PAPER FOR THE NSC MEETING ON NICARAGUA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00140R000100090020-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 22, 2016
• Document Release Date: December 7, 2010
• Sequence Number: 20
• Publication Date: March 17, 1981
• Content Type: MEMO

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? Washington, O.C. 20520
March 17, 1981
MEMORANDUM FOR MR. RICHARD V. ALLEN
THE WHITE HOUSE
Subject: Paper for the NSC Meeting on Nicaragua
Attached is a paper on Nicaragua for this
week's National Security Council meeting.
L. Paul Bremer, III
Executive Secretary
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NSC Paper on Nicaragua
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NSC PAPER ON NICARAGUA
-- How do we meet both legal requirements and
our political requirements with regard to Nicaraguan
support for violence in other countries?
LEGAL REQUIREMENTS
There is no hard evidence of arms arriving in
El Salvador from Nicaragua since February 1. However,
the intelligence agencies believe that support for
the Salvadoran insurgents probably continues. Support
includes training, stockpiling, operations in third
countries, and planning for future support. Such
an assessment requires us to make a determination
under Section 533(f) of the Foreign Assistance Act
that Nicaragua is supporting violence in other countries.
POLITICAL REQUIREMENTS
We, nevertheless, have major political requirements
.which also must be met:
-- we need time to strengthen our security--and
intelligence positions in El Salvador, and elsewhere
in the region, and to develop a strategy for dealing
with Cuba. An unremittently aggressive Nicaragua
can make that harder;
-- although we are not optimistic about the outcome
in Nicaragua, the situation is volatile and now is
not the time to withdraw and pull the plug on private
sector and other non-communist forces there;
-- we must be careful not to overload the circuits
in the Congress and jeopardize support for the El
Salvador program;
we need to retain the understanding, and hope-
fully support, of our European allies as well as key
countries such as Venezuela and Mexico for our policy
in Nicaragua and El Salvador.
'NF IQP?;TI*h
GDS 3 16/81
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. CONFIDENTIAL ? 2.
INTERAGENCY CONCLUSIONS
After extensive discussion in the IG and SIG,
there is general interagency agreement on the following
course of action which meets the requirements of the
law while giving us flexibility to buy time and maneuver
tactically:
-- determine under Section 533(f) that Nicaragua
is supporting violence in other countries;
use Section 614 waiver authority to avoid making
the $40 million in previously disbursed ESF immediately
repayable;
announce that, if favorable trends continue
after further monitoring and evaluation, we will resume
PL 480 food aid on humanitarian grounds and possibly
development assistance (neither of which are subject
to Section 533(f) as ESF is), and will consider eventual
resumption of ESF.
The foregoing would have to be implemented very
carefully to achieve our multiple objectives.
1. We would have to first consult with the Congress
as required on use of Section 614. To those opposed
to using 614 we would stress the need to keep the
leverage on Nicaragua to hold down arms trafficking
so that our El Salvador program has time to take hold.
We would also emphasize humanitarian aspects of continu-
ing assistance and the need to avoid pulling the plug
on the Nicaraguan moderates.
2. Our Ambassador would present such a decision
to the Nicaraguan leadership as a major effort on
our part to sustain a constructive relationship despite
what they had done to support Salvadoran guerrillas.
He would emphasize the waiver and prospects for future
aid as major concessions which provide a basis for
continuing cordial relations. In connection with
our ongoing relations, especially additional assistance,
the Ambassador would raise our concerns with maintenance
of pluralism, including a free press, and our growing
concern with an arms and military buildup out of propor-
tion to other Central American countries.
CONFIDENTIAL
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3. The President would give the same explanation
to President Lopez Portillo personally and seek his
intercession with the Nicaraguans. Our Ambassadors
would make similar approaches to selected Europeans
and Latin Americans, especially the Venezuelans.
4. We would mount a public relations effort to
explain the decision at home and abroad.
5. We would continue giving careful attention
to the security of.our personnel in Nicaragua and
to contingency planning in the event of a seizure
of our Embassy, which in the present semi-chaos in
Nicaragua cannot be excluded. However, we believe
that despite the risks it would be wrong to evacuate
now. That step would provoke a panic among the moderates,
and deprive us of all leverage in the arms trafficking.
6. We would need to choose the moment of surfacing
our decision in view of current developments in Nicaragua.
For a fuller discussion of these issues and of the
options not recommended by the SIG, see attached paper
prepared for the March 16 SIG.
Attachment:
As stated.
CONFIDENTIAL
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PAPER ON NICARAGUA .
-- How do we proceed with Nicaraguan assistance?
BACKGROUND
There is no hard evidence of arms arriving in
El Salvador from Nicaragua since February 1. However,
the intelligence agencies believe that support for
the Salvadoran insurgents probably continues. Support
includes training Salvadorans, operations in third
countries, stockpiling, and planning future support.
Efforts to activate the airlift from Costa Rica and
overland shipments from Honduran stocks are cited.
The intelligence agencies are preparing an assessment
which will be distributed separately.
KEY CONSIDERATIONS
-- Our actions must accord with the law. If
there is conclusive proof that the Government of Nicara-
gua is currently abetting violence in other countries,
a determination must be made. If the evidence is
less than conclusive there is discretion to decide
whether or not to make a determination depending on
the standard of evidence applied.
-- A confrontation with Nicaragua now could be
counterproductive. We need time to develop government
forces in El Salvador; a formal cut-off of U.S. aid
would eliminate the leverage provided by the threat
of a cut-off and could lead to accelerated infiltration
into El Salvador, even infiltration of combat personnel.
-- A U.S. aid cut-off would weaken private sector
and other non-Communist forces within Nicaragua, pos-
sibly fatally.
-- We would also like to continue the operation
of our Embassy in Nicaragua so that our intelligence
assets can be strengthened. We must be concerned
with the safety of our people.
GDS 3/13/87
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-- Finallipa confrontation with Nic?gua and
even an assistance cutoff will raise an unwanted issue
with our European and Latin allies. Mexico, Venezuela
and West Germany all strongly urge us to continue
our dialogue and assistance to Nicaragua. They either
believe there is still hope for a non-communist Nicara-
gua or want to avoid trouble with their public opinion
and leftist groups. We would prefer that it be Nicaraguan
actions that show these countries they are wrong.
As the military buildup of Nicaragua's own forces
continues, we shall eventually have to react regardless
of whether or not Nicaragua is arming others. We
cannot permit Nicaragua to become another Cuba, armed
to the teeth and potentially intervening in other
countries while we continue to provide substantial
economic assistance. But it is better -- for our
public and worldwide opinion -- to delay our reaction
on this point until the buildup is clearer and until
we have a more comprehensive Nicaragua strategy.
OPTIONS
The interagency group has developed four options
to try to deal with all the above considerations.
IF THE INTELLIGENCE ASSESSMENT DOES NOT PROVIDE
CONCLUSIVE PROOF THAT THE GRN IS CURRENTLY ABETTING
VIOLENCE, ALL FOUR OPTIONS BELOW ARE AVAILABLE:
1. Postponement of a Determination on ESF pending
additional evidence on support for violence in-other
countries. Resume limited shipment of PL-480 ($10
million remains suspended) or possibly development
assistance ($10 million remains suspended.) Neither
PL-480 nor development assistance are subject to the
statutory determination. Would avoid a confrontation,
and provide time to obtain better evidence of Nicaragua's
intentions. In the interim, a limited amount of
PL-480 ($3 million) would show our interest in maintain-
ing good relations. Resumption of assistance would
be difficult to defend in Congress.
2. Strong Statement, no Determination. A strong
public statement would be made indicating that the
Government of Nicaragua had supported violence in
El Salvador but that such activities were now reduced
or stopped. We would further state that, nevertheless,
SECRET
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assistance would'1e held in suspense until 40
steps are
taken to make this improved performance permanent
and that a formal determination would be made if there
were "a reversal of recent improvements. Some PL-480
($3 million) would be made available in about three
weeks. If favorable trends continue some development
assistance might follow. Repayment of previous loans
would not be required and it would not be necessary
to use 614 authority to waive repayment or subsequently
begin ESF assistance should that be desired after
an additional testing period.
IF THE INTELLIGENCE ASSESSMENT PROVIDES CONCLUSIVE
PROOF THAT THE'GRN IS CURRENTLY ABETTING VIOLENCE,
ONLY THE FOLLOWING TWO OPTIONS ARE AVAILABLE:
3. Straight Determination. Make a determination
that the GRN.is involved in terrorism, formally suspend
assistance, and call outstanding ESF loans.
Would probably force an immediate confrontation.
Does not buy time for our other objectives. Would
be popular with some in Congress, but would damage
our ability to get wide support for our Salvador policy.
4. Nuanced Determination. A series of steps
would be worked out with the Congress and the Nicara-
guans in advance of their comprehensive announcement.
The elements are:
-- a determination that Nicaragua is involved
in abetting violence, worded to concentrate on the
past more than the present and to recognize recent
improvement;
-- use of provision 614 authority to avoid
making previously disbursed ESF funds immediately
repayable; this would be presented to Nicaragua as
a major concession and to Congress as the price of
buying time; a finding that the waiver is important
to U.S. national security interests is required as
well as prior Congressional consultations.
-- announcement that, if favorable trends
continue, PL-480 will be restarted in about three
weeks; this is another major carrot for continued
Nicaraguan cooperation; the humanitarian aspects would
be stressed with Congress;
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-- announcement that, after a further testing
period, development assistance could be again considered.
-- finally, the President would indicate
that he would subsequently reexamine the situation
to see if what Nicaragua is doing on support for violence
and other issues warrants a further 614 determination
that it is important to U.S. national security interests
to restart ESF assistance.
This option is designed to comply with the law,
while winning,time for our other objectives by providing
assistance in moderate amounts. However, it risks
repeal or amendment of section 614 which is a valuable
authority in many other contexts if there is serious
objections in Congress to this use.
SECRET
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? Legal Considerations ?
Section 533(f) of the Foreign Assistance Act of
1961, as amended, (text attached) was originally enacted
in the Special Central American Assistance Act of 1979.
It will expire at the end of FY 81 unless reenacted
by the Congress. It requires the Presiaent to terminate
ESF assistance to Nicaragua and makes all outstanding
ESF loans due and payable immediately if the President
determines "that the Government of Nicaragua ... is
aiding, abetting, or supporting acts of violence or
terrorism in other countries...." (emphasis added)
The legislative history of the provision indicates
that the President has discretion as to the nature and
degree of proof to be required. He is without discretion
and must make a determination only if there is conclusive
evidence that the GRN is providing material support
(as opposed to moral or political support) to acts of
violence in a foreign country.
The plain language of the statute provides for
a determination only where the evidence supports a finding
that the GRN is supporting acts of violence at the time
the determination is being made. This is consistent
with the view that the purpose of the statute is to
deter present and future involvement in arms traffic
rather than simply to punish Nicaragua for past activities
in this area without regard to current GRN actions.
Nevertheless, the President may find the:.-_GRN to
be supporting violence within the meaning of the statute
based on past activities if he considers those activities
to evidence a continuing pattern of support for acts
of violence. (There is an inherent time lag in intel-
ligence reports and therefore the statute cannot reason-
ably be interpreted as requiring a determination based
on up-to-the-moment data.) On the other hand, if he
is not persuaded that the evidence conclusively estab-
lishes current GRN support for violence he would not
be obligated to make a determination irrespective of
the degree of proof of past GRN activities.
Given the judgmental factors necessarily involved
in deciding whether or not a determination should be
made under this provision, a certain degree of Congres-
sional criticism is likely irrespective of the decision.
LIMITED OFFICIAL USE
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Section 614(a) of the Foreign Assistance Act of
1961, as amended (text attached) is denominated a "Special
Authority." it provides the President the important
extraordinary flexibility to.provide assistance to foreign
countries "without re ard" to the other provisions of
the Act. It has traditionally been used to avoid the
application of outdated provisions or the application
of statutory restrictions of a general nature to specific
circumstances in which they were clearly not intended
to apply. For example, Section 614 was utilized to
provide assistance to Egypt in reopening the Suez Canal
and is currently being used to in effect reprogram funds
from Egypt to El Salvador.
Section 614(a) was amended this year to provide
the President additional authority to waive statutory
restrictions under the Arms Export Control Act. This
amendment was obtained on the basis of representations
that Section 614(a) authority would be used prudently.
The Congress has also established a requirement
for the President to engage in formal consultations
with the Congress prior to utilizing this authority.
Section 614(a) authority could technically be used to
overcome the requirements of Section 533(f) to call
outstanding loans to Nicaragua and to resume ESF assis-
tance at some later date. However, it would be extremel
difficult to justify so using it to override a recent y
enacted provision that was clearly intended to produce
a specific result in a particular country under specific
circumstances. Such a departure from the traditional
uses of Section 614(a) would be challenged in the Congress,
by those who would like to eliminate or severely restrict
the President's broad authority under this section.
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