CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026700010036-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 20, 2016
• Document Release Date: May 15, 2007
• Sequence Number: 36
• Publication Date: July 9, 1974
• Content Type: REPORT

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Top Secret 25X1
National Intelligence
Bulletin
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DIA Review Completed.
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National Intelligence Bulletin
July 9, 1974
CONTENTS
JAPAN: Ruling party appears to have emerged without a
clear majority in upper house. (Page 1)
PORTUGAL: Sharp rift. in forces that brought Spinola to
power in April. (Page 2)
ISRAEL: National Religious Party may soon join coali-
tion government. (Pa.ge 4)
CANADA: Trudeau scores impressive election victory.
(Page 6)
CAMBODIA: Phnom Penh. makes new bid to open peace nego-
tiations. (Page 7)
SOUTH KOREA: Leaders of Roman Catholic community moving
toward open opposition to the government. (Page 8)
WEST GERMANY: Egon Bahr appointed to cabinet post.
(Page 19)
TURKEY-GREECE: NATO Secretary General Luns offers to
mediate dispute. (Page 20)
ISRAEL-FEDAYEEN: Israeli patrol boats attack three
Lebanese ports. (Page 21)
PERU: Navy may purchase Soviet patrol boats. (Page 22) 25X1
ARGENTINA: President retains Lopez Rega as private
secretary. (Page 23)
BOLIVIA: President Banzer announces all-military cabinet.
(Page 24)
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National Intelligence Bulletin
JAPAN
July 9, 1974
Returns from the election on Sunday are nearly com-
plete, and it appears that Prime Minister Tanaka's Lib-
eral Democratic Party (LDP) has emerged without a clear
majority in the 252-member upper house. Unless some of
the independent winners affiliate with the ruling party,
the LDP will hold only 126 seats, compared with 134
prior to the election. Although the upper house is the
less important of the two houses of the Diet, the in-
creased strength of the opposition may hamper some of
the ruling party's legislative efforts.
The LDP's losses are being attributed to economic
discontent. Tanaka's conduct of the campaign, however,
and particularly his heavy use of corporate contribu-
tions, may also have cost his party a few seats. The
weak LDP performance will almost certainly damage
Tanaka's recently reviving prestige within the party.
The Socialists, the largest opposition party, put
on an unexpectedly good performance, coming on strong
in the final weeks of the campaign and picking up a few
seats. The Communists increased their small upper house
base, almost doubling their previous strength of 11
seats.
The Buddhist-based Komeito, on the other hand, just
about maintained its strength in the upper house, con-
tributing to a growing belief that the party has reached
its political plateau after an extraordinarily rapid
growth in the 1960s. The small Democratic Socialist
contingent in the upper house was further depleted,
though not to the extent that it is likely to fade into
oblivion, as its partisans had feared.
With the upper house elections over, political ma-
neuvering in the Liberal Democratic fold will now focus
on next summer's party leadership race, particularly the
effort of Tanaka's major factional opponents to unseat
him as party president, and hence prime minister. F 25X6
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National Intelligence Bulletin
July 9, 1974
The shake-up in the cabinet expected today flows
from a sharp rift in the forces that brought President
Spinola to power last April and reflects Spinola's ap-
parent determination to give the regime a more conserva-
tive orientation.
There are, however, differing accounts of the na-
ture of the rift. According to the US em-
bassy in Lisbon, the cabinet changes grow ou of a split
between leftist members of the cabinet and Prime Minis-
ter Palma Carlos over pending legislation, particularly
in the labor field. The Prime Minister reportedly of-
fered to quit the government last week. Spinola refused
to accept his resignation, and instead plans to dismiss
five leftist ministers. The junta and the Armed Forces
Movement reportedly have agreed to authorize the Prime
Minister to legislate by decree.
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Armed Forces Movement is resisting efforts of the junta
to consolidate Spinola's position. In meetings last
weekend with Spinola, representatives of the Armed
Forces Movement reportedly demanded the elimination of
the paramilitary forces that have police functions--the
National Republican Guard and the Public Security Po-
lice--and insisted that supporters of the Movement be
appointed to key military positions.
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National Intelligence Bulletin July 9, 1974
Spinola is said to feel that he has the support of
the junta and of enough of the rank-and-file soldiers
to remove from the political arena t1e leftists in the
Armed Forces Movement who oppose him. 25X1
Spinola has formed a new commando regiment
outs/ e Lis on that would support him against the Armed
Forces Movement. T'1i.; regiment anq Qther military
forces in Portugal reportedly have been on alert for
the past several days?
4 fey issue has thus become whether Spinola or the
Armed Forces Movement will control the government. If
Spinola moves abruptly against the left, he will upset
the equilibriu;n of political forces that been
trying to maintain. 25X1
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National Intelligence Bulletin July 9, 1974
ISRAEL
The National Religious Party may soon join Prime
Minister Rabin's coalition government. The support of
the Religious Party's ten members in the Knesset would
greatly enhance the government's chances of survival and
deal a setback to opposition hopes for early new elec-
tions. The opposition will suffer a further blow if one
of the Likud bloc's most popular members, Major General
Sharon, follows through on his reported decision to with-
draw from active politics to military service.
Religious Party secretary Bernstein on July 7 was
reported as saying that a decision to enter the coalition
is "imminent." A number of factors appear to be con-
tributing to a reconsideration by the party of its earlier
refusal to join forces with. Rabin:
--Orthodox rabbinical objections to such a move may
be softening sufficiently to permit a compromise
formula on the contentious religious conversion is-
sue.
--The party's ultraconservative youth faction re-
portedly has dropped its opposition to joining the
government, and one of its leaders is said to be in
line for a cabinet post.
--Party leaders may be coming to believe that Rabin's
prospects of survival without the participation of
their party are better now than they anticipated
when the government was formed in early June. Con-
sequently, they may now be more eager to get aboard.
Rabin, for his part, is anxious to have the National
Religious Party return to its traditional role as Labor's
major coalition partner and has kept open four cabinet
seats as an inducement.. Labor Party negotiators have
continued their contacts with Religious Party and ortho-
dox rabbinical leaders to work out a solution. The
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Laborites have been at least partly motivated by concern
that the Religious Party could eventually team up with
the opposition Likud bloc! to challenge Labor's continuing
political hegemony. Rabin recently told the US ambassador,
however, that he had gone as far as he could to meet the
Religious Party's demands and that the next step was
completely up to them.
If the Conservative Religious Party opts to join,
the liberal Citizens Rights Movement is expected to leave
the government. It controls only three Knesset seats
and will in any case support the government on major
issues, such as the Middle East peace negotiations.
Rabin's other coalition partner, the Independent Liberal
Party, which controls four Knesset seats, would probably
elect to stay on. Rabin, who now commands only a one-
vote majority in the 120-member Knesset, would thus end
up with a more comfortable majority of eight.
Rabin's flexibility in conducting Middle East peace
negotiations with Egypt and perhaps Syria would probably
not be significantly affected by the addition of the
Religious Party to the cabinet. The party would insist---
and Rabin has already agreed--that the government submit
to new elections before accepting a peace agreement with
Jordan embod in territorial concessions o ccupied
West Bank.
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National Intelligence Bulletin July 9, 1974
CANADA
On the basis of incomplete returns, Prime Minister
Trudeau's Liberals have won a majority of seats in the
House of Commons.
The latest returns show the Liberals won or were
leading in 139 districts, the Progressive Conservatives
in 95, the New Democrats in 18, and the Social Credit
Party in 12. In the election in October 1972, the Lib-
erals won 109 seats, the Tories 107, the New Democrats
31, and the Social Credit 15. The remaining two seats
were won by independents.
The strong Liberal showing was a surprise. Polls
conducted throughout the campaign indicated that the
voters would not elect a majority administration.
The win is a personal victory for Trudeau, whose
lackluster performance in the 1972 campaign contributed
greatly to the Liberal setback. This time, however, the
Prime Minister adopted an aggressive, highly visible
style that was more convincing to the voters.
Without pressure from the nationalist-minded New
Democrats, who held the balance of power in the last
Parliament, a majority Liberal government might be less
influenced by the "Canada first" approach that was fre-
quently demonstrated during the minority Trudeau govern-
ment's stay in office. There remains, nevertheless,
strong bipartisan support in Ottawa for the current pol-
icy of trying to lessen Canada's dependence on the US.
Inflation was the dominant issue, and the voters
clearly rejected Tory leader Stanfield's proposal for a
freeze on wages and prices. This was Stanfield's third
chance to lead his party to victory; the loss is likely
to result in his resignation or ouster as party leader.
New Democratic leader David Lewis was upset by a
Liberal challenger in his Toronto district. He had held
the seat since 1965.
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Phnom Penh has made a new bid to open peace negoti-
ations.
The formal declaration on negotiations issued today
by the Lon Nol government invites the Khmer Communists
to enter immediately into talks without prior conditions
at a mutually agreeable time and place to find a Cambodian
solution to the present conflict. The declaration ex-
presses the hope that such a dialogue will lead to a
cease-fire, to the withdrawal of all foreign forces, and
to unity and national reconciliation. In addition, it
appeals to all countries to help the two Cambodian sides
in establishing a dialogue.
This is the government's first major peace initia-
tive since July 6, 1973, when.it issued a six-point pro-
posal. In contrast to the new declaration, that proposal
stressed the need for the withdrawal of foreign troops
and a cease-fire before negotiations could start. Al-
though Phnom Penh probably is not optimistic that its
new, more flexible formula for negotiations will draw a
favorable reaction from the Communists, it apparently
believes the statement will put them on the diplomatic
defensive.
The Communists have consistently rejected any nego-
tiations with the present regime in Phnom Penh. In the
past few months, the Communists have emphasized that the
only way to peace is a withdrawal of all US support to
Phnom Penh. They recognize that a withdrawal of US sup-
port would cause the fall of the Lon Nol government.
The insurgents' nominal leader, Prince Sihanouk,
has also underlined the need for the withdrawal of US
backing for Lon Nol, F___
Thus far, however, there are no signs that the in-country
Communist leadership shares Sihanouk's interest in deal-
in directly with the US.
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National Intelligence Bulletin July 9, 1974
SOUTH KOREA
Leaders of South Korea's 800,000 Roman Catholics
are moving into open opposition to the Pak government.
On July 5, the Catholic Bishops' Conference on Korea
issued a lengthy pastoral letter affirming the right
and responsibility of the Church to speak and to act in
support of human rights. The following day, one of the
most vigorously anti-Pak Church leaders, Bishop Chi Hak-
sun, returned to Seoul from Rome in an apparent challenge
to the authorities, and was promptly arrested.
The Bishops' letter, soon to be read in all Catholic
churches in South Korea, is a relatively moderate and
generalized statement of support for the many Christian
and other dissident elements currently on trial in Seoul
for alleged antigovernment activities. It is a product
of compromise, worked out by the influential Cardinal
Kim in an effort to avoid an unnecessary affront to the
government. It will be interpreted, however, as a de-
mand for political moderation on the part of President
Pak. As such, it aligns the South Korean Catholic lead-
ership with the nation's leading Protestant grouping, the
National Council of Christian Churches.
Cardinal Kim opposed Bishop Chi's return to Seoul
at this time, and his effort to avoid an outright Cath-
olic confrontation with the government has undoubtedly
been complicated. Even if Bishop Chi is released--and
this is not certain to occur soon--his arrest and inter-
rogation are likely to cause resentment among Catholics.
The arrest, moreover, is further evidence of Presi-
dent Pak's willingness to call even the best known public
figures to account for opposing him. The others include
political opposition leader Kim Tae-chung, now on trial,
and former president and elder statesman Yun Po-sun.
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National Intelligence Bulletin
WEST GERMANY
July 9, 1974
Egon Bahr's appointment last weekend as minister
for economic cooperation came as a surprise to political
circles in Bonn. Hans-Juergen Wischnewski, the Social
Democratic Party's expert on Middle East affairs, had
been widely expected to replace Erhard Eppler, who re-
signed on July 5 following a cabinet dispute over cuts
in his ministerial budget. In this post, Bahr will ad-
minister a wide range of assistance programs to the less
developed countries.
Prior to this appointment, Bahr's political future
was clouded. He had served as Brandt's chief foreign
policy adviser and was the architect of Ostpolitik, but
he lost much authority when Chancellor Schmidt came to
office in early May. His relegation to obscurity was
widely interpreted as a sign of Schmidt's intention to
de-emphasize Brandt's controversial Ostpolitik.
There had been several hints during the past month,
however, that Bahr might be asked to accept a position
in the Schmidt government.
--In an interview in early June, Schmidt indicated
that he had not "parted" with Bahr and that he re-
garded him as a personal friend who would influence
his foreign policy decisions.
--Schmidt has also indicated interest in using the
swing credit system that underwrites Bonn's trade
with East Germany as a lever to extract concessions
on a number of issues--a course Bahr claims he
supports.
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National Intelligence Bulletin
July 9, 1974
NATO Secretary General Luns will make a new offer
this week to mediate the dispute between Athens and
Ankara over rights to the Aegean seabead.
Luns will propose to Greek and Turkish NATO repre-
sentatives that the two countries set up joint companies
to exploit the mineral resources of the Aegean and work
out arrangements concerning each side's participation
later. He hopes this suggestion will enable the Greeks
to begin negotiations, perhaps in a NATO forum, and pro-
vide a way around Greek objections to setting up new
machinery for such talks.
The Turks appear to have convinced Luns that they
are eager to work out some kind of compromise, in part
because they are worried about recent arms purchases by
Greece.
Some Greek officials--particularly in the Foreign
Ministry--seem to favor a flexible approach to the prob-
lem, but they are not calling the shots. This was made
clear by the behavior of Greek officials conducting re-
cent talks with Turkish representatives in Ottawa and
Brussels. The Greeks had no authority to negotiate sub-
stantive issues and had to check back regularly with the
military leaders in Athens.
The Greek junta shows no sign of give. Greek lead-
ers continue to insist that earlier agreements give
Athens extensive rights in the Aegean and that there is
nothing to negotiate. Frustration over this inflexible
stance may have prompted the resignation last week of
two key Foreign Ministry officials and may in part have
caused the resignation yesterday of the foreign minister.
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July 9, 1974
Several Israeli patrol boats attacked three Leba-
nese ports late last night. Press reports from both
Tel Aviv and Beirut state that about ten fishing vessels
were sunk in each of the harbors. The Israelis left
leaflets warning local inhabitants against permitting
terrorists to operate from the ports.
Tel Aviv says the attacks were prompted by indi-
cations that fedayeen amphibious operations would be
launched from the ports. Israel claims that the Arab
commandos who killed four of its citizens at a seaside
resort in late June came: by boat from Lebanon.
The raids yesterday were in line with Tel Aviv's
announced policy of disrupting terrorist preparations,
rather than just reacting to guerrilla attacks. 25X1
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The recent shake-up in the navy high command has led
to renewed interest in the purchase of Soviet cruise-
missile patrol boats.
Negotiations for the sale of Osa or Komar class ves-
sels have gone on intermittently since 1971
The new navy commander, Vice Admiral Arce, may have
a more positive view. He reportedly has declared that
the army got a good buy on its new Soviet tanks and that
there is no reason why the navy should not acquire patrol
boats from the USSR. He may also believe that the Soviets
can be persuaded to share technical data on the missile
in order to make the sale.
Arce's reasons for making a point of his interest
in the Soviet craft may involve domestic political con-
siderations as well as possible use of a potential pur-
chase from the Soviets as a lever in an attempt to ex-
tract similar equipment from the US.
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President Maria Estela Peron has decided to retain
her late husband's private secretary, Jose Lopez Rega,
despite strong pressures from some military and politi-
cal leaders to remove him.
Lopez Rega, who is also social welfare minister, is
strongly distrusted by the military and by rivals in the
cabinet, while the Peronist left wing views him with con-
tempt. He has no political following of his own.
The politically inexperienced Mrs. Peron has long
leaned on Lopez Rega for political guidance. Even though
she has occasionally been at odds with him, she will need
his assistance more than ever, now that she is President.
Unfettered by Juan Peron, and aware of his importance
to Mrs. Peron, Lopez Rega?'s power now appears to have in-
creased noticeably. This in turn could lead his enemies
within the Peronist movement and the military to increase
their efforts to get rid of him. They will move cauti-
ously, however, for fear of causing Mrs. Peron to resign
abruptly.
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Press reporting indicates that President Banzer last
night announced the formation of an all-military cabinet.
In addition, Banzer said there would be general elections
sometime next year.
The selection of an all-military cabinet is clearly
designed to recapture flagging support among the Presi-
dent's fellow officers, and perhaps to boost their mo-
rale. At the same time, Banzer probably hopes to under-
cut potential military plotters by giving them a stake
in the success of the regime. His call for elections
may be meant to assuage restlessness and desire for
change on the part of a number of younger officers.
Banzer has talked about elections in the past without
following through.
The new cabinet may presage the further weakening
of the coalition of political parties that had backed
Banzer until it was racked by disunity both within and
between the parties.
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