DEFENSE DEPARTMENT CORRESPONDENCE ON LAOS FUNDING PROBLEMS

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 02234257
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: December 28, 2022
• Document Release Date: February 8, 2018
• Case Number: F-2016-01079
• Publication Date: April 8, 1971

VIA
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SUBJECT
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REFERENCE
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MEMORANDUM FOR: Executive Director-Comptroller
Deputy Director for Plans
Defense Department Correspondence on Laos
Funding Problems
,or01. -
4,071
8 APR 1971
CIA Memorandum of 26 March 1971 to Brigadier
General Manor Entitled "Funding and Equipping
the Thai Special Guerrilla Unit Forces in Laos"
1. You will recall that we sent a memorandum on 26 March 1971
to Brigadier General Manor entitled "Funding and Equipping the Thai
Special Guerrilla Unit Forces in Laos." The point of the memorandum
waF. to e 'k the Defense Department to make avaiTable- specific materiel
or funds to replace a shortfall. which has occurred because of ODX1)
a drawdown on CIA stocks in Laos to equip various battalions which were (b)(3)
programmed to be equipped and funded by DOD. In Attachment A,
Dennis Doolin, Deputy Assistant Secretary of Defense, replies to this
request with a refusal to make such a funds or equipment transfer.
Doolin's memorandum stated that the problem lies with the Country Team,.
in Laos which has failed to program up to the authorized (b)(1)
special project ceiling already authorized. Doolin claims only (b)(3))(1)
has been programmed to date.. He concludes that when the Country (b)(3)
Team "enters the equipment into the program, replacement supply action
can proceed." It would appear, therefore, that our request has come to
naught and that the Defense Department does not intend to pull our chest-,
nuts out of the fire by alternative action in Washington. Thus our PRA
crisis, which was temporarily stayed when you released addi- (b)(1)
tiona.1 PRA, is still with us and may be expected to be a problem through (b)(3)
the remainder of FY 71. This problem may, however, be solved by
alternative actions now underway.
NS1TIVE �
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2. As you know, a Committee has now been asked to examine
all joint CIA/military problems in detail and make action recommenda-
tions by April 19th. The DOD is aware of the inadequacy of the RO and
of its inability to adequately program for the requirements which have
been thrust upon it. There is some conversation among the military of
a need to build a separate logistics framework in Laos to handle the en-
tire problem. Whatever the results of the Committee study may be,
however, we can hardly expect additional, funding releases to take place
much before the end of this fiscal year. As I see it, therefore, FE
Division will continue to be in fiscal difficulty since the field will continue
to arm the Thai SGUis coming off the training line. At this stage we must
turn to you and ask you to take such action as you deem advisable to help
resolve this problem.
3. The second attachment is a memorandum for the Deputy
Secretary of Defense from DOD/ISA which discusses FY 72 funding for
special units in Laos. This memorandum is dated April 5th and was sent
to us electrically on 6 April. As you can see, the memorandum gives
Deputy Secretary Packard a review of th.e funding problem for the Thai
irregular units in Laos and makes five recommendations. In the first
three, ISA asks that Packard approve logistic support to CIA for 22 Thai
infantry battalions, two Thai artillery batteries, and four (b)(1)
infantry battalions. ISA also recommends funding for pay and allowances(b)(3)
for these 28 battalions. In addition ISA asks that Packard approve DOD
programming in FY 72 for 15,8.70 M-16 rifles and associated ammunition
which will be given to the Lao battalions in our CIA-supported Lao ir-
regulars program. If the Deputy Secretary approves these recommenda-
tions, we will have to take action to amend our FY 72 funding for CYTRUST
in terms of the current programmed rifle and ammunition costs. Perhaps
you would prefer not to identify this potential surplus to the Bureau of the
Budget at this stage and merely accept that we will meet some extra-
ordinary program costs in FY 72 for which these additional funds can be
used.
4. In this memorandum ISA recommends that Deputy Secretary
Packard not approve providing CIA :187 M-60 machine guns for our Lao
irregular battalions and continue DOD funding in FY 72 of the former
regular Thai army troops now deployed in northern Laos. ISA also
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SENSITIVE
FVFc CIKI I
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recommends disapproval of a proposal to fund the Thai regular army
troops for 60 days in FY 72. FE Division is prepared to accept the ISA
ruling on the machine guns because the weapon is extraordinary to the Laos
inventory and its provision appears to pose unnecessary difficulties for
DOD. We expect Secretary Packard will disapprove this item. On the
other hand the issue of whether Thai regular troops will remain in the
Long Tieng area in FY 72 will probably need referral to the White House,
and we believe that Secretary Packard will go to higher authority with
this problem.
5. In summary:
a. The PRA problem for FY 71 is still with us and we will
leave further appropriate advice and action on this to you.
b. There may be surplus monies available out of the FY 72
program for Laos if the issuance of the M-16's is approved by
DOD.
Attachments: AiS
cc: a/KISS
D/L
Chief, Far East (Division
3
(b)(1)
(b)(3)
SEe1L$ESITIVE
Plfrg
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A5S1STANT SECRETAllY OF DEFENSE
WASHINGTON, D. C. 20301
INTERNATIONAL SECURITY AFFAIRS
Director for Far East, DDP
Central Intelligence Agency
Washington, D. C. 20509
Dear
In reply refer to:
I-22490/71
I have your memorandum of March 26 to Brigadier General Manor concerning
funding and equipping Thai SGU's. We are now attempting to identify the
exact problems involved in DOD support and then, of course, to resolve
them. In the interim, you may be interested in the following related
matters.
As you pointed out, agreement now exists for Defense to support the 24
Thai SGU's programmed for activity in Laos. The Deputy Secretary of
Defense approved allocation of Fiscal Year 1971 defense funds to support
of 14 of these units. Accordingly, we have raised the so-called Special
Projects ceiling in the Laos Military Assistance Service Eunded
Program from
in the structure of the overall program.
My staff has been working closely
Year 1972 DOD budget implications
SGU's but for the 14 approved for
decision on this matter. However
largely unprogrammed--as
the preparations for the decision
(b)(1)
(b)(3)
(b)(1)
(b)(3)
in order to accommodate this change (b)(1)
(b)(3)
with yours in identifying the Fiscal
not only for the additional ten Thai
Fiscal Year 1971. I expect an earl
, given the costs involved--over
well as the legal and political hazards,03)(1)
have been extensive. (b)(3)
The difficulties encountered by the Requirements Office in provisioning
the first 14 Thai SGU's have been especially difficult to isolate. While
several months may be required to have a smoothly functioning pipeline
for logistical support of these units, theater stocks should be available
for drawdown now and replenishment later. It should be noted in this
connection that within the Laos MASF ceiling the Country Team abW)
establish priorities and allocate resources. Requirements must(b)(3)ro-
grammed within the ceiling in order to activate the defense logistic
system. While that may be an obvious matter, it is pertinent because
the Country Team has not programmed up to the authorized
Special Projects ceiling. Only has been programmed and
that was funded as soon as the program was received. In effect, the
field has not levied us for supnnrt of the Thai SGU's beyond the
level. (b)(1) (b)(1)
(b)(3) (b)(3)
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As was explained by Mr. Brazier in his meeting of March 31 with Mr. Clarke
and others, it does not appear that a transfer of funds from (W(1)
DOD FY 1971 appropriations is feasible. Additionally, since this money (b)(3)
is for military assistance to Laos, it should be in the Laos MASF Program.
Thus, when the Country Team enters the equipment into the program, re-
placement supply action can proceed.
I hope that we can continue to work closely in resolving the problems
which arise in Defense assistance to Laos.
Sincerely,
Den:-:vs, Df.ioilri
Deputy Asiit &aerofoil
2
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ASSISTANT
WARW.:010K D. C, 2(141
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.MAIRWArt0tAt IMAM MMIAII
In reply refer to:
1-35364/71
M411v1ORA/IDUM FOR THE DEPUTY SECRETARY OF DErEliSk?
The. Assistant Secretary of Defense (Comptroller)
SUBJECT: FY 72 Funding Tor-Special Units in Laos
� � �
CIA directs the operation of certain third-country gu rrilla groups �
called Battalion Comrno.ndo (11Ds formerly SGIJs) in Laos, spoolfi-
ce;lly .Thaie which are fully funded by the Depart- (b)(1)
ment of Defense. Except for certain special support buch asSpecia(b)(3)" �
Zaorces training and tactical air support which in provided directly,.
DOD provides logistical and air transport support for those force via
CIA in SEA. All other requirements ouch as troop payments, subsis-
tence, and other operational expennos are met by having DOD transfer
funds to CIA in Washington through the SWITCHBACK procedure utiliz-�
in the 50 USC 4031(a)....103j auth,ority. �
On 18 December 1970, you approved a, rovision of Plit.D No. �i3 (13G) wluch
deleted all DOD funds for pay and allowancef of paramilitary units in Laos
and Cambodia 'during YY 7. Your decision to eliminate DOD funding for
pay and allowances.of these units in FY 72 was based on the .P.a urripttion.
that funds-for-these programs should bo budgeted by CIA rather than TiOb.
At the time, there was no Washington Special Acton Group.(WSAG) or other
requirement for DOD to budget for such requirements. -Accordingly, only
logistical support for a limited number of these guerrilla units was provided
for in the FY 72 DOD budget, Your decision was communicated to the CIA
promptly, but we undorstaind that they did not budget for _these costs.
More recently, yeu agreed to fund the pair and allowances for these guerrills
forces in FY 72, again using the SWITCHBACK procedure. Further, we
understand that you agreed (on 20 February 1971) to finance 10 additional
Thai DC's in Laos &I-113'Y 72. These. 10 units would be in addition to the 14.
Thai Cu73 currently prograthr,ned and funded by OD in FY 71. Itegarding-- '
other 13Cs which are funded exclusively by CIA, we have a request from
Ireirns (Tab A) that DOD furnish, without C A reimbursement, 113,870
M-16 rifles and 187 M-60 machine guns.
�16�.
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Granting the request for M-16s .woeld,have the .benefit of standardizing
all Lao forces on the name basic weapon.. If you approve this request,
we would plan to approve the M-16 for all FAR/FAN units which do not
now have this weapon. Approval of the M-60s, �howovor, would constitute
the introduction of an entirely new weapons system. in L408 and will load
to additional costs in future years. The CIA has proposed that. DOD hear
the 'coot of those weapons in FY 71 and FY 72. However, in this paper we
have included all, of those costs as unbudgeted FT 72 increases" that. would
have to be. 0;C:corn:I-iodated throagli�Ireprograrnming within resources avail,:
-able in FY 72 because earlier -upgrading of these force�will not have an
Impact on the outcome during the current dry season. JiGS view on
and M-60s.aro at Tab D. � �
tddition to the support of 13Cs, it in our understanding that DOD is
expected to continue to provide for the pay and allowances in FY 72
for the former regular That Army units (SIERRA ROMEO Hand Ix)
which we consider to be BC, 4, Those units are deploye'a in northern
Laos until they can be replaced by newly recruited Thai Infantry and
Artillery BCn, by end FY 71 if the ochodule holds. If recruiting goes
slowly, these units could be oxTectod to remain in'Laos during the
first 60 days of FY 72. The risk associated with continuing DOD �
support of these forcon is very high in light of the new legislation.
There arc some significant ramifications to the approval of those
s.dditional progranie, I.e.
� .(b)(1)
a. The will have to bo-aocomniodaited within current -.0:0(3)
DOD FY 72 totals through .reprogramming. ,
(b)(1)
(b)(3)
W. A largo portion of the will.ohow up as an increase
� in-the'Ltios-1171ilitary'Ass1stanceservice Funded Program�which is
certain to raise questions on the Hill..
: C.
of
increase in FY 72 mAsr against our coiling
(MAS5)(1).rently totals in the 72 budget.)
� � � � d. The possibility(b)( M3)at there will, be Congress tonal Hearings on the
� MASF Program. (Mr:- granwell, Senator Stennir staff has indicated
)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
Based on the current CIA prepared budget for thJ program, adjusted by
�SD no as to avoid overcommitment at this time JLecauco.of likely slippage
In the recruitment of Thai BC8 (recurring costs Jor new Thai infantry units
wore reduced by 10%), the estimated FY 72 cost to DOD would be:
Trip
EGRET (
--NSITIVE
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it IVIILLTONIgt
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The Genoral Counsel (Mr I3uzhardt) advises that all of the boosible actions
- are �viithin 'yoUr- loi/al aulority.
1. Approvo ry 72 DOD programming of up to 'ffor aont(b)(1)E
, logistical suPport via PIA in SEA of 22 Thai Infantry 13Co, 2 Thai Ai(1D)(3)ry
I3Cs,
the increa.sea cost of/ , currently 1P(b)(1)(
----by reprograrxuning-within rosourcen avallablci-in FY 72. Recommend (b)(3)
approval.
Approve
......
(b)(1)
(b)(3)
�
� Disapprove
I.
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in Laos. Direct DA to accornmo(b)(1)
,
.1V4 ST.1,� 1010101
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2. � Approve FY 3.972 funding for pay and allowances of 28 Thai (b)(1)
BCs by transferring sufficient funds to the CIA under thl(b)(1)
SWITCI-IBACK procedure. Direct DA to accommodate the inerease(b)(3)' .
cost of by reprogramming within available resources (b)(1)
lit ry 72. Recommend approval. (b)(3)
. �Approve
Disapprove
3. Approve FY 72 DOD programming of 15,070 M46 rifles and associated
EtMmunition for Lao BCH. Direct DA to accommodate the increased cost
of , be reprogramming within resources available in FY 7(b)(1)
FY .72. Recommend approval. The CJCS (Admiral Moorer) wants ad(b)(3)1a.
funds made avails.ble to DA to cover this =budgeted expense.
Approve
Disapprove
S10.31502E1�44�PALAI.V..
4. Approve FY 71 or FY 72 DOD programming of 187 M-60 machine guns
and associated' ammunition for Lao 13Cs. Direct DA. to aCcommodate the
increased cost of I w,ithin available resources in FY 71 or F(b)(1).
1cma tlisap.proyn.l. The CJCS, (Ad.rai:rat Mool.nr) concuro that !(b)(3)
M--60 system should not be provided to all forces in Laos:
Approve
Disapprove ,.�
S. ApProve continued DOD funding in FY 72 of for pay z(b)(1)
� allowances and programming of logistic support of the 1(b)(1)31.
regular Thai Army units which we consider BC/3 that are deployed ii(b)(3)the)
1.4a0U (SIERRA ROMEO II and DC) for 60 days only. Direct DA to accommotlf
" � "the. increaBod. copt of the by reprogramming within
available in ry 72. Recommend dinapproyal.. The General Counso1(b)(3).
lluzhardt) concurs thaif mdhg these, units constitutes an unacceptable
political. risk.
Approve
't
Disapprove
The ASD/i&L; Mr. Shillito) concurs in all of the above recommendations.
4 /PP splRE f SLNSITIVE
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LYL UNLI
CENTRAL INTELLIGENCE AGENCY
WASHINGTON, D.C. 20505
26 March 19 71
MEMORANDUM FOR: Brigadier General Leroy J. Manor
Deputy Director for Operations (SACSA), J-3�
Pentagon
SUBJECT : Funding and Equipping the Thai Special Guerrilla
Unit Forces in Laos
1. As you know, there is an agreement between the DOD and the
CIA for the support of the 14 Thai Special Guerrilla Units (SGU's) pro-
grammed for activity in Laos. Simply stated, this agreement calls for
the DOD to provide equipment for these 1.4 battalion's, as well as funds fOr
direct costs, while CIA undertakes to train, pay, and coordinate these
Thai forces while they are in Laos. An additional 10 Thai SGU battalions
were recently approved so that the program now contains 24 battalions.
The newly approved Thai battalions are under- recruitment and will begin
training in the near future.
2. Implementation procedures for these agreements have been
worked out under which the Requirements Office (RO) of the Deputy Chief,
JUSMA.G/Thailand programs for and provides materiel support to these
battalions while the Department of Army provides the funds to CIA for the
direct costs. The monies for the direct costs are being transferred to
CIA on a quarterly basis. A problem, however, has arisen in the
materiel flow. ..The RO has been unable to completely provision these
battalions. Therefore under field agreement CIA has provided the short-
fall materiel out of its .own stocks which are programmed and funded to
support Lao, as distinct from Thai, irregular forces. The CIA program
is limited and the drawdown on CIA stocks, as of 26 March 1971, amounts
to I We have reached a point where CIA requires immediate 0Dx1)
relief or we will be unable to adequately support those Lao irregular (b)(3)
forces we are charged with supporting.
SECR NS1TIVE. irtrr���
� � -
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3. Therefore we ask that your office take immediate action to
implement the earlier agreement by either:
a. Having the DOD issue the appropriate instructions to
CINCPAC and the RO to make available to CIA immediate
replacement of the materiel already issued, or
b. Making available to CIA, by funds transfer, the (b)(1)
(b)(3)
(b)(3)
4. At the same time we suggest you carefully review this problem
with the appropriate military authorities. It has become clear that unless
adequate instructions are issued to CINCPAC and RO there will be a con-
tinuing shortfall in materiel issue in subsequent months which should
exceed per month. We ask that you arrange for adequate �
(b)(1)
provisioning of materiel through military channels to avoid this anticipa-jb)(3)
ted shortfall.
shortfall or by issuing materiel in the Continental U.S.
5. We suggest both the Defense Department and CIA appoint offi-
cers to a working group which would consider paragraph 3 alternatives
and future problems as they arise. It would be useful if such a group
could meet early next week.
FOR THE DEPUTY DIRECTOR FOR PLANS:
(b)(1)
(b)(3)
cc: Mr. Dennis,Doolin
Deputy Assistant Secretary (East Asia gz Pacific Affairs)
Pentagon
aSENSITIVE
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EYES
Memo to: BGen. Manor, SACSA, Pentagon
Subject : Funding and Equipping the Thai SGU Forces in Laos
DDP/DCFE/ :acl (26 March 71)
Distribution:
otig - General Manor
1 - Mr. Doolin
1 - Ex. Dir. -Compt.
1 - DDP
1 - ADDP
2 - CFE
1 - CFE,/TBL
1 - 0/PPB (Mr. Sherman)
1 - ADC FE /Support
1 - Mr. Eichelberger (FE)
2 - DCFE
3
SECR NSITIVE
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