THE CIA HAS ITS VIRTUES- AS KENNEDY LEARNED DURING THE CUBAN MISSILE CRISIS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP77-00432R000100220001-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 43
• Document Creation Date: December 9, 2016
• Document Release Date: June 21, 2001
• Sequence Number: 1
• Publication Date: August 31, 1973
• Content Type: NSPR

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This publication contains clippings from the
domestic and foreign press for YOUR
BACKGROUND INFORMATION. Further use
of selected items would rarely be advisable.
GOVERNMENTAL AFFAIRS
GENERAL
FAR EAST
/uz2.G~cY' .Gtr
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LOS ANGELES TIMES
31 August 1.973 ,
? n ? r
CIA Has".Its Virtues-=-as Kennedy Learned
BY HARRY ROSITZKE '
The Central Intelligence Agency's
connection to the Ellsberg and
.Watergate affairs has again, raised:
the question of the agency's proper
functions in the foreign affairs oft:
the United States. What does CIA''
contribute? Do we need intelligence,`
secret or otherwise? Why spy?' .. '
The word "intelligence" in the.
agency's title covers two widely' se-
parate activities: academic-type re-
search and analysis in Washington,
and secret operations abroad.
The CIA's main overseas mission.'
'is to carry on espionage and counter=
espionage work, a mission that rare-
ly warrants\ notice on the front;
pages. Its principal function in.
government,' however, is to provide'
the President with estimates of!
foreign events and situations that
are as objective and as close to real-.
ity as is humanly possible. r
Such estimates are based upon a,
solid foundation of evidence and.in-
terpretation, the CIA's main day-to-,
day business. What is happening to'
the Chilean economy? What popular
.support do the Greek colonels en-
joy? What prompted Peking to wave.
a friendly Ping-Pong paddle at
Washington? What military and
.economic pressures led Leonid I.:,
Brezhnev into his opening. to the'
West?
Espionage reports per se normally;,
contribute only a small share to.the';
pool of information with which the:
CIA's intelligence analysts work,'
but occasionally a single agent-re-,
port makes a crucial difference.
A Communist source delivered a.,
'verbatim copy of Nikita S. Khrush-
chev's 1956 "secret speech" that,
alerted the world to the force and
venom with which the new Soviet;
regime rejected Josef Stalin and his
policies. In another case, a.l few re
,ports from a Soviet colonel in Mos-'
.cow "saved the-.Pentagon' at least a,
quarter-billion dollars in research
and development. Two agents in dif-
ferent parts of the . world=both:
Communist Party meinbers~--sent'in
the first reports.. of border ' differ-'
ences -between Moscow and Peking
,--as early as the winter of 1957-58.?
The Cuban missile crisis was a-
dramatic example of the confluence
of basic research, analysis, predic-
tion 'and agent-reports that gave
President Kennedy the .information
needed to make his decisions.,
Without a specialist' on. Soviet
crates who could judge what was.
inside the boxes on the decks of So
viet freighters going to Cuba, with-'j,
out experts on Soviet launching-
. sites, without the previous U!2
Harry Rositzke worked for the.,
Office of Strategic Services and the
Central Intelligence Agency for 26
years before he retired in 1970. He is
author of the book, "U.S.S.R. Today."
flights over the U.S.S.R., without de-.'
,tailed military-technical data from a
'top-level agent in Moscow, without a
'.few. sound (among the many un-
sound) leads provided by agents in-;
side Cuba-without all these, the So-:
viet missiles could easily have be-
come operational before the Pres-
.ident was able to take preventive ac-
Lion.
' It is essential, of course, that the
Intelligence 'analyst be:'as free as
`possible from preconceptions thatf
will prejudice his 'conclusions. His,
'task, like that of the academic his-''
?torian or the journalist, is to let thgy~
A major threat to the exercise of
unprejudiced analysis in the govern=
ment is the distorting influence of
so-called departmental -intelligence,
,-estimates m .a d e in the. Departe',
mentsof State and Defense on mat
ters 'of'. crucial policy interest' to;
them.`-' The main virtue of central ihtel=
ligence is to. produce independent;
national estimates and not leave the.
estimating function in the hands of.
the policy-makers.
Any department of 'the"govern-'
ment.with policy-making powers is
.bound on. occasion to use the-infor-.
mation available 'to it in support of
its own policies. The' Department of
'State, for example, may be inclined,
'to select or highlight facts and inter-,
pretations -that support the depart-i
ment's or?, the President's adopted
:,courses of. action-say, in the Arab-'
-Israeli conflict'drin'the India-Pakis-'
;tan confrontation on Kashmir and,
Bangladesh.
The Defense Department similarly
will tend to. overestimate an enemy's
capabilities and be constantly.
'alarmed-about his intentions. Gener-'
,als naturally want more' and better
'arms to meet these "threats," and it'
in around budget tiniethat the mill
Lary tells Congress and the public
.about its principal worries: the,
`alarming number of Soviet missiles;
'and launching sites,, the impressive
?size and quality of the enemy sub-:'
marine fleet,,an. impending Chinese,,
missile threat. '
On these and other crucial infor-'
'mation? questions, the -CIA's. index'
pendent ' intelligence function ' has,
;served over . ' the; _ years to give the
,President.'as disinterested 'and -level-i
`headed "estimates. of the situation",
as only a separate intelligence agen..
,cy can. %
j It is not surprising, therefore, that!
in the great game of counting Soviet-,
missiles the CIA's numbers have.
consistently been more modest, than'
the Pentagon's.' ,
Some attack all Intelligence work,
,departmental or, central-as one
ban Missile- Unsis
writer did
on this page some weeks ,
,
.
-ago. Such critics appear to be con-,
vinced that the 'intelligence' function'
;serves no, useful purpose, since the.
analyst always comes out with the.
'` conclusion he subjectively wants.
t In my own experience, this is`
simply not true. The analysts I have
known are not only extremely well
informed but reasonably, self-criti-'
cal, ahd, when they differ with each
other, the .arguments that ensue are'
r likely to shake out any hidden as-'
`'sumptions or political. biases one or
.another may entertain.. Intelligence)
work is a profession, not a bureauc-:
' 'cratic game, ' and personal detach-'
ment is a basic element in -the
profession's ethic.
Yet, intelligence analysts, like his-
{torians or journalists, are ,human
"and subject to the deeper social-pre.
judices. of their time.
,t In the. hysteria of -the cold war.
,years, for- example, there were fe v'
Americans who.. were 'not convinced
of a real" Sovi6t,threat 'to overrun
Western Europe or to blast the Unit
ed States with atomic bombs. There
was never. any rational evidence-
then or now-that Moscow ever en=
tertained such intention's. During
.the 'S0s there were widespread-pub '
1ic'and private fears-now-ludicrous:
,in retrospect-that the American.
Communist Party threatened the se
curity.of the nation. These were hu-
,,man, not academic or bureaucratic,
aberrations. -
All men, -of course, think' partly
with their stomachs but,
fortunate- the, CIA's analysts need not--;and
?do'not-think first of justifying poli-,
Gies or fortifying budget requests:',:.
What concerns me more than any
built-in inadequacy . of the Lintel-.
'ligence system is the failure of'poll-
cy-makers to make' better use of the,
information they are given.
The war in Vietnam is a tragic ex-,
ample. A careful reader 'of the Pen-
tagon Papers will recognize that-;the,
CIA estimates on Vietnam were, far
closer to reality than were the opts.
mistic forecasts of the generals, 'It
was an extensive,. detailed CIA stu
dy in the, mid-'60s that first, con-
'.vinced the secretary of defense that'
the Vietnamese war would be a long,
'one and that it could not-be won on'
the battlefield. '
Good intelligence does not auto.
'matically make for good, policy deci-,j
sions, nor does it make up for bad
'decisions. Presidents do not make
'decisions on the basis of intelligence'
alone, for they work under the. pres-'
sures of allies, Congress, the Amerl'
,can public and domestic interest.
groups.,
If, in the final analysis, the Pres-1
ident's decisions are subject to per.'-;
sonal inclination or outside in-
fluences, that is, not a fault of intel-
ligence.. - , . ' - .
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THE PROGRESSIVE
September 1973
The CIA's
under Fire
irty' ''ricks
-at Last
For the first time in more than two decades, Congress
is beginning to take a hard look at the Central Intel-
ligence Agency. In the wake of revelations of CIA com-
plicity in the Watergate affair, a serious debate about
the Agency is now taking shape, and it could develop
into an historic battle over the role of clandestine oper- ;
.,Lions in American foreign policy.
"Clandestine operations" (which should not be con-
fused with the gathering of foreign intelligence) in-
clude a wide range of political,. propaganda, economic,
cultural, and paramilitary activities known within the
CIA as "covert action" and "special operations," or,
more generally, Dirty Tricks. These operations have
included, over the years, such practices as:
S Hidden support and assistance to political parties
in., foreign election campaigns.
? The establishment of dummy foundations to pro-
vide funds for a number of private organizations en-
gaged in scholarship, propaganda, labor, youth,. and
cultural affairs.
? Establishing ostensibly independent,- private com-
panies, including a number of airlines.
? Arranging coups d'etat; supporting, training, and
leading private armies and air forces in foreign nations.
? Helping to establish security police organizations
in a number of countries, and other Cold War ploys.
The CIA operations amount, in, total; tq a clandes-
tine American foreign policy under , the exclusive
control of the President, insulated from public control
and even from public scrutiny-not to mention Con-
gress itself.
President Nixon has given a clear signal that he
places a high value on covert operations. His new Di-
rector of Central Intelligence, William Egan Colby,
fifty-three, spent his adult life in Dirty Tricks, begin-
ning with OSS guerrilla operations in World War II
and' culminating in a twelve-year stint as one of the
CIA officials most deeply involved in the Vietnam war.
Colby was CIA station chief in Saigon (and a
staunch supporter of President Ngo Dinh Diem) from
1959 to 1961. From 1962 through 1967 he was chief of
the Far East Division of the Clandestine Services, the
formal title of the operating arm of the CIA. From
1968 to 1971 he was involved with the "pacification"
program in Vietnam, first as deputy and later as am-
bassador in charge. In 1971-72 he was back in Wash-
ington again as Executive Director (number three
man) at the Agency. When that post was abolished in
a reorganization this year, he became head of the
Directorate of Operations, which runs the Clandestine
Services.
Andrew Hamiliton is a Washington writer whose articles
have appeared in many publications; including Congressional
Quarterly, Science, The New York Times, and The
Economist in 4ondon. Recently he served in the office of
program analysis. of the National Security Council, where
he specialized in the defense program and arms control
plans. He wrote '"Helpless Giant," a study of the national
de/en;e budget. '
Colby is a .quiet, undemonstrative man-"when he's
really mad he's almost whispering," recalls a former
employe-whose mild manner conceals the toughness
and boldness of a behind-the-lines guerrilla fighter. He
has the reputation of being one of the CIA's most re-
sourceful managers of Dirty Tricks. He was responsi-
ble, as head of the pacjfi ation program, for American
participation in the Phoenix program' in which thou-
sands of Vietnamese suspects were killed or jailed on
suspicion that they worked for the Vietcong.
Senator,. William Proxmire, Wisconsin Democrat,
complained during the recent debate on Colby's nom-
ination that, the Senate was being asked to cast a
"blind vale:" He observed: "We don't really know who
Mr. Colby is, We are not allowed to go back into
his persopal employment history and judge his fitness.
We do not know what jobs he has accomplished .. .
And we, will be confirming him for a blind position
[about which] we know very little...."
Although the Senate confirmed Colby August 1 by
a vote of eighty-three to thirteen, the decisive battle
will begin this.. fall. Senator John C. Stennis, Mississip-
pi Democrat, has announced that his Senate Armed
Services Committee will hold hearings on the CIA's
basic legislative charter to determine whether the
Agency exceeded its authority in waging war in Laos
and. in its involvement with the White House "plumb-
ers".in the Watergate affair.
Stennis's Committee is the one whose CIA Oversight
Subcommittee has failed to meet for several years,
and whose members have rarely expressed any interest
in supervising the secret and powerful Agency. But the
hearings come amid a growing feeling in Washington-
expressed even by Chairman Stennis-that the CIA's
Cold War mission as the clandestine action arm of
U.S. foreign policy no longer serves the national inter-
est, if it ever did.
' The man who founded the CIA in 1947, President
Harry S Truman, reached this conclusion a full decade
ago.. In 1963, he wrote: "For some time I have been
disturbed by, the way the CIA has been diverted from
its original assignment. It has become an operational
and at times a policy-making arm of the Govern-
ment . . . I', never had any thought that when I set
up the CIA it would be injected into peacetime cloak-
and-dagger. operations."
Other Presidents have had qualms about the CIA.
John F. Kennedy,' a former aide once said, wanted to
"splinter it into a thousand pieces and scatter it to
the winds" after the Bay of Pigs disaster, a CIA-
,planned operation which Kbnnedy'had approved. Lyn-
don B. Johnson,'hardty a shrinking violet when it came
to U.S. exploits abroad, was appalled by the ramifica-
tions of some CIA operations. When he took office he
learned, according to an account by Leo Janos in the
July, 1973, Atlantic, that "we had been operating a
'damned Murder Inc. in the Caribbean." Even Rich-
ard M. Nixon, in a 1969 speech to CIA employes,'
acknowledged that "this organization has a mission
that, by necessity, runs, counter to some of the very
deeply held traditions in the country, and feelings, high
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idealistic feelings, about what a free society ought to
be."
But President Kennedy, like his successors, soon came
to recognize the immense potential of an organization
whose acts could be neither traced by the victims nor?
supervised by his political opponents in Congress. The
Kennedy years, in the opinion of one former intelli-
gence official, became "the heyday" for the CIA's covert
political intervention in other countries. President
Johnson followed by unleashing massive CIA oper-
ations in Laos and South Vietnam. And President Nix-
on, in the same 1969 speech, concluded that the CIA
"is t necessary adjunct to the . conduct of the
Presidency."
What both troubled and attracted these Presidents
was not the CIA's "quiet intelligence" activities, but
its wide range of Dirty Tricks. In the decade since
Harry Truman's warning, little has been done to curb
the President's own Back Alley Boys. Except for a hand-
ful of progressives, Congress continued politely to look
the other way and ask no embarrassing questions.
Now, in the lurid light of Watergate, Congress can no
longer refuse to take a closer look.
By their very nature, covert operations defy effective
Congressional oversight. A handful of men in the
House and Senate, senior members of the Armed Serv-.
ices and Appropriations Committees, are the only
members of Congress allowed to ask the Agency what it
is doing. Their meetings have always been secret, and
their deliberations are never disclosed even to, other.
members of Congress. Their recommendations to the
Agency, if any, have never been tested in general de-
bate or put to a vote of Congress. ?
From the time of its. inception, the CIA's name ? has
been synonymous with secrecy; no outsider can hope-
to obtain more than a rough map of its terrain. It is
the Agency's practice neither to confirm nor to deny
any allegations made about it. CIA employes take the
most stringent secrecy oath administered by the Gov-
ernment. This oath has been interpreted by the Agency
as prohibiting a present or former employe from reveal-
ing anything he has learned while working for the.
CIA-an interpretation that has won at least partial
support in the Federal courts. Victor Marchetti, a for-
mer CIA official, is under court order to submit the
manuscript of his forthcoming book about the Agency
for review before publication, and the Agency has been
authorized to make deletions, provided they are not
arbitrary or capricious.
But the Agency has found it impossible to remain
wholly invisible. The picture I present here was as-
sembled from the public record (which grows longer
almost daily), and from interviews conducted over a
period of several years with a number of present and
former CIA employes, intelligence officials from other
U.S. agencies, foreign service officers, Congressional
sources, and Administration aides. (While I had a
limited contact with CIA intelligence analysts when I
servgd as a member of the National Security Council
staff in 1970-1971, I had no contact with the clandes-
tine organization or activities of the CIA.)
The CIA has both a public and a secret charter.
The public charter, on which Senator Stennis's hear-,
I - ngs will focus, is found in the National Security Act
of 1947 and its 1949 amendments (U.S. Code Chapter
50, Title 15, sections 403 ff.). It is the vaguest of char-
ters, stating that the CIA shall "coordinate" intelligence
activities undertaken in the interest of national security
and shall:
o Advise the National Security Council regarding
national security intelligence activities.
o Make recommendations to the NSC for coordina-
tion of intelligence activities.
@ Correlate, evaluate, and disseminate national se-
curity intelligence.
0 Perform "for the benefit of the existing intelligence
agencies such additional services of common concern"
as the NSC directs.
0 "Perform such other functions and duties related
to intelligence affecting the national security as the
National Security Council may from time to time
direct."
The last two provision's provide the official rationale
for the CIA's clandestine activities, both in collecting
intelligence and in performing covert operations.'
,These duties are detailed in the Agency's "secret char-
ter"-a series of top-secret Presidential 'orders known
as National Security Council Intelligence Directives, or
"N-Skids."
The Senate Armed Services Committee, which has
jurisdiction over the National Security Act, apparently
has never seen these documents, though they are essen-
? tial to an understanding of the CIA's 'clandestine op-
erations. Colby, the new director, recently promised to
make -the "N-Skids" available to the Committee, but
there is no reason to assume that they will be disclosed
to the public.
Section 403(d) also contains two seemingly contra-
dictory provisos regarding CIA activities within the
United -States. One declares that "the Agency shall
have no police, subppena, law-enforcement powers, or
internal security functipns." The other states that "the
Director of Central Intelligence shall be responsible
for' protecting -intelligence sources and methods from
unauthorized disclosure."
The first proviso, which the ?CIA. apparently violated
in extending assistance to the White House "plumb-
ers," was intended to protect the FBI's turf from CIA
encroachment and to restrict the CIA to foreign intel-
ligence activities. The second proviso, however, seems
to give the Director scope for a broad. range of domes-
tic counter-intelligence activities. Whatever the justi-
fication, the CIA has not ? been reluctant to undertake
clandestine operations within the' United States.
The Act also permits the Agency to keel) secret its
budget, organization, personnel strength, identity of
personnel, and other operational and administrative
details, notwithstanding other provisions of law, and
to spend money without regard for normal Government
procedures.
Three points about the ,CIA's charter stand out:
FIRST, the Agency is answerable directly to the Pres-
ident, and to the President alone. (The National Se-
curity Council is merely an advisory body made up of
Presidential appointees-the Secretaries of State and
Defense and the Director,of the Office of Emergency
Preparedness.)
SECOND, the CIA enjoys extraordinary freedom from
public and even Congressional scrutiny.
THIRD, its duties encompass much more than the
routine collection and evaluation of information. "The
powers of the proposed 'Agency," warned Secretary of
State George C. Marshall in a memorandum to Pres-
ident Truman in 1947, "seem almost unlimited and
need clarification."
The CIA grew rapidly from its first days in A947.
("Bigger than [the Department of] State by '48,".was
a common boast.) The Agency now has about 16,500
employes (after a seven per cent reduction in force
put into effect earlier this year by Director James R.
Schlesinger, now Secretary of Defense). In recent
years its direct budget has hovered around $750 million,
3
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including funds for direct expenses and covert projects,
but it may now be slightly lower as a ,result ? of the
winding down of the wars in Vietnam and Laos.
Similar in size, budget, and overseas staff, the CIA-
rivals-if it does not surpass-,the Department of State;
as an instrument of U.S. foreign policy. ; In A Thou-
sand, Days, Arthur Schlesinger, Jr. wrote that in 1961
the Agency "had almost as many people under official.
cover overseas (i.e., posing as employes of other Gov-
ernment agencies, such as the Foreign Service or AID)
as State; in a number of countries CIA officers out-
numbered those from State in the political sections (of
the U.S. mission). Often the CIA station chief had been
in the country longer than the ambassador, had more.
money at his disposal, and exerted more influence."
This situation seems to have changed little' in the;
last twelve years. Some recent U.S. foreign policy offi-
cials ' :icve that the CIA's overseas employes, both
direct and indirect, U.S. nationals and foreign, includ-
ing those, operating under "deep cover"-that is, with
no visible ties' to the U.S. Government-far outnum-
ber those of the State Department.
For a variety of reasons, the CIA's direct budget
(including project money) does not begin to tell the
full story of the Agency's size or role within the Gov-
ernment:
0 In large overseas clandestine operations, such as.
the war in Laos, covert activities in Vietnam, and the
Bay of Pigs invasion, direct Agency costs and project,
funds represent only a fraction of the total costs to the
U.S. Government. The staff of the Senate Foreign Re-
lations Committee found earlier this year, for instance,,
that of the $375 million ceiling set by legislation for
spending in Laos (until recently a CIA operation) dur-;
ing the last fiscal year, only $5.5 million represented
direct CIA expenditures, while another $60 million was
distributed "by- the CIA as project money for support j
of Laos and `Thai irregular troops. The rest ~of the,
funds were supplied from the budgets of the Agency
for InterIlational Development and the Defense De-
partment. (These Laos program figures exclude addi-
tional large costs for U.S. air operations in Laos, many
of which" have, been in support of CIA-directed military
operations.)
SANDERS IN THE MILWAUKEE JOURNAL
"No, dear, they weren't on trial ... they were
the prosecuting team" ?
Force intelligence agencies; the Defense Intelligence
Agency; the minusFule State Department Bureau of
Intelligence and Research; and such miscellaneous
'other organizations as the National Photo Interpreta-
tion Center and the. Foreign Broadcast Information
Service, the latter of which transcribes and translates
overseas radio. broadcasts. When the tactical military
,intelligence operations of the various military com-
mands around the world are i.'cluded, the annual cost
may reach $6 billion, according to some sound esti-
mates. In cost, personnel, and influence, the foreign
intelligence "community" ranks with 'or above several
Cabinet departments. -
The CIA is organized into four main divisions; known
as "directorates," each headed by a deputy director.
Until recently, these men reported more or less formal-
ly to the Executive Director, nominally the Agency's
number three man. Under Schlesinger's reorganization
plan, the post of Executive Director was abolished, early,
in 1973 and the incumbent, at that time William ?E.
Colby, was made the head of the Agency's largest
branch, the Directorate of Operations, which has re-
sponsibility for all clandestine activities and for the
CIA's eighty-five overseas stations. In recent years this
Directorate (formerly called "Plans") has had about
6,500 to 7,000 employes and a budget of about $350
million, or nearly half the, Agency total.
The other directorates are:
? The CIA has financed, and apparently controls, a
number of private corporations which provide cover for
covert activities overseas. Of these the largest and best
known is Air America. Earnings from these activities
are said to be available to the Agency in addition to
the annual budget provided from general Federal rev-
enues.
? The CIA has the use without cost, according to
former officials, of U.S. military bases and "surplus"
equipment, from which it is said to have built up a
large worldwide supply and operational base network.
For these reasons alone, the CIA has been called a.
multi-billion annual operation. But, in addition, the
Director of Central Intelligence, in his role as head of
the U.S. foreign intelligence community, has respon-
sibilities for coordinating the, activities and reviewing
the budgets of all U.S. foreigrt- intelligence agencies
and operations. In total, these activities-most of them
under Defense Department auspices-cost between
$3 billion and.$4 billion a year, not ,counting the CIA.
These operations include the costly overhead recon-
naissance activities of the Air Force (such as spy satel
lates, U-2s, SR?71 aircraft) i communications and sig-'
nals intelligence; which come under the direction of the
$1-billion-a-year'National Security Agency; the analyt-
ical staffs a4Id operations of the Army, Navy, and Air
? INTELLIGENCE, which collates, analyzes, and - dis-
seminates intelligence collected by all U.S. foreign in-
telligence agencies and also gathered from unclassified
sources. The size of this directorate has been .esti-
$75 million.
roughly 3,000 persons; its budget, about
? SCIENCE AND TECHNOLOGY, which oversees re-
search and development of technical systems for collect-
ing intelligence, such as spy satellites; analyzes scientific
and' technical data collected by all sources, and circu-
lates reports on its findings. The personnel strength
is estimated at about 1,500; its budget at about $125
million, not counting large additional amounts (per-
haps $500 million to $1 billion) spent annually by the
National Reconnaissance Office and the Air Force on
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technical collection systems.
# ADMINISTRATION, under which are lumped such
functions as supply, finance, medical and personnel
services, training, security, and communications. (Over-
seas communications appear to have been transferred
to Operatious under the Schlesinger reorganization.) In
recent years,. the personnel' strength of this directorate
has been estimated at roughly 4,500 and its budget at
about $200 million a year.
Former intelligence officials calculate that when sup-
port costs are distributed, somewhere between two-
thirds and three-quarters of the CIA's direct budget is
allotted to clandestine operations. Of these funds, more
than' half are said to go to various types of covert
foreign policy operations-Dirty Tricks-rather than to
intelligence collection and reporting by overseas stations.
A separate staff known as the Office of National
Estimates supervises the preparation of the intelligence
community's principal long-range projections-the se-
ries of National Intelligence Estimates which cover
,such diverse subjects as the strength and organization
of the Vietcong and the size, trends, and doctrine of
the Soviet strategic nuclear forces. The office is under
the direction of the Board of National Estimates, a doz-
en senior officials from CIA, State, and the military.
In addition, a number of smaller staff offices are
attached to the office of the Director. These include
the inspector general, general counsel, legislative coun-
sel, cable secretariat, and an office of plans, programs,
and budgets. Perhaps the most important of these of-
fices is the Intelligence Community Staff (ICS)., recent-,
ly expanded by, Schlesinger and given a stronger role in
coordinating the programs and budgets of the entire
intelligence community.
The Directorate of Operations constitutes the covert
side of CIA, known as the Clandestine Services. Offi-
cers of the Clandestine Services generally pose as offi-
c4Is of some other U.S. Government agency or private
organization, and sometimes use false names. Except
for, some minor modifications that may have been in
stitutad in the Schlesinger reorganization, the Director-
ate is organized as follows:
A. number of specialized, functional staffs oversee as-
pects of clandestine activity. Their names provide some
notion of the'range'of CIA work: Foreign Intelligence
(espionage and political _ reporting) ; Counter-intelli-
gence ('reporting the operations of -the intelligence'
services of other nations) ; Covert Action and Political
Action (secret financing of various youth, labor, cul-
tural and academic groups, operating clandestine radiol
propaganda outlets, large-scale efforts to influence for-
eign elections) ; Special Operations (planning, support-'
ing and directing paramilitary operations); ,and Tech-,
nical Services (wiretapping, lie-detector operations, ille-'
gal entry, false identities, disguises, and the like).
Most work of the Clandestine Services is carried
out by the large regional divisions and their field staffs';
abroad and in the United States. The major divisions,
and some of their activities which have come to light,,
are:
DOMESTIC OPERATIONS DIvIsION, which allegedly re-
cruits agents among foreign students and U.S. res-
idents with .relatives in foreign-countries. It also in-
terviews Americans planning 'to travel abroad for'
pleasure or business and those who have recently re-,
turned. (The Domestic Contact Service, which carries'
out these interviews, was recently transferred from'
the "overt" side of the Agency, where it was under the
Directorate of Intelligence, to the Clandestine Services.)
This Division also apparently conducts counter-intel-
ligence activities among East European, Cuban, and
other emigre groups in the United States.
WESTERN HEMISPHERE DivisioN. Among the major
known clandestine operations of the past twenty years
are:
? Overthrowing the Guatemalan government of
Jacobo Arbenz in, 1954.
? Setting up and supporting a special anti-Commu-
nist police agency for the Batista regime in Cuba in
1956. The agency, known as BRAC, soon gained a
reputation for brutality and oppression.
? Later backing anti-Castro'Cuban exiles in a variety
of political and paramilitary activities, 'culminating in
the disastrous Bay of Pigs invasion in 1961.
? Helping to put down an attempted coup in Guate-
mala in 1961, in part to protect the base of operations
for the planned invasion of Cuba.
? Mounting a major covert political campaign to
deny leftist Brazilian President Goulart cdntrol of the
Brazilian Congress in. 1962.
? Advising and assisting the succcessful Bolivian ef-
fort to capture Che Guevara in 1966-67.
? Intervening with covert financial and other sup-
port for opponents of Salvador Allende in the Chilean
Presidential elections of 1964 and 1971.
FAR EAST DIVISION. Largest of the regional divisions,
thin organization supervised:
? Large-scale clandestine operations by Nationalist
Chinese and U.S. agents against mainland China from
the Korean War period through the late 1960s. Agents
were air-dropped into China-two, Richard G. Fecteau
and John T. Downey, were captured in 1952 and freed
after the U.S.-China rapprochement of 1971-and
guerrillas and ? political agents were . infiltrated into
Tibet in the late 1950s.
? The Philippine campaign against Huk guerrillas
in the 1950s,
? U.S. efforts to establish the South Vietnamese gov-
ernment of Ngo Dinh Diem after the Geneva settle-
ment of 1954. CIA agents subsequently encouraged (at
President Kennedy's direction) the generals' coup
against Diem in 1963.
? An unsuccessful coup, against President Sukarno
of Indonesia in 1958, in which an American pilot, Al-
lan Pope, was captured.
? The arming, training,. and operations of an army
of Meo tribesmen in Laos during the 1960s.
? Financing -and directing a wide range of clandes-
tine and special operations during the 1960s in Viet-
nam. These included cross-border operations into Laos
and Cambgdia to gather intelligence and harass North
Vietnamese' and Vietcong base areas, organizing and
paying various mercenary groups, and setting up the
Provincial 'Reconnaissance Units, special Vietnamese
teams whose job was to locate and capture (or assassi-
nate) Vietcong political agents. The latter effort, orig-
inally organized under the "Combined Studies Divi-
sion" of the U.S. military command in Vietnam, later
became known as the Phoenix program, which Colby
headed.
NEAR EAST-SOUTH ASIA DIVISION, now reportedly be-
coming one of the more active branches of the CIA.
'The best known CIA exploit in this part of the world
was the coup which overthrew Premier Mohammed
Mossadegh of Iran in 1953 and returned political
power to the Shah.
AFRICA DIVISION. Deeply involved in Congo affairs
during the early and mid-1960s, when the CIA sup-
plied pilots (Cuban veterans of the Bay of Pigs), me-
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chanics, and aircraft to the government of Moise
Tshombe.
? The EUROPE and 'SOVIET DIVISIONS. One of the
first major clandestine operations of the postwar period
was the massive infusion 'of funds to prevent a Com-
munist victory.in the 1947 Italian elections. According
to, reliable' sources, CIA continued well into the 1960s
toiprovide a large annual subsidy to the Italian Chris-
tian Democratic Party. In Greece, the Agency became
deeply involved I- .internal politics in the late 1940s,
and its role, according to sound speculation, is un-
diminished today.
The CIA and its predecessor organizations also
helped organize . anti-Communist labor unions in
France and other West European nations during the
period following World War II. The Washington of-
fice of the Clandestine. Services provided funds to sup-
;, art an entirely independent underground network
established under cover of the international division of
For many years during the 1950s and 1960s the Co-
vert Action staff in Washington ran one of the most
.remark-able CIA activities: the large-scale subsidization
of a wide range of youth, academic, cultural,, prop-
aganda, and labor organizations in the United States
and abroad. Among the long list of beneficiaries of the
payments, which ran as high as $100 million a year,
were the National Student Association, the Asia Foun-
dation, the American Newspaper Guild, Radio Free
Europe, and the Congress for Cultural Freedom (which
sponsored Encounter magazine). The Covert Action
staff, under Cord Meyer, Jr., now CIA station chief
in London, set up numerous dummy foundations- to
distribute the money, using a wide number of legiti-
mate charitable institutions as cooperating go-betweens.
(One of the dummy foundations was named, by
strange and, to me, annoying coincidence, the Andrew
Hamilton Fund.)
These subsidies, exposed in 1967, were terminated,
but the Covert Action staff remains in business. Accord=
ing to informed sources, its annual budget continued
at about the $100 million level in 1971.
This list of operations is hardly comprehensive. It
does not, for example, include such. large-sole intelli-
gence exploits as the U-2 project and the first spy sat-
ellites, both initiated by the covert side of CIA. But
the list illustrates the wide range of political, propa-
ganda, and paramilitary operations which the CIA'
has carried out, in deepest secrecy, at White House
behest.
Two points stand out: These operations were often
mounted not against hostile countries, but against neu-
trals or allies. And they frequently resulted in creating
and sustaining repressive regimes. The CIA has been.
accused by well-informed U.S. officials of helping to
establish "anti-subversive" police units in a number of
countries which have then used them to repress all lib-
eral, political opposition.
Informed sources estimate that of the roughly $350
million annual budget of the Clandestine Services in
recent years, perhaps $225 million-most of it project
money-was allocated to covert action and special op.
erations (including $80 million 'to $100 million for
Vietnam and Laos). The remaining $125 million went
to support the CIA's Clandestine Services in its es-,
pionage and counter-intelligence activities.
As the budgetary breakdown suggests, the road to glory'
and advancement in CIA is through operations-Dirty
Tricks-rather than the patient and often grubby work
of collecting foreign intelligence. A number of former
high-ranking intelligence officials have complained
over the years about the Agency's tendency to mount
"operations for operations' sake."
In theory, CIA covert operations are tightly con-
trolled, and can be engaged in only with the approval
of the President, who delegates the task of reviewing
suggested operations to a high-level NSC committee
consisting of his assistant for National Security Affairs,
Henry A. Kissinger; Deputy Defense Secretary William
P. Clements, Jr.; Undersecretary of State for Political
Affairs U. Alexis Johnson; and the CIA Director. But
this-group has no staff facilities for a proper review-
the,papers are handled at the White House by a single
CIA official who acts as secretary to the committee-
and, in any event, the committee would hardly be dis-
posed to subject CIA plans to close scrutiny.
CIA station chiefs, moreover, enjoy considerable
autonomy. An enterprising, empire-building station
chief, as one source pointed out, will be on the constant
;lookout for an opportuni y to mount a covert action,
perhaps by bribing a foreit:: minister or a key legislator.
With sufficient initiative, he can increase his budget
and staff and enhance the standing of his station with
Washington. In the process, the United States gradual-
ly becomes drawn more and more into the internal pol-
ities of that country.
"The Clandestine Services," says a former CIA offi-
cial, "never developed a philosophy that `our job is to
spy.' They have always had the desire to manipulate
events."
The CIA's predisposition toward operations has been
influenced by the fact that for most of its life the
Agency has been headed by men who made their rep-
utations in that field. Allen W. Dulles (1953-61) and
Richard C. Helms (1965-1973) were both operators;
so was the new Director, Colby. Colby'and Helms, be-
. fore their respective appointments as Director, were
both in charge of the Clandestine. Services, a job which
has generally been filled by forceful men who wielded
great, if unobtrusive, influence in Washington. By con-
trast, 'the Agency's senior intelligence official,'the Dep-
uty Director for Intelligence (DDI), has seldom been a
man of comparable stature or influence.
As long as the glory, power, promotion, influence,
and White I-louse attention fall on the Dirty Tricks op-
erators at CIA rather than on the intelligence special-
ists, the inherently unmanageable predisposition of
many CIA station chiefs toward operations rather than
intelligence work is unlikely to come under control.
And as long as operations are the principal source of
his influence, the Director of Central Intelligence can
hardly be faulted for taking a narrow view of his job.
In theory, he weals at least three hats: He is the top
operator; he is the nation's senior interpreter of foreign
intelligence; and he heads the. vast but amorphous
community of U.S. foreign intelligence agencies. In
practice, however, recent directors have not fulfilled
all roles equally well.
For several years, White Hod'se foreign policy experts
have sought improvements in intelligence analysis and
management of intelligence budgets and activities. In
November, 1971, President Nixon ordered a reorganiza.
tion of the intelligence committees to address these
problems. He gave the Director of Central Intelligence
power to oversee the budgets and activities of all in.
telligence agencies, including those under the Defense
Department. The Intelligence Community Staff was
expanded and an Intelligence Resources Advisory
Committee (IRAC) was established with the Director
as chairman. At the same time the National Security
Council set up ar} Intelligence Committee to review the
quality of intelligence reports.
Director Helms, in the White House view, failed to
make the reforms work. This was a factor in the deci-
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sion to replace Helms (now Ambassador to Iran) with
James Schlesinger, author of the 1971 reorganization
plan. . . ' .~'
Schlesinger's background seemed admirably suited to
the broader concept of the Director's job. He was not
only a management expert but also an economist and
defense intellectual, with a background at Rand Corpo-
ration, where he had a reputation as,a forceful analyst.
But the Watergate scandal forced shuffles. -Schlesinger
became Defense Secretary. Colby, his successor,. is not
considered by intelligence experts to be as well-
equipped to manage the intelligence 'community, or to
improve the quality of analysis. His appointment ap-
pears to have shelved or diminished the ambitious ie-'
forms envisioned by Schlesinger. Instead the appoint-
ment of Colby put the spotlight back on operations.
When Congress confronts the CIA this fall, it should
recognize that it is time for the United States to end
all Dirty Tricks operations-by the CIA or any other
organization. Such operations, a standard part of the
U.S. foreign policy repertoire since World War II, have'
become more than occasional embarrassments: They,
are now a distinct liability to the nation's foreign re-
lations. And they present a serious threat to constitu-
tional government in the United States.
The reasons for ending clandestine operations are
not just moral but practical as well. The moral objec-
tions to covert -action are obvious. Intervening in an-
other nation's internal politics violates the principles
to which the United States professes to adhere when it
establishes diplomatic relations. And covert interven-
tion offends the,general principle that nations, like in-
dividuals, should be accountable for their actions.
There are at least two practical objections. The first
is that clandestine operations have a corrupting influ-
ence on Arrierican politics and foreign relations. They
undermine the credibility of the Government at home
and abroad. Their inherent secrecy violates the princi-
ples of accountability in the American political process..
Available recourse to clandestine operations breeds
contempt -for' more arduous-but legitimate-methods
of achieving objectives. As Watergate has demon-
strated, an easy familiarity with clandestine operations
and a ready access to persons and techniques used in
clandestine' operations can become a direct threat to
the American political and legal system.
It has been'evident for some years that the American
political establishment is deeply divided on the direc-
tions and the tools of foreign policy. Politics no longer
stops at the water's edge. No more vivid demonstration
of this division is needed than the recent votes in
Congress to end the bombing of Cambodia and to limit
the PresidenX's war-making powers. In ' these circum-
stances a clandestine foreign policy becomes a danger
to domestic politics. To prevent leaks, the circle of peo-
ple in the know is drawn ever smaller. In the process,
the definition of the national interest becomes more
narrow, and more directly associated with the political
fortunes of the party in control of the Executive
branch. ..
As the confusion between the national interest and
political advantage spreads, distrust of the opposition
grows to paranoid. dimensions. Political operatives find
it difficult to discriminate between, domestic opponents
and foreign agents. In this paranoid state, they have no'
difficulty justifying the resort to espionage and Dirty
Tricks=-originally developed to fight a clandestine war
against alien enemies-against their ' domestic political,
opponents. The existence of occasional proof of sim-
ilar skulduggery oyr the part oe.their opponents, merely
intensifies the'psychosis. The result. is an indiscriminate
intermingling of', domestic politics, foreign policy, and
covert. operations=-a 'common theme in the Water-
gate affair and associated cases.
If the corrupting effect of. clandestine' operations is
,one practical objection, a second is that when they do
not fail spectacularly, they -are often ineffective. The
successes of the CIA in clandestine operations may be,
as several Presidents have hinted, substantial.. But these'
successes would have to be of phenomenal value to
outweigh the general damage which results from the
CIA's blunders, from the widespread assumption that
the Agency meddles everywhere, and from the exposure
of those operations which have come to light over the
years. .
An outright ban on the CIA's clandestine operations
would result in a cut of as much as fifty per cent in
the Agency's budget, an annual saving of perhaps
$300-$400 million, not counting the savings of substan-
tial additional funds diverted from other agencies for
covert CIA activities. The more important effect, how-'
ever, would be a much needed redirection of the ef-
forts of the Agency's overseas staff (which could be
greatly reduced in size) toward 'collection of ' intelli-
gence.
Since many CIA operatives already work under dip-
lomatic cover at U.S. embassies, it might prove feasible
to transfer activities devoted to gathering intelligence-
not to operations-to the State Department. (The far
smaller British Secret Intelligence Services come under
the control of the Foreign Office.)
Such steps would go a long way toward restoring
the primacy of the Department of State in foreign rela-
tions, and toward putting clandestine activities under
an official directly responsive to the Congressional
committees responsible for foreign relations. Under the
present system, decisions on the use of the' Clandestine
Services are made by the President, who is not directly
answerable to. any committee of Congress, and oper-.
ations are the responsibility of the Director of Central
Intelligence, who answers to the Armed Services and
Appropriations Committees, neither of which has prin-
cipal responsibility for oversight of foreign relations.
Freed from his weighty operational responsibilities,
the Director of Central Intelligence could begin to de-
vote full time and attention to improving the man-
agement'of the intelligence community and, upgrading
'the quality of analysis.
Finally, it would be feasible to set up a more
broadly representative system for Congressional over-
sight of, intelligence activities by the CIA and other
agencies, since the risk of compromising sensitive for-
eign policy operations would no longer exist. This
could 'be accomplished by creating new House and Sen-
ate committees, as recommended by Senator Proxmire
=and others, or by setting up a joint committee on intel-
ligence, along the lines of the existing joint committees
' on economic policy and atomic energy.
In sum, the Congress should:
? Repeal CIA's vague authority to carry out "other
functions and duties related to intelligence," as directed
by the National Security Council.
? Substitute, if necessary, language authorizing over-
seas and domestic activities strictly for collecting for-
eign intelligence, plus such counter-intelligence activ-
ities as are required overseas (leaving domestic counter-
intelligence to the FBI).
e Consider placing the Clandestine Services under
the,operational control of the Secretary of State, either
by. requiring that he be responsible for reviewing and
authorizing clandestine activities, or by transferring
the CIA's intelligence collection functions to the, State
7
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 Department.
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o Deny CIA all project funds for covert action or
special operations, but allow limited secret funds for
intelligence purposes only.
*Require the CIA to divest itself of ownership or
control of such organizations as Air America. '
o Clarify and strengthen the statutory powers of the
Director of Central Intelligence by giving him explicit
authority in law to review and make recommendations
to the President on the budgets and programs of all
U.S. foreign intelligence activities.
o Require disclosure of the overall expenditure of
the CIA and other intelligence agencies, with reason-
able accuracy allowing a little leeway for security
purposes.
a Establish a committee or committees of Congress
o '?.?r-? ~e the-programs and authorize the budgets of
i U.S. foreign intelligence agencies, including the
CIA. An effective oversight committee is essential to
insurd that a Congressional ban on clandestine oper-
ations_ is honored by the President. Given the fine line
between some types of intelligence gathering and the
clandestine manipulation of events, it will be impossible
to draft a law which c loses all loopholes through which
small-scale operations will be undertaken. Thus vig-
orous oversight will. provide the only reassurance that
the spirit of the.law banning Dirty Tricks operations is
being observed. The committee should include, but not
be restricted to, current members of the Foreign Re.
lations and Armed Services Committees of the Senate,
and Foreign Affairs and Armed. Services Committees
of the House.
The committee or committees should have automatic
access to all finished intelligence reports published by;
any intelligence agency, and these classified reporti
should be retained at the Committee for review by all
members of Congress. This would provide Congress
with an intelligence library, which it now lacks, and
could considerably improve the quality of understand!
ing and Congressional action on foreign policy and, de-
WASHINGTON STAR
25 August 1973
tense questions.
It is by' no means certain that a majority of Congress
.is ready to bar all clandestine operations. Such a step
would signal a major shift from the way the United
States has conducded foreign policy since World War`
II, and opponents will no doubt argue that it would be'
tantamount to "tying the President's hands" or.
"unilateral disarmament." And' ii ihight"also be argued
that a clandestine aetion agency is more necessary in.'
the 1970s than ever, given the decline of the Cold .
War with its clear-cut .antagonisms, the emergence of'
a multi-polar world of shifting, alliances, and the devel
oping contest among the industrial nations of the
world for access to oil and other raw materials. Nor is
President Nixon likely to abandon without a struggle'
a tool which seems peculiarly suited to his approach to
foreign (and domestic) antagonists.
Finally, the job of defining clandestine operations to,
they can be stopped without damaging the capabilityfor intelligence-gathering 'ctivities or leaving large.
loopholes could prove difficult for legislative draftsmen.`
These are all important practical considerations. Were'
the nation really in a state of siege, were real
. politik the only basis for conducting American foreign:
relations, were there a genuine consensus on the aims,
and methods of American foreign policy, and were-
clandestine operations compatible with As eriean dem
ocratic institutions and 'processes, then such reasons:
might suffice to justify continuing such operations. Is
the real world, they do not.
The Administration's approach, and that of many'
influential members of Congress, will be to cope with
the CIA's current crisis merely by making its covert.
operations even more truly clandestine, and by restrict-
ing them in' size to reduce the risk of exposure. But'
the only way to clear the nation's reputation, restore.
credibility, and re-establish a basis for a.foreign poliq
based on broad consensus-and the only way to creatt?
a real basis for effective Congressional participation 4foreign policy-is to put a firm end to clandestine oper%;
ations. The divorce must be clear and categorical, and'
ought to carry the force of legislation-an outright bas
on Dirty Tricks.
assignment? The Watergate testimony has shown
.that he was forced out because he would not allow.
the agency to be used to cover up White House par-
ticipation in the scandal.
Now we learn that the Office of National Esti-
mates is to be abolished. And the sin of this presti-
gious group of analysts appears to be that it did its
job too well, producing accurate intelligence esti-
mates rather than ones that supported the prede.
termined policies of the White House.
Perhaps the saddest aspect of all of this is that
the Nixon administration, which after all is with us
for only eight years, can, if it sees fit, destroy the
effectiveness of a continuing governmental institu-
tion like the agency. We are all aware of the irrep-
arable harm that has been done to the Federal .
Bureau of Investigation. Now much the same thing
seems to be happening to the agency. These insti-
tutions are absolutely vital to national security,
' but they cannot function effectively unless they are
allowed to function independently.
One final note- Much has been made over the
question of how much the President knew about
?' Watergate. I cannot believe that he would have.
r accepted Helms' resignation unless he were fully
aware of the reasons behind it. This certainly lends
support to those of us who feel the President knew
? about the cover-up. He would not otherwise have
let go of a man of Helms' caliber,
Elliott Bunce.
Alexandria, Va
Nikon and CIA
SIR: As a former employee of the Cerftral Intelli-
gence Agency I am extremely concerned about the,
harm being done to the Agency by the partisan at-
titudes of the Nixon administration. The revela-
tions in the' Watergate testimony concerning the'
treatment of the agency and its former director,
Richard Helms, and the more recent revelations.
concerning the abolishment of the agency's Office'
of National Estimates make it clear that the White:
House will go to any lengths to bend the agency to,
its designs, no matter how harmful those designs'
may be to the national interest.
Helms was appointed director during the period
of my employment with the agency and he enjoyed
an excellent reputation. It was particularly grati-
fying to see the top post go to a career intelligence'
man who would place the good of the agency and
the intelligence community above any political
considerations. Helms certainly proved his worth
in this regard during his several years as director..'
When he left the agency and became ambassador'
to Iran I found it impossible to believe the change:
was voluntary. Why would a career intelligence'
than with his credentials - who held the top intelli-
gence job in the world -- agree to such a lackluster
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TIME
27 August 1973
THE LOSERS
Watergate: The View from Jail
Life behind bars has not been kind to
Convicted Watergate Conspirator E.
Howard Hiatt Jr. Only five months into
his provisional 35-year sentence. lie has
become noticeably thinner-25 tbs. by
his own tneasurement-his hair grayer,
his eyes listless, and the muscles of his
left calf have slightly atrophied as the
result of a mild heart attack. He emerg-
es from prison only to tell authorities
what he knows about the Watergate
break-in; so far, he has testified 19 times
before grand juries and congressional
committees. For security reasons, on
those occasions his legs are put in irons
and his wrists are manacled to a chain
round his waist. Much of the time,
WATERGATE CONSPIRATOR E. HOWARD HUNT
No end in sight for convicted legmen.
however, Hunt broods bitterly in his
cell. Last week TIME Correspondent
David Beckwith visited him -raid sent
this report:
E. Howard Hunt shows little reti-
cence nowadays in talking about those
whom he considers responsible for the
Watergate raid. "I guess it's obvious
now," says Hunt. "that the Watergate
thing was planned by a small group of
people-Mitchell. Magruder. maybe a
few others. We were just legmen in that
operation following decisions made by
others. and yet we're the, only ones who
have sabered from it so faf`-
The fate of Mitchell's depute' Jeb
Stuart Magruder, who last week plead-
ed guilty to obstructing justice, partic-
ularly irritates Hunt. Says he: "".saw a
picture of Magruder taking a river raft
trip, visiting London, preparing to hit
the lecture circuit and make some mon-
ey." He shakes his head, looking down.
"I can't for the life of me understand.
Here are the prime conspirators walk-
ing around on the streets, free on bond.
But there's no end in sight for me. I
think it's ironic and inequitable."
Hunt still justifies his participation
in Watergate and the plumbing activ-
ities on grounds of national security. His
view of national security, in turn, de-
rives from his unabashed right-wing
politics and his almost paranoid suspi-
cion of anyone who criticizes U.S. pol-
icies. The break-in at the office of Dan-
iel Ellsberg's psychiatrist, he says, was
not to discredit Ellsberg per-
sonally but to find out wheth-
er Ellsberg "might he a con-
trolled agent for the Sovs
[Soviets]." Says Hunt: "He
spent a period at Cambridge,
and a lot of defectors like
-[British Double Agent Kim]
Philby and others were from
Cambridge."
Farfetched. Watergate,
similarly, evolved from a
mixture of rumors and anx-
ieties about security. Hunt
still clings to his rather far-
fetched explanation that Fel-
Liddy told him "that he had
heard from reliable authority
that Castro funds were going
to the Democrats in hopes
that a rapprochement with
Cuba would be effected by a
successful Democratic pres-
idential candidate. The main
purpose of the Watergate
break-in was a photographic
job-to get lists of contrib-
utors and check if any were
blind fronts for Castro."
Hunt is not convinced
that the discovery of the
break-in team at the Demo-
cratic National Committee headquar-
ters was an accident; he thinks he smells
a trap. "There were just too many fishy
things that occurred. What was the
(plainclothes] mod squad doing out on
the street -some two-three hours after
they were supposed to be off duty?"
Hunt also suspects that Alfred C. Bald-
win, who was the break-in team's look-
out and who na9nitored the bugs from
a Howard Johnson's motel room across
the street. might have been a double
agent.
"Baldwin was a very convenient fel-
low. He had a girl friend at the D.N.C..
and he somehow came up with the floor
plan of the D.N.C. headquarters. He
was never checked out at all-McCord
got hint off a job-wanted list of former
Fill agents. He didn't do his job; he
didn't alert anybody about the police
until they were running around the
D.N.C. with their guns drawn."
As for James W. McCord Jr.. the
conspirator who first started spilling the
story of high officials' involvement.
Hunt now portrays him as a bungler,
..an electronic hitchhiker who shouldn't
have been allowed on our operation."
He says the bugging apparatus that Mc-
Cord had bought was faulty and sec-
ondhand. even though McCord billed
Liddy for new equipment. While he was
inside the Watergate, McCord turned
down his walkie-talkie or turned it off.
apparently to conserve batteries. "There
were just too many things that went
wrong for them all to be coincidence."
says Hunt darkly.
Hunt vehemently denies that he and
his wife were attempting to shake down
the White House for hush money. "Ev-
ery time I hear the word blackmail it
makes my blood boil. It wasn't black-
mail or hush money ... It was main-
tenance payments and lawyers' fees, the
same sort of arrangement that the CIA
gives its agents who arc captured. We
had no silence to sell. We knew the
grand jury would be. impaneled follow-
ing the trial, and that we would be im-
munized and forced to talk. Just be-
cause John Dean thought he was paying
hush money doesn't make it necessarily
so. I never heard the term Executive
clemency until it started appearing in
the news media."
No Concentration. Hunt, who
once had five automobiles, riding hors-
es and live-in servants, now leads a sim-
ple existence. At Danbury the prisoners
are awakened at 6 in their barracks-
style rooms and immediately make their
beds, shower, shave and breakfast. At
8 Hunt reports to work in the prison li-
brary. At 10:30 there is a 90-minute
lunch break, then another three and
one-half hours in the comfortable li-
brary job. From 3:30 to 5:30 is dinner
and free time. when Hunt attempts to
answer sympathetic mail.
"Every clay you're in prison seems
four times as long as a normal day.
We have a so-called law library at Dan-
hury, but the latest law books are dated
1947. It's a disgrace. I've read where
I'm sitting up in Danbury getting rich.
writing a novel about Watergate. But
I can't concentrate, especially without
a typewriter.
"I haven't written a thing. I sit down
.%ith a pad and try to write longhand,
but I can't think and I lose interest. i
can't believe the money I'm spending
on attorneys. It costs me S 1.200-S 1,500
es cry day I'm in a hearing or legal ap-
pearance. Luckily, my notoriety has
sparked an interest in my books-i've
had 19 titles issued this year. 17 reis-
sues and two new ones-but all the
money is going to lawyers."
Is the truth on Watergate really
coming out? "Well, it lot of it is, but it's
distorted. The Ervin committee ques-
tioning is erratic, but I'd better not crit-
icize them because I'll be up there next
month."
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WASHINGTON
Washington, D. C, Sunday, August 1Z 1973'
By Frank Getlein
Star-News staff writer
.,,by the now famous Watergate
burglar and 'long-time CIA.opera.
,. tive, is technically an immense
improvement over the earlier
,novels of his reviewed here short.
.ly after his confession and con
viction as a common criminal. -
\ He is able now, as he was not in
those works, to sketch out half. a
dozen different sets of characters
and intentions in a story and keep
:them all going more or less simul-
taneously up until their moments
of impact with one another.
MS PROSE IS better, though'
his is still subject to imprecision
and to what can be reasonably
interpreted as a kind of 'institu-
. tional self-glorification and self-
pity, the institution being the men
of the CIA, humble, faceless.
agents doing their best for their,
country and ending, like the hero,
facing trial for murder in the be-
loved country or, like the author,
jail for burglary.
- Although this book and a mem-
oir to be published later this fall
on the Bay of Pigs -- an enter-
prise Hunt was deeply involved
in - both bid fair to be best sell-
ers before the year is out, the
author still has a lot to learn
` about his chosen field from its
masters: Le Carre, Chandler,
Hammett, above all the -Graham
'Greene of the early novels, the
"entertainments."
Hunt is not a first rate spy nov-
elist any more than he has been a
first rate burglar or a first rate
stager of counter-revolutionary
invasions, but the novel is impor-
tant in another sense: it offers us
a chilling glimpse of the' mind
and motivations of one of the-
:principal architects of Watergate
and hence, quite possibly, the
essential relationale of the whole.
apparently idiotic escapade.
THE BERLIN ENDING. By E.
Howard Hunt. Putnam. 310'
pages. $6.95.
THE HERO OF "Berlin End-
ing" bears a number of resem-
blances to his creator, besides
the self-glorification-self-pity.
already noted. Neal Thorpe is ex-
CIA and dulled by the lack of ac-
tion, of "romance" in his straight'
life re-doing Georgetown houses.
Through a chance meeting at :
National Airport, he becomes
involved in 'a far-reaching:
scheme of the Kremlin spymas-
ters to install their man as the .
next secretary general of the
United Nations and becomes'
himself an agent of an America-
led international effort by indi-
vidual agents or former agents
from Washington, Helsinki, Tel
Aviv and Paris to thwart the
dread Reds.
It is in managing all these bits
and pieces of a conspiracy and a
counter-conspiracy that Hunt
'shows his chief inprovement over'
the old days when he simply took
a hero of his own type and fol-
lowed him scene by scene. Also,
once you get over the initial in-.'
credibility of Hunt's premises,
you do keep reading to see how
the story comes out, which is '
more than the earlier work got
you to do.
The incredibility stems from
the central Soviet device discov-
ered by Hunt's CIA people,
Thorpe and an aging, retired,
almost legendary agent, Alton
Regester.
REGESTER HAS concluded
that the Soviets employ "Agents
of Influence" in other countries,
people with long-established
identities in their host countries
but with some ancient Soviet
connection that gives the Reds
absolute power over them.
The four principal Agents of
Influence that Thorpe and Reges-
ter fight against are a German
foreign minister clearly modeled
on Willy Brandt, the man the
Kremlin wants as U.N. Secretary
General; a French television
commentator and hero of the re-
sistance and the Spanish war,
less closely based, perhaps, on
Andre Malraux; a Spanish cardi-
nal in, the Vatican who engi-
neered Pope John's meeting with
Krushchev's son-in-law, and fi-
nally a New York Jewish private
banker with a mutual fund bear-
ing his own name: Your guess.
The point, however, is that if a
Soviet directed Agent of'Influ-
ence is the only reason you can
think of for Pope John's opening
to the left, for Willy Brandt's
window to the east, for Malraux's '
(?) assorted leftish views
throughout his life, for a New
York capitalist's support of non-
reactionary views in general,
then you are ready for Water-
gate.
IF ALL ACTIONS and state.
ments in the West that can be
interpreted as less than bitterly.
implacably hostile to commu-
nism are the result of Agents of
Influence, then, clearly, George"
McGovern, Larry O'Brien and
Daniel Ellsberg's psychiatrist
were all Agents of Influence:
Bring on the red wig, the, bugs
and the camera.
Hunt may make his fortune
from book sales based on his
bungled burglary, but the real
bonanza lies still ahead: Water-
gate as a musical comedy: Only :
.Hunt could write the book.
NEW YORK TIMES
18 August 1973
PITTMAN RESIGNS
AS HUNT'S LAWYER
WASHINGTON, Aug. 16 (AP)
-William O. Bittman, a Water-
gate defense lawyer who tes-
timony says was paid thousands
of dollars in a clandestine cash,
drop, ? withdrew ' Thursday as
the attorney, for a convicted
conspirator, E. Howard Hunt Jr;
A motion approved by Fed-
eral District Court Judge John
J. Sirica gave no reason for
the withdrawal, but said Hunt
had approved and had retained
new counsel.
Austin Mittler, an associate
of Mr. Bittman, also withdrew;
Mr. Mittler said the withdrawal
was a "mutual understanding".
reached between Hunt and the
two attorneys. .
During the Senate Watergate
hearings, Anthony T. Ulase-
wicz; an undercover operative
for the White House, testified
that he paid $25,000 in fees
by leaving the money in a
brown envelope near a tele-
phone booth in the lobby of
Mr. Bittman's office building.
He said he had called ? Mr.?
Bittman and observed from'in-,
side the booth while he picked
up the payment. The money
came from funds put together,
by Herbert W. Kalmbach, then
Presidents Nixon's personal at.,
torney.
Hunt's new attorney, accord-
ing to the motion and con-
firmed by the lawyer's office; is
Sidney Sachs of Washington.
He was not available for com-
ment .
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 'Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
BALTIMORE NID S AMERICAN
6 Auguot 1973
THE BERLIN ENDING. By
E. Howard Hunt. Putnam,
Reviewed by
VICTOR WILSON
Newhouse News Service
For some 32 years E. How-
rrd Humt has been trying un-
..., -le the liter-
ary beg.-, ? a put of
gold awaits any wrur-, --
make the climb.
This month at last, the gold
will start pouring In when
Hunt's 44th novel is published
by a top-rung publishing
house with a heady roll of
publicity drums.
But by an ironic twist of
fate that any author would
scorn to use, Hunt will cele-
brate his luck In a narrow cell
at the Danbury, Conn., Feder-
al Prison.
As is probably known even
In the steamy jungles of Gua-
temala, where Hunt once op-
erated tender cover for the
CIA, he's in jail awaiting his
eventual fate as a convicted
principal conspirator in the
Watergate affair.
As Hunt paces his cell, his
latest book will be published
An. 2S. Perhaps before, or si-
multaneously, eight of his
earlier spy novels will hit the
paperback stands.
Another prestigious publish-
er is rushing Hunt's 45th nov-
el, based on his CIA expa,rl-
once at Cuba's Bay of Pigs,
toward the presses. And the
word in publishing circles is
that most of the rest of Hunt's
largely Ignored earlier works
on the art of spying and inter-
national intrigue are being
prepared for the paperback
market.
If thin"a turn out better
than d'd the fiasco at l)en:o-
cratic National Committee
headquarters at the Water-
gate Complex here June 17,
1972, Hunt just may prove to
be the hottest literary proper-
ty In the 1973-74 market.
How much pleasure Hunt's
realized pot - of - gold - at -
last will produce is In the
~"'.nr+s t t I-cue; a' Court Judge
Joiuia. Ju...>.? 1iF iudre
sentenced Hunt and six co-
conspirators In the break-in to
Indeterminate jail terms, pun-
ishment to be based on the de-
gree of their co-operation (the
CIA calls it "singing") with
federal prosecutors. Rumor
here has It that Hunt very
probably will wind up eventu-
ally as a willing witness be-
fore Sen. Sam Erwin's Water-
gate Investigating Committee.
Meanwhile, other rumors
report that the 20-year ex-CIA
veteran either (A) tried to
shake down the White House
Criminals
At Large
The Howard Hunt who has
written THE BERLIN ENDING
(Putnam's, $6.95) is the E. Ho-
ward Hunt of Watergate. "The
Berlin Ending" is typical of his
previous books, with cold-war
elements, the C.I.A.. a touch
of romance. And some of the
stiffest writing this side of E.
Philips Oppenheim.
Hunt is a made rather than a
natural writer. He has his little
tricks. One is to drop place
names: "Driving from the DST
parking lot, he steered into traf-
fic speeding west along the
Seine. He passed the Tuileries,
the Grand Palais and UNESCO
and just short of the Trocadoro
turned north to Avenue Kleber."
C ils ~Jlll P Q
ci .1103
r*~'k .
C1. ~
for a cool million to remain si-
lent, or (B) that he received
$100,00 In hush money for
himself and the other defend-
ants but stashed It for him-
self, or (C) both.
One would.never guess after
reading an advance copy of
"The Berlin Ending" that its
author would go in for such
"dirty tricks"--except per-
haps against Russian agents.
The plot can't be discussed
until publication date, though
"Publisher's Weekly," al-
lowed an advance peek for.
guidance to book-sellers, de-
scribed it as a "thorounnly
professional, fast-paced work."
While awaiting, his o::n fate,
Hunt at least will savor the
satisfaction that the two un-
coming novels, as volt as all
the reprints of pair. rhacks,
will be under his ov,n name.
Putnam's book, In fact,
prints his name on the jacket
in type as' tall as the title It-,
self, calling It "A Novel of In-
trigue By One of the Water=
gate Seven." Only his first
three books came out with
Hunt's real byline, and then
he went In for different paper-
back pen-names. Hunt still
prefers, apparently, to keep
all but a few facts about him-
self to himself. In Its advance
A touch of French is always
elegant: "Bon, mon vieux. Bien
rdussi." On his own, Hunt has
a flat style heavy with plati-
tudes. "Five hours, Leroux said
half-aloud. Five hours from now
the stage will have been set.
The time has come to study
for my entrance" As for dia=
logue, well: "'It never hap-
pened,' she said huskily. 'Some-
day' ,
It's all really pretty bad. At
the end there is a completely
unconvincing shift in the orien-
tation of one of the main char-
acters-a shift for which the
author has not' prepared the
reader or even (one imagines)
publicity, Putnam says that
prior to his 20 years with CIA,
he served' with the Navy in
World War II, saw service also
during that conflict with the
Office of Strategic Services-
(which preceded the CIA), and
that he worked for the March
of Time, a defunct radio news
funct Life magazine.
The CIA never discusses
former agents. But reports
have It that Hunt, WhIlL . erv-
ing In Guatemala, tried tk -.,-
list troops training for the Cc
ban Bay of Pigs adventure to
help keep a right-wing Guate-
malan president in power.
And that earlier, on service in
Uruguay, he attempted a deal
with that country's president
to intervene with the U. S.
when his tour was up, and ask
that Hunt be kept in Uruguay.
But perhaps Hunt Is trying
to tell us something by a spy's
maxim, credited to one Gal-
tier-hoissiere, which he uses
on a separate page just after
the frontpiece of his new
book:
"It is in the political agent's
Interest to hervy all parties
who use him, end to work for
then all at the same time, so
that he may move freely, and
penetrate anywhere..,','
himself. This sequence is sup-
posed to be ironical. Instead, it
is merely grotesque. .
The C.LA, also figures
heavily in Blaine Littell's TILE
? DOLOROSA DEAL (Satur-
day Review, $5.95). Littell is
as sophisticated as Hunt is
clumsy. He has come up with a
lively novel involving a black
agent, a fiery Israeli girl, a ra-
cist demagogue and a close look
at young radical leftists. Littell
is interested in the relation-
ship of Jew and Arab, but he
never lets sociology or politics
interfere with the smooth flow
of his story.
11
P77-00432 8000 4SA22000'F-2
 WASHINGTON POST
2 3 AUG 1973
Somethinj to Miss on a Rainy Day'
Book World
THE BERLIN ENDING: A Novel of Discovery.
By Howard Hunt
(Putnam's. 310 pp. $6.95)
Reviewed by
Laurence Stern
The reviewer writes for the
national desk of The Washing.
ton Post.
here of Arthur Bremer.
(Hunt in 1960 proposed a
plan to his CIA superiors
for the assassination of Fi-
del Castro.) One of the lessons of
Watergate was that men like
Howard Hunt is a loser Howard Hunt, Gordon
wit .i humid fantasy life Liddy, Anthony Ulasewicz
who was subsidized by the and the Cuban bugging
American taxpayers, un- squads were circulating
known to them until re- about like loaded revolvers
cently, for the better part of at public expense under
a quarter-century. By moon- vague White House aus-
light, he has been a prolific pices, trying to savage the
manufacturer of pulp-grade enemy.
spy novels, nearly four Who is the enemy? To the
dozen in all. - Cuban operative, Bernard
He has emerged from the
Watergate scandal as a bro-
ken man, a convicted bun-
gler, Instead of targeting on
the enemies list, he came
homing in, like a wayward
missile, on the President
and the White House.
Failure is not new to
Hunt. He played an impor-
tant role in an overseas ver-
sion of the Watergate fiasco,
the Bay of Pigs horror. Hunt
played with Cuban emigres
as small boys do with dou-
ble-edge razors. He and
those closest to him always
ended up getting cut.
And so it seemed- neces-
sary to have a vicarious life
in which he succeeded, or at
least didn't make such an i
nominious mess of things.
Howard Hunt escaped into
bad novels.
Neal Thorpe, the paste-
board hero of "The Berlin
Ending," is Hunt's fictional
self-idealization. He com-
bines the muscularity of
Steve Roper with the politi-
cal overview of Daddy War-
bucks. "Without the condi-
ment of excitement his life
was as tasteless as boiled
beef," writes Hunt of his fic-
tional surrogate, Thorpe.
"Excitement," it quickly be-
comes evident, is the pursuit
Barker. the enemy was
whoever Howard Mont said
it was-no holds barred.
The enemy in "The Berlin
Ending" was a suspected So-
vict "agent of influence"
who held the position of
West German foreign minis-
ter (the resemblance Hunt
draws between his KGB di-
rected villain and Willy:
Brandt is almost too strong
to he coincidental). The!
scheme is to destroy the;
'West German principal by
compromising him with his
Soviet masters.
Hunt is never very far
from the Watergate mental-
ity. His catalog of Commu-
nist villains is worth de-
scribing in brief: a pederas-
tic, opium-smoking French
count who is not above
strangling stewardesses; a
paunchy Russian Jew
("almost the 'prototype of
Streicher's archetypal Jew,",
writes Hunt with typically
jangling redundancy) whose
"front" is high international
finance: and, finally, the
treacher-m.rsly . liberal West
German minister, who col-
lur-les in t!;!- attempted as-
sassination of his own
daughter after she learns of
his covert Soviet backing.
Hunt's interior life seems
to be spun of such stereo-
types. How easily Daniel
Ellsberg must have fit into
this political demonology. .
The spy novel that is writ-
ten by an ex-spy or ihtelli-.
of fantasies that most men
leave behind with other
memories of prepubescent
life, such as their tenderfoot
badge or first overnight.
Thorpe-alias-I-Iunt is an in- .'-gence operative is common
norent. lie appears, rather, to our fiction. It is a genre
to be a case of arrested dc- that includes such outstand-
velopmeut. He was bored Ing contributors as Graham
and dissatisfied with himself
and so he had to escape into
action. There are shades
Greene, John Le Carre and
Ian Fleming. .
the novel can only be viewed
as a piece of psychiatric
documentation for the Wa-
tergate case. It is far more
revealing than anything that
Hunt and Liddy may have
retrieved from the files of
Ellsberg's psychiatrist.
Prophetically, the counter-
espionage scheme of "The
Berlin Ending" falls in the
end. A nice girl who hap-
pens to be a CIA accomplice
dies needlessly in the at-
tempted execution of the
plan. Thorpe has a moment
of bitter reflection. Then he
lapses into his familiar con-
dition of boredom with him-
self.
This sounds suspiciously
like Hunt's own predicament
in his final years at the CIA
when he had fallen into. dis-
favor and was serving out
the time required to qualify
for a $20,000-a-year pension.
He was rescued from his
ennui by White ?I-Iouse aide
Charles Colson, who was in-
strumental in getting him
on the payroll, wherein he
got an official license to
burgle, falsify documents
and eventually provide the
incriminating link between
the Watergate burglary and
the Oval Office.
There are undoubtedly
those who feel that Hunt,
.,n' i,rcorrigible loser. de-
serves some appropriate ex-
pression of national grati-
tude. Anything but a Na-
tional Book Award.
NEW YORK TIMES
31 August 1973
I cCord College Lecture Tour
Is Halted by Order of a Judge`
By JAMES FERON
Spec- aL to The New Yovk Times
NEW PALTZ, N.Y., Aug. 30 day before his next scheduled
-James W. McCord Jr., a con-appearance, at Georgetown Uni-
victed Watergate conspirator, in Washington.
ended his college lecture tour McCord, appearing relaxed,
tonight after his second ap-Ispent only 15 minutes outlining
pearance. Ithe background of the Water-
He spoke last night at Sanga-;gate break-in before answering
mon State University in Spring-questions from an audience of
.field. III:, and planned appear. ;AO students, faculty members
.ances at 40 other schoolsiand townspeople.
`across the countr. The former C.I.A. agent said'
However, Judge' John J. Siri-,that he believed President Nixon
ca, Chief Judge of the Uniled;had authorized the Watergate
States District Court in Wash-!break-in and also the cover-up,
ington, ordered him to end his,an assertion that was greeted
lecture tour. Archibald Cox,jtilth applause. However, he
the special Watergate prosecu-Isaid that he did not believe that
tor, had said that additiunalMr. Nixon should be impeached
publicity would be prejudiciabon the basis of the evidence
to future defendants. 1presented so far. .
Before addressing a packed! McCord said that former;
lecture hall here, McCord said;Attornev General John N.
in answer to a question put to; ditr.hell and two former Nixon
him by a ne'',vsman that he; aides. Job,, D. El:rlichntan and
would "certainly comply" with II. R. }laldeman, had committed
Judge Sirica's order, He saidiperjury, but that John W. Dean
that there would he a hearingi3d, former White House coun-
on the order next Wednesday, a: set. had told the truth.
WASE ITGTON POST
7 2 1 AUG 1973
The WVa4a;i;sgtoas 11ftwry.Goa .?.oannad
By Jack Anderson
and .Les Whitten
1, Spooky Censors -- So far,
the , Central Intelligence
Agency has successfully
'blocked publication of a CIA
expose by ex-agent Victor l
Marchetti. Now, State Depart- ,I
Among the manuscript's,
secrets: the CIA ordered an
informal boycott of a Chinese
restaurant in Washington be-
cause "Jack Anderson is one
of its owners" (In fact, I have
ment censors are trying to get 'a small interest in a Chinese
a copy of the manuscript from restaurant.)
its co-author, John Marks, for. . The book also discloses CIA.
merly a State Department em- "spooks" in Chile and CIA
ployee. misuse of funds.
This is not to suggest that,
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MINNEAPOLIS TRIBUNE
19 Aug 1973
secret
y
CIA rates high in public esteem, poll finds
By George Gallup
Director, American Institute of Public Opinion
Princeton, N.J.
The Central Intelligence Agency received a "highly fa-
vorable" rating from only 23 percent of the public in a
recent Gallup Poll which sought opinions about law en-
forcement agencies.
Over-all favorable opinion of the CIA, however, out-
weighs negative opinion by nearly three-to-one. Little
difference was found on the basis of age or political af-
filiation, as well as on the basis of other major popula-
tion groups. Following are the national findings from the
survey:
By Frank Wright
Staff Correspondent
Washington, D.C.
Every so often, the country rediscovers the CIA.
This usually happens when one of its secret endeavors is
disclosed under circumstances embarrassing to the Cen-
tral Intelligence Agency and to the president it serves.
No president has been exempt. Under Eisenhower it was
the U2 incident. Under Kennedy it was the Bay of Pigs.
Under Johnson it was South Vietnam and, at home, the
CIA's financial ties with the National Student Associa-
tion, labor unions, foundations, universities and myriad
other domestic instl.utions. Under Richard Nixon it was
the secret war in Laos. To name only a few.
Each time the reaction has been the same. The agency,
and sometimes the President, it is argued, have gone too
far and must be brought under tighter control.
Each time the outcome has been the same. Since the.
agency was established a quarter of a century ago as one
of our first lines of defense in the Cold War, approxi-
mately 200 bills and resolutions have been introduced in
Congress to either restrict the activities of the CIA or to
at least give the public more. information about it. None
of the bills or resolutions has passed. Only two ever have
come to a vote before either the full House or Senate.
The transitory pressure for change never has been
enough to overcome the deeply ingrained attitude on,
Capitol Hill,' and across. much of the nation for that mat-
ter, that to tamper with the CIA and its secret role in our
government is to tamper with the national security'and
that to tamper with anything bearing the label of nation-
al security is unthinkable.
The push for restricting CiA,,a.Ctivities and for strong
congressional oversight of the agency is on again, how-
ever. 't'his time it stems from the disclosure during the
past few months that the agency gave questionable as=
sistance to the White House investigation of the Penta-
gon Papers leak and from the claim that the White
House tried to enlist the CIA in the Watergate cover-up.
To be successful, the revision effort will have to amend
the laws and directives under'which the CIA operates
and alter the continuing committee operations of the
House and Senate.
Highly favorable ....................... 23 pct.
Mildly favorable ....................... 44
Mildly unfavorable ......... ...... 12
Highly unfavorable ..................... 7
No opinion ............................ 141
The findings were based on interviews with 1,544 adults,
18 and older, interviewed in person in more than 300 sci-
entifically selected localities across the nation during the
period July 6-9. Interviewing was conducted prior to the
appearance before the Ervin committee of Richard
Helms, former director of the CIA. Gen. Vernon Walters.
present deputy director, and Gen. Robert Cushman, for-
mer deputy director.
The laws
The basic statute is the National Security Act of 1947,
which was designed to centralize our armed forces and
our spy activities to better meet the Communist threat
of that time.
The law created the Department of Defense and gave it
control over the Army, Navy, Air Force and Marines.
The law also created the CIA to pull together a sprawl-
ing intelligence community consisting of the National
Security Agency, which makes and breaks secret; codes;
the Intelligence and Reports Bureau of the State Depart-
ment; the Defense Intelligence Agency in the Depart-
ment of Defense; the intelligence components of the
Army, Navy and Air Force; the FBI, the Atomic Energy
Commission, and, less directly, the attorney general's of-
fice and the-Departments of Treasury and Commerce.
The CIA was made accountable to the President through
the National Security Council.
As passed by Congress and signed by President Truman,
the law authorized the CIA:
n "To advise the National Security Council in matters
concerning such intelligence activities of the government
departments and agencies as relate to national security;
!4 'To make recommendations to the National Security
Council for the coordination of such intelligence activi-
ties...;
l "To correlate and evaluate intelligence relating to the
national security and provide for the appropriate dissem-
ination of such intelligence within the government .:.;
N "To perform, for the benefit of the existing Intelli-
gence agencies, such additional services of common con-
cern as the National Security Council determines can be
more efficiently accomplished centrally;
.13 "To perform such otlfer functions and duties related to
intelligence affecting the national security as the Nation-
al Security Council may from time to time direct."
The law also provided that "the agency shall haye no po-,
lice, subpoena, law enforcement powers or internal secu-
rity functions" except in protecting its "intelligence
sources and methods from unauthorized disclosure."
Congress, according to CIA critics and to many students
of the committee hearings and House and Senate debate,
13
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w to limit the agency to a co ec ion
d the l
i
d
a
nten
e
intelligence information outside the United States, The .
:a :< .. tended was to do only the kind of spying
that would enable us to know what our enemies or po-
tential enemies were tip to so we could avoid another
Pearl Harbor. There was, it was contended, no intention
of authorizing secret foreign military or paramilitary op-
erations or other covert overseas activities designed to
overthrow governments of other nations or violently but
surreptitiously alter their course. Nor, it was contended,
was there any thought that the CIA would apply Its tech-
niques to life in the United States.
Obviously, however, the. CIA has entered both of those
supposedly forbidden fields.
Its entry was' eased only two years after the agency was
created, by passage of the Central Intelligence Act of
19;9. This law allows 'the agency to keep secret 'the'
"functions, names, official titles, salaries or numbers of
personnel" it employs. And the law gives the director of
c.::. ,ra1 intelligence, who is the head of the CIA and the
nation's chief spy, the unprecedented authority to trans-
fer money from one intelligence appropriation to another
on his own initiative "without regard to the provisions of;
.law and regulations relating to the expenditure of gov-i
ernment funds."
The directives
Despite the supposed intent of Congress, little time was.
wasted in expanding the CIA Into clandestine activities
at home and abroad that went far beyond the bulk of the
precise language of the law.
This was done by taking advantage of a loophole-the
1947 statutory authorization to "perform such other
functions and duties" as the security council may direct.
Over the. years the council has issued a number of se-
cret intelligence directives, about 10 according to one
source, expanding the activities of the CIA. One of the
first, according to students of the CIA, authorized active
overseas operations-the "dagger" as contrasted to the
"cloak" of simple intelligence-gathering. The directive's
two main guidelines for approving an operation, it is
understood, are that the chances for maintaining secrecy
must be good and that the President must be able to
plausibly deny any knowledge of the operation if Its
cover is blown and Its connection with the United States
becomes public. The, theory of plausible denial permits
lying to the public in the interests of national security.
Control
In addition to the president and the security council,
internal control over the CIA and the remainder of the
intelligence community is exercised by an advisory
board or two, which reportedly have little effect, and by
the cabinet-level 40 Committee. The committee, labeled
according to the number of the decision memorandum
establishing it, is composed of representatives of the
State and Defense Departments, the president's national
security adviser, the Joint Chiefs of Staff and the direc-
tor of central intelligence. The committee meets several
times each month, primarily to pass judgment on pro-
posed covert action programs.
Externally, Congress has the main responsibility for
overseeing the CIA. It is a responsibility which Con-
gress has largely overlooked.
The CIA and its friends on;Capitol Hill like to point out
that the agency Is responsible to four different and
powerful subcommittees. ?
14
The agency's
overseers
in Congress'
Members of the CIA oversight committees in Congress:
-Senatn Armed Services Subcommittee-Chairman John
Stennis of Mississippi, Stuart Symington of Missouri and
Henry Jackson of Washington, Democrats. Potor Dom-
inick of Colorado and Strom Thurmond of South Caro-
lina, Republicans.
Senate Appropriations Subcommittee-Chairman John
McClellan of Arkansas, Stennis and John Pastore of
Rhode Island, Democrats. Milton Young of North Da-
kota and Roman Hruska of Nebraska, Republicans.
House Armed Services Subcommittee-Chairman Lu-
cien Nedzi of Michigan, Edward Hebert of Louisiana,
'Melvin Price of Illinois and C. C. Fisher of Texas; Demo-
crats. William Bray-of Indiana, Leslie Arends of Illinois
and Bob Wilson of California, Republicans.
House Appropriations Subcommittee-Chairman Fred
Rooney of Pennsylvania, John Slack of West Virginia,
Neal Smith of Iowa, John Flynt of Georgia and Robert
Sikes of Florida, Democrats. Elford Cederberg of Michi-
gan, Mark Andrews of North Dakota and Wendell Wyatt
of Oregon, Republicans.
Technically speaking, that is true. Subcommittees of
both the Appropriations and Armed Services Committees
in both the House and Senate are assigned to keep track
of the intelligence community led by the CIA. And the
subcommittee rosters include some of the most senior
and most influential members of Congress. Chairman
John Stennis, D-Miss., of Senate Armed Services; Chair-
man John McClellan, D-Ark., of Senate Appropriations;
Republican Milton Young of North Dakota, ranking mi-
nority member of Senate Appropriations; and Chairman
Edward Hebert, D-La., of House Armed Services are but
a few of the 24 who serve.
But the subcommittees have existed in name only for the'
most part. They hold few meetings and sometimes go for
long stretches, a year or more, with none at all. They
have no permanent full-time staff of their own to do re-
search or help prepare lines of inquiry. They often have
taken the position that they don't want to know very
much because of the terrible security burden that knowl-
edge would inflict on them. And, with the exception of
moderate Rep. Lucien Nedzi, D-Mich., chairman of the
House Armed Services subcommittee, and Rep. Neal
Smith, D-Iowa, they are to a man so conservative polit-
ically and generally so supportive of CIA activities that
no serious challenges ever have been raised.
Stennis summed up the usually prevailing congressional
attitude in November 1971, when the Laotian affair was
rising to the surface: "This agency is conducted in a
splendid way. As has been said, spying is spying. You
have to make up your mind that you are going to have
an intelligence agency and protect it as such and shut
your eyes some and take what is coming."
Change
The two proposals for revision that have reached a vote
In Congress involved Senate plans to alter the overnight
committee structure. In 1956, a joint House-Senate com-
mittee on intelligence proposed by Senate Democratic
Majority Leader Mike Mansfield of Montana was reject-
ed, 59 to 27. Ten year::-, later, in 1966, a plan fora new
Senate committee on intelligence operations, offered by
Democrat Eugene McCarthy of Minnesota, was killed 61
to 28.
Similar proposals again are abroad in Congress. For ex-
ample, Sen. William Proxmire, D-Wis., the most active
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 'Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
IVMAL TELEVISION
12:00 PM, EDT
PRESS LOOKS AT CIA HEADQUARTERS, FIRST TIME IN 14 YEARS
JOHN CRISWELL: In this era of Watergate investigations,
news leaks, and secrets, big and small, the ever mysterious Central
Intelligence Agency has provided a big surprise. Yesterday CIA
unveiled to the press, for the first time ever, its 14 year old
headquarters in Langley, Virginia. Correspondent Bill Downs has
that report. (FILM CLIP)
BILL DOWNS: Driving through the nation's most secure
gate, the 50 million dollar super-secret CIA headquarters looks
surprisingly like a well kept prison, which in a sense it is for
the country's most sensitive secrets.
Permission to film the seven story concrete and granite
building came as a surprise, and marked the radical departure from
previous CIA security practices, meaning the agency is worried
about its public image. But any airline passenger flying west from
Washington can look out and see the whole 140 fenced-in acres, in-
cluding the more than 20 acres o/f parking lots for the 8 to 10,000
faceless employees.
The agency auditorium, sometimes used for cloak and
dagger briefing-s, looks like the top of an ice cream cone. The
cafeteria, with its crenelated roof, can feed 1,000 anonymous
people at a sitting.
We were allowed to photograph only the outside of the
agency headquarters, but this is the American'taxpayer's first
look at his CIA. investment. We can report their--property: is in
good condition. This is Bill Downs, ABC News, at CIA headquarters,
Langley, Virginia.
anus vocal CIA critic, has offered a resolution creating a
seven-member Senate Committee on the Central Intelli-
gence Agency. It would guarantee the pro-CIA old guard
only two seats - by reserving a pair of memberships for'
senators who also serve on Armed Services. Two seats
would be held for members of the Foreign Relations
Committee, which now has no viable oversight role. The
other three would come from the Senate at large.
There is talk of sharply cutting back the over-all intelli-
gence community budget and personnel, estimated by-
Proxmire at $6.2 billion and 148,851 persons, and of
making public the long-classified figures for those cate-
gories so that voters can weigh the big federal expen-
ditures for spying against -other national needs.
Sen. Edward Kennedy, D-Mass., and others are urging a
shift in emphasis from "dagger" operations to long-range
intelligence evaluation.
Proxmire has Introduced legislation to narrow the two
3408 WISCONSIN AVENUE. N. W. WASHINGTON. D. C. 20016 244-8682,
supposed loopholes in the 1947 law - those allowing the
CIA a domestic function in this country and permitting
clandestine and often-violent efforts to change the
course of foreign nations. His bill would require written
approval of such endeavors by the oversight committees.
McClellan and Sen. Stuart Symington, D-Mo., acting
chairman of Armed Services, have expressed interest in
making a full review, apparently for the first time, of the
security council intelligence directives that transported
the CIA through the loopholes.
Stennis, too, has promised alteration of the CIA charter
"to fix it so they can't have all this false-face stuff,
crowbars and burglary tools operating in the U.S."
On the House side, Nedzi, who has received good marks
from many of his colleagues for pushing steadily ahead
since his appointment two years ago, plans more hear-
ings to supplement those he already has had on secrecy
classifications and CIA Involvement In Watergate.
RADIO-TV MONITORING SERVICE. INC.
THE SCENE AT NOON
AUGUST 27, 1973
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26 August 1973
Curdy
." J
From
By William Claiborne
Washington Post Staff Writer
"I don't think you can get absolute
security without almost establishing a
police state, and we don't want that.
You can't put security in a black groove
or a white groove. It is a gray 'groove,
and certain chances have to be taken."
J. Edgar Hoover, May 14.1964
Ur?? ?? ,i,? for the already troubled
FBI, !'resident Nixon uttered one sen-
tence last week in which he, perhaps
unintentionally, provoked a national ex-
amination of -what past administrations
have done to protect the Republic from
its enemies, real or imagined.
Standing before microphones In a
parking lot adjacent to his San Clemente
estate, Mr. Nixon was asked whether
he, if he were a congressman, would
entertain impeachment proceedings in
light of disclosures that the plot to
burglarize the office of Daniel Ellsberg's
psychiatrist was hatched in the White
House.
First denying that he had violated his
oath of office, Mr. Nixon bristled slight-
ly and said to newsmen:
"I should also point out to you that
in the three Kennedy years.and in the
three Johnson years through 1966, when
burglarizing of this type did take place,
when it w, > authorized on a very large
scale, there: was no talk of impeachment,
and it we quite well known."
The see once: sent newsmen scurrying
to the r-1.icvs of almost every living
former A;:.orney General who served in
the past ;;ua1?ler of a century, and what
emerged iin;t was a spate of indignant
denial: into th?' top Justice Department
:s of John F. Kennedy and Lyn-
appoint r,
don B. 1o111;;on.
"I don't. h?'ltet-e it," said Nicholas deB.
Katzenbm-h. who held, successively, the
three top Justice posts in the years
Mr. N i' on was talking about. Ramsey
Clark, Attorrey General in -President
Johnson's administration, said, "I don't
know w0 hat he is talking about." Presi-
dent I. enho::er's Attorney General,
Herbert Brownell, declined to comment.
Following the initial barrage of de-
nials--::Mich indicated that the FBI may
have cot:ducti;d national security burgla-
ries N%'Wlout the knowledge of the at-
torneys general - a pattern of such
break-ins. stretching back to the pre-
1Forld War 11 era began to emerge.
rea k-inst
J 1V
i it (0 it
The former FBI officials, , vices, were subsequently ap-
who declined to be identi- plied in varying degrees
'fied, said that the burglaries over the years to each new
that were committed were. national security threat as it
always authorized by Hoo-, arose.
ver and not by attorneys, Those threats, the former
general or other administra- bfficials said. included the
'tion officials, as Mr. Nixon American Nazi Bundists,
suggested in his press con- suspected Japanese' espio-
;terence. nage- agents, Communists,
said, involved foreign intel-
ligence and were made at
foreign embassies here and
at consulates in cities across
'the country. Some break-ins
were conducted in offices
of tile Communist Party of
the United States and in
the homes and offices of
suspected Communist
ized crime syndicates. labor
racketeers and radical anti-
.war groups.
While the broadening of
the FBI's intelligence capa-
bility was attributed by all
the former agents inter-
viewed to Roosevelt, one
former FBI official at-
tempted to put the bureau's
agents.
in the case of foreign mis? first foreign intelligence op-
mer olftcials, the target of -. "We were at war. We were
the burglaries was almost: fi0itin" for survival. Marty
always cryptographic ma- thines had to be done for
terial, secret codes. For ex-
iimple, the Japanese code survival," he said.
was broken months before. The former official cited
the outbreak of World War. the relocation of thousands
II because agents entered of American-born Japanese
the Japanese embassy here to Western internment
and photocopied code books., , camps, and said, "If that
In some cases, the break-, Was considered uer.cssary.
ins were necessary to plant then naturally other thines
hidden microphones in em-. were consideered neces-
bassies, a practice that for. sm?Y?"
mer agents note has been During the Cold War of
practiced widely in other the 1950s, according to for-
countries as well as in the mer FBI officials, the num-
,United States. ber of "black bag Jobs"
The genesis of the FBI's , (burglaries) committed by
unusual intelligence opera-. FBI agents escalated as the
tions can be traced as far I government sought more
back as September, 1937, and more information from
when after an 18-year hia-. Communist Party offices
tus? the bureau was ordered . and the missions of Commu-
back into the intelligence nist countries.
field by President goose- One special agent who was
Sett, fired from the bureau in
,:,,l3ctween 1919, when the 1961 for publicly criticizing
old General Intelligence Di- 'Hoover, said he participated
vision (GID) was abolished, in about 12 break-ins of for-
and 1937, the bureau had no ! eign missions and Commu-
intelligence assignment in . nist Party offices.
relation to national sectti?ity. William W.? Turner, 46,
By the summer of 1939, said in a telephone inter-
when events in Europe ill-, ' view from his home in? San
preasingly prompted ques- Rafael, Calif., that "burglary
tions at home about foreign 'was a well-established tech-
ined the
velt
ex
anded
t
R
h
j
h
i
"
,
p
s,
oose
e
o
w
en
que
p
Accorc(in ; to former high officials Of agen
....,,..,.. ,..,,,. ? his' directive and made the FBI in 1951.
......1- ....., r:l
41, LOOT
d
to
e
an
have since left the bureau, such activity
began on the specific authorization of
President Roosevelt as war
loomed in Europe and con-'
tinued until 1966, when the
late FBI Director Hoover
put an end to it. ?
(Hoover, according to his
f or m e r associates,: acted
morn out of dissatisfaction
with the risks his agents
were taking on the behalf of
another government agency
-The National Security
Agency-than out of any
moral uneasiness over the
break-ins.)
16
FBI responsible for all in- Turner said he acted as a
vestigations of espionage, lookout during a burglary of
counterespionage and sabo-. the Japanese consulate in
tage. . Seattle in 1957 during which
According to a former a safe was opened and rec-
long-time agent, that man-. ords were photographed.
date was the beginning of - "A guy flew out from
.an evolution in which the Washington and spent four
FBI-assisted by the mobili- or five hours up there. I
zat ion for war-began to de- went up once, and he was
:vclop its highly sophisti- photographing some stuff
?'eated intelligence tech- from the safe," Turner said.
,ques. Turner, now an author
The techniques, which in-- and a frequent critic of the
:eluded surreptitious entry FBI, said he also conducted
'and the use of complex glee- burglaries at the homes of a
ttonic eavesdropping de- Seattle Communist Party
leader and a suspected So-
viet spy. He said such opera-
tions were 'approved in
Washington, but they were
"never put to paper. You
could never prove it was au-
thorized." .
The normal procedure,
Turner said, was for agents
to "case" a burglary target
to determine when it was
unoccupied, and then sta-
tion a lookout to watch for
anyone returning. Addition-
ally, he said, an agent was
stationed at the local police
headquarters to monitor the
police radio and "shortstop"
ally citizen complaint that a
burglary was in progress.
11'c would just tell the
police we have an operation
in this area and we want t1i
male sure nuthir?' hap-
pens," Turner said.
i Turner said he 'could usu!
ally tell when the bureau's
most experienced "black-bag
tnan'4 had committed a
highly successful burglary
"because you would read in
the house organ that he got
'another meritorious award.;
'That's the only way they
.could pay him." -
Turner said he was
'trained in wiretapping in
1958 in Washington and that,
,he was instructed in surrep
titious entry ~at the same
time. As agents retired, he
said, new glasses in burglar!
dzing were held "to replen
ish the guys in the field."
i The classes were 'held,he
'Paid. In an attic room in the
Justice Department here,
and agents were instructed
on how to make their own
lock-picking tools with a
grinding wheel. Each agent
made his own kit of tools,
and was instructed never to
perform a break-in while
carrying identity papers.
Turner said burglaries
"weren't really widespread"
and almost always involved
foreign intelligence. which
he suggested was necessary
to national security.
This theme was echoed by
the other former FBI offi-
cials, who asserted that they
knew of no break-ins that
were comparable to the one
to which IIlr. Nixon referred
in his press conference-the
Ellsberg burglary.
That break-in, planned in
1971 by the special White
House intelligence unit
known as the "plumbers,"
was designed to obtain psy-
chiatric records of Ellsberg,
who was on trial in the Pen-
tagon Papers case.
Turner said he knew of no
authorized break-in in which
burglary was used to obtain
material on a defendant in a
criminal case.
He said he was aware that
some break-ins were author-
ized In domestic intelligence
situations, such as organized
crime and certain black ac-
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WASHINGTON STAR
26 AUG 1973
tivitics, but that the purpose
of such entries was to install
electronic listening devices.
Included among these do-
mestic intelligence opera-
tions were break-ins con-
ducted to install listening
devices used in recording
conversations of the late Dr.
I Iartin Luther King Jr.
Part of his training,
Turner said, i,ivolvca "how
to? get into a place, put in a
baseboard microphone,
paint over the plaster and.
get out of there quickly."
. The disclosures by Turner
-and other former FBI of- -
ficials whb spoke anony-
mously-has created an.
"uptight" situation in the
bureau, according to an FBI ?
source.
The public scrutiny of
closely held operating se-
crets conies at a time when
morale in the bureau is al-
ready low because of Water?
gate.
It also comes at a time
when the FBI has just is-
sued an expanded "employ-.
ecs' agreement" requiring
agents to acknowledge that
leaking confidential infor-
mation after they leave the
bureau could result in crim-
inal prosecution or civil in-
junctive action.
The pledge, according to
an FBI spokesman, was is-
sued Thursday, but stems
from a June, 1972, Supreme
Court decision upholding
the legality of a secrecy
pledge signed in 1955 by for-
mer CIA agent Victor L.
Marchetti.
The FBI spokesman said
yesterday that the new em-
ployees' statement "updates
and expands" the previous
pledge, which simply stated,
that agents were expected
to keep the details of their
work confidential, even of-
ter lcavinn- the bureau.
Other than confirming
that Turn(.x served as an
agent form 1951 to 1961 and
had been assigned to Scat-
tic, the FBI here has ref-
used to comment on any of
the disclosures of former
bureau officials. -
ens Secrecy Pe'dge
.-By John M. Crewdson ject to criminal or civil resulted in the decision was
New York 7lmes News Senics penalties , brought in connection with
The FBI has directed its an article he had submitted'
18,000 employes to sign a ASKED whether the re-- -a few months earlier- tot
written statement recogniz- wised statement was a re- Esquire magazine,
ing that the work of the sponse to the continuing . ' ;i
bureau is confidential and controversy over leaks of ONE SOURCE in the Jus?-'
that unauthorized disclo- information from federal tice Department said that
mation may result in crimi-
nal prosecution.
An FBI spokesman said
the printed statements
which have been distributed
to bureau supervisory per-
sonnel in the last few days,.
were simply a revised ver-
sion of the bureau's tradi-
tional employment agree-
ment "which indicated that
the work of the FBI is confi-
dential" and was not to be
revealed except through
normal channels.
The only substantive
change, the spokesman
said, was the inclusion in
the new version of the cave-
at that the confidentiality of
the FBI's work was protect-
ed 'by federal laws that
could make anyone violat.
ing such confidentiality sub-
Washington Post
with respect to the investi- any similar statement cau-:
gation of Vice President tioning against unauthorl
Spiro T Agnew, the spokes- ized disclosure.
man replied "no, not at Atty. Gen. Elliot I. Rich-
ardson, he said, s,?;-ply'
He explained that the warned his top officials '.?,~t
bureau had decided to issue week that no one should ta,',
the revised statement fol- about the Agnew case out-.
lowing a Supreme Court rul- side the department.
ing last December that up- Almost from the inception'
'held -the legality of a similar of the Watergate scandal in.
affirmation of secrecy re-' June of 1972, federal law.,
quired by employes of the enforcement agencies, espe-'
CIA. cially the FBI, have been
In that case, the court accused of being the source
prevented Victor L. Mar- of leaks to the press of con-
chetti, a former CIA agent, fidential investigative infor-
from disclosing classified mation about the case.
information obtained during ' On Tuesday, Agnew pub-
his employment there that licly accused members of
had not already been made. the Justice Department of
public. trying to "indict" him in the
The government action press through leaks of infor-
against Marchetti which mationo
September 1973
Getting Paid by GOP for _6 nn '
dential race.
"The basic facts in Ander-
ton's story are correct, at-.
though there was never any
From News Dispatches question of espionage-I'm next year, he said.
LONDON, Sept. 4-Ameri?I not really the James Bond Freidin, who worked for the
can journalist Seymour type," he said. New York Herald Tribune be-
Freidin today cheerfully ad. "i did pass on information fore it folded in 1966, joined.
to the Nixon camp and I did Hearst Newspapers in Septem-
emitted receiving substantial tecei~ a money-about 66,000 ber, 1972.
:sums of money from the Re- 'in 1#63 and $11,000 in 1972. I He described his political al-
publican Party for relaying in. was surprised by the size of legiances as "independent
--formation from the Denio- the payments, but they were Democrat" and added with a
cratic camp during the 1968 'all legal and aboveboard. The' laugh: "I've never voted Re-
Internal Revenue has taken: :publican in my life".
and 1972 .presidential elections. huge chunks of it." Anderson also 'claimed
He was commenting on to. Freidin said he was merely Freidin was an informant for
day's syndicated report by col- passing on- information that 'tile Central Intelligence
umnist Jack? Anderson which would have been available to :,Agency in the 1950s and 1960s,
alleged that during the 1968 the mass media within hours while lie was working as a
:campaign Freidin filed three of his reports reaching the Re- newsman.
publicans. "lt-hat. I contrib. Freidin said he was in eoti?
reports a day from Huberti !uted was junk-they could tact at that time with CIA -per-i
-Humphrey's headquarters. / /have read it in the newspa? i sonnel, but on an "exchange
Freidin, now London bureau I pers." I of information" basis. ?
chief of Hearst Newspapers, The book that Freidin had l "I know an awful lot of guys
been researching was tempo who exchange information"
said that during both elections i racily shelved when the with U.S. agents he said.
he was working as a freelance Watergate scandal started to! He .writer and was engaged in re- break. "I reckoned the hook with thsaid that in his dealings
?eaaching a book on the presi- Istoocl no chance of success. Its with e CIA and with
ovine
shadowed by 1; 1 1stealing secret ' papers or
breaking?in. There was noth-
Freidin said. I IIt was now. hoped the book underhanded in any aspect,
would be published sometime l of my work." - ? " , _ .i
17
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 "ASHINGTON POST
3 SEP 1973
a FI,erga tLe
urn FBI,
~ny Feel
WALL STREET JOURNAL
29 August 1973
Fly Me, I'm Spooky
CIA Is Apparent Seller.,
Of a Charter Airline,
But Nobody's Talking:.,
Southern Air Transport Sale
Is Assailed by Competitors;
Tier CAB Acts in Secrecy
By Louis Harris
''`By 5? to l6 per cent, a
majority feels the Federal
Bureau of Investigation was
'used to its detriment in a
cover-up of the Watergate
affair, while a 46 to 33 per
cent plurality feels the same
way about the Central Intel-
ligence Agency.
On Aug. 18-19, the Harris
Survey conducted interviews
among a cross section of 1,536
households nationwide, asking
about those alleged White
House efforts to use the na-
tion's two leading investiga-
tive agencies:
Do you feel the White
1-louse staff was trying to get
the CIA and the FBI to cover
up, the Watergate affair,. or
didn't you think that was the
case?
Total Public
Tried to eel CIA and
Tat to corer 11D .......... 565'.
.Yia>, not the case .......... 20
Not aura ................. .. 31
People were also asked:
Do t'ou feel that the CIA
was it.volved in the Water-
pcta affair and other illegal
don estic spying activities or
rot?
Total Public
Ws, Involved ................ 454.
Wag noL involved ............. 24
Not ore .................... 31
The cross section then was
asked:
.. Do you feel the reputation
of the FBI was damaged by
the way it was used in the
cover-up of the Watergate
affair, or don't you feet that
trey? And, Do you feel the
CIA's reputation has been
damaged or not in the Water-
gate affair?
Not Not
Damaged Damaged Sure
Tnr.... .... 52'e .1t; 12's
CIA' 4G 3:1 21
?~c t273. The Chicago Tribune
`Still Another Muddled' Deal
BY TODD E. FANDLLL
Staff Reporter of Tar; }v ALL STNTr,T JOURNAL
All the guys In the air-charter business used
to wonder why Southern Air Transport (unre-
lated to Southern Airways) didn't fully exploit
the mushrooming charter market. It had the
money, it had valuable routes awarded by the
Civil Aeronautics Board, and it was modestly
thriving. Yet the Miami-based outfit never'
really seemed to take off.
Competitors suspected, and now they think,
they know for sure, the reason: For 13 years,
Southern has been secretly-and possibly ille-
gally-owned and controlled by the Central in-
telligonco Agency.
This, is conning to 'light because of an at-
tempt to sell the line and to get the sale ap-
proved, secretly, by the CAB. So far, the CAB
has appeared to cooperate. Despite legal re-
quirements that public hearings be held on ap.
plicatioas to transfer ownership or control of
the companies it regulates, the CAB has with-
held documents and conducted a closed-door
heating on the sale application. The agency
has gone so far as to require oaths of secrecy
from wltnc nes who appeared in the five-day
closed hearing In June. "We weren't even sup'
posed to tell anyone how long the hearing
lasted," says a. lawyer close to the case.
The issue focuses on the attempt by Stanley
G. Williams, 62-year-old president and a direc-
tor of Southern, to buy 100ct, of the line for $3.1,
i million. Mr. Williams has told the CAB he al-
ready owns one-third, and he wishes to buy the
remaining two-thirds from its other two dirce-
tors, both former high-ranking government of-
ficials.
Evidence: Circumstantial but Spooky
Distressed by the prospect of stiffened com-
petition from a ]hie they say couldn't have sur?
viven without CIA help, four major charter
competitors- joined by eight scheduled airlines
--ore opposing the sale. The protesting car.
riers Insist that none of the three directors Is a
true owner of Southern. They are nominees,
the carriers say, for the real owner and seller
rho CIA.
One -':nnrce close to the controversy rays:
"The CIA ho. maucttvct'c:?? ei iian:s? and
In ore i:atance, they are
l:no'.?n I) 1,::.c >?ta,hc.I lacui
of No. 4 Indochina heroin-
probably the strongest pro,-
duced anywhere in the world--
f n the body of a dead `cobra
dumped into a 'cage of live
snakes en route to the States
for sale to zoos. . '.
That load,, incidentally, was
stopped. But It is estimated as
ttjuclt as 20 kilos of the 90 to
95 per cent pure Southeast
Asian. heroin got to the United
Slates from here last 'year
with a street sale value of.SS.5
to $7 million. Largely thru the
ei'fots of Chinese dope syndi-
cates operating thruout Indo-
chiile, Malaysia, the Philip-
pines, and Hong Kong.
HOWEVER, AN equally
tough group to intercept are
the 'independent American en-
trepreneurs who figure on
mating a quick, one shot kill-
lug in the dru! market. ,Many
of these are former GIs who
had their first taste of heroin
during the Viet Nam War_
in fact. American officials
here report 93) per cent of the
American citizens arrested on
narcotics charges in this part
of 'the world are ex'service-
m^1t. six of v'hom are serving
sentences in Thai prisons.'
',.'hat makes takhig the risks
attrr.ctit e are the faiitastic
profits to be reared from a
minimal investment.
Ffll: I?1,:11.WLT,,. an titrle
pendent operatat can buy a 1st
C118s ticket to I;an fkok for el,_
0^0 In San (Francisco. jot hero
in, a matter of a day. then
p earl an average of 2(.0 a
rl in hich living while spend-
ing $100 for an ounce of the
hir!t gqi:',c_ No. 4 heroin. With-
in 21 hgtlrs. he can be on his
tt?t:y hotite \~ to turn a $7j"00
ptoiit.
'Very of en . such ind^hand?
clt!5 tone it,rrd t~ Idcnt!fy tc-
C mi.=3 tl.cy ,nL' lt'~t phefrc~lon-
?1 traffit'kcrs? !tear pre rt~en
hard.'r to collar\'?iiile c.u?rt?i:kg
:w;?'t're! titcly s atilt ritacai?
1!:ey midi: take as ounce of
I:.t?'ruin coca cod inn h::'Turin,
p`;: tic. F^:, ot? f1, :;t!c 1+i1l err:;c
a i+f _atialu,r i!, t; tt laPe'rnca-
.passed by their body until it is'
safely back in the U.S.
IN SEVERAL instances, rho,
such schemes have failed with
fatal results when the packet
of almost pure heroin broke
inside the courier's body and,
the drug spewed into his sys-
tem.
The ,cal wheelers and deal-
ers among the Americans are
out to'make far greater prof-
its, for if they can get just one
kilo of heroin back to the U.S.,
they are assured, of a $25,000
to 550,000 profit before it is
.diluted for street sale. A kilo
can be bought for as little as
$1,000 to $2,000 in Thailand.
Thus, if an independent can
smuggle, thru a cow Jo of loads
like that, he can retire for life,
probably at the age of 25.,
THE REAL professionals.'
however, are the Chinesq wlto
have continued, a more : than
2,000-year tradition of dope
smuggling since being driven
from their .homeland; by the
29
Communists in 1940.
They know hdii to slip Iwo
kilos of gold past customs fiffi-
cials buried in a shipment of
eight lebacrs. So there is no
reason they Cannot smuggle it
kilo of heroin 'in' a 100-pound
sack of rice,. tons of which are
in transit thr'uout this land
every hour the day and
night.
Officials here ' ave told Rep.
Morgan tiltrrphy Jr., (D., IILI
that the Chinese merchants of
death are in a sic'. t at the mo
nient. ..furphy is, -onductin g
his third intcrnalion, ? int'esti-
gatioll of tile drug traffic,
IrNI O CI':}Itr,:':f' c 1o
Lhruout :iouthea';t Asia by
ntuitinaiional alliance of ctls-
t;uns and ' narcotics men is
forcing the Iraffih;ers to final
new ruu'.es.
Narcotics are backing up' in
such traditional outlets in the
opium poppy growing areas of
the Golden Triangle as Vicnti?
one, Lars; Tachilck, Burma;,
Chiang Mai;' and. Chiang Rai,
in Northern ' Tiimiland, and
ri!;ilt here in B n ;kok, the
c; :tter of Gulf of iatn siitug-
glin ; operations.
Decently., Pedro Woo, the
&inese operator of an ap art-
ipt_nt hotel\,4it. the Vicnliat:c
airport, was arrested with , $
million worth of morphine
base, from which heroin is
'made.
AGENTS R1*,PG'.T lie had
been desperately stroit,'-arni-
ing airline pilots who bunk at
his hostalry to spirit' the : iuff
out to Manila, h".I., or Bong
I;On;;, but no one would touch
(),.a load, even tho' it is more
?
CCZiiy -tto~c;l is iiiat form
than , rclinc'i l .,,? i't.
_.Appraved.for-Release-20.0-'!/08/0-7-; -CIA-RRP77-004328000100220001 2- ._
 Approved For Release 2001/08/07..: CLA-RD.P-7-7-08432R000100220001-2
Ci UCA00 'r1YBIJ'Nr;
Bob 157; which in Asia 2 5 AUG 1973
f ~l 'v 1 it '.' J % r - 1 ~! is E J ~.j i r ~~~~ (~::/r+ 1-.n, ,++ V",
i ~..s/
1i
i
.rt
--
Chtca:o Tribune Press Service
BANGKOK, Thailand. Aug.
2.1-Southeast Asian Chinese
drug dealers are mounting a
frontal assault on the United
States in frantic efforts to
pump high grade heroes into
the American market.
In recent months, the'Chinese
,are kn %. n to have offered a
fortune in payments to Ameri-
can : ? ; c) er agents posing
as po,u:ntial narcotics couriers
in the deadly battle to stamp
out the flow of heroin at or
near its sources in the Golden
o
American narcotics agents
are fighting an intensive
battle iu Southeast Asia to
plug the traditional methods
drug traffickers have been
using to get their deadly car-
goes to 500,000 American ad-
dicts. Their efforts are pay-
ing off and have f o r c e d
Chinese dealers to seek new
pipelines to the U n i t c d
States. Tribure columnist
Bob 1i iedrich reports o n
some of those new channels.
In many cases, American
agents have found that the
clannish Chinese dealers will
associate only with other. Chi-
nese.
--is a result, U.S. agents
must devise a continuing se-
ries of ploys in efforts to pene-
trate the Oriental syndicates
operating thruout IndoCnina
and Malaysia.
Often, they must rely on Ori-
ental informers who are more
readily accepted than the Cau-
casian agents. However, some
Asian syndicates and identify
higher-ups. The real money
makers are always well insu-
lated from the lower level'
traffickers.
triangle area of Thailand, LARGE concentrations of prone' to deterioration during
Laos, and Burma. overseas Chinese in Argentina transit than heroin, there is a
The Chinese 'dope peddlers and Brazil also pose the threat trend toward moving the drug
are seeking new routes to of a new drug smuggling con- in that form.
mainland America as increas. nection to the states, agents Much of the bankrolling of
ing pressure is brought on the here report. , And there is the narcotics traffic is also
traditional heroin and opium growing concern that the influx' handled by the'Chinese, most
pipelines thru Hong Kong and of Indochina heroin-the pur- of whom fled mainland China
o t h e r major transshipment esf and deadliest in production after the Communist takeover
points in the Orient. -may be joined by raw opium in 1949.
THE MERCHANTS knorr from India, the world's largest They operate primarily thru
the United States represents producer of legitimate opium black market banks thruout
the most lucrative mark::t- for medicinal purposes. ' ... this part of the world, avoid-
piace for their wares as opium
supplies from the Middle East
dwindle because of continuing
American efforts in Turkey
,
France, and elsewhere in Eu- ' intelligence reports reaching ficult to trace.
here indicate as much as 25
rope.
American narcotics, agents per cent of the legal indian
here know the Chinese are in- opium already may be being
terested only in moving large I diverted to illicit channels. In-
heroin shipments of 100 kilos than authorities 'deny the re-
or more, fully aware the stuff Ports-
is worth ;200,000 a kilo when The opium
diluted for street sales in Chi- less morphine bass for the
c a g o and other American manufacture of heroin than
cities. the h i g h grade narcotics
Thus, as the conventional spawned by the Golden TriaD-
heroin routes are denied them, gle area. But when added to
the Chinese are expected to the overwhelming onslaught of
seek new channels, quite -pos- drugs from Southeast Asia, the
sibly thru South America and ! total presents a serious threat
Mexico, which already are 1! to the young Americans at
heavily engaged in smuggling whom the traffic is aimed.
drugs from Europe and Latin The Golden Triangle alone
America. 1 produces over 700 tons of opi-
Federal agents in Southeast um annually, an amount. copa-
Asia fear the heroin smugglers ble of producing 70 tons of 30
may reach--an accommodation 11 to 93 per cent pure heroin for/
I the more than 500,0D0 Ameri-
with South American organ- cans addicted to the drug.
ized crime syndicates that; IT IS believed the illicit In-
have connections in the Unitdd,.4tian opium is smuggl2~l into
Mates and a long tradition of Indochina for conversion to
morphine base and heroin.
expertise in smuggling thru And because morphine base is
Mexico and Southern Irlorida. I more easily concealed and less
Americans have successfully
gained the confidence of those
Chinese whose' greed sways
their better? judgement. And in
such cases, the merchants
have been packed off to jail
and their shipments confiscat-
ed here and back in the Unit-
ed States.
NO ONE really knows, how-
ch of the drugs
v
w m
h
u
er,
o
.e
IN SOME instances, Chinese are being carried to the U.S.
traffickers have been known to . by the so-called "mules" -
carry a clandestine bank draft merchant seamen, traveling or
representing hundreds cf thou- vacationing Americans, and
sands of dollars in a series of others who take a one shot
scribbled Chinese characters flyer into the narcotics traffic
the size of a postage stamp. Their identities are difficult
Reportedly, the drug met?- to ascertain and it is an al-
chants also make liberal use
most hopeless fast: to search
of secret Swiss bank accounts every traveler to the United
to disguise and safeguard their States, unless there is advance
illicit profits. intelligence information of a
As in many criminal enter- i shipment or cause to suspect
prises, the Chinese assemble a them as couriers.
group of investors to finance . Tomorrow: Two 27-year-old
the shipment of a heroin load. former GIs relate in their own
That way the 'risk is spread words from a Thai prison how
among the shareholders and
no one individual gets 'hurt
badly or wiped out if the load
of drugs is intercepted by au-
thorities.
And again, because of the
devious methods used by the
Chinese, it is often difficult for
undercover agents posing as
Amercan buyers or couriers
to penetrate the Southeast
30
they-got involved in the drug
traffic and wound up serving
5- to 20-year sentences in a
foreign jail with no hope of
parole,
Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
Rep. Morgan Murphy Jr. inn
for the most part, legit-
,
[I)., Ill.), who is on his third mate banking channels. There-
trip to investigate the Indochi- f o r e , even their financial
na drug traffic, has been told transactions become more dif-
iT
 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
CHICAGO'TIIBUNE
2 9 AUG 1973
Bob Wiedrich in Asia
is o~ r- Kong rdLfwr hub
Chicago Tribune Press Service
. HONG KONG, Aug. 28 -'
This British crown colony was
founded in 1841 to promote the
opium trade with mainland
China. But now the problem
has come full circle and the
shoe is on the other foot.
Opium addiction, for all
practical purposes, is nonexis-
tent in Communist China. But
IIong Kong has the worst opi-
um addiction problem per cap-
ita of any place in the world
- .at least 100,000 [some say
150,000) of a population of 4.5
million.
drugs arriving 'here aboard
Thai trawlers from Bangkok,
the 'vessels must be stopped
somewhere in the?.South China
Sea. THAI TRAWLER traffic has
Otherwise, once they are off- stopped in recent weeks be-
loaded into junks and lighters
cause of British and American
on the far side of the Lima pressure here, plus Thai cf-
Islands 60 miles south of here, behest of Amcri-
the opium, morphine base, and {re cores in at the
Bangkok.
bpure heroin disappears into a
mass of junks and other fish- However, British officials
ing craft. There are 30,000 are not deluding themselves.
such craft alone registered in They are certain the expatri-
the colony. ate Chinese masterminding the
Also, it seems almost impos- Indochina dope traffic will
sihle to- stop the flow of drugs switch to airplanes or mer-
fro-n Indochina by d i r e c, t chant ships if need be, if only
search of aircraft, ships, and to supply the 100 tons of opium
required to supply the colony's
passengers, opium smoking and heroin ad-
Annually, 20 million tons of (lict.e(1 population,
cart o move thru the port; over For about live years, Thai
7,300 shipping movements oc- trawlers virtually ran a ferry
Granted, the People's Re-
public of China solution to ad-
diction after the Communist
takeover in 1949 was less than
humane. Top dope peddlers
were rounded up and shot.
And the addicts - estimated
at 10 million then - were giv-
en a period of time in which to
cure themselves or face jail,
hard labor, or death.
Of these, some 300,000 are
said to have finally been exe-
cuted as the Socialist solution
to a pressing problem.
Nevertheless, taday the Pe-
king government has no addic-
tion problems. Conversely, the
British administrators of this
colony do. And so do the
Americans, whose Yankee
Clipper ships got into the opi-
un1 trade, too, hauling opium
from Turkey while the British
did the same from India thru
their East India Company.
Further, if there is tragic
justice to be found in this his-
toric turn o* f events, witness
the fact many of America's
more than 500,000 heroin ad-
dicts were initially hookers on
Turkish drugs. Now they face
continued hell because of
Southeast Asian heroin, much
of which funnels ' thru hlon
Kong en route to world mar-
kets.
IN ORDER to have
chance of intercepting
cur, excluding the junks, and y t at?service to the. colony.
there are at least 21A W
arc 1 host of the outgoin heroin,
and r assenge .Ingilts_
eventual We in the United
States.
The 90.01)0 to 100,004 sallo s
of the United States 7th Flea,
who take shore leave here an-
nually, also pose a drug prob-
lem for authortttcs. -
LAST YEAR there were sev-
en deaths :.In-.o,-.g the Navy
men from drug overdoses, six
of them in the last four
months of i`72. This year,
there has Orly been one such
death to (}ate.
No one during t.iits Investiga-
tion of ne.r devc'.oputg drug,
routes to the G.S. from the
opium r; l(:aci Golden Tri-
ang:le area o, T`,aila nd, Laos,
and Euru1;.t has charged Red
China with inr;,lvcmcnt in tfe
dope truth:,,
TlTt- ::ation;tlist Cl i-
p 1 u s 8.4 million travelers, ,:p by Americans flying direr- ONLY
mostly by air.
nC=c on Taiwan foztc'r t::-,is _to-
ly here from the states. They
C 0 U 1' L E TIIE SE figures concede, no, no ore. really 11'Y'. e'i:ich e`:cr;:r:;z we h re
1 (i'.tStIe;1C(1 coilsa; `r5 a n1,:,11.
wit}1 the reported 30 elanecs- knows low much funneled , I r
tine heroin laboratories so thru by ? other mcaiis. In ;act, itis a t.ac the exp ntri-
simple they can be hidden in a ate Chinose narcotics r?ur-
t;'IIIt.E WE were iicrc with !had in Southcast Asia are
kitchen or bathroom of over- cell, Morgan Murphy Jr.. [D.. sl;..,;c'eted Of (?rcati g - t o.-n-
populated Hong Kong's housing Ill.), the Chicagoan on his sc lv^_s in an atter.ipc to divert
and one begins to grasp the ..ir the
}tii'd trip 1nJC7tii~attug t. alten'(,on from. op;;ra-
bl
foe-
'
f th
e pro
em
mity o
enor
Southeast. Asia narcotics traf-
ing authorities ],,ere. fie, a Hong Kong ship's cook
The British and South Viet- t was arrested in hamburg.
namcnc, plus American mar Germany, with 1.3 pounds of
cotics agents stationed thruout inside IICi'elil strapped inside a trou-
Southeast Asia, have (lone a 11 Sor leg.
reniarhoble jcb iutLrecpting Dev'intis as that route may
some of the narcotics loads
stem, American agents k no",
headed here by trawler. narcotics are being smuggled
In recent mouths, a Thai ttkru li:a,l urn and miter \nrth
trawler captured Off Viet Nom. Ccrinan }arts from u:c Middle
yielded G tons of opium des- ? t r ri fit;i;:F in i;~ t'till I:ai1-
tined for Hong Kong. Another at I contained one ton for Saigon
a n d probable transshipment
here.
But once. the drugs; disap-
pear into the rabbit warren of
hots:;ng in this crowded, 20
Square mile colony, it'is vir s-
ally impossible to ferret them
out. Some of the heroin labs
any are so simply (lcsigncd th('
the can be packed up and. spirited
away within minute". of a
warning of appmarhing }wh('t'
snundcd by lonkcrt;ti. ?
31
t ion1s.
Not 1;;:1, arm, a load of o ili-
um a'';owrd a 1-Icag
Kong junk pound to be
l/ticked in C..^.t (ins bearin the
la' :1, 1L:... in the Peoples
Ili-i+.rever, the 1('ater-proof in-
ner parka :in1; was exactly ,?r;s
sane as Shipment,
Lo m Thai(:.,,rt, I'C -. Pii Il,le CVi-
(;i-.t(?C fiat : u,.:^ as try; n'
Approved-Per---Release-20D-a-/08/07-CIA-RDP77- O432RMD 00770001-2.
 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
WASHINGTON STAR
29 August 1973
By Oswald Johnston
Star-News Staff Writer
After months of seeming
indecision, the administra..
tion has given its first tangi.
ble sigh that it takes seri-
ously .\rab threats to limit
oil production if the United.
Stn' ',es not cut back,
military and political sup-
port for Israel.
President Nixon has cho-.
sen for the next ambassador'
to Saudi Arabia a recog-'
nized expert on the world.
petroleum market who re-'
jects openly the official!
State Department arrument
that a Saudi threat to hold'
J.S. policy hostage to its'
immense oil resources is no:
more than "press specula-
tion. "
The ambassador-desig-
nate, James E. Akins, is the
first diplomatic nominee to
be announced 'since Henry
A. Kissinger was tapped to
take over as secretary of,
State. In a news conference
last week, Kissinger hinted
that the Middle East is one
area in which new depar-
tures in policy might be
necessary to bring a dan-
gerous political stalemate
to an end.
Akins' nomination comes
at a time of growing aware-'
ness in the United States
and the Middle East alike
that increasing American:.
dependence on Arab oil rep-.
resents an increasing Arab
leverage on American poli-
cy,
THIS HAS become doubly
apparent in recent days.
Egypt's President Anwar,
Sadat has this week com-
pleted an intensive diplo-,;
matic campaign to harness
Saudi oil wells to the Arab
confrontation with Israel'
and to ease his own depend, j
ence upon the Soviet Union,
Despite quiet disclaimers'
from State Department offi-'
cials,there is every reason
to think that he has sue
ceeded.
In the past six months,
there have been these sig-,
nificant developments ?
0 A pointed warning by,
Sheikh Zaki Yamani?, the
Saudi petroleum minister,
that he opposes the future
increases in Saudi produc-
tion that would be neces .
sary if projected American
;fuel needs are to be met.
TY e # at" t 5
U.S. support of Israel was
-given as a prime reason for,
his reluctance,
C A more pointed repetition
of Yamani's warning by.
Accordingly, it 'is widely ` , ' policy, Akins sees his as-
'argued that the Saudis will(' signment as a two-fold task..'
have to be given an overrid to persuade the Saudis not
ing political reason to pump'
their oil, and deplete their
resources, beyond their
Inierpretsid$On' need. U.S. support of Israel
King Faisal - - the one man'
who has power to decide
how Saudi resources are to-
be used. The Saudi monarch
intervened earlier this.
summer in a rare interview
-granted jointly to the Chris-
tian Science Monitor and
the Washington Post.
It is understood Faisal,
,`himself initiated the inter,
views because, he feared.
that secretary of State Wil-'
tliam P: Rogers and his,
Middle East deputy, Asst.;
Secretary Joseph J. Sisco,'
misunderstood Yamani's.'
message..
0 Reports from Cairo that"
Faisal for the, past six
:months has sought to step
up the payments, about $100
billion a year, Egypt has
been receiving from Saudi,
Arabia under the Arab,
summit agreement after the
1967 Six-Day War Reports.
are circulating that Sadat'
has agreed to move still fur-,
ther away from Egypt's.
'earlier dependence on the
Soviet Union, in deference'
to Faisal's traditional'
is obviously not that reason.
The State Department has
been reluctant to accept
'this argument, and officials
reject its consequence that
Saudi Arabia may emerge
as the spearhead of a con-
certed Arab dommercial
counterattack upon the
'United States.
State officials concede;
that the Saudis can offer'
Egypt even more support
over the short run than can
the oil-rich, but radically:
anti-Western regime of Li-
bya's Muammar Kadafi.
"THE REAL task is not
in Libya, it's eastward,"
one official remarked re-
cently as he studied reports,
of Sadat's just completed:
visit to Saudi Arabia even,
while the Sept.. 1 deadline
for the scheduled Egypt-,
Libya merger approached.
Nevertheless, the State'
to limit oil production, and,
to persuade them not :o
raise prices.
In the present climate,
one well-placed source'
speculated, his chance of,
"ccess is "about two per
cent," and the real likeli-
hood is not only that prices
will go up, but that Saudi'
production will be cut - not
merely held back.
EARLIER this year, Ak-
ins, on State Department
loan to the White House'
.
energy task force, sought to
influence the administra-'
tion's fuel policy by advo-'
cating such stringent con-
servation measures as im-
posing a five cent a gallon.
gasolint tax and establish.
ing an automotive horse
power tax.
Those proposals were
shot down by economic con-
servatives who then domi-
nated Nixon's domestic poli
cy, and last'spring Akins
and the White House staff
Department attitude to' were barely on speaking
Saudi warnings on oil policy terms. At that stage, Akins ?
is that there has been no ' reportedly gave serious
:tangible evidence that pro- ? thought to leaving govern-'
duction will not'?continue to ment service. 1
:be increased to suit Ameri- , His return to prominence
' abhorence of 'Communism.' interview is discounted, and
The quid pro quo, it is sug- his message is dismissed as
'gested, is the new Saudi '"speculation."
,campaign to influence U.S. Akins, now chosen to rep-
policies: ' resent the United States at.
.The estimation among' :Faisal's court, rejects this
petroleum experts here is view. According to informed
that Saudi Arabia must step sources close to the admin
o up production to 20 million' 'istration's developing fuel.
. barrels a day if American ?,
.needs are to be met. Cur-
rent daily production is;
nearly nine million barrels,:
up from an average of six,
million last year. OIL EXPERTS have rec."
ognized for several years'
that increasing prices for;
Middle East crude diminish;
the economic need for the.
Saudis to increase total.
production. Too much pro-
duction, it is recognized,-'
will put. too much of the real
wealth of a one-product
economy into depreciable',
currencies, while oil re
serves underground can
only increase in value per
barrel in the foreseeable
;future
with the nomination to the'
Saudi post has been ru-
mored for more than a '
month by`? sources close to '
the administration's reorga-
nized energy management
team. -? although such ru-
mors were discounted by
the State Department.
32
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 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
THE GUARDIAN, MANCHESTE
13 August 1973
JOHN GITTINGS reports on. overlapping,'. between 13 -of 17 under-
water claims. by South Korea, Japan, and Taiwan, with China
,,
reserving her ~ rights
S
an tangle in cramble.
_ ..
for seabed of
THE SCRAMBLE for oil in the
East China Sea seemed to be at
flashpoint three , years ago,
when protests were flying
between Tokyo, Taipei,
Washington, and Peking over
the disputed Tiaoyu Islands.
Today, the dispute over con-
trol of the potentially oil-rich
underwater resources of this
area is muted. The diplomatic
thaw between the United States
and China, with Japan in their
wake, has made it an apparent
non-issue, about which no one
likes to talk too much.
But the problem now is not
who will protest at whom
tomorrow, but how in the long
run the whole sticky tangle can
ever be sorted out. A recent
map prepared by the US State
Department shows considerable,
overlapping between 13 out of
the 17 underwater claims spon-
sored by South Korea, Japan,
and Taiwan. China and North,
Korea have not yet made any
specific claims, but both have
reserved their rights in general.
terms
According to a detailed study
in the latest issue of Harvard
University's Studies in East
Asian Law, any. attempt to
reach agreement on the con-
tinental shelf off China will.
make the, North Sea shelf'
agreement seem bike -an ele-
mentary exercise for inter-
national lawyers. The author,
Dr Choo-n-ho Park of the Iiar-
vard Law School, concludes
that " the problem of boundary
delimitation here : involves
almost every conceivable
difficulty which the f 1.958
Geneval Convention was
int'oded to prevent or solve."
The only agreement reached
so far has been between Japan
and ''outh Korea, who in May
this Y *.ar agreed to defer deci-
sion :,n the area south of
Chacju Island where
sovereignty is disputed, and
conduct explorations jointly.
Four oil companies, including
Royal Dutch Shell and Texaco,
are now conducting seismic sur-
veys off the Korean coast
But the Seoull-Tokyo agree-
ment was signed only weeks
,after a Chinese protest at the
dri-liling operations of one 'of
the foreign companies which,
said Pelting, was part of the
design of the " inter?nationail oil
monopolies" to " grab China's
coastal seabed reso?unces."
And- it was followed by an
even sharper protest from
North Korea, who denies that
the Sonth has "any ri,gIllt of
competence to strike a bargain
with anybody about Our con-
tinental shelf."
In its protest to South Korea,
Peking referred to "the areas
of jurisdd.ction of China and her
netighbours in the Yellow and
East China Seas as a matter
7 y:~
KYUSHU
'`??
EASTCN/NA ?
EA/:
S
r/AOY
/SLAN
a5
V
,..
.i] TAIWAN
OK/AMA
7RMh'
0 Miles 500
Prospective oil and gas fields beneath the Yellow Sea.
and the East China Sea.
subject to future delimitation.; ' A second probil'em is,'
So China does not deny that obviously, the Tiaoyu Islands
this is a negotlab.le issue, and which lie 100 miles north-east
in the Foreign Ministry in of Taiwan. Japan claims that
Peking they are apparently well the islands come under the
-informed on all the legal prece- junilsdii'ction of Okinawa and
dents: But this is where, the have adwa?ys been associated
'
difficulties only begin. with the Ryuku Islands.
One problem is. that two Earlier this year Mr Naka-
separate principles have now s'o'me, Minister of International
been established in inter-' Trade and Industry, had tried
national law to deal with the to cool the issue by saying that.
division of sovereignty over the no Government sanction would.
continental shelf,. The ' first, be given for any prospecting in,
which is based on the 1958 Con-' the area until -tlh'e question of,'
vention, lays down that the sovereignty was settled. But Mr
bound?ainy shall generally be the Nakasone left the door open fors
"median dine" between. two the gill companies, and for
.
,
adjacent states. future conflicts, by saying tlhat;
The second, anising out o.f- a; /any development "sihouhd be,
North Sea decision by - the handled on a ,pri.vate batiis."
International Court of Justice ' What the. Japanese would.
in 1967, sees the shelf as ' a like is an agreement with China,
" natu-rah proll'on,gation of . land ,to exploit the Tra'oyiu area,
territory "? 'which does not, jointly, whidh would bypass (a's
. ii cessarily have to be divided! does tlheir agreement, with,
up eq.ualiy. . . ' . South Korea) the delicate issuer
In this case the continental
uliellif between China and Japan
is . broken, closer to tiled
Japanese side, by a deep.fiss,ure
'known as the Okinawa Trench.
The "median line " principle
would ive T? n ' ^tht h .
d
a rt
t
of sovereignty: But when Mr,
Nakasone visited China lash
year to negotiate the first. sales
of Chinese oil (produced on the,
mainland to Japan, Peking was
adamant that s?u,dh a. shared-
dead was not on.
g ,
p
? s on
e China's legal position on the
maiatlarid side of thus trough. Tiaoyu Islands us, anyhow, very,
The " natural prolongation " strop As an atlas will Shaw
argument would limit Japan t~o g' an,
a smablter slice on its own side the -islands. fail within the
of the trough. ? 200-lyard.mark to.. the . west of
5th Okinawa Trench, A more
,exotic argument on Peking's
side, which shows that the
Tiaoy.us were traditionally
thought of' as Chinese, is an,
Imperial edict of 1893 in whnah
,the Empress Dowager Tzu Hsi
awarded three of the .islands to
a loyal minister " for the, pur.
pose of collecting medicinal
heilbs."
Another problem is quite
simply how any agreement can'
ever be reached over the oil
resources of the East China Sea'
so long as Taiwan continues to
exist as a separate entity, pur-
porting to license prospectors
in the area. Since well before
Mr Nixon's visit, to Peking,
Washington has tried to dis-
suade American companies
from taking up oil contracts.
with Taiwan, but explorations
continue in the area under,
flage of convenience.
The usual metaphor is inap-
propriate. It is the otl which)
troubles the waters in the Nast
China Sea, and further south
as well. In the last two months
alone the regime in Saigon and
- even. in its extremity -
Phnom Penh have signed oil
concessions with Western com-
panies, over the protests of the
.rival revolutionary govern-
ments of South Vietnam and
Cambodia.
33
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;YEI LOW'
 Approved For Release 2001/08/07
NEW YORK TIMES
20 August 1973
U.S. Lags in Giving
Support' to Banks,.
Aiding Poor Nations
By EDWIN. L. DALE Jr.
Special to The New York Times
WASHINGTON, Aug. 19-An
unfinished highway in Ohio, the
Japanese ancestry of a Senator
and the. Chicano constituency
of a Congressman are among
the many forces at work in
Congress that are threatening
to f:,;sLrate what the Nixon
Administration regards as an
in--- part of its foreign
The issue, which gets little
public attention at home but a
good deal abroad, is the lagging
American contribution to the
resources of the internation
lending institutions that aid
the economic development of
the poor countries. The institu-
tions are the World Bank, the
inter-American Development
Bank and the Asian Develop-
ment Bank.
For about five years the Ad-
ministration has . encountered
gradually increasing difficulty'
in winning Congressional as-
sent to the agreements estab-
'lishing the United States con-
tributions, which are now far
behind schedule. Four separate.
committees,of congress are in-
volved, and even if the commit-
tee stage is hurdled, floor ac-
tion in both House and Senate
is increasingly unpredictable.
With the United States for-
eign aid program dwindling-
the bill for this year barely
passed by the House last month
provided less than $1-billion in
economic aid for the whole
world apart from Indochina-
the contributions to the interna-
tional banks are seen by the
State and Treasury Deparments
as the chief remaining sign of
United States interest in thei
nearly 100 poor countries.
"This frustrating business is
complicating things for us else-
where," says Paul A. Volcker,
Under Secretary of the Treas-
ury for Monetary Affairs. "It
is subject to the interpretation
that we are going isolationist.
In matters like trade and mone-
tary reform, the less-developed
countries are less enthusiastic-
ally with us than they might
otherwise be."
' Congress, or at least an ap-
parent majority of Congress,
seems to be unimpressed. This
is the current evidence.
qThe United Staates is more
than a year behind schedule in
the current round of contribu-
tions by the' rich countries to
the International Development
Association, the World Bank's
subsidiary, which helps the very
poorest of the poor countries
with easy-term loans. The other
industrial countries had to vol-
unteer their subscriptions be-
fore they were legally obliged
to do so to prevent the asso-
ciation from stopping opera-
tions altogether last year.
cCongress has still not ap-
proved the United States
pledge of $100-million to the
comparable division of the rela-
tively new Asian Bank first
agreed upon three years ago..
Congress last year approved,
only half of the pledged amounts
.for the Inter-American Bank,!
and a further cut is threatened!
this year in the $500-million,
requested.
Laborious Talks on Share
CIA-RRFJ7-f 8WFT9AW220001-2
19 August 1973
U.S. Shortages Peril
World FoodAid Plan
Supplies for 80.Million Needy Overseas
Will Have to Be Cut Back or Abandoned
By KATI.ILEEN TELTSCH
Special tome New York Times
, UNITED NATIONS, N. Y.,
'Aug. 18-In Colombia's poorest;
rural areas, a school-lunch pro-
gram faces shutdown. Elderly
patients in a hospital in Haiti
will have to' go without ass
extra daily hot meal. And in
India, the promising develop,,
ment of a new food for babies'
his threatened.
These operations. and hun-
dreds more will be abandoned.
or drastically cut back in.com
ing weeks because private
.United States relief agencies,
will no longer have the com
modifies to continue helping
80 million to lb0 million needy
people in 100 countries around
the world.
The agencies have been in-
formed in the last week by
Washington officials that the
Department of Agriculture will
not be able to purchase com-
modities for the Food for Peace
program during August and
possibly not in September.
Moreover, the agencies werei
told the commodity situation
was so unsettled that it was
uncertain when they could
again expect to , get supplies
of wheat, flour, vegetable oil
and other foodstuffs on?which'
they have based their free dis-
tribution of relief overseas for
alinokt 20 years.
The effect will be calamitous,
according to administrators of
in all of these cases, the
United States share of the con-
tribution was worked out in
laborious international negotia-
tions, conducted mainly by the
Treasury.Department. The Unit-
ed States share in the Interna-
tional Development Association,
for example, is 40 per cent.
Why the Congressional hos-
tility?
One part of the answer is
exemplified by the case of Rep-
resentative Clarence F. Miller,
'Republican of Ohio, a member
of the appropriations subcom-
mittee that handles funds for
the international banks.
Part of Mr. Miller's district
lies in Appalachia and President
Nixon's budget austerity has
resulted in the halting of con-
struction on a 'half-finished
highway there. Mr. Miller is fu-
rious and believes that his dis-'
trict should, come ahead of lit
tle-known international lending
agencies of which his constitu-
ents have barely heard.
Representative Edward R.
Roybal, Democrat from Los
Angeles, is another member of,
the subcommittee. Mr. Roybal
is said to have soured on the
Inter-American Bank because,
in his view, it has not hired
enough Spanish-speaking Amer-
icans.
An ironic case is that of
Senator Daniel K. Inouye, 1
Democrat of Hawaii, who
heads the Senate appropria-
tions subcommittee, Senator,
Inouye, a member of the Water-
gate investigating committee,'
was called "that little Jap" by
John J. Wilson, the attorney
for H. R. Handeman and John D.
Ehrlichman, the former Presi-i
dential assistants.
In fact, one, of Senator In-
ouye's chief concerns about the
international lending agencies
is his fear that Japan Is coming
to dominate the Asian Bank,
which makes him reluctant to
appfove a large United- States
contribution. Meanwhile, be-
cause of Congressional delays
and doubts, the American
share in the capital of the bank
has dropped to only 9 per cent.
' - - Of deeper importance than
these particular cases is the
general apathy; and even hos-
tility, in Congress about foreign
aid in general, of which the
international banks are an im-
portant part. The House passed
this year's foreign'aid bill by
only five votes, and at one
point last year the Senate
voted to kill the aid bill
altogether.
.,One of our problems," says
,John M. Hennessy, Assistant
Secretary of the Treasury for
International Affairs, "is that
the people in Congress never
hear from home about this."
Mr. Hennessey and others
.argue that the United States
would take "real risks" if, by
finally abandoning its contri-
butions to the international
banks, it showed a lack of
interest in the underdeveloped
countries.
"There is a race for raw
'materials in the world," he
points out. "We cannot be
pushing for international solu-
".tions in the trade, monetary
rand investment fields and fail
to pick up our part of the
,burden in the `fourth area-
?proving resources for the de-
veloping countries.
I- I Meanwhile, most of the other
industrial countries have ex-
pressed a willingness ' to ap-
'proximately double their contrl-
.butions in the next round.
`Given the problem of Con-
gressional attitudes, the United
States negotiators have been
n s
able to make no commitriie t
the voluntary agencies, as they
are called.
"I have not seen a situation
like this in my 28 years in
overseas assistance," said Fred
W. Devine of CARE - the Co-
operative for American Relief
Everywhere. "It's going to be
disastrous."
CARE and Catholic Relief
Services operate the two most
extensive programs supplying'
supplementary foods to the
poor. The Catholic agency
cares for 10 million of the
"poorest of the poor," said
Bishop Edward E. Swanstrom,
executive director. The relief
activities in more than 50 coun-
tries will have to be terminated
by the end of the year, he said,
unless the Agriculture Depart-
ment resumes buying and dis-
tributing commodities.
The voluntary agencies gee
their relief goods for distribu-
tion without cost under United
States Public Law 480, which Is
the basis for the Food for Peace
program. The same legislation
provides for assistance to such
operations as the United Na-
tions Children's Fund, the Aid
Program for Palestinian Refu-
gees and the World Food Pro-
gram. So far they have not
been advised officially of pend-,
ing cutbacks.
Under the law the Adminis-
,tration must first satisfy do-
~mestic requirements including
aid for poor Americans, must
meet foreign sales commitments
and provide a carry-over of
,supplies before taking care of
the agencies which are at the
,bottom of the list.
When the law was enacted
,in 1954 there were surplus sup-
plies of dairy products and free
distribution to the needy-a
humanitarian way of disposing
i'of the surpluses. Later, with
.bumper crops of wheat on
;Band, grains were added.
i But all of the commodities
!traditionally used for relief
have been in short supply in
recent years. The Soviet Un-
ion's purchase last year of one-
' quarter of the United States
twheat crop sent the market
'price soaring, but in trade cir-
~cles spokesmen maintain that
tithe crisis in grain was brought
, on by a combination of cu-
`cumstances, including droughts,
poor harvests and floods in
many of the wheat-producing
areas as well as the big Soviet
purchases.
Because officials of the vol-
untary agencies have been anx-
watching the commodity
iously
34 market, they anticipated dif-
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 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
ficulties even before they were
invited to a recent meeting
with Daniel E. Shaughnessy,
associate coordiilator of the
Food for Peace office of the
Agency for International De-
velopment.
At the meeting at the head-
quarters of CARE the message
was as plain as the luncheon
-fare of hero sandwiches and
coffee in containers.
Mr. Shaughnessy said that
the Agriculture Department
had made no purchases in July
or August and probably only
small quantities of commodities
would be procured in Septem-
ber. ?e said that the depart-
ment was not going into the
grain market to make further
purchases until it completely
reviewed the commodity situa-
tion'and assessed the needs for
domestic use and foreign sales
in light of a revised crop esti-
mate. This estimate showed
lower production of wheat and
other grains than had been;
forecast earlier.
Some of the agencies coun-
tered with an appeal saying
they did not want foods to
be diverted from American con
sumers but asked that 1 per'
cent be held back from alloca-1
tions for sales abroad and be!
earmarked for Food for Peace.
An extensive review of the
commodities situation now is
under way in Washington, and
the decision will be made "at
the highest level," according to
spokesmen at the Agriculture
and State Departments.
Meanwhile, Church World
Service has sent its representa-
tives in the field a terse an-
nouncement that shipments for
October through December
"will be nil." Most of the pro-
gram goes to help preschool
children. -
The American-Jewish Joint
Distribution Committee intends
cutting back on some of its
services so as to be able to
buy bread for such operations
as the soup kitchens run in
Morocco.
"But where -can we buy
bread at prices we can afford?"
asks. Abe Loskove, director of
community relations. In Mo-
rocco, the agency's program
goes to Moslems as well as
Jews.
` CARE already has been re-
ceiving cables from field of-
fices saying that reserve stocks
have been exhausted, said Mr.
Devine, the deputy executive
director. After years as a field
worker, a paralyzing illness has
confined him to a wheel chair,
but he still runs the agency's
supply program for 30-million
people in 34 countries.
CARE will juggle what's left
of its dwindling supplies as
long as it can, but unless the
Agriculture Department pro-
vides new commodities by Sep-
tember, there will be a break-
down in the pipeline of sup-
plies in 20 countries, according
to Frank Goffio, CARE's exec-
utive director.
All of the agencies' directors
stress that a delay of even three
months in shipments risks the
collapse of distribution services
that have been developed over
CHRISTIAN SCIENCE MONITOR
30 August 1973
Narcotics use dedines
in U.S. armed forces
By Dana Adams Schmidt
Staff correspondent of
The Christian Science Monitor
Washington
The ' Pentagon has asked for re-
search on methods to test servicemen
for the abuse of the two favorite drugs
in Europe - mandrax and hashish.
This was disclosed by Dr. Richard
S. Wilbur, Assistant Secretary of
Defense for Health and Environment,
who reported that the services were
making headway against most types.
of drug abuse in the U.S. military, but
had no means of controlling these two.
Mandrax is a form of methaqual-
one, a type of sleeping pill, which'
some servicemen have used instead
of barbiturates.
Hashish is a concentrated form of
marijuana, derived entirely from the
berries of the cannabis plant. Like
many other drugs, it is easily avail-?
able in Germany and has been more
widely abused by American service-
men there than heroin.
Dr. Wii13ur showed satisfaction with
the armed forces' performance in
'rehabilitation of drug abusers. His
figures showed that of 83,874 individ-
uals identified as drug abusers be
tween June, 1971, and March, 1973, the
armed services naa succeeded in
returning 48.0 percent to duty. Still
undergoing rehabilitation were 17.3*,'
percent and discharged after rehabili-
tation were 29.3 percent; 5.4 percent
were transferred to veterans hospi-
tals for additional treatment.
"Rehabilitation varies a good
deal," Dr. Wilbur admitted. "It's a
relatively new program and we've
had to train a great many drug
counselors, but the ability to rehabili-
tate is improving really ex
ponentially. We feel that we will have,
an entirely satisfactory rehabilitation
program over a period of the next few
months."
To illustrate how many different
approaches there can be to the matter'
of rehabilitation from drug abuse, he
described the method adopted by the
Navy at Subic Bay in the Philippines
"""s"" i "They said, 'We first take the lab
news conference this week empha- positives, eliminate those that have
sized that overall statistics indicated. legal prescriptions, and then we ex-
;that drug abuse was declining among amine for needle tracks.
American servicemen around the ; "'As you know in the drug taking in
world. 11 'Southeast Asia most is done, by
Although the worldwide percentage' mouth, by nose, by smoking. Very
of drug positives among U.S. service- little is done by needle, so this is
men and women was only 0.7 percent rarely ever found.
during 1973, troops in Germany had " 'We look for evidence that he's
considerably higher test results. under the influence, which is also
Of those tested there, 2.8 and 2.9 uncommon when one has an appoint-
? percent showed positive in January ment with a doctor a day or so ahead.
and February, gradually declining to' We then tell him that anything he says
2.0 and 1.8 percent in May and June. may be used against him and ask him
The drugs most frequently abused' if he's a drug user. And they all say
-, as indicated by these analyses - no. Therefore, he is put down as a,
were amphetamines, commonly re negative and put on a surveillance
i ferred to as "speed," which was taken by 51 percent of those registering program for eight weeks at three
positive. Thirty-eight percent were urine tests a week. Very few-of the
positives,for opiates, mainly heroin, men ever have a second positive.' "
and most of the rest were barbiturate ' \Dr. Wilbur observed that the sys-
positives. tem might not be statistically sound
A special test in Thailand showed a but "I personally like the Navy
decline in positives from 1.4 down to .6 ' approach,
t b
e
percen
etw
en January and
this year. .
.many years.
"We have tried to get peo-
ple to learn to help themselves
by' using food as a tool," ex-1
P Anthony Foddai of
I
 WASHINGTON #gjTved For Release. 2001/08/07 : CIA-RDP77-00432R000100220001-2
19 August 1973
?U? t StudyH::i
t.t .
O ..
orpo Rio s
porn? ; ' . ,Lich have been
prai sc . nor developing the
ned for subverting the politi-
der the scrutiny, but probable
"iiot the control, of the United
!-Nations.
' To launch the study the
United Nations issued a 195-
'ceeding the majority of the
.U.N.'s member countries. The
,"flexibility" and "resourceful-1 I
ness" of the . multinational
corporations. At the same time
.ble.
? r It calls for "some form of
establishment of a code of
conduct, and in a somewhat
,corporative activities.
"Many key issues already
identified do not lend them-
.present world realities," the
report stated. "An untimely
The report traces the dra-
the manufacturing and extrac-
tive industries-since the end
of World War II. It notes the
thigh degree of concentra-
the developed countries and
investments gravitate towarrj
other developed countries. At
thQ role of the multinationals
warning about their corpora-
tive impact on their societies
and their national aspirations.
m "Eight of the 10 largest mul-
tinational corporations are
By Marilyn Berger ?
Washington Poet Staff writer
alone accounts for about at
third of the total number of
foreign affiliates, and together
.itli the United Kingdom, the
Federal Republic of Germany
and France, it accounts for
over three-quarters of the to-
tal . , .. Of a total estimated
stock of foreign investment of
about $165 billion; most of
which is owned by multina-
tional corporations, the United
States accounts for more than
',half, and over four-fifths pfj
Germany." . '
.report stated, have received
only about a third of the total
estimated stock of foreign di:
:A measure of the size of the
corporations considered In the
study is seen in 'the decision
by the authors to ignore enter-
pl ises witl\i less than $100 mil-
lion in sales. Included is a list
of 211 corporations with sales
totalling more than $1 billion
cal interference in Chile by
International Telephone and
c*rn that the multinationals
parative activity as former Un-
der Secretary of State George
company law for chartering
,But in a masterpiece of un-
derstatement, the report noted
powerful supranational ma_
o1i'aque about the alleged po-
litical activities of the multi-
Tensions," the report dis-
pgration in international rela-
!'Non.governmental bodies,"
actions of their own govern-
ments, or by influencing the
policies and actions of foreign
governments; either directly
or: through non-governmental
entities in those countries. In
the latter case they bypass
their own governments, al-
though the consequences may
affect these governments' poli-
cies and actions. Furthermore,
modern communications per-
mit non-governmental entities
to affect the environment in
which international relations
take place by influencing
taste, values and attitudes .. .
Multinational ... corporations
are often close to the centers
of political ? power and can
thus influence the affairs of
nations." .
. This appears to mean that
the giant corporations' can
'make or break governments ?
and can have a deep impact on
economies; both in their coun-
tries of origin and in countries
where they establish subsidiar.
ies. In a less roundabout way,
the report also states that
home governments may use
the giant corporations for the
'implementation of their for-
eign policy.
The activities of the multi-
national corporations and
their impact on international
finance, trade, politics and de-
velopment, will be discussed
.by a panel called the "Group
of Eminent Persons." A 'two-
week meeting is scheduled to
begin at the United Nations
Sept. 4. Included among the
participants are bankers, diplo-
mats and politicians.
New York Republican Sen.
Jacob - K. Javits, sometimes
known as the father of the
United States' Overseas Pri-
'vate Investment Corporation,
-and J. Erwin Miller, chairman
of Cummins Engine Company,
Inc. will be the U.S. partici-
pants. Sicco Mansholt of the
Netherlands, former president
of the commission of the Euro-
pean Economic Community,
Hans Schaffner of Switzer-
land, vice chairman of Sandoz
pharmaceuticals, and a.British
professor, John Dunning of
Reading University, an author-
ity on multinational corpora-
tions, will represent the indus-
trial nations.
From the less developed'
countries come Mohammad'
S'adli, head of Indonesia's For-
teign Investment Board, and
L. K. Jha, former governor
!?pf tjlg Reser%' Bank pi' illf?jgi
36
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The Soviet Union is rejprg-,J
senieci by I. l). lyppov of 111E
1$gvjet institute for U.S. fitud--
? jss. jlrperjk Blum of Yugosla-,
vj,a, bead' of Energoinvest,
which has been called 'the
.Communist bloc's only multi.
national conglomerate, is also,
on the panel.
? . At the September meetings
representatives of some of the
major multinational corpora-
tions like International Busi-
ness Machines and General
Motors, as well as labor union
leaders, . will deliver. state-
ments. Further meetings pre'.
scheduled for November in
Geneva, And for March in New
York.
Although the U.N. study
suggests possible Areas for in.
ternational action it makes
clear that individual countries
of regional groupings can do
much to harness the energies
pf multinational corporations
in order to take advantage of
the contributions they can
linalte -while controlling their
power. Major areas for action,
the report suggests, are in tax,
ation and the transfer of
funds.
"The corporation, operating
within several tax jurjsdle-
tions," the report stated, "can
minimize its overall tax bill by
establishing an artificial trans.
fer price which will inflate the
profits of subsidiaries located
in countries where the tax
,burden is lowest and limit the
. profits earned in countries
.where taxes are higher." The
report cites other methods re-
sorted to by corporations to-
decrease taxes. It notes that
individual countries-like the
United States-are already.at-
tempting to get greater con-
trol over corporations for tax
purposes but that shared data
would help in the process.
. The report also attributes to
multinational corporations an
'important impact on the inter-
national monetary system,
stating that "the recent cur-
rency crises have focused at-
-tention on `hot money' move-
ments." Although this has be-
come accepted wisdom Deputy
-Under Secretary of Treasury
for Monetary Affairs Jack F.
Bennett said in a recent letter
to Sen. Harry F. Byrd of Vir-
ginia that he had found no evi-
dence that large U.S. corpora-
tions were to blame for the
massive attack on the dollar in
the world's currency markets
at the beginning of this year.
 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
WASHINGTON POST
12 August 1973_.
gr Barry Lando
Lando is a Washington producer for.;
the CBS news program, "60 Minutes."
F OR YEARS, ONE of the best-kept
of the many secret operations. of
the Vietnam war was an o'rganizatipn,
with the inoffensive name , of SOGt
The Studies and Observation Group.
.Recently, in scattered newspaper. sto-
ries, then with the Pentagon's admit
ting for the first time that Americans
were killed In clandestine raids in
Laos and Cambodia, finally with the
testimony of former green. berets be-
fore the Senate Armed Services Com-,
mittee last week, some of the activities:
of SOG have begun to surface. The
full scope of SOG's operations, how-
ever, may never be disclosed.
SOG was a formidable operation, at
its height involving more than 1,000
American soldiers and almost 2,000 In-
digenous mercenaries. They ran almost
daivy raids into Laos and Cambodia,.
baked by helicopter gun ships, their
own secret bases In South Vietnam,
even a manned radio relay station in-
side Laos itself. At times they could
call upon U.S. tactical air units in'
South Vietnam for help If they ran
into trouble, and they frequently did.
Official, U.S. protestations notwith-,
standing, SOG's operations were not
simple exercises in trail watching and.
intelligence gathering, but often in
volvc d sabotage and bloody combat.
SOG was launched by a Democratic
,president, continued by a Republican,
It first went into action Feb. 1, 1964,
set up by Lyndon Johnson on the rec-
ommendation of then Secretary of De-
fense Robert McNamara. Its code
name was Operation Plan 34A. Accord-
ing to the Pentagon Papers, as Mc-
Namara viewed the plan it would
"present a wide variety of sabotage'
and psychological operations against:
North Vietnam from which I believe"
we should aim to select those that pro-
vide maximum pressure with minimum
risk." A faint administration hope was
that. by putting pressure on North VI-.
etnam the United States would some-,
how convince Hanoi to get the Pathet
Lao in Laos and the Vietcong in South
Vietnam to back off.
During 1964, 34A teams of Ameri-
cans and South Vietnamese cgnducted,
wide-ranging operations into and over'
North Vietnam:, U-2 ' spy flights, sea
'raids on coastal Installations, sabotag-
ing bridges, kidnapping for Intelli-
gence purposes, and carrying out prop
4aganda warfare.
An analyst quoted in the Pentagon
Papers concluded that the, 84A opera-
tion "carried with it an implicit sym-
bolic and psychological intensification'
of the U.S. commitment., A firebreak,
had been crossed." The analyst also,
found that the,34A raids played a ma-
jor role in provoking the 1964 clashes `
in the Tonkin Gulf.
SOG Extension
As- THE VIETNAM conflict ex-
panded so did the SOG's operations,'
first into Laos around 1965, under the ;
code name "Prairie Fire," then into'
.Cambodia about 1967 as "Salem
House," three years before President
Nixon's solemn assurance that the U.S.
had always respected Cambodian neu-
trality. "We weren't trying to spread ~
the war," says a former SOG com-
mander, "but to increase our defense
capabilities in South Vietnam. 'The
idea was to protect our flank, to put,
some eyes and. ears where we didn't.
.have them."
Support elements, such as medics'
and chopper pilots, came from other
units, but most of SOG's American
field troops were drawn from Special
Forces. Informally, they devised their;
own emblem, based on the skull and,
crossbones, which they hung in the
base bar and put on beer mugs.' At
their bases they continued to wear,.
Special Forces' insignia and their'
green berets, but once assigned to
'SOG they were no longer under Spe-
cial Forces command.
SOG operated as a special unit of
MACV (Military Assistance Command,
Vietnam), headquartered in , Saigon,
.with some input from the CIA and the
'Department of State. Overall supervi-;
Sion, though, come from the Secretary
of Defense through' an office of the
Joint Chiefs of Staff called "Counter.
insurgency and Special Activities."
SOG's forces were split into three
base camps, with about 150 Americans
,assigned to each camp: Banmethuot
and Kontum in the central highlands,
Danang in the north. The field opera-
tions were given the cover name of
? Command and Control and, to an out-
sider, the camps looked like any of se
-veral green beret camps scattered
throughout Vietnam.
The bulk of SOG's forces were na-
tive mercenaries, about 600 based at
each camp. "They liked to work for
us," says a former SOG officer. "They
weren't just mercenaries. They knew
that if anything happened to them In
action we'd bust our ass to take care of .
them. It wasn't like being with the reg
ular troops.
-.'They were good soldiers '- Monta-
gn'irds, Cholon cowboys (the long.
,haired studs from Saigon), lots of Cam-
bodians. Many of them became fine
soldiers. The good ones were as good
as any, soldier anywhere. ' Te trained
with, them for weeks at the base camps
and those patrol units became as tight
as brothers."
Usually the patrol teams were made
up.of. six to eight native soldiers and
two or three Americans. According to
the former SOG commander, "If we
didn't put Americans on those patrols
we felt- we really couldn't rely on the
flnformation we would get. But we
'didn't want to put in large numbers
that might get all shot up.",
"Inserting" the Patrols
F?rER INTENSIVE TRAINING for
I- the Americans at a secret camp
near Longbinh outside Saigon, fol-
lowed. by more practice at the base.
camps, the patrols moved to SOG's for-
ward operating bases near the Cambo-
dian and Laotian borders. Only four or,
five patrols could operate from any
'of those bases at one time because they
required an extensive force to be.
safely-"inserted": two helicopters plus
a.--backup to transport them, a mini-
muzn pf two gunships to provide cover-
InTg-:ire if they ran into trouble, a for-
ward air controller and, often, a com-
mand-and-control chopper overseeing
the operation. The patrols lasted about
?a`week and there could be no resupply.
The men carried all their supplies,
:front spare radio batteries to Claymore
mines and stripped-down mortars, on
their backs. The choppers were un
marked and the men wore plain uni-
form's-without any insignia. At times,
a te?ni'would try to pass itself off as a
North' Vietnamese patrol, complete:
with' full NVA' uniforms, and equip.
ment. They were never able to figure
out why, but almost invariably the dis-
guise -failed. The NVA troops would
open, fire as soon -ac they caught sight
of the.SOG team.
After "inserting" the patrol, the
choppers would hover over the area for
a few'minutes, ready to sweep back in
case of enemy ambush. Then they left,
"When they had gone," says a former
SOG officer, "you lived with constant
mental strain. The fear never left you.
It 'was worse than for anyone else in
the war because of the isolation. Six or
seven other men and yourself and no
one. else within 100 miles except the
enemy.'
Actually, the patrols, usually oper-
ated up to 15 or 20 miles inside Laos
and Cambodia, but not always. Some
teams penetrated more than 100 miles
on special missions. According to arti-
cles by Gerald Meyer of the St. Louis
Post-Dispatch 'and confirmed by Spe-
cial Forces Veterans, SOG even estab-
lished its own radio relay station,
"Eagle's Nest," on a mountain peak 30
miles inside Laos. It was manned by
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 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
i
By Joseph P. Mastran8elo-The Washington Post
Sku'l-and-crossbones insignia mark?SOG's bases in Vietnarn.
SOG troops, regularly resupplied by difficult. Sometimes our successes,
helicopter. came when an NVA soldier would acci-
dentally stumble into our arms and;
The prime goal of SOG teams was "would be just too damned surprised to
gathering intelligence: checking poten- be
tial bombing targets such, as arms : SOG's teams often went far beyond.
caches, truck parks and radio installs- ? :simply gathering intelligence. They
tons, tapping North Vietnamese army would mine supply trails, attack small'
communications, placing sensors on
the trails, which were then monitored ',targets like radio installations or sup-
from the air, calculating road and ply caches. "Usually you'd try not to.
initiate contacts," says the Special,'
river traffic. Forces off; er, "but some guys got,
One of the best sources of enforma-, pretty gutsy. Three bikes coming down
tion was considered to' be enemy sol- a trail. You toss out three grenades,
diers themselves. One POW was worth search the bodies for weapons or docu?
a,? ' ments Some guys took on much bigger
four or with t th hein 'indays of digenous soldiers the getting ol patrol,,
wng odds.
cash bonus besides. The problem, says,
a Special Forces officer, was to get the Bloody the Enemy's Nose
prisoners. "We'd try to grab the last T TIMES the small patrol teams
guy in an NVA unit, ambush two guys It
were doubled in size to larger
as they went for water, but it was
"Hatchet" operations, aggressively seek-'
ways to take ly seek- -
ing enemy targets, armed with, stripped-
a without thout losing over'
ways
w
them or bringing everything down on down mortars, machine guns, even'.
top of us. Those knock-out dart guns flame throwers. Occasionally, they ex-
you see In the spy movies never' 'panded' to . company-size SLAM
seemed to work in practice. We'd wind ,(Search Location and, Annihilation.
up using a pistol or a grease gun with Mission) of 200 men or more; full.
a silencer, aim for some non-vital part, blown combat operations. "The aim,",
and hope the guy wouldn't die before says the former SOG commander,
we got him out. Occasionally it .,w~ to bloody the enemy's nose."
worked; mostly it was just goddamned
t
If a patrol ran into enemy fire,
was frequently able to call in support
not just from its own gunships but
from regular tactical air squadrons op-
erating in South Vietnam. The reports
of those strikes, according to a former
air liaison sergeant, were falsified to ap-
pear as strikes within South Vietnam.
SOG teams frequently were blood-
ied themselves. The Pentagon now ad-
mits that 102 Americans were killed
during clandestine missions in Laos
and Cambodia since 1967. That number
may,. still go much higher. Because.
their numbers were greater, the in-
-digenous SOG forces lost three or four.
times more men than did the Ameri-
cans. No one talks about any Ameri-
cans taken prisoners by the enemy
durin^ SOG operations.
Some of the sharpest actions were in
1967 in the Parrot's Beak area of Cam-
bodia where NVA forces were heavily
concentrated. Potential landing zones.
were constantly monitored by the en-
emy, then very much alert to SOG op-.
erations. "One favorite tactic the NVA
had," says a former SOG officer, "was to,
wait until the patrol had unloaded and
the choppers left the area. Then they,
ambushed the patrol and let loose on
the choppers when they tried to get.
back in. At one point, we were getting'
hit so often that we started blasting
out our own LZ's, dropping a 500-'
pound bomb; then landing the patrol
even before the dust had settled. Even
then we'd still get hit."
Though very few congressmen were
then aware of SOG or its operations,
on Dec. 29, 1969, Congress passed a,
military appropriations bill with an.
amendment prohibiting the introduc-
tion of U.S. combat troops into Laos'
and Thailand. But SOG s operations
continued.
"As far as we were concerned," says
the former SOG officer, "those restric-
'tions on combat troops never applied
to us. We had been carrying 'out those
missions for years. All the time the
Communists were saying they had no
men in Laos, no men in Cambodia.'
.Okay, we were also saying we had no'
`men there. But somehow we sure got
,into a hell of a lot of fighting."
.Another Cover
T A PRESS CONFERENCE Feb.
it 17, 1971, President Nixon affirmed
'that "we are not going to use ground
forces in Laos" and "we are not going
to use advisers in Laos with the South'
Vietnamese forces." Yet during last
week's Senate Armed Services Com-
mittee hearings, former Special Forces.
Sgt. Thomas J. Marzullo said that "at,
the time the President said there were
no Americans in Laos whatsoever we
had two teams inserted on the
ground."
When the Special Forces officially ;
pulled out of Vietnam in the beginning
of 1971, SOG found another cover for
its, operations. The name of its units
was changed from Command and Con-
trol to' Task Force One Advisory Ele-
ment. The men removed all Special
Forces insignia; switched their green
berets for baseball hats, and kept on
38
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 'Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
patrolling. " .
In December, 1970, one year after
the prohibition of ground combat'
troops in Laos, Congress passed a simi
lar prohibition for Cambodia. But it
was not until February, 1971, that "
Americans In SOG were told to re-
strict themselves to planning and sup-
NEW YORK TIMES
27 August 1973
port and leave the actual crossborder;
incursions to indigenous forces. That-
:is, according to a Special Forces offi
"cer who claimed that SOG complied.
'Other men who served with SOG, ,.
though, claim that Americans contin-
ued to lead raids into Cambodia.
SOG's operations officially came to at
halt in Vietnam when MACV shut
down this February. "We had South
Vietnamese counterparts," says the
former SOG officer, "and they were
supposed to be prepared to assume the
operations. If anyone is doing anything
like SOG anymore, SOG is nbt the
name for it."
ork
More dirty
By Stuart H. Loory
COLUMBUS, Ohio-The revelation
in recent days of clandestine cross-
border operations by American ground
troops in Cambodia, Laos and North
Vietnam during the war reminds me
once again that, somewhere in the
United States, at least one Vietnam
veteran has some important stories
to tell.
I do not know his name. I have
heard from him only once. He wrote
to me from the San Diego area on
Feb. 2, 1971 in response to an article
I had written for The Los Angeles
Times. My article detailed the plane
ning and execution of the November
1970 raid on North Vietnam's Sontay
Prison, the famous abortive attempt to
rescue American P.O.W.'s from a site
just a few miles from Hanoi.
The article exposed the bungled
intelligence procedures used which
meant that mission planners had no
good information on whether. Ameri-
cans were actually kept at Sontay,
whether, indeed, it was even a prison.
My anonymous correspondent ex-
pressed incredulity and he offered
enough detail in his letter to make
himself credible. His detail exposed
the fact that for years the United
States had actually been carrying the
war in South Vietnam, with ground :
troops as well as bombers, right into
the North Vietnamese heartland.
He spoke of an organization called
"SOG," which, at the time, was un-
' familiar to me. In recent weeks,
SOG (Studies and Observation Group)
has been revealed by articles in this
newspaper and The New Republic as
the military's own dirty tricks depart-
ment.
"SOG can put a recon team into any
place in North Vietnam, utilizing Viet-
namese who were born and raised in
the specific area," my correspondent
said. "I know this is true because I
spent 23 months as head adviser to
the waterborne element of SOG, and
helped plan and, execute many such-
missions.
"It was not unusual on many mis-
sions of this unit to have a man
killed or wounded in the same hamlet
in which he had been born.... "
The letter writer then continued
with some specifics about how SOG
men, who had been commanded for
a time by the same Col. Arthur D.
"Bull" Simons who led the attackers
into Sontay, could have parachuted
into the Sontay region, checked out
the camp and radioed a. one-word yes
or no answer to the question of
whether Americans were there. He told
of special radios the unit used. He said
the men were trained in HALO (high
altitude, low opening) parachute jump
techniques..
C3
And then, on page three of his
letter, he penned the sentence that has
haunted me for the two and one-half
years since I first read it. It was
added parenthetically:
"SOG is not beyond sending in an
armed chopper in a case like this
and executing the 'scout/recon team
by gunning them down on the ' LZ."
LZ is military shorthand for landing
zone.
If Iread that sentence correctly, I
was being told that once the American
military had employed Vietnamese to
do a difficult piece of dirty work, the
commandos were rewarded with exe-
cution rather than rescue out of the
feeling that dead men cannot, like
recovered heroes, live to talk of their-,
exploits and ? compromise future miss
sions.
In other words, SOG disposed of its
own Vietnamese like so many pieces
of Kleenex. Even against, the back-
ground of all the documented cruelty
in the Vietnam war-the' free-fire
zones, the carpet bombing, the use of
white phosphorus and other antiper-
sonnel weapons, the tiger cages, the
torture,. the defoliation-the thought
39
Approved For Release 2001/08/07_
that Americans were cynically execut-
ing their allies beggared the imagina-
tion.
The thought bespeaks an inhumanity
that shames our country more than
any Watergate, "plumbers" group or.
enemies list can.
My - instincts have told me the
contents of the letter are true. How-
ever, despite repeated efforts, I was
never able to doublecheck and con-
firm the veracity. Because of the lets
ter's implications, I have refrained
from publishing the information. Now
that other activities of SOG have been
exposed, I am more convinced than
ever of the letter's truth and impor-.
tance.
My correspondent took me for a'
better reporter than I actually was.
He concluded his letter this way:
"I could relate page after page of
data on SOG but I feel you've probably
heard much of it' or similar stories.
... So take it from an old scout-swim-
mer and SOG alumni, Mr. Loory; some-
body ain't telling it like it is." '
Old scout-swimmer and SOG alum-
nus, wherever you are, if you should
happen to read this, your page after
page of data would be a welcome con-
tribution to history. Come forward,
please, as so many others have re-
cently and, help the American people
find the way.
Stuart' H. Loory, Kiplinger Professor-
of Public Affairs Reporting at Ohio
State, is author of the forthcoming,
"Defeated. Inside America's Military
Machine." .
 Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
Sunday, Sept. ',1973 THE WASHINGTON POST
By D. Gareth Porter
Porter is a research associate in Cor-,
Well University's International Relations
of East Asia project. His monograph,
"The M,th of the Bloodbath," published
1cs. ;ear, challenged the administration's
as::, -';, '.,; about the consequences of
c.._ ..,~,,i&unist victory in Vietnam.
CONGRESS IS NOW considering-
an economic aid program for .
South Vietnam which would continue,
to maintain for an indefinite time'
what one high U.S. official has called
the "client relationship" with the Sai-
gon government of guyen Van Thieu.
The main purpose of the proposed'
aid program, which the administration"
has called a "reconstruction and devel-
opment" program, is neither recon-
struction nor development but the sub-,
sid.ization of Thieu's military-police ap-
paratus. By not only arming and equip-
ping that apparatus but also by paying
for most of South Vietnam's budget
and artificially maintaining levels of
consumption, the United States still:
refuses to allow the Saigon govern
ment to stand or fall on the strength'
of its support among, the Vietnamese
people themselves.
The Thieu government remains to-
day essentialy a creation of American
military intervention In Vietnam. For
it is kept in power by a military and a
paramilitary control apparatus which.
the South Vietnamese people never de-
sired and would have been unwilling
to finance themselves.
It was in fact the U.S. mission which
Imposed this political and economic
monstrosity on South Vietnam. As the '
economic counselor to the U.S. em-
bassy, Charles Cooper - the man cred-,~
ited with masterminding economic pol-,
icy in Vietnam during the war - told'
me in a 1971interview, "We've always `
been in the position here of pushing
their expenditures up. We pushed;
them on pacification, on increasing the
army, etc.... We were actually satisfy-
ing our own ideas...."
As a result the South Vietnamese
ground and air forces increased from:
216,000 men in 1964 to 1.1million in
1972; the police force increased from
20,000 men in 1964 to 120,000 in 1972.
The official government budget in-
creased from $219 million in 1964 to
.$856 million in 1972.
Inflation or Taxes
N ORDER TO FINANCE such a.
swollen apparatus of control, any
independent state would have had to
resort to runaway inflation or heavy';
taxes on the entire population, rich'
and poor. The taxes required to sup-
port this level of military spending;
only could be raised successfully if the
government In question had had rea-
sonably solid support for its anti-Com-
munist war effort - something which
the Saigon government has manifestly
,lacked.
But the Saigon government had an
alternative to uncontrolled inflation or'
burdensome taxation - which was to
rely on the U.S. to pay for most of its'
'budget and to prevent any significant
drop in living standards by providing
massive quantities of imported goods.
The main instrument for preserving
the Thieu government's military and
paramilitary apparatus while minimiz-'
Ing economic hardship Is still the Com-
modity Import Program, under which
the government receives letters of
credit which it then sells to the Viet-
namese importers for piasters. It uses
these aid-generated piasters to pay its
budgetary expenditures, and when the'
goods arrive in Vietnam, the customs
taxes collected on them add additional'
resources for the budget. Meanwhile, t
Vietnamese are able to purchase im
ported -goods which South Vietnam
could not possibly afford with its own
minimal foreign exchange reserves:,
gasoline and parts for motorbikes, fer-
tilizer, cement, sugar and other food-
stuffs.
In fiscal year 1974, the Nixon admin-
istration has requested $275 million
dollars for the Commodity Import Pro-
gram and is adding a $50 million
"development loan" for imports which
Thieu can also use to help pay for his'
military budget. This assistance Is esti-
mated by the Agency for International
-Development to represent roughly one-
fourth the living standard of the aver
age Vietnamese.
If the artificially maintained stand-
and of living has neither made the Thieu
regime popular nor silenced opposi-
tior'to the war in the cities, it has nevl
~ertheless helped to keep urban discon-'
tent at a level which can be controlled
through the massive use of police sur-
veillance and terror. Millions of Viet-
namese thus have been dissuaded from.
taking to the streets or to the jungles
'to overthrow the Saigon regime. There
is no doubt in the minds of U.S. offi-
cials that Thieu's regime could not have,
survived the political turmoil which
would have occurred without the U.S.'
subsidization of Saigon's state appara.:
tus and economy.
Gradual Reduction
ESPITE ADMINISTRATION state
menns paying lip service to the ob-
jective of Saigon's economic independ.
ence, the official rationale accompany-
ing the 1974 aid program for Indochina
makes clear its intention to continue
the client relationshp with Saigon in
definitely. Instead of offering a plan
for the rapid elimination of American
subsidization of the Thieu government
'the rationale suggests that the import
subsidy can only be reduced
"gradually" and that Saigon will
"continue to require foreign assistance
for the next few years to maintain the
flow of ioods needed for production,,'
invDstmedv an" consumption." It does
not mentl"o. that this flow of goods is
'also necessary for Thieu to pay for his
army and police force.
The army lives off foreign aid rather.
than relying on the support of its own
people, and-any attempt to reorient it
economically, socially and politically
.away from the present American style
of organization and operation would al-
:most certainly end in disaster. More-
over, for Thieu to demobilize most of
his 1.1 million-man army would mean
-relinquishing a convenient means of
political control over them and, indi-
rectly, over their families.
Equally important, the Saigon re-
gime has shown little interest In mak-
ing domestic taxation its main finan-
cial basis. For nearly 20 years, Ameri-
can largesse has encouraged Saigon to
avoid the taxation of domestic wealth
in order to gain more fully the support
of those comprising the taxable popula-
tion. As a result, taxation in Vietnam
has been feeble on the one hand and
regressive on the other.
The Saigon government has shown
an aversion to direct taxation, which
must constitute the backbone of any
healthy fiscal system, and has focused
its efforts instead on the taxation of
soft drinks, beer and tobacco products,
which fall more heavily on the poor
-than on the rich and which. do not
draw on the primary sources of wealth
.in the country. For many years, well
over half the domestic taxes collected,
by the government came from only
nine foreign-owned companies in Sai-
gon which produced beer, soft drinks
and tobacco. In 1972, direct taxes
brought in only $37 million - 4 per
cent of total income, including U.S.
aid.
There are two simple reasons for Sai-
,gon's persistent refusal to tax the real I
wealth available to It. On the one hand,
officials have always feared that such
taxation would increase its unpopularity
'or lose the cooperation of those whose
'acceptance or support was crucial for
pacification and political stability. On the
other hand, the readiness of,the United
States to provide whatever revenues were
not obtained through taxation provides
a lack of incentive for maximizing tax
collections and 'an incentive for officials
to exploit the most lucrative sources of
40
Approved For Release 2001/08/07 : CIA-RDP77-00432R000100220001-2
 Approved For Release 2001/08/07 : CIA-RDP77-004328000100220001-2
Taxing Isn't Popular
THE GOVERNMENT, unable to ap-
peal either to patriotic sentiment or
a commonly shared vision of society,". has'
implicitly admitted its own doubts about
the legitimacy of the war effort in the'
eyes of the Vietnamese people `in'
avoiding direct domestic . taxation.
When he was prime minister in 1909,-
Trap Van Huong declared, "If we levy;
here more unstable."
Willard Sharpe, chief ?of the eco-
nomip analysis branch of AID in Sai.
gon, explained fears of reduction in
American Commodity Import funds in
1971 by saying, "I don't think the gov-
ernment feels it is, strong enough to,
ask the people to pull in their belts.
It's just not popular enough."
Between one-third and one-half of
the private wealth of South Vietnam'
,still lies in its agricultural production,
primarily in the country's rice bowl,
the Mekong Delta. American officials:
have been pointing to the new prosper-;
ity of commercialized farmers in the
Delta, thanks to large inputs of ferti-
lizer, new rice strains, and favorable
rice prices. But Thieu's pacification
strategy in the Delta has been based
more or less implicitly on the idea that ?
the government can give the farmers
something for nothing, with the help
of American generosity.
' One of Saigon's bright young Amer(.;'
can-trained economists, who was then
vice minister of agriculture, proudly
asserted to me in 1971 that his govern-
ment collected only a "very nominal
tax" on land -less than 200 plasters,
or 50 cents, on a hectare of` land!
which brought an average of $180 a
year in income, or about one-third of 1
per cent of gross income.
"With our system," he pointed out,
"the farmers themselves benefit fram
land reform. With the Vietcong Pro-
gram, the result is more revenue for
the Vietcong." This was precisely the'
difference between a regime depend
ent on popular support for its military'
operations and one dependent on for
eign support. As the American tax ad-
viser in Saigon, Paul Maginnis, ex-
plained two years ago, "The national
government is subsidizing villages and
hamlets in order to purchase their loy-;
alty instead of demanding money from.,
them to finance the war effort."
Subsidies Increase
THILE THE GOVERNMENT col-'
W lected d a token 54 million piasters"
($242,000) in agricultural taxes in 1969,
it was subsidizing the village budgets
in the amount of 2.2 billion piasters
($9.8 million), for both local :govern-
ment operations and village develop-i
ment projects. And while agricultural;
taxes rose to 3 billion piasters in 1972
($6.9 million), the subsidy increased
even more,. to 10.4 billion piasters ($24?
.million). Whether or not the rural sec;;
more taxes, the government will be un-
popular and the political situation'
tor of the society will ever contribute'
more to the budget than it receives in
subsidies is thus still open to question.
Political considerations also have
,kept Saigon from taxing fairly the un-:
salaried urban middle class which con-
stitutes the most active segment of the
U.S.-sponsored political system. The'
traditional policy toward this stratum'
has been summed up by one Vietnam-,
ese expert on taxation as, "Leave it.
,alone as long as the circumstances per-,
mitted." The American budgetary sub-
sidies thus far have, provided just such
circumstances: In February, 1971, Pres.
(dent Thieu abruptly called off the,
work of special tax teams, which were;
trying to assess fairly the income of.
the professional and business class in
Saigon, after it complained loudly
through the press and its representa
tives in the national assembly. Later in ;
1971 the building containing Saigon's
tax records was blown up. The. teams
were never revived.
The most important untapped source
of wealth in Vietnam, however, are the 1
profits which were generated by; the
war itself, which long has been the big-,
Best industry by far in the country.
Again, the U.S, subsidization of the`
budget not only encouraged Saigon to`ti
avoid taxing, the war profiteers but,
,gave officials an incentive to enter
into collusion with them at the ex
pense of the government's fiscal
health. And more important than the"
bars, nightclubs, brothels, laundries
and other enterprises, which were offi
cially untaxed but generated large in-
comes for district and province chiefs,Si
t was the import business.
From 1965 to 1971, Vietnamese im-;
porters were making enormous profits',
because of the officially overvalued
piaster in'exchange for the dollar and i
the -rationing of import licenses. In;?,
1970 a secret government report which
was obtained by the House Subcommit-
tee on Foreign Operations estimated,
,that these "windfall profits" were run
ping as high as $150 million per year.
(An even more detailed study of wind-,
:fall profits done In.1970 by Dr. Douglas
Dacey of the Institute for Defense
I Analyses on a contract with AID,,.
which carefully estimated the amount
of windfall profits each year on the bast.
sis of official economic data, was sup.
pressed by the agency before it could`
be.published. Congressional efforts td.
(obtain a copy have been systematically
-refused.)
Revenues Affected .''
r~HESF UNEARNED PROFITS werq
all at the expense of revenues, since
-they would have- remained in Saigori'4
treasury had the exchange rate kept
up with the rate of inflation. Yet ac=
.cording to the Ministry of Finance, the
government collected only 100 million
piasters ($250,000) in taxes on the 1969
incomes of those importers - an infinf,
itesimal fraction of their illegitimate.
Profits.
The failure of the government to get;
.more tax revenues from war profiteer8
was caused by the same situation
which produced the windfall profits in
the first place. Relieved of the neces=
sity?to squeeze every bit of revenue
possible from the South Vietnamese
economy, powerful officials turned the'
rigged import licensing and foreign ex;
change system to their own advantage
instead of reforming it.
The officials who had power over,;
the distribution of import licenses
used. it to extract from the recipients a'
:private "tax" in return for. the favor:
Accorcing to business and financial
ysource in Saigon, including a former
high Economies Ministry official who
'now is in the import business and a
Japanese businessman with 7 years' ex=
.,perience in Vietnam as of 1971, import-
ers had to pay 3 per cent of the total
value of the license, or 10 piasters on
every dollar of goods imported, to the
minister of economics, Pham Kim
Ngoc, who became known in Saigon
circles as "Mister 3 Per Cent." Ngoc'
,was assumed to have divided "taxes"
with other top officials of the Thieu re-'
,gime.? The 3 per cent rakeoff, if applied
'to the total volume of imports, would
have netted $23 million in 1970, or 92
times the amount collected from them
in the form of income taxes.
Although, the threat of drastic reduc
tions in U.S. subsidies to Vietnam fi-
nally moved the U.S. mission to insist
on an end to the system of overvalued
currency and tight controls over licen-
ses, the system had already' allowed
importers to accumulate hundreds of
' millions of dollars, virtually -none of
,which ever was used for the budget,
(The increased but still modest.
amounts in income tax collection in
1972 from nonsalaried Individuals ($7.5
million) and corporations ($19 million),
do not begin to scratch the surface of
this wealth.
Ending the Commodity Import Pro-
gram would have the effect of making
the government dependent on the sup=
,.port of the South Vietnamese people'
,for' the first time in its history.. It
would then be up to the Vietnamese
people themselves (as it should have
been all along) to decide, whether or
how much they are willing to sacrifice,
in order to maintain the present mili-.
' tary and paramilitary apparatus. ,
To the extent that the population,"
wealthy or poor, wishes to see the Sai
gon government survive, they can coil
,tribute their share through direct:
(taxes, which Saigon ti unquestionably
has the physical capability to cpllect. ?
If the government cannot obtain the
resources to support the present level,
of military spending through this,
,means, it will have to reduce its ex=,
,penditures to the level that it can sup-
port.
In any case, the United States no.
longer should be in the position of ar-.
tificially maintaining a political and
military structure through its assume-
'tion of the bulk of its budgetary expen-
ditures and the subsidization of con=
sumption levels. .
 rr~G Nk W YORK TIMES, TUESDAY, AUGUST 21, 1973
Those Papers That Survive 'in Saigon
Are Subdued by Thieu's Harsh Curbs
By JAMES M. MARKHAM
`SDeclal to The New York Times
SAIGON, South Vietnam,
Aug. 20 - With the firm ap-
plication of financial and po-;
litical; pressures, the Govern-'
ment of President Nguyen Van
Thieu 'has tamed Saigon's once
outspoken and contentious'
press.
Newspapers that more than
a year ago got away with scald-.
ing commentaries and irrever-
ent cartoons -- a huge, hairy-
hand' Ric ,a-d Nixon,-for ex-`
ample, icaiing a diminutive
President Nguyen Van Thieu
and his people to slaughter on
the battlefield - are now cen-
sored or seized for publishing
a vest-pocket biography of Leon
id I. Brezhnev, the Soviet Com-
munist party leader, or the dec-
laration of South Vietnamese
neutralist.
"Freedom of the press does,
not exist in Vietnam," declared
Vo Long Trieu, a member of
Parliament who publishes Dai'
Dan Toc (The Great People),
one of perhaps two news-
papers that can be called anti-;
Government.
"Every day the Government
can seize any paper for any
reason it likes," Mr. Trieu said
in an interview. "And the rea
son it gives may have nothing
to do with why it orders a con-
fiscation."
Some of Mr. Trieu's col-
leagues disagree slightly. Free-
Idom of the press, they say,
has not been entirely' extin-
guished in South Vietnam; jour-,
nalists have been less political,
elbow room in South Korea,i
the Philippines and Taiwan --:
not to mention North Vietnam.
However,. after subjecting it
self to a brief period of unin
hibited criticism in the press,.
the Thieu Government has
cracked down on. journalists
and successfully narrowed the.
limits of acceptable opinion to
its own.-variety of unwavering
antiCommunism and antineu
tralism..
Today no one questions the
actions of Government policy..
No one criticizes President
Thieu or any of his gen-'
erals, unless these have fallen'
into disgrace; colonels and-
prov-ince chiefs may occasionally be
criticized, if their identities are
thinly disguised or if their cor-
ruptions are particularly fla-
grant, Cabinet ministers are
generally immune from criti-
cism, but civil servants are not:
Officially, the Government is
still constrained by the rather,
liberal law of December, 1969,
,that declares press freedom to
be "a fundamental right" and
says flatly that "censorship is
prohibited."
The . law ushered in a period
of press freedom, but late in
1971 Mr. Thieu began his crack-
down. '
Then on Aug. 4, 1972, the
President, buttressed- with spe-
cial powers assumed during the
Communists' spring offensive,
promulgated Decree Law 007,
which established a system of
censorship and required news-
papers to make deposits of 20
million piasters ($40,000 at the
present rate) to guarantee the
payment of any fines and court
costs.
At the time of. the decree,
Saigon, which is the country's
conly newspaper town, 'had 42
dailies many of them on
the brink of insolvency.
Today it has 28-16 In the
Vietnamese language and 10. in
Chinese, the English-language
Saigon Post, which was found-
ed in 1963 as America's com-
mitment here deepened, and
the French-language Courrier
d'Extreme-Orient which caters
to French expatriates and-mem-
bers of the Vietnamese elite
who consider Paris their second
home.
The printing run of all Sal-
gon's papers is thought to be
about 300,000 copies but only
200,000 are said to be sold-
about half in Saigon and the
rest in South Vietnam's other
major cities.. _ ... _ _ . .
Among the victims of the de-
posit requirement . -- and the
generally deteriorating South
Vietnamese economy --- were
several independent papers and
the capital's most popular op-
position daily, Tin Sang (Morn-
ing News).
' The 1972 decree gave enor'-'
mous powers to the Minister
of the Interior, who can order
the seizure and even the tem-
porary suspension of newspap-
ers that violate "national se-
curity" or "sow dissension."
Military courts are empow-
ed to' try 'national securityl
cases and can impose sentenc-
es of up to three years and
fines of up to 5 million. pias-
ters ($10,000). For the most;
part, the Government has re-
lied on fines to subdue the
press.
Finally, the newspapers must
submit copies to the Ministries
of information and Interior,four
hours before publication. As a'
result, almost all Vietnamese'
papers reach the stands late in,
the afternoon - often after
;discreet "unofficial" calls have
produced white spaces contain-
-ing the words "voluntarily with-i
idraw>ti: '~ ;
WASHINGTON STAR
2 August 1973
By Tammy Arbuckle
Star-News Special correspondent
VIENTIANE:-American-
backed operations by Cam-
bodians operating from Lao
soil have been completely
terminated and all Canibo-
dians involved in these op-
erations have been returned
to. Cambodia, well informed
sources say.
These operations were
carried out by Cambodian
troops based on an island
close to the Cambodian bor-
der in South Laos.
Intelligence and harass-
ment teams were inserted
into Northern Cambodia in
the Se Khong River area
north of Stung Treng and
around the North Cambodi-
an town of Siem Pang.
American aircraft were
used for these insertions
from contract airlines such
as Continental.
OPERATIONS WERE
under the control of Lon
--ol's departed brother Lon
Non and run from the South
Lao town of Pakse by Cam-
bodian army Col. Lim Siso-
wath. The operation was
funded by the Central Intel-
ligence agency but Ameri-
cans who were dissatisfied
with lack of results broke
off from it about six weeks,
ago.
The Cambodian teams'
were failing to reach their
objectives. Usually they
were spotted, by insurgent
sentries hidden in treetops'
who scanned the flat, thinly-
forested terrain.
The operation received its
death blow when Premier
Souvanna Phouma ordered
it stopped and all Cambodi-
ans involved to leave Lao
soil. Possibly this was to
42
5
l avoid any Cambodian in-
volvements which could
ruin Lao negotiations with
the Communists.
A LAO AIR Force DC3
transport landed in Khong
in late July and all Cambo-
dians were sent to Phnom
Penh, although some tried
to hide from Lao authori-
ties, well informed sources
said.
"Vietnam is still at war, sol
we must maintain certain nec-
cessary restrictions," observed
'Tran Huu Triet, the 30-year-
old chief of the Information
Miistry's Department for Co-
ordination of the Press and the
'Arts. Mr. Triet. however, insist-
ed in an interview that censor.
,ship-does not exist in Vietnam.
Mr. Triet is ultimately re-
sponsible to his relative by mar-
iriage, Hoang Due Nha, one of
`the President's closest advisers
and the man who prepares Mr.
'Thieu's daily press digest. Mr.
!Thieu is said to be an avid
'newspaper reader himself and
soften pores over the papers,
(even reading the classified ads.
If Mr. Nha finds an article-
or several articles in one paper
-particularly offensive, orders
are given to the Ministry of the
Interior for it 'to be seized. If
,the offense is slight, a tele-
phone call, and a white space,
,suffice. - --
i The one publicist who has
totally ' resisted the Gov-
1'ernment's censorship efforts,
the Rev. Chan Tin, a liberal Ro-
man Catholic, priest, was tem-
porarily put ' out of business
last week when the police raid-
ed his clandestine printing press
and arrested 35 people -
"among them. 10 deserters," ac-
cording to an official state-
ment.
Father Tin, who has cham-
pioned the cause of political
prisoners held by the Saigon
Government, was sentenced by
a military court last October to
five years in solitary confine-
ment for .continuing .to publish
his . leftist monthly, Doi Dien
(Face-to-Face).
After, that the publication'
went underground, but the sen-
tence against Father Tin, who
enjoys the 'tacit protection of,
the church, has not been. car,
xied out.''
-
In an interview, the jolly;
round-faced priest hinted that
the recent raid would not put
an end to Doi Dien.
"There are lots of printing
presses," he said. "At the time
of the French invasion of Viet-
nam, our ancestors printed
tracts on palm leaves."