ALLEGED GAO REPORT THAT USAID FUNDS ARE DIVERTED TO CIA IN LAOS

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-22-6-15-4
• Release Decision: RIFLIM
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: January 11, 2017
• Document Release Date: November 27, 2012
• Sequence Number: 15
• Publication Date: April 18, 1972
• Content Type: MEMO

No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
MEMORANDUM
NATIONAL SECURITY COUNCIL ,._? 2504-X
MEMORANDUM FOR: MR. KISSINGER
FROM: JOHN H. HO"LDRIDGE(Jt.l~
are Diverted to CIA in Laos
`
GAO Report that USAID Funds
Aleged
At Tab I is a memorandum from you to the President responding to his
interest in the facts surrounding Senator Kennedy's allegations, as re-
ported in the press, that a GAO report charges that USAID funds are
diverted to CIA for support of the paramilitary effort in Laos. The CIA
memorandum attached explains that the Kennedy allegations are incorrect.
Re commendation:
That you sign the memorandum to the President at Tab I.
NSS, USAID reviews
completed
SECR
No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
 "__~ No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
,~,,&4EMORANDUM
THE WHITE HOUSE
SECRET
THE PRESIi ;r,'i1 HAS SEEN..
INFORMATION
April 19, 197zV
MEMORANDUM FOR : THE PRESIDENT
FROM: HENRY A. KISSINGER
SUBJECT: Alleged GAO. Report that USAID Funds
Are Diverted to CIA in Laos
At Tab A is, a CIA memorandum responding to your interest in
the facts surrounding Senator Kennedy's allegations, as reported in
the press, that a GAO report charges USAID funds are diverted to
CIA for support of the paramilitary effort in Laos.
CIA states that Senator Kennedy's allegations are incorrect. \ The
$2. 5 ,million referred to in the press report constituted FY 72
medical support to paramilitary dependents which CIA. transferred
to USAID, rather than from USAID to CIA as alleged.
More generally, beginning in 1969 costs for military and paramilitary
dependent relief previously provided by USAID were progressively
moved into the Defense and CIA. budgets. As of FY 72, no identifiable
costs for medical support to paramilitary dependents have been
funded by USAID. USA.ID personnel and facilities do, however, pro-
vide some humanitarian services to those paramilitary dependents
included among refugees in Laos.
SECRET
No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
 No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
CEWRAL INTELLIGENCE AGENCY
WASHINGTON, D.C. 20505
2 1 MAR 1972
MEMORANDUM FOR: Major General Alexander M. Haig, Jr.
Deputy Assistant to the President
for National Security Affairs
SUBJECT Alleged GAO Report that USAID Funds
are Diverted to CIA in Laos
1. The President has indicated an interest in the facts surrounding
Senator Kennedy's allegations as reported in the press thata General
Accounting Office report alleges that USAID funds are diverted to CIA
for support of the paramilitary effort in Laos.
2. The allegations are incorrect. The facts are that commencing
in 1969 costs for military and paramilitary?dependent relief previously
provided by USAID were progressively moved into the Department of
Defense and the Central Intelligence Agency budgets. In FY 72 medical
support to military and paramilitary dependents is funded by DOD and
CIA respectively, completing the transfer of funding responsibility.
The total amount of the medical support funding responsibility transfer
was 3.6 million dollars, 1.1 million dollars to DOD and Z. 5 million
dollars to CIA. This is the 2.5 million dollars referred to in the
Senator Kennedy article. It is CIA money being transferred to USAID
during FY 72, not a diversion of USAID funds to CIA supported para-
military programs as alleged in the Senator Kennedy article. As
noted in the GAO report and in the Senator Kennedy article, 1. 3 million
dollars of the 2. 5 million dollars has been passed to USAID by CIA.
SECRET i,. .t r
No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
 %)LUIIL 1
No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
? Ip
3. As of FY 72, no identifiable costs for medical support
to paramilitary dependents are funded by USAID. USAID personnel
and facilities do provide some humanitarian services to those
paramilitary dependents included among refugees in Laos.
Thomas H. Karamessines
Deputy Director for Plans
. F1 nrT
No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
 No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4
W 1P
THE WHITE HOUSE
.sa41X
21 March 1972
MEMORANDUM FOR: GENERAL HAIG
FROM: PETER FERGUSON
SUBJECT: Alleged GAO Report that USAID Fund
are Diverted to CIA in Laos
Attached is CIA's response to your query regarding
Senator Kennedy's allegations reported in the press
that USAID funds are diverted to CIA support of
paramilitary efforts in Laos.
CIA states the allegations are incorrect, that Agency
funds were, in fact, transferred to USAID in the
amount of $2.5 million for support for military and
paramilitary dependent relief in FY-72. Both DOD
and CIA have, since 1969, assumed the budgetary
responsiblities for funding the relief of military
and paramilitary dependents through USAID in Laos.
Attachment
Tab A
Seen by:
John Holdridge
SECRET
No Objection to Declassification in Full 2012/11/27: LOC-HAK-22-6-15-4