such a shift from Beirut would
be disastrous for Lebanon. Already physical de-
struction and lost tourist and trade earnings are
estimated at as much as $3.5 billion--nearly a full
year's gross national product. The longer term
loss of earnings from financial services, transit
fees, and other commercial services would turn Leb-
anon's traditional trade surpluses into chronic
deficits. Fully two thirds of the country's gross
national product is drawn from the services account,
primarily banking, commerce, and tourism, centered
in Beirut.
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PORTUGAL
The government and its communist
and far-left antagonists appear to be
bolstering their own positions in prepa-
ration for new tests of strength that
could come later this week.
On Monday the government announced that it had
removed four district governors. The location of
the posts, one in each of the country's four mili-
tary regions, suggests that the government may be
warning its opponents that it is prepared to exer-
cise its authority in whatever part of the country
it is challenged. This also is the first step in
fulfilling a promise made earlier by Prime Minister
Azevedo that leftist local administrators who seized
office after last year's coup would be replaced.
The new governors, who will undoubtedly reflect the
views of the government, have not yet been named.
The government also took another step on Mon-
day to lessen the hold of the communists on the
media. Libel proceedings were instituted against
a Lisbon paper controlled by pro-communist workers
following an editorial attack on General Melo Egi-
dio, head of the new military intervention force
which has been set up to curb military indiscipline
and maintain public order. Control of the media is
critical at this stage because news reports appear
to have aided key opposition groups by exaggerating
their strength and importance.
In addition to the attack on General Melo Egi-
dio, the opposition continues to criticize the com-
mander of the Northern Military Region, General
Pires Veloso. The general, whose attempts to main-
tain military discipline in his command have made
him the focal point of anti-government demonstra-
tions, has been accused of trying to undermine a -
compromise reached last week between rebellious _-
troops in the north and army Chief of Staff Fabiao.
The opposition's accusations could actually have
some basis in fact, in light of reports that the
government is displeased with Fabiao's compromise
measures and that the army chief may soon be re-
placed.
(continued)
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As positions continue to harden, pro-govern-
ment military figures have begun to criticize the
opposition more openly. Captain Vasco Lourenco, a
key member of the Revolutionary Council, has put
the blame for insubordination in the military
squarely on the communists and the far left. Colo-
nel Jaime Neves, commander of the crack commando
regiment which will form the backbone of the new
security force, has referred to an opposition plot
that he said would surely lead to armed confronta-
tion.
The chances for such a confrontation will in-
crease later this week when several important dead-
lines occur.
The findings of an inquiry into
recent incidents of violence in Porto will be made
known on Friday, and Saturday is the deadline set
by Costa Gomes for turning in arms held illegally
throughout the country. According to press reports,
the security forces said yesterday that not a single
weapon had been surrendered in response to the
appeal, which was issued four days ago.
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VIETNAM
The Vietnamese communists are at-
tempting to exploit the 1,600 refugees
now en route from Guam to Vietnam as an
issue with which to embarrass Washington
over its alleged mistreatment of refugees
in the US.
The main thrust of communist propaganda is
that the US "tricked" thousands of Vietnamese into
exile by "raising the scare of a bloodbath." Hanoi
and Saigon claim that Washington has now been
obliged to accept the "legitimate demand" of the
Guam refugees to return home. The communists com-
plain, however, that the US has denied its respon-
sibility for the "crime" of creating the refugee
problem and has decided unilaterally to return the
1,600 Vietnamese without obtaining "authorization"
from the Saigon authorities.
The principal motive of the communists prob-
ably is to "settle accounts" with the US over the
massive exodus of refugees last April that outraged
and embarrassed the Hanoi leadership.
The claim that this US unilateral action "vio-
lates Vietnam's sovereignty" raises the possibility
that Saigon will refuse to allow the refugees to
disembark unless the US acknowledges its "responsi-
bility" for all the refugees and agrees to general
arrangements for future repatriation. The commu-
nists appear to be making the case that many others
now living in US "concentration camps" will request
repatriation. Despite their denunciation of the
"unilateral" action of the US, the Vietnamese com-
munists thus far have stopped short of any call for
direct talks between Saigon and the US on the ref-
ugee question. They may nonetheless be tempted to
do just this, reasoning that considerable propa-
ganda advantage could be derived from a US refusal
to deal with Saigon.
The communists' apparent determination to
bring the entire refugee question to a head was re-
flected in their warning to UN Secretary General
Waldheim on October 19 that they reject the US de-
cision to return the refugees from Guam and that
they will not be responsible for anything that
might happen.
(continued)
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In what may be an attempt to contrast the al-
leged irresponsibility of the US and its disregard
of the refugees' welfare with communist generosity
and good will, Hanoi announced on Monday that the
Provisional Revolutionary Government in Saigon will
release Americans and other foreigners who have
been denied permission to leave South Vietnam since
the communist victory last April. Hanoi stated
that the UN High Commissioner for Refugees has
agreed to assist this repatriation, which "may be
carried out in late October or early November."
The timing of the release, however, raises the
possibility that Hanoi will make the departure of
the Americans and other foreigners conditional on
a "satisfactory" US acknowledgment of its respon-
sibility for resolving the general Vietnamese ref-
ugee problem.
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YUGOSLAVIA
President Tito may soon move deci-
sively against his domestic opponents,
with pro-Soviet, Stalinist elements as
his principal target.
Widespread rumors in Belgrade claim that a
major show trial of so-called Cominformists will
take place in the near future. An East European
diplomat has told our embassy that one or two
"prominent personalities" are to be arrested for
Cominformist activities.
Tito ordered
the internal security network last August to pre-
pare specific proposals for an extensive suppres-
sion of di7isidence. With the recent examples of
Portugal and Spain presumably in mind, the Presi-
dent may well be determined to clear the slate,
before it is too late, of those regime opponents
hovering on the fringe of outright opposition.
In addition to Stalinist subversives--12 more
of whom have reportedly been arrested--the likely
candidates for arrest include supporters of Tito's
former heir-apparent, Aleksandr Rankovic, and pos-
sibly a sprinkling of pro-Western liberals like
Milovan Djilas. The pro-Western dissidents would
be included in the sweep for both domestic and
foreign reasons. At home, Tito does not want any
moves against Stalinists to raise the hopes of the
liberal reformers he sacked during 1972 and 1973.
Externally, Belgrade presumably wants to avoid any
serious deterioration in already strained relations
with Moscow.
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NOTES
Soviets
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Discussion of New York's financial plight dom-
inated the meeting of central bankers at the Bank
for International Settlements last week.
The Europeans expressed concern that New York's
problems may cause severe difficulties for the in-
ternational banking community and may erode foreign
confidence in US financial stability. Foreign cen-
tral bankers are concerned that a loss of confidence
in New York's notes would spread to other US munici-
pal issues and cause a decline of foreign confidence
in US Treasury issues. They lamented the potential
impact of the city's plight on the solvency of US
banks and the stability of the US financial market.
The Europeans cited the New York problem as one
cause of the dollar's recent weakness.
(continued)
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FOR THE PRESIDENT ONLY
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Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012800010045-6
FOR THE PRESIDENT ONLY
Israel is planning to conduct local elections
in the occupied West Bank starting next week and
possibly in the Gaza Strip early next year.
The Israelis probably hope the elections will
buttress their case against claims by the Arab
states that the Palestine Liberation Organization
represents the Palestinians. Israel contends that
the elected leadership on the West Bank is more
representative of the Palestinians, perhaps with
an eye to the possible participation of West Bankers
in peace negotiation. Jordan has never recognized
the validity of West Bank elections held under the
Israreli occupation, contending they are the illegal
acts of an occupying power. Egypt undoubtedly will
object on the same grounds if the Israelis call for
elections in the Gaza Strip.
17
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012800010045-6
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012800010045-6
Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2016/07/14 : CIA-RDP79T00936A012800010045-6