COURT PAPERS SHOW EFFORT ON PIPELINE PLAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000400020005-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 22
• Document Creation Date: December 19, 2016
• Document Release Date: December 12, 2005
• Sequence Number: 5
• Publication Date: July 31, 1984
• Content Type: NSPR

A R taf cve,rL ~se 2005/12/23 : CIA-RDP91-0090 1R000400020005-0
ON FAGS _LL1 . ~
Court Papers
Show Effort on
Pipeline Plan
Greek arms dealer Basil Tsakos
claims to have spent $1. million try-
ing to win support in high places for
his scheme to build a pipeline across
central Africa that would pump Sau-
di Arabian oil from the Red Sea to
the Atlantic coast.
.
In a court suit, Tsakos charges
that he paid Joe Rosenbaum, an old
wartime intelligence buddy of CIA
Director William J. Casey, $25,000
to open doors for him in Washing-
ton-but that Rosenbaum failed to
spend the money to influence offi-
cials, as Tsakos had intended.
Still, from court documents and
inside sources, my associate Corky
Johnson has learned that Rosen-
baum did get Tsakos something for
his money.'For example:
? To lend the effort a proper air
of intrigue, Tsakos and Rosenbaum
assigned code names to various big
shots they tried to interest in the
project. In telephone calls and in
cables to Tsakos' Geneva headquar-
ters, Rosenbaum would refer to
Casey as The Visitor"; to former
Navy secretary William Middendorf
as "The Banker"; and to James
Woods, head of the African section
of International Security Affairs at
the Pentagon, as "The Forest."
WASHINGTON POST
31 July 1984
? Casey was kept regularly in-
formed about the project's status.
Sources suggested that, because of
the pipeline's potential strategic
importance, the CIA would have
infiltrated the pipeline company if
the project ever made it off the
drawing board.
? Rosenbaum told Tsakos he
needed $50,000 for Bill Gifford, a
former Bechtel Inc. executive who,
Rosenbaum said, was about to join
another Bechtel alumnus, George
P. Shultz, at the State Department.
Tsakos later brought up the matter
in a conversation with Gifford in a
men's room at the Kennedy Center,
but Gifford reportedly said he had
never heard of Rosenbaum and
didn't know what Tsakos was talk-
ing about.
? Gifford later did work as a con-
sultant on the project, and con-
tacted Shultz, whom Tsakos met at
a State Department dinner. But
Tsakos paid Gifford only about
$10,000, and was upset because he
hadn't pushed the matter with
Shultz. Gifford, who now works for
General Public Utilities on the
Three Mile Island nuclear plant,
refused to comment.
? Rosenbaum also told Tsakos he
needed $15,000 for Woods, saying
the money would go toward the ed-
ucation of the Pentagon official's
children. Sources said Woods never
got a dime. Rosenbaum did arrange
for Tsakos to talk with Woods and
his boss, Assistant Defense Secre-
tary Francis West. Letters and re-
ports discussing details of the pro-
posed pipeline were later sent to
West and Woods.
? A senior Pentagon official con-
firmed that there had been several
meetings- with pipeline company
representatives, and that a memo
on the project was sent to Defense
Secretary Caspar W. Weinberger.
According to the official, the memo
recommended that the Pentagon
keep informed on the project and
help the pipeline company in con-
tacting other federal agencies, but
should stop short of giving official
endorsement to the plan.
The official said Rosenbaum and
Tsakos repeatedly sought Pentagon
approval for the project, and threw
out names of government officials
who supposedly backed the idea-a
standard lobbying technique known
as "bandwagoning," intended to en-
list support of other officials. -? Rosenbaum also arranged
meetings between Tsakos and State
Department, officials, including one
with Assistant Secretary Chester A.
Crocker and his deputy, Frank G.
Wisner.
? In September, 1982, Rosen-
baum introduced Tsakos to former
CIA agent Albert Jolis, now a.New
York gem importer. The three had
lunch at the Watergate, and Jolis
told Tsakos he knew Africa well and
could be helpful on the pipeline pro-
ject. He said he was on. his way to
see Casey at the CIA, and said he
would brief him on their discussion.
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 Approved For Release 2005/12/23: CIA-RDP91-00901R0004
ARTICLE APPEARED
ON PAGE
Tsakos Enlisted
Friend of Casey
In Pipeline Deal
` Since 1981, when Basil Tsakos
came to town to promote a dubious
plan to run an oil pipeline across
Central Africa from the Red Sea to
the Atlantic Ocean, the Greek arms
dealer has had occasion to ponder
the cynical. rules of the Washington
influence game.
He spent a bundle, and lived to
regret his reliance on a former in-
telligence agent who was supposed
to be paying off well-connected gov-
ernment officials. At least some of
the payoffs apparently were not
made.
My associate Corky Johnson has
been investigating the scheme for
six months. Here are some of the
highlights:
Tsakos started off by purchasing
a $500,000 condominium in the
Watergate complex and spreading
word that he had $200 million to
spend to promote the project.
As I reported last week, Tsakos
,.made a believer of Sen. Mark O.
.';Hatfield (R-Ore.), who saw the
pipeline as a way to assure access
to Middle East crude oil without
military action. Tsakos paid at least
$40,000 to Hatfield's wife, Antoi-
nette, for real estate transactions.
WASHINGTON POST
30 Wily 1984
But Tsakos had less success in
his dealings with the ex-intelligence
official, Joe Rosenbaum, a "venture
capitalist" and friend of CIA Direc-
tor William J. Casey. As evidence
that Rosenbaum had good connec-
tions, Tsakos was shown a letter
Casey wrote Rosenbaum. The two
men's friendship dated to their days
in the World War II Office of Stra-
tegic Services (OSS), a predecesgor
of the CIA.
According to court documents
and other sources, Tsakos paid Ro-
senbaum $250,000 over the next
couple of years "to pave the way,"
as Tsakos put it, for the pipeline
project. The first payment of
$100,000 was delivered Feb. 12,
1981.
That same day, Rosenbaum set
up a meeting among Tsakos, Casey,
former Navy secretary J. `William
Middendorf II and Carl Shipley,
Middendorf's attorney and a former
member of the.Republican National
Committee.
Middendorf reportedly said he
liked the pipeline idea, but couldn't
get involved because he anticipated
getting a post in the Reagan admin-
istration. He is now ambassador to
the Organization of .American
States.
Casey also responded favorably
to the plan, and vouched for Rosen-
baum as the man who could carry it
out.
Rosenbaum and Tsakos then set
up the Trans-African Pipeline Co.
with Shipley as president. Shipley
ME a
promoted the project with govern-
ment and congressional officials.
Over Christmas, 1981, Shipley and
his wife were Tsakos' guests at a
ski chalet in Gstaad, Switzerland.
"He loved it. He loved it. He kissed
my bottom," Tsakos said of Shipley,
according to court records.
But Shipley withdrew when he
learned from intelligence docu-
ments of Tsakos' criminal record in
Greece and his arms deals. Shipley
said he was never paid by Tsakos.
Rosenbaum drew up a ledger of
.influential people he supposedly had
on the pipeline payroll. One was
Fred Biebel, a deputy chairman of
the Republican National Committee
and its liaison with the White
House. The ledger listed $10,000
in payments to Biebel for "services
in connection in dealing with the
White House and State [Depart-
ment]."
Biebel told my associate that he
was never paid any money in con-
nection with the pipeline deal, and
said he was "shocked" when he
learned he was on Rosenbaum's list.
Biebel said he was paid $2,500 a
month by Rosenbaum during the
same time period, however, on a
matter involving the sale of railroad
boxcars in Connecticut.
The ledger gave Tsakos the im-
pression that he was getting a lot
for the money he was giving Rosen-
baum. In fact, Rosenbaum did get
Tsakos something for his money.
And the CIA was definitely inter-
ested.
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 0901 RO
ARpf WVM 2005/W /?,- P-RDP9I TIMES
ON PAGE A-) 27 July 1984
Split voiced by CIA,
Pentagon on buildup'..
By Jay Mallin Sr
THE WASHINGTON TIMES
The Soviet acceleration of its
? armed forces combat readiness is
causing growing concern among
U.S. military and intelligence offi-
cials.
It has also resulted in a split
within military and intelligence
:circles over the significance and
importance of the Soviet moves.
At the center of the controversy
is a confidential report by CIA
Director William Casey sent
recently to President Reagan and
top government officials, which
,details steps taken by the Soviet
Union and its East European sat-
ellites to raise the readiness level of
their military forces.
Mr. Casey made the report in the
midst of rising concern by U.S. offi-
cials over the Soviet moves, with
some officials apprehensive that
the Soviets might be setting the
stage for future military activities.
The CIA report, it has been
learned, tends to downplay the sig?
nificance of these developments.
The Defense Department yester-
day also downplayed any recent
increase in the Soviet buildup. "I
don't know of any events that have
occurred overnight, or in the last 48
hours, or in a short period of time
that give us undue concern," said
spokesman Michael Burch.
The Washington Times yester-
day carried a news article, "Russia
at high level of battle readiness:'
which provoked the following
Defense Department comment.
"The overall thrust of the (The
Washington. Times] article is con-
tained in 'Soviet Military Power'
(published by the U.S. government]
and ... the Chairman's I of the Joint
Chiefs of Staff] posture statement
and the Idefensel secretary's
annual report. I think if you go back
through those three that you'll find
most of those (buildup] indicators
mentioned"
The third edition of "Soviet Mili-
tary Power" was released in April,
the other documents in January.
Mr. Burch also said he was not
aware of any CIA document.
The CIA, as reflected in the
report sent recently to Mr. Reagan,
in Europe of Pershing II intermedi-
ate range nuclear missiles.
"We believe that the Soviets have
concluded that the danger of war is
greater than it was before the INF
[intermediate nuclear forcel
decision, that Soviet vulnerability
is greater and will grow with addi-
tional INF emplacements, and that
the reduced warning time inherent
in Pershing II has lowered Soviet
confidence in their ability to warn
of sudden attack;' Mr. Casey stated
in his report.
"These perceptions, perhaps
driven by a building defense bud-
get, new initiatives in continental
defense, improvements in force
readiness, and a potentially mas-
sive space defense program may be
propelling the U.S.S.R. to take
national readiness measures at a
deliberate pace," he said.
The CIA chief then concluded:
"These activities by the Soviet
Union] may all he prudent precau-
tions in a period'of anxiety and
uncertainty on the part of the Sovi-
ets."
Other officials watching the
Soviet moves, however, believe it is
an error to view the Soviets as
solely responding to the introduc-
tion of the Pershings. While not dis-
counting this as one factor, they
insist that prudence requires other
possibilities must also be consid-
ered.
Some defense intelligence
experts believe the Soviets have
concluded that the Russian mili-
tary could win a quick conventional
war in Europe. According to the
scenario predicated on this Soviet
doctrine, Soviet tank-led forces
would rapidly speed into Western
Europe and overrun the NATO
forces there, including tactical
nuclear installations.
NATO would then have to decide
the next step in the ladder of escala-
tion, presumably including the use
of nuclear weapons.
. With the introduction into West-
ern Europe of Pershing II missiles.
the experts believe, the Russians
decided that they must bring their
forces much closer to the threshold
of readiness if their conventional
victory doctrine is to remain valid,
and this is what they are doing.
apparently believes the Soviets are Speculation on the Soviet inten-
responding to the U.S.Apgdppi,edt For Relpais2OOR12L'28a11G1A-RDP91
? The Soviets want to he in an
improved military position vis-a-
vis the altered military situation
brought about by the introduction
of the Pershing missiles.
? The Soviets may be trying to
intimidate NATO, perhaps split it,
as they have sought to do through
their support of the European anti-
nuclear movement.
? The military steps may be part
of the army's increasing impor-
tance within the Soviet govern-
ment, a move made easier by the
inability of the Communist Party to
provide vigorous leadership at the
top.
? The Soviets may be preparing
for a major military move some-
where on their periphery. This, to
U.S. officials, is the most worrisome
possibility of all. Mentioned as pos-
sible areas into which the Soviets
might drive are West Berlin or the
Middle East oilfields. U.S. officials
say that if the Soviets are contem-
plating such a drive, they would
build up their military readiness in
Western Europe in order to deter
NATO from taking counter-action.
One U.S. official speculated:
"Say they launch a military adven-
ture somewhere, possibly in the
Mideast. Just as they do that, they.
take the wraps off all the prepara-
tions they've quietly been making
in Europe and say. 'OK, NATO, if
you try to come at us, this is what
you'll be up against.' "
That the Soviets and their allies
have been trying to conceal their
military activities has been proved
by increasing restrictions placed
on Western military attaches and
other military personnel: Pre-
viously open areas such as Lenin-
grad in the Soviet Union and
off-highway zones in East Germany
have been placed off limits to West-
ei-n military.
Officials concerned over a possi-
ble Soviet thrust somewhere see
the present electoral period in the
United Statesasa time of particular
danger. The Soviet leadership, they
say, may feel that the United States
would hesitate and perhaps not
move decisively during the election
period.
 Y
FT= CLT AP-D7
Aproved a
ease zuu5i~ ' Fi ~'T~~'~TyI~tl V O1
26 July 1984
Russia at hi g4 level
of battle readihn-ess
u
t
By Jay Mallin Sr.
-1 HE WASHINGTON TIMES
The Soviet-Union and other com-
munist countries appear to be
accelerating the upgrading of the
level of combat readiness of their
armed forces, particularly in
Europe, according to Defense
Department sources.
"The Soviets are moving into a
higher and higher state of
readiness," according to one offi-
cial. "They are increasing their
ability to begin a conventional war
from a standing start. They have
reduced their preparatory time to a
very few days," he said.
The Soviet Union's increased
'readiness was tote suhyect of a con-
fidential report sentv CIA Direc-.
to W~'illiam Casey
Reagan and other top_goPvensimdeent_
officials rer#ent1S
The report, which has triggered
concern within the administration,
detailed a substantial number of
steps, particularly during the past
few months, that have been taken to
heighten the combat readiness of
communist forces, especially in
Europe.
A significant indicator of the new
situation, according to defense ana-
lysts, is that military vehicles have
been withdrawn from their normal
use as support vehicles for the har-
vest.
Because there are insufficient
civilian vehicles to handle wheat
and other harvests, the Soviet army
has customarily provided vehicles
of its own to assist with the crops.
In 1968, however, the Soviet gov-
ernment abruptly halted this use of
of military vehicles. Shortly
afterwards, the Soviet Union
invaded Czechoslovakia.
In succeeding years the military
again helped with the harvests. in
March of this year, however, a gov-
ernmental directive again hatted
military support for'the harvest.
In view of food shortages within
the Soviet Union and the country's
partial dependence of imports, this
move was seen as a setback in a
critical economic area. The Soviet
or military - leaders clearly felt
that their military plans now had
priority over the needs of the pop-
ulation.
The stopping of the utilization of
military vehicles for cro*PP ?lMcd
been one of the steps taken to,
increase the readiness level of com-
ns
rces. Other moves that the
analysts point to are:.
? A portion of the Soviet nuclear
forces in Eastern Europe have been
placed on quick-alert. This appears
to be the first time this has 11
occurred in recent years.
? Increased numbers of elite
Soviet SPETNAZ'troops have been
brought into Hungary. and
Czechoslovakia. These Special
Forces-type soldiers are used for
sabotage, terror. and other activi-
ties behind enemy lines.
? In Hungary, a recall of an
undetermined number of reserv-
ists was begun in May of this year.
In Czechoslovakia, the term of ser-
vice for draftees with missile
experience has apparently been
extended from two to three years.
In East Germany, it has been
reported, men up to 35 years of age
have been drafted without consid-
eration of their professions or
difficulties to their families.
? The Soviets have increased the
periods during which troops are
rotated on railroads.
Such movements interfere with
the normal transportation of civil-
iaris and economic materials. On
occasion trains have brought in
more troops than they later took
out. To prevent observation of troop
movements at the Weimar freight
station in East Germany, State
Security has occupied homes in the
area.
? In a highly unusual civil
defense exercise held at Omsk in
March, 800 people walked some 40
miles. The Soviet government and
press maintain high interest in civil
defense.
? The role of the Soviet intelli-
gence agencies, the KGB and the
GRU, as well as of satellite services
has been upgraded. This has often
been done at the expense of career
diplomats in the various foreign
services who have been replaced by
or placed under intelligence per-
sonnel.
? There has been a reduction in
production of commercial aircraft
in-favor of military transport. Com-
mercial aircraft production
dropped ' significantly in' 1983.
Soviet airlines are not adding new
planes to their fleets; in fact, they
are buying back old aircraft from
? At least two tractor factories
have been converted to man-
ufacture military tanks or parts.
One of these plants, at Chelyabinsk,
is making tank chassis for the first
time since World War II.
'? The first new nuclear weapons
storage facility to be built in a dec-
ade is under construction at Kom-
somolsk.
? Floor space for ammunition
and explosive plants is being
expanded throughout the Soviet
Union. The ammunition plant at
Luebben in East Germany has been
placed on full 24-hour production
and has more than doubled its pro-
duction.
? The Soviet government is
pressing hard to have industrial
plants increase their production. At
the same time, Soviet assistance to
the economies of the satellite coun-
tries has been cut back. In
Czechoslovakia, state-owned
trucking companies have been
affected by fuel shortages, and in
Poland factories which had been
producing civilian goods report-
ed[y have been converted to the pro-
duction of military supplies for the
Soviet Union.
Against this backdrop of war-
related readiness measures, the
Soviets have continued their bellig-
erent mood against the United
States. Soviet media have contin-
ually emphasized the theme that
relations between the Soviet Union
and the United States are bad and
dangerous.
These relations have been com-
pared to those between the Soviet
Union and Nazi Germany prior to
World War II, and the Soviet press
reiterates that the Soviet Union will
not again be caught by a surprise
attack.
The Soviets and their allies have
also tried to restrict the movements
of Western military personnel so
they cannot witness communist
military moves. In Russia, military
attaches have been denied permis-
sion to travel to Leningrad this year,
an area previously open.
In Poland the surveillance of for-
eign attaches in the southwest of
the country has intensified. There
have been three recent incidents in
Poland in which NATO attaches
have been detained and then forced
to drive throughmilitary restricted
areas so photos of them violating
the restrictions could be taken.
East European rl
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24 July 1984
CIA- needs Ameri
cans supporti
in struggle a ai ~ nst Communism
By WILLIAM d: CASEY ,e'd us to acquire advanced technical''.'
echnical '. ' All this is overlaid on intense ~-
America is confronted with an systems that have brought us new demographic problems. A large and
undeclared war by the forces of information-gathering capabilities. rapidly growing percentage of
international Communism and rad- Second, we have been able to non-Slavic Soviet. people does not
ical Arab states. employ top systems analysts to .. fully identify with the Soviet state
Terrorism has reached a stage handle the flow of new informa- or the ruling elite.
where the distinction between war tion. In hiring them, we aren't Meanwhile, the CIA is achieving
and peace is often obscured. The looking for spies. We're after patri- gratifyiing results in such areas as
Soviet Union's KGB is waging con- ots, friends and supporters - .peo-our campaign to curb industrial
stant battle against us, using tech- pie who understand the endless espionage.
niques of propaganda, disinforma- difference between human freedom Through,KGB operations, Ameri-+
tion and other so-called "active and totalitarianism and, who are ca has often wound up contributing
measures," such as stealing or oth- willing to put. themselves on the indirectly to the Soviet buildup -
erwise improperly acquiring our line for the things we in America" .the accuracy.and precision of Sovi
best technology. believe in. et weapons _ which, in effect, has.
The KGB is destabilizing weak Third, we see increasing dissatis- ?_us competing with our own tech-
governments, undermining trade faction among the people of Com- _ nology. This has forced us to make
and international economies and - munist nations. Over the years; the those budget-busting appropria-
providing weapons and training to Communists. were very successful tions to come up with more ade-
insurgents who seek to overthrow in supporting guerilla :action and .quate defense forces.
non-Communist governments.. destabilizing and overthrowing ; But we now fully.recognize the
At the same time, the Soviets seek governments. They came into con- problem, and we in the CIA are do-
to build an overwhelming military trol in Ethiopia, Angola, Nicaragua ing a much better dounter-
power that can be used to intimi and of course Cuba and Vietnam. espionage job. Last year,. well over
gains. others and. force political MORE. RECENTLY, HOWEVER, _ 100 Soviet agents were arrested or
they've been encountering sub- kicked out - or defected - around
THUS WE IN THE Central Intelli- _ stintial '-unrest. People in those the world. Most of them had been
gence Agency have our work cut countries are less > willing to take engaged in stealing technology.
out for us. What do we have going Communist oppression. lying down. The . CIA's task of -fighting the
in our favor? They are more aware what the undeclared war, is an unceasing
First, the benefit of strong sup- Communist bosses are really up to. ',one. For-the nation's: sake, it is im?
port from the Administration and The people. are progressively : perative that we ..have the under=
Congress for our rebuilding pro- more fed up with the rigidity and '.standing and support of our fellow
gram. We have had considerable ineffectiveness of bureaucratic Americans.
increases in budget and other re- Communist controls and their neg-. ', William J. Casey. is director of the
sources. The.increases have allow- ative economic and social: impact. Central Intelligence Agency.
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ON FAGE__=.._L_?
WASHINGTON POST
23 July 1984
Hatfield Aided Greek mho Paid Real.
;Estate Few to Senator's wife
By Howard Kurtz
Washington Post Staff Writer
Sen. Mark 0. Hatfield (R-Ore.) helped a
Greek financier try to win government sup-
port for a proposed trans-African oil pipe-
line in 1982 and 1983 while the man was
paying Hatfield's wife; Antoinette,' $40,000
in real estate fees.
Hatfield's role in aiding Athens entrepre-
neur Basil Tsakos with the $15 billion,
2,200-mile pipeline project was reported
today by columnist Jack Anderson.
In a telephone interview from Portland,
Ore., Hatfield confirmed that he had helped
arrange meetings for Tsakos with Energy
Secretary Donald P. Hodel and Exxon Corp.
President Howard Kauffmann. Hatfield said
he also had discussed the project with De-
fense Secretary Caspar W. Weinberger and
with President Jaafar Nimeri of Sudan, an
African nation along the pipeline route.
But Hatfield said there was no connection
between ' his wife's real estate work for-
Tsakos and his support of the pipeline.
"We have maintained very separate and
distinct professional careers," Hatfield said.
"She has not been involved in my political
matters, and I really haven't been involved
in her business."
Hatfield said he has long been concerned
that the United States is "very vulnerable to
supply cutoffs in the Middle East" and faces
"the great potential for a superpower con-
frontation" over Mideast oil. He said the
pipeline could defuse the situation by allow-
ing Saudi Arabia to avoid the Strait of Hor-
muz by shipping oil across central Africa to
an Atlantic port for export to the United
States and Europe.
"That was my one and only interest in
this," said Hatfield, who chairs the Senate
Appropriations Committee, "I was not qual-
ified to make judgments on the economics
.. I had always tried to delineate my role
in the project to the aspect of promotion. I
made no presentations or recommenda-
tions."
A spokesman for Tsakos, who . is in
Greece, said Tsakos hired Hatfield's wife
for legitimate real estate services and that
"he denies anything improper in that rela-
tionship."
Approved
A series of payments by Tsakos to An-
toinette Hatfield is to be detailed in Ander-
son's column Tuesday.
Hatfield said that in early 1982, Tsakos'
wife asked his wife, a licensed real estate
broker in Washington, for help in finding an
apartment here. He said Antoinette Hat-
field helped Tsakos find a : cooperative
apartment at the Watergate, which Tsakos
bought for a reported $500,000, but that
she did not handle the transaction.
While there was no formal contract, Hat-
field said the $40,000 paid to his wife in-
cluded "a commission and finder's fee" for
locating the Watergate apartment, consult-
ing fees for supervising the apartment's
renovation and additional fees for trying to
locate investment properties for Tsakos.
The senator said the work and payments
continued through 1983.
Hatfield said that while the pipeline does
not require U.S. approval and needs no con-
gressional action on his part, the African
nations involved were seeking assurances
that U.S. authorities would not oppose it.
Hatfield said that in 1982 and 1983 he sug-
gested that Hodel and other officials "take a
look" at the plan and talk to Tsakos.
A DOE spokesman said Hodel's staff later
decided the proposal was not advanced
enough to warrant further DOE involve-
ment.
Anderson also reported today that Hat-
field continued to promote the project after
being given a report alleging that Tsakos
had a criminal record in Greece.
Carl. L. Sh ptgL a _Washi gton_attorn y
and former member of the Republican Na-
tional Committee, said in an interview that
he gave the report to Hatfield and CIA Di-
rector William J. Casey at a meeting with
them both.
Shipley, who had served as president of
Trans-Africa Pipeline Co., a firm formed to
pursue the project, said he pulled out of the
venture about two years ago after questions
were raised about Tsakos' background and
the source of his financing.
Shipley said he had obtained "an intelli-
ence report on Tsakos later confirmed
fiyour ownLutigence agencies. It showed
Anderson said that he had confirmed th
renu t independently, that it summarized
in ormation from Greek gov _pmment files
and that the CIA has -a cOQ According to
Anderson, the report said that Tsakos twice
has been sentenced to jail in Greece for
short periods on theft and misappropriation
charges and that he had engaged in "black-
market" arms sales through a Geneva com-
pany.
The spokesman for Tsakos said the finan-
cier denies the report and maintains that
"he has never been involved in anything of a
significant criminal nature in Greece." He
said Greek authorities have cited Tsakos
only for a traffic infraction and a late social-
insurance payment. The spokesman said
Tsakos _ has been involved in one or two
arms deals through the Austrian govern-
ment, but "categorically denies" participat-
ing in improper sales.
Hatfield also said that he 'confronted"
Tsakos with the allegations, but that
Tsakos said they were "absolutely untrue"
and produced a document that Tsakos said
showed that the only charge against him in
Greece was for a traffic infraction.
"I'm not ready to convict someone on the
'basis of what someone else may say," Hat-
field said.
Shipley said he withdrew from the plan in
part because Tsakos began to "back away"
from two conditions for the deal: that Amer-
ican investors retain a controlling interest
in the pipeline and that Tsakos disclose his
European backers. Shipley said that Tsakos'
financing sources remained "mysterious"
and that he "was refusing to disclose infor-
mation" when pressed by State Department
officials.
Hatfield said that he and Tsakos and their
wives see each other socially and that
Tsakos recently told him that the project is
making progress.
he had a long criminal record .... I
couldn't turn my back on those intelli,~ence'
-
"--~
r
eports.
 Approved For Release 2005/12/23 : CIA-RDP91-00901R0004 020005-0
? ran n Fr' nM,1
ARTICLE APPEARED
?; FI~CLr_.CJ5
Hatfield Helps
Arms Dealer's
Pipeline Project
'Sen. Mark 0. Hatfield (R-Ore.),
whose reelection effort this year is
supported by peace and nuclear-
freeze groups, has used his consid-
erable influence in Washington to
promote an oil pipeline project
hatched by an international arms
merchant.
Hatfield, chairman of the Appro-
priations Committee, has continued
his helpful efforts even after being
warned that the Greek munitions
dealer, Basil Tsakos, had a criminal
record. In fact, Hatfield's string-
pulling occurred at the very time
that Tsakos was trying to sell at-
tack helicopters to Iran from his
Washington office, in apparent vi-
olation of U.S. law, according to a
document obtained by my associate
Corky Johnson.
I have also- learned that other
well-known Washington figures,
including CIA Director William J.
Casey; were involved with Tsakos'
pipeline,,scheme.
. -Hatfield was introduced to
Tsakos about two years ago by Carl
Shipley, a prominent Washington
attorney and former member of the
Republican ; .National Committee.
Shipley had been working with
Tsakos and his American partner,
Joe Rosenbaum, a friend of Casey
and a former intelligence agent, on
the idea of a pipeline across Central
Africa from the Red Sea to the At-
lantic. This would allow Saudi Ara-
bia to ship its oil to the United
States without having to send it
through the Persian Gulf.
Shipley said he disengaged from
the project when he learned of
Tsakos' alleged criminal record in
Greece. Shipley gave Hatfield an
intelligence report, contained in
CIA files and marked "strictly con-
fidential," which summarized ma-
terial taken from Greek govern-
ment files.
Tsakos "was given a sentence of
imprisonment for 45 days for with-
holding and pilfering of [Greek]
government fringe benefits and
funds," the report stated. It said he
also was sentenced to jail in Athens
for the "stealing of foreign funds."
The report also accused Tsakos
of dealing in "black market" arms
through a Geneva company, and of
exporting antiques illegally. The re-
port also said Tsakos has used
'forged passports for his arms deal-
ings in Europe, Saudi Arabia,
Egypt, Argentina and other coun-
tries.
None of this, apparently, de-
terred Hatfield. The two men and
their wives socialized regularly at
private dinners in Tsakos' Water-
gate apartment and the Hatfield
home in Georgetown. In a lengthy
interview with my associate, Hat-
field said he became interested in
the arms merchant's trans-Africa
pipeline project as an alternative to
possible U.S. military action-in the
Middle East.
Hatfield confronted Tsakos with
the derogatory information. Tsakos
reportedly was furious, told Hat-
field the report was false and pro-
duced a document that showed he
had only one minor traffic violation.
Hatfield asked his attorney to
check out Tsakos, and was told that
he was "clean."
Meanwhile, Hatfield used his
clout on Tsakos' behalf. He phoned
Energy Secretary Donald P. Hodel
and asked him to give Tsakos.and
his pipeline project personal atten-
tion. The three men had dinner in
the Senate dining room,, according
to sources. Hodel saw that the pipe-
line project was given careful eval-
uation, but the Energy Department
staff didn't think it was worth pur-
suing.
Hatfield also lined up an appoint-
ment for Tsakos with Exxon Pres-
ident Howard Kauffmann in New
York. A company spokesman said
that Kauffmann met with Tsakos
only because Hatfield asked, and
that the pipeline project has not
been given serious consideration by
Exxon.
Last November, Hatfield dis-
cussed the pipeline project with the
president of Sudan, Mohammed
Gaafar Nimeiri, who was visiting
Washington. Sudan is where the
pipeline would start.
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 -COL1JMB-US LEDGER (GA)
Approved For Release 2005/1243 I A-RDP91-OO9O1 R00040
Local Former Airman Sues
To Void-Secrecy Agreement
By Phil Gast
Staff Writef
H. Glenn Hatfield of Columbus
says he was sworn to secrecy by
the federal government. Now he's
suing to end the agreement, saying
he was deceived.
His complaint in U.S. District
Court paints an intriguing sce-
nario: charges of CIA evolvement
in the developrnent'a reconnais-
sance airplane, his assigned pseu-
donym and what he terms were il-
legal flights over Soviet territory.
Hatfield filed his own complaint as
a pauper.
Furthermore. Hatfield's com-
plaint claims, the spy jet was "ob-
solete and unnecessary" and was
used "for the purpose of ? .. the en-
hancement of personal reputa-
tions ... " of the defendants.
The former Air Force airman
second class' involvement began at
Groom Lake (also sometimes re-
ferred to as Broom Lake, a south-
ern Nevada test site), the suit con-
tends. He was given a pseudonym
upon his arrival in January 1962
and did "support" work for the de-
velopment and testing of the A-11,
it says. He would not elaborate on
his duties.
The CIA is one of 14 defendants
in the suit filed last week, including
Director William Casey, several
agency employees, diplomat Rich-
ard Helms, President Reagan,
Pratt & Whitney, Lockheed Corp.,
and offices of the presidency, sec-
retary of defense and Air Force
chief of staff.
U.S. Attorney Joe Whitley in
Macon, Ga., said Thursday his of-
fice had received the suit, but
would make no comment. Spokes-
men for the two aircraft com-
panies said they had not seen the
complaint.
Prior to a mission briefing, Hat-
field was told to " 'ask no questions
- just listen, sign the form and get
out ... ' " The plane was designed
to take photos over foreign coun-
tries, the suit says.
Hatfield says he asserted "I
thought this was illegal," referring
to former President Eisenhower's
remarks in 1960 that such flights
were suspended. The Soviet Union
Approved For Release 2005/12/23
that year had shot down an Ameri-
can U-2 spy plane and its pilot.
Francis Gary Powers, was held
captive.
The project director assured
Hatfield, now 41, that the plane
wouldn't enter Russian airspace
and the airman signed a secrecy
agreement, the suit says.
His bosses' pledge was false,
Hatfield argues, and the CIA and
Air Force have denied. such inci-
dents and said they "were the re-
sult of navigational errors." Hat-
field, who lives at 5037 Eton Drive,
says he can prove the flights were
deliberate.
. Reconnaissance satellites
launched over a three-year period
made the A-11 and other aircraft
useless and cameras aboard one
satellite "clearly revealed airfield
runways and/or missile sites in the
Soviet Union and China," the com-
plaint.states.
He's asking the court to issue an
injunction prohibiting the destruc-
tion of any documents on the A-1 1,
which he says is the forerunner of
other planes, such as the high-
speed and sleek SR-71, also known
as the "Blackbird." -
A voided secrecy pact would re-
store "plaintiff's rights to freedom
of speech ..."
Hatfield wants $10 million in pu-
nitive damages from each defen-
dant and $1 million from each for
each year that his free-speech
rights have "been unlawfully in-
fringed upon."
 Approved For Release 2005/12/23: CIA-RDP91-00901R0
RADIO TV REPORTS, 1~
4701 WILLARD AVENUE, CHEVY CHASE, MARYLAND 20815 (301) 656-4I
DATE :uly 20, 1984 8':00 P.M. CITY Washington, D.C.
FRED FISKE: Among the things which I deplore is the
willingness on the part of so many people to see conspiracy be-
hind many of the dramatic events which occur these days,
especially when all the answers aren't immediately apparent.
That doesn mean that plots and conspiracies don't exist. And
Paul Hen, in his new book The Plot to Kill the Pope, re-
constructs the conspiracy behind the attempt to assassinate Pope
.John II on May 13th, 1981.
Paul Hen; was a key staff member of President Carter's
National Security Council, and a top expert on Turkey.
Very nice to have you with us.
.cam
PAUL HEN.SE-Y Thank you, Fred. Good to be here.
FISKE: You spent your career in the Foreign Service and
with the National Security Council. Is that correct?
HEN.': Yes, primarily. I spent nearly 30 years in
government by the time I retired, and that was almost four years
ago now. I spent about half of that time abroad in quite a
variety of places, but Turkey was one of the places where I spent
a considerable amount of time.
FISKE: And you are fluent in Turkish.
r_ E
HEN-{mot': Yes, I speak Turkish, and have always managed
to keep it up. I go to Turkey quite often and know the country
quite well.
Approved F~Qqr Rgl~ease 200a5/12/2l3 : CIA-RDP91-00901 RO004000~ 0005-0
FISKE: Now you develop your interest in ur ey and
 Approved For Release 2005/12/23.: CIA-RDP91-00901R0
t:,N PAGE
U.S. Skepticism Fades
" "They have
wouldn't be able
said, referring
(nethods that
agencies could
abroad.
WASHINGTON POST
13 July 1984
Aides Agree on Bulgariawrioie
In Turk's Shooting; of the Poiue
By Charles R. Babcock
and Bob Woodward
Washington Post Sta.!! Writers
Some senior administration
aides, including ranking intelligence
officials, now agree that the Bulgar-
ian secret service aided convicted
Turkish gunman Mehmet Ali Agca
in the attempted assassination of
Pope John Paul 11 in 1981, accord-
ing to well-placed sources.
Senior CIA officials, including
Director William J. Casey, were
once skeptical of the allegations of
Bulgarian involvement in the assas-
sination attempt. But they now are
said to be impressed by the evi-
dence gathered by Antonio Albano,
the Italian prosecutor who alleges
that the Bulgarians hired Agca to
kill the pope.
"It looks substantial," said one
high intelligence official. "There is
too much to be coincidence." An-
other senior administration official
with access to intelligence reports
added: "There's something to it."
This is not a unanimous view in
the administration. Some State De-
partment experts still say the Ita-
lians' evidence as to an Agca-Bul-
garian connection might be reflec-
tive of a drug smuggling operation
that Turkish nationals run from Bul-
garia.
Details from the Italian state
prosecutor's secret 77-page report
on the case were published last
month by The New York Times and
The Washington Post. The U.S.
government apparently has ob-
tained copies of the report which
was filed in'Italian court in May and
seeks a formal charge and trial of
three Bulgarians and six Turks in
the alleged plot.
No separate U.S. investigation of
the shooting has been attempted;
the officials said. The Italians have
corroborated parts of Agca ,s story
done things we
to do," one official
to investigative
U.S. intelligence
not easily use
. Some State Department officials
said they feel the Italians' evidence
establishes a substantial relation-
ship between Agca and the Bulgar-
ians. But they said it does not nec-
essarily follow that the contacts
were to set up a plot against the
pope.
Said one official, "It's fair to say
there is a good deal of smoke, but
there's no smoking gun. I think the
Italians can make a persuasive case
that there was a Bulgarian connec-
tion. Whether that was for the pur-
pose of using him [Agra] to kill the
pope, we don't know. Maybe they
were keeping him paid for some
other purpose. He came out of
shady circles."
Another intelligence official said
it also is possible that Agca was an
"enforcer in the drug trade" for the
Bulgarians. According to this rea-
soning, it would be possible that
Agca was operating alone when he
shot the pope.
The Bulgarian role in the drug
trade has been documented several
times in recent years. Last month,
John C. Lawn, the Drug Enforce-
ment Administration's acting ,dep-
uty administrator, told a House For-
eign Affairs? Committee drug task
force that DEA information "indi-
cates that the government of Bul-
garia has established a policy of en-
couraging and facilitating the traf-
ficking of narcotics through the cor-
porate veil of KINTEX," the state
trading agency.
At least two of the Turks the Ital-
ian prosecutor wants to indict,
Bekir Celenk and Omer Merson,
have been listed as narcotics smug-
In addition, Abuzer Ugurlu, a
Turk mentioned in the prosecutor's
report as having supplied Agca with
a false passport, is listed by DEA as
an international drug kingpin. He is
now on trial in Turkey on smuggl-
ing charges.
And a May, 1984, DEA report on
Bulgaria's role in the international
drug trade identifies the Hotel Vi-
tosha in Sofia, Bulgaria, where Agca
stayed the summer of 1980, as a
meeting place for narcotics traffick-
ers supported by the Bulgarians.
There is no evidence in DEA files
that Agca was in the drug trade,
sources said.
U.S. officials and others following
the case said that the Italians ap-
parently do not have a wiretap, a
witness or other evidence to show
that the connections between Agca
and the Bulgarians were expressly
for the purpose of shooting the
pope.
Nonetheless, U.S. officials seem
to agree than the Italians have
amassed an extensive circumstan-
tial case based on Agca's move-
ments, meetings, phone calls and
financial transactions.
A public trial that would directly
accuse Bulgarians in the assassina-
tion attempt would be explosive
because of the widely held view in
intelligence circles that the Bulgar-
ian intelligence service answers to
the Soviet Union.
Asked if Bulgarian sponsorship of
Agca's actions would mean Soviet
involvement as well, one senior
U.S. official said recently, "I've
been led to believe that the Bulgar-
ian secret service is controlled by
the KGB," the Soviet secret police.
Another intelligence official said,
however, that there are many mat-
ters in Bulgarian intelligence that
the KGB "doesn't know diddly squat
about."
about Bulgari iyt pbq.lq 'cease 205iblii!i to?UA? P91-00901800040 GO CO;omment on the issue
phone calls, inc using some from
phone booths.
 ARTICLE APPEARPproved For Relde 70MUIMES CIA-RDP91-00901 R00040002
ON PAGE -,,i g 12 July 198,+
S50 Years of Tending
the World's Repair
By KENNETH B. NOBLE Seven past -,Chairmen were among Estimate of Savings
several thousand S.E.C. alumnni, se- Not surprisingly. Administration
spKW to The Pisa York Times
WASHINGTON, July 11 - Fifty scholars who gathered here the other light Last August, the? vice Presi-
} years ago, in the first days of the day to celebrate the 50th anniversary . dent's Task Force on Regulatory Re-
agency that was to remold Wall Arthur Levitt Jr., chairman of the lief said in its final report that S.E.C.
Street, the nation's securities mar- American Stock Exchange, said at moves to cut red tape "`will save pub-
;'"kets were moribund and deep in the the banquet, "The S.E.C. stands as a lie corporations and their sharehold-
grip of the Great Depression. beacon among Washington agencies $350 million per year, with-
Manipulation, fraud and other in terms of protecting the public in- out compromising full disclosure."'
questionable practices by market and that.
corporate insider3 had been preva- One of the former chairmen Wil- Mr. Shad, by most accounts, has
lent and they had involved enormous hats J. iffftsft, ndhv Directbf o C also kept his promise that the agency
losses to the public. tral Intelli enced the S.E.C. had would comedown an those accused of
"We knew the world needed fixing, illegal insider trading "with hobnail
wiw
an 'enormous count on boots.,, In his tenure, the commis-
and we were part of fixing it," re-
Freeman who fresh to the "bounce the American 0=- sion's enforcement divi-
called Milton V
.
, , am is demons ra sion has brought insider
out of Columbia Law School, was one
w 'chest
of the first to join the new agency, the a rest o e world envies. trading ' charges against
Securities and Exchange Commis- These days, however, the is 99 people, representing
sion, which was intended to prevent a watching a stock market that is almost a third of all such
recurrence of the trading practices vastly different from its IBM's coup- cases brought in the
that helped foster the great stock terpart. For one thing, the stock mar- agency's history.
market crash of 1929. ket's power over the economy has di- These cases are nota-
'It Was a Very Exciting Time' Street was considered the epicenter the volume, but also be-
President Roosevelt chose as the
commission's first chairman Joseph
P. Kennedy, who only shortly before
had been cited by the Senate Banking
Committee for participating in stock
manipulation. Jerome Frank, a later
chairman, said the Kennedy appoint-
ment was "like setting a wolf to
guard a flock of sheep." However, by
most accounts, Mr. Kennedy proved
to be a successful adminstrator. An-
other among the commission's early
chairmen was the legal luminary Wil-
liam 0. Douglas, and his chief assist-
ant was Abe Fortas. Both later be-
came Justices of the Supreme Court.
"The whole basis of the thing," said
Mr. Freeman, who is now a promi-
nent lawyer with the Washington firm
of Arnold & Porter, "was that uncon-
trolled securities sales and markets
had resulted in a disastrous failure,
and it was time to do something about
It."
"It was a very exciting time," he
added. "The world was being made
new.,,
Now, 50 years later, the Securities
Acts of 1933 and 1934, both key pieces
of New Deal legislation, still provide
the framework for regulation of the
nation's securities market. And the
S.E.C., created to enforce those laWs,
is widely regarded as perhaps the
country's finest independent regula-
tory agency. .
of the world's free market. cause, in many cases, of
In addition, the targets of the the prominence of the defendants- in
S.E.C.'s scrutiny are not only the big January, for example, the S.E.C.
Wall street brokers and bankers, but charged former Deputy Defense Sec-
increasingly those individual inves- retary Paul Thayer with passing on
tors who hope to make a quick profit confidential information obtained
by trading on the basis of illegal in- while he was chairman of LTV Corpo-
sider information. ration to friends who then traded on
Still, said John S. R. Shad, the 61-
year-old former vice chairman of
E. F. Hutton who became the com-
mission's 22d chairman in 1981,
"We're got the broadest, deepest and
best markets the world has ever
seen."
In the view of some, the commis-
sion is no longer the vigorous market
watchdog it once was. Critics contend
that the agency, under the leadership
of Mr. Shad, has been too zealous in
embracing the Reagan Administra-
tion's financial deregulation pro-
grain-
Among other things, the commis-
sion has eased the requirements for
most companies on data they must
disclose to the agency and to share-
holders; made it easier, especially
it.
More recently, R. Foster Winans, a
Wall Street Journal reporter and four
others were charged with illegally
profiting from stock trading based on
market-sensitive information leaked
by Mr. Winans.
Meantime, voices from other quar-
ters are more critical of Mr. Shad's
policies and performance. They
argue that the commission has been
lax in carrying out the agency's man-
date to provide shareholders with
more information about companies
and a greater voice in their affairs.
Michael Unger, president of the
North American Securities Adminis-
trators Association, a group of state
securities regulators, said. "If you're
for small companies, to sell securi-
ties; ties; and reduced the minimum capi-
tal that brokerage firms must main-
tain as a cushion. This last action
alone, agency officials say, has freed
$500 million for other uses.
Such decisions have won praise
from many on Wall Street, where the
agency's disclosure requirements
were once ritually condemned as a
burden and a discouragement to capi-
tal formation.
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 e2.
Approved For Release 2005/12/23 CIA-RDP91-00901 R000400020005-0
talkh g about Setting government off JOSEPH P KENNEDY
UM seuunucn UMUOUr ? uo , "s .
be 's been succcessful. But I dn't , 1 11 11934-35
think that always inures to the benefit
of investors. There will be some peo-
ple who will take advantage of the
loosening of regulations, and there
will be a significant number of people
harmed as a result."
Perhaps a more genermrs vlew is
that of Joel Seligman, a George WILLIAM O. DOUGLAS
Washington University law professor a kY `. ' 1937-39
who has been a persistent critic of
Mr. Shad's deregulatory efforts.
"In the insider trading area," Mr.
Seligman said, "and in the S.E.C.'s
general program in the tender offer
area, there clearly seems to be a ma-
turing and moderating of the com-
mission within the last two years or
so."
"He's still a very conservative
chairman," Mr. Seligman added,
"but he's grown up in the job, and
that's to the good."
Approved For Release 2005/12/23 : CIA-RDP91-00901 R000400020005-0
 Approved For Release 200544DP91-00901R000
EMPLOYEE
BULLETIN
DISCLOSURE OF NATIONAL SECURITY INFORMATION
13 July 1984
1. In recent weeks I have had to take severe action agaipst several
senior persons in the Agency and in industry for indiscretions in the handling
of classified material. Actions in these cases have included suspension or
revocation of security clearances, termination of employment, and referral to
the Department of Justice for legal action.
2. I want to reemphasize the seriousness of the unauthorized disclosure
of classified national security information. I also want to stress the dangers
of idle gossip and'the confirmation of speculation about classified material with
unauthorized persons.
3. Recently, a prominent journalist claimed that Agency employees passed
classified information to him. I would like to believe this is not true, and
urge all employees to abide by their security obligations.
DISTRIBUTION: ALL EMPLOYEES (1-6)
ALL PORTIONS CONFIDENTIAL
CONFIDENTIAL
Approved For Release 2005/12/23 : CIA-RDP91-00901R~-A.A.-d80020005-0
 Approved For Release 2005/12/23 : CIA-RDP91-00901
ARTICLE APPS D
ON PAGE
at. . 'Soviets
th . ucu yVU reaa
em again. Then you read them a
i
ga
n And
. then it dawns on you that re ardl
f
WASHINGTON TIMES
11 July 1984
Bulgarian plot to murder his holiness, are: Ital-
ian State Prosecutor Antonio Albano, who has
assembled 25,000 pages of evidence; journalist
Claire Sterling; NBC reporter Marvin Kalb;
Soviet disinformation specialist Arnaud de
Borchgrave; and Paul Henze, author of "The
Plot To Kill The Pope" (Charles Scribner's Sorr,
.1983). ":.
In his report, Mr.?Albano writes: "The But
garian secret services had a specific political
interest in killing Pope John Paul II. The impos-
ing rise of Solid
i
i
ar
ty
n Poland i thu
ne smmer.:
of 1980 and consequent social convulsions con-
--
,a
-A LsL
..states of Eastern Europe. This was perceived as
a mortal danger- t
.t;_._-_ _,?.. . . _
o
how many ess o
5 times you read this quote it still does
not m n Lre co-
Take, for example, a recent statementiade
by Secretary of State George P. Shult -before a
conference here sponsored by theathan
Institute, a group with headquarters in Jerusa-
lem that is named after Jonathan Netanyahu
who led and died in the Israeli hostage rescue.
missio
E
n at
ntebbe) Sekinb
.pag aout the plot to:
murder the pop
nor.. S
. ,
e
hutt
authorities unravel the answer` to one of the
bloc involvement in th'e' attempt to assassinate
the
o
e?"
p
p
Huh?
Now; it's one thing to say there are u
nan
swered questions about the role of the Soviet
Union in thi
s
the crime of this century. But it defies
io
rat
nal
analysis to try and figure out why our secretary
of state still speaks :o:.._ ___ .
In fact, the attitude of the entire R
n
eaga
administration toward this shootin
-f
g
rom
day'one when it occurred _ defie
s
-
a this
t
e
d
-
a
t
mpte
assassi
ns
tion happened, various administration officials
called background - have thrown cold water on
the idea that the Soviets were involved in this
l_
hair,.,.
s p
t
At the-end of last month, the New Yo
k P
s
o
t
r
reported that CIA Director William Casey had
removed his
--
++~ ,Ut tU Kill th
.e
DOpe." Senior U S intelligence and
e
congr
s
sional sources are, reported as sayin that ,Mr.
Ca,ey_derided to o ths after
re art fro
m
lalligar~rsecuto_ rs teat eta
evidence of a
8ulian Crvnnot,'
n to this assaite
ssna tl i
all th
h
,
is lout-dragging since.
there
is so much overwhelmingly convincing '
evidence that point
h_ L,_
s t
Sofia? ,,,,,, and tneir puppets in
Amon those who have per si
in great detail connectPirh1 rea e
re 1
Moody finger
mostly due to the fervid religious faith
f t
o
he
population - sustained and helped above all by
the first Polish pope in history= the Polish
rebellion` might be greatly weakened and frag-
mented [by his) physical elimination.
"It is easy to see what really happened. In
some secret place, where every secret is
wrapped in another secret, some political fig-
ure of great power took note of this grave
situation and, mindful of the vital needs of the
Ea
t
bl
c
s
ern
o
decidd i
,et was necessary to kill
Pope Wojtyla."
In his bo
k P
o
aul Henze cnldeh "
,ocus tathis-
torical, inferential. circumstantial d
l
an so
id
factual evidence all point in the same direction
Roman Catholic Church, and h
i
e
s a tireless
advocate of freedom of the hum'
m
an etng to
choose his course in life. Says Air. Henze:
an spirit and
the,rightof the individual hu
b
GUU?,ur the
Soviet rulers. The problem is n
ot only that it
undermines their control over Pola
d U
n
lti
. matelyit threatens their power over their own
nennie Cr l:_,_ ___
gi
h
a out t
e popes
divisions' has come back to h
n
t his succes
sors ' au
-4z~ WIT_
as regards the plot to, murder the pope the aila1
not: Was there Soviet or Soviet-bloc.-
} istration officials seem t -?t neagan aamin.
o believe this?
ea ed a distinct picture of a Soviet.
 ARTICLE APPEARED
ON PAGE 6rD ed For Release 20 'July 1 984 ?1-00901R
By Jeremiah O'Leary
THE WASHINGTON TIMES
President. Reagan has issued a
formal directive ordering the Pen-
tagon to resume military and naval
exercises in Honduras and off the
coasts of .Central Atnertcain view~_
of the continuing military' buildup
,in Nicaragua, sustained Sandinista]
support for the.rebelsinELSalvac
dor and the expected' rebel` offeii=?
sive there in September, The
Washington Times has Joarned
"We don't want our allies in Ceti.
--teal America to start jumping ship..
because of erroneous reports that
the U.S. is seeking-a direct accom-
modation with Managua,". said an,
informed - administration- .source. `?
"The Nicaraguans would love to
have a separate deal because it
would weaken us with ourfriends in
Central America.-"; He
acknowledged that the other Cen-
tral Americans are shaky because
of the perception that the United
States may not stick to the course-
charted by President Reagan... .
There may be some dis_
agreement at lower.. staff levels but
there is no disagreement among top,
"policy levels - that it would' lse- a
major mistake to negotiate. a sep-
arate deal `witFi..-Nicaragua "_an;
administration official said yester-
day. The president issued a three,
apart directive after a meeting of all
senior security officials` June 26 at-
which Special Ambassador Barry:,
ShIaudemanreported on the state
iof affairs.1n.-the Central' merican
arena. All the presi'dent's, senior
advisers, in cluding='Secretarv ofi
State George P. Shultz, Defense Sec=:
retarv
{ asoer V3? i~ ein erg~er~ CIAl
child-WL 11iai~.LCase;;_-national
security advisor Robert C. McFar
lane n3-U.N.Ambassador Jeane
Kirkpatrick, agreed withPresident .a
Reagan on his directive
The president ordered f
+ Continued dialogue with.
`.raguawithinthe`frameiathk of the
Contadora group- and. adhering- too
the, four basic--U.S.- gbjectives
regarding the Sandinista:regime..
* All-out support by .all agencies
with troop exercises
for achieving : congressional and
public support for the administra-
.tion's ,proposals for funding the
Jackson Plan for Central America
and specifically the $21 million in
funds for. the anti-Sandinista con-.
;tras and the rema}Fii;g$116 million
thepresident wants ;Congress. to
appropriateInthe;regular supple
mental bill, for aid to El Salvador;
The president already has signed
the $62 million urgent supplemen-
tal legislation for support of El Sal-
vador. T ,.?.
The Pentagon a week ago reacted
to this directive by ordering a
resumption of low-level military
and naval exercises to begin before
the expected Salvadoran rebel
offensive. This represents a major
policy change and senior officials
said the resumption of U.S. exer-
cises was designed to demonstrate
the firm American commitment to
its friends and allies in the region.
Informed sources said the exer-
cises will be 'small-unit maneuvers
of short duration, stepped-up secu7
rity assistance to the allies in Cetitral America, increased
intelligence efforts about the Nica-.
raguan military buildup and a naval
presence offshore that officials
would not discuss in detail. .
The primary reasons for this
high-level decision were the
expected fall offensive by the Marx-
ist forces in El Salvador, the appre-
hension in Costa Rica, which has no
army, and the nervousness in Hon-
duras where there are 15,000 anti-
Sandinistas whose future financing'
is in the hands of Congress when
members return to Washington
July 23.
In issuing the directive, Mr. Rea-'.'
gan emphasized that U.S. objet; ?'
Jives remain-,the same. They are-
that.Nicaragua must cease export=
ing arms and advisers to the Salva=
doran insurgents; that Nicaragua
must reduce the_size- of?_its_
atively huge military machine; that
Nicaragua must cut its ties with the
Soviet Union and Cuba; and that
Nicaragua must adhere to its prom-
ise to the Organization of American.
States to conduct free elections.
Despite reports of a bitter battle
within the administration about
make a separate deal with Nicara
gua giving the Sandinistas a free
hand internally in return for an
agreement to cease helping the left-
ists in El Salvador, there is a solid':'
front against such an accommoda-
tion among the president -and all
senior officials;;
Members of Congress were :
given a 35-page, classified report; .
recently which states that Nicara
guan aid to the Salvadoran rebels
continues unabated. The report-
states that-the Nicaraguans have
completed the . longest runway in
Central America at Punta Huete as
well as lengthened the airfields at -
Bluefields and Puerto Cabezas; .
that Bulgarian ships are bringing a
continous flow of weapons to Nica-
ragua including 120 Soviet tanks,
some of them amphibious, 120
armored vehicles, 120 Soviet howit-
zers, 24 multiple rocket launchers
made in the U.S.S.R., 1,000 trucks
and jeeps and 10 Soviet helicopters.
Nicaragua also has been given
six heavy ferry boats for river
crossings. The current estimate'of
intelligence sources is that there
are in Nicaragua 3,000 Cuban civil-
-ians; 200 Soviet officials and hun-
dreds of military and civilian
advisers from eastern European
countries, Libya, North Korea and
the Palestine Liberation Organiza-
tion. The Sandinista strategy,
according to the report, continues
to be to exercise command, control
and training for the Salvadoran reb-
:els and to foment violence in Costa.
Rica ?-'. i n,.
The administration`is -now look-
ing for a means of securing con-
gressional authority for the $21
million for the contras, perhaps by
attaching it to another appropri-
ations bill, and for the rest of the
military assistance funds for the
;government of: President Jose.
Napoleon Duarte. ,
"If we don't get the whole pack-
age, the Jackson Plan [developed by
the Kissinger Commissions for ;
..Central America will windup in the
dead letter office," an administra-
tion official said yesterday. The
White. House expects Senate
approval but believes that the Cen-
tral American legislation is in trou-
ble -in the Democrat-dominated.
Approved For Release 2005/12/23 : CIA=RDP91-00901 R0M'b~`1(MSe6entattves._
Continued
 ARTICLE APWOW&~bd For Releasff /Vb3 P RXJP 01 R
ON PAGE
8 July 1984
n COLD WP&OR'S ruffF6QE
WTH A WOR.U HE SEES
flu. OF D1PES, DECEPTiOCd
DSfff3FORMATION..
By EmsEy YoPie
RED
rnaud de Borchgrave- -still 1 The story is one of classic decline
remembers clearly a lunch , and fall barbarians (the Soviets)
he had 33 years ago with a from without and decay (a media
man he says was a KGB honeycombed with Marxist dupes)
agent: de Borchgrave was from within. The' allegations of this
only 24 years old at the time plot have not gone unnoticed by some
and Paris bureau chief of . in the Reagan administration. At a
Newsweek magazine when a Washington book
t
f
M
i
par
y
or
on
mbo
Soviet diplomat called with last September, administration fig-
i
i
i
"I
an
nv
tat
on.
n a very ures who showed up included presi-
quiet under-stated way, he dential counselor Edwin Meese
At-
,
kept telling me I was al- torney General William French
ready one of the world's most impor- Smith, USIA director Charles Wick
tant journalists . . . but I could be- and FBI director William Webster.
come the world's most famous jour- Because he has spent more than
nalist if only I could develop a social. three decades as a reporter, The
conscience. Spike and Monimbo aren't seen only
"I said, 'How can I go about that?' as novels by de Borchgrave fans, but
He said, 'By denouncing the evils of as thinly disguised accounts of what
capitalism and the evils of theCIA~; he thinks goes on in the media gulag.
and we will help you.'" And because he spent'so many years
De Borchgrave rejected that offer of as a reporter, the vision of the world
orchestrated success made more than presented in the novels has many for-
three decades ago. Today, he is con mer colleagues scratching their heads
vinced that such recruiting of journal- about how he came to believe such a
fists by the KGB didn't stop with.him. Proposition.
He believes there are witting and un- ~- -
THE B
witting communist dupes within news-
ELGIAN-BORN de
papers, radio and television who Borchgrave, 57, is small, balding and
spread Soviet lies--which de Borch- meticulously groomed. He has an ac-
grave calls "disinformation." Such cent of the kind once described as con- .
journalists, he says, "spike"- discard
-stories critical of the Soviets.
In two bestselling novels, The . De Borchgrave (pronounced: duh'
Spike (1980) and Monimbo (1983), de Bore-grahv) is one of those people
Borchgrave and coauthor Robert about whom stories are told- After a
Moss lay out the scenario of this un- tough day covering a war zone, for-
derground war, one battled with such eign correspondents at times would
subtlety by the enemy that most of us sit around a bar and talk about the ,
don't even know it's going on. Borchgravian persona. Peter Brae-
strup, a former foreign correspondent ;
and now editor of The Wilson Quar- !
terly, remembers that de Borchgrave
wrote a good first-person account in
1966 of a Marine battalion's battle in
Vietnam:: "Arnaud came back to Sai-
gon and he had a little arm wound..
He had a bandage on that arm a long
time."
For de Borch?grave storytellers,
there has been a legendary tan, leg-
endary self-promotion and legendary
access to world leaders.
De Borchggrave is no longer a for-
eign correspondent, but the persona
remains. He still has the tan, al-
though at 57 it has permanently mot-
tled his scalp.
He is still good at making it clear
he moves in important circles. In the
course of a. 10-minute conversation,.
he mentions the names of places in
seven countries: ` Fm on my way to
South Africa, I've got a speech in
Paris on the way back I just had a
kidney stone removed in LA ..."
He brings up the . names of eight
-VIPs: "(John] Vorster was the only
head of state who ever denied any-
thing I wrote. Be banned me for life
from South Africa. When I heard
that, I said, My life or his?' Sadat
and Hussein had some complaints,
but they couldn't deny it. Now, of
course, Pm welcome in South Africa
I have to go to a reception to-
night for Chuck Percy at the French
Embassy, which is right down the
block ..."
Recently he had a lunch with Rich-
ard Nixon, and attended a small din-
ner party at Clare Boothe Luce's
Approved For Release 2005/12/23 CIA-RDP91-00901 R000400020005-0 Co, ,
1. 170ay
tinental.? he's from somewhere else,
but nothing betrays exactly where.
 ON PAGE 10, sec. 6 8 July 1984
By George de Lama .
and more of a personal interest
ever since he had to be briefed for
his trip to Managua," said one offi-
cial.
HARD-LINERS in the National
Security un the Pentagon and
CIA are re oFf`ed urI in tougher
military pressure on the an in -
tas, per aps hoping to rovoke Nic-
ara a into a m itary move or
majo' rplitical bIunderthat could
provide an excuse or full-scale U.S.
miIicaryanterv enti~on.
"There are some people in ~o-
vernment who really want nothing
short of us taking the Sandinistas
out," said a worried State Depart-
ment official.
? WASHINGTON-Two months ago,
President Reagan went on national
television to dramatize what he
called an urgent situation in El
Salvador.
Government troops were running
out of ammunition, he said. Some
soldiers were said to have but one
clip for their rifles.
The point, said Reagan, was that
without congressional funding, El
Salvador was on the brink of falling
apart, an easy prey for Marxist
guerrillas. After that, he said,
Americans would face "the spectre
of 100 million people from the
Panama Canal to Mexico" falling
under Communist rule.
Reagan won his funding battle.
And under the new leadership of
moderate President Jose Napoleon
Duarte, El Salvador has not fallen
apart.
That news has been lost
somewhere in the shuffle as the
Reagan administration once again
turns to yet another crisis, the lat-
est in a series of crucial testing
grounds in Central America.
. QUIETLY, WITHOUT fanfare but
with mounting concern, the State.
Department, CIA and the Pentagon
are focusing once again on Nicara-
gua, the fulcrum of a regional
triangle of conflict.
And unlike El Salvador, where
the immediate security situation
and official policy are in some re-
spects looking up, a convergence of
circumstances and new develop-
ments are threatening a dismal
failure for almost four years of
Reagan policy, U.S. officials warn.
:."The focus has certainly shifted
shortages of basic
to Nicaragua again," said one sen- goods and a
for State Department official. "El
Salvador is once again a sideshow.
And all the signs are looking worse
and worse in Nicaragua."
The problem of how to deal with
Nicaragua's leftist Sandinista go-
vernment, a question that has bede-
viled Washington since Democrat
Jimmy Carter was in the White
House, is vying for attention with
such policy questions as the Soviet
Union and the Middle East, sources
in the administration say.
Secretary of State George Shultz,
fresh from a disappointing diplo-
matic. foray to Nicaragua last
month, is heavily involved in daily
deliberations. ` He's taken more
The hard-liners- include. Deputy
Defense- Secretariesred.kle and
Nestor_Sanchez. __Gern_Paul_Gor-
_ma.n,commander, of.the U.$. South-
.
ern_Commandin Panama; CIA Di-
rector -'A'illiam Casey; and National
Secur_ity_=Tstaffer -Constantine
lated-..at. the State Department,
Part of the hard-liners' frustra-
tion may also stem from a disheart-
ening set of facts facing administra-
tion policymakers. After three
years of an openly hostile policy
towards the Sandinistas:
?Qne CIAacked guerrilla force,
the Nicaraguan Democratic Force
I [FDN), has substantially failed to
shake the Sandinistas militarily.
The FDN, operating from bases
in Honduras, has penetrated deep'
into Nicaragua and at times wreak-
ed havoc in remote rural areas. It
has also helped squeeze the crippled
booming black market.
The shortages have; helped fuel
discontent, but the widespread
grumbling has not translated into
the anti-Sandinista fervor that CIA
analysts had hoped would rock the
regime.
eThe other major anti-Sandinista
guerrilla force, the Costa Rica-
based Revolutionary Democratic
Alliance [ARDE], has just under-
gone a demoralizing period that in
cluded a near-successful assassina-
tion attempt on its leader, Eden
Pastora, and a major Sandinista
offensive that has dislbd~ed it from
some of its key bases inside Nicara-
gua
Continued
Approved For Release 2005/12/23 :' CIA-RDP91-00901 R000400020005-0
Pastora, the famed "Commander
Zero" who as a Sandinista guerrilla
helped lead the fight to overthrow
late dictator Anastasio Somoza, was
badly wounded in a May 31 bom-
bing attemppt that killed three for-
eign journalists and several guerril-
las.
Hobbling on a cane, Pastora
emerged here last week to sppeeak
instead of peace with the Sandinis-
tas, promising . to de-mobilize his
8,000-man rebel force if- the
Managua regime makes substantial
political concessions to guarantee a
free election this November.
The Sandinista concessions, ad-
ministration analysts say, are not
likely. But if Pastora must resume
his fight, he will find that Sandinis-
ta troops have moved his men out
of several of their key bases of
operation within Nicaragua.
The ARDE forces reportedly suf-
fered a sound drubbing,' in early
June, just after the bombing at-
tempt on Pastora. Their ability to
regroup soon is questionable, par-
ticularly with their charismatic
leader still wounded and unlikely to
rejoin the fight soon,
"They're the only movement, in
Central America built around one
guy's mystique," said a U.S. official
in the region. "Without Pastora
around, it will be hard for them to
do' much."
 AR11 CLAp :d Release 2005/12/23': CIA-RDP91-00901 R
ON PAGE All WASHINGTON POST
8 July 1984
ADMINISTRATION SPLIT
Pursuit of U.S.-Sandinista Pac is ii-e-o-a
By John M. Goshko
and Joanne Omang
Washington Post Staff Wrltera
A proposal that the United
States seek direct accommoda??
tion with the leftist government
of-Nicaragua reportedly has pro-
duced sharp divisions. within the
highest levels of the administra-
tion.
At issue, according to the re-
ports, is whether the Reagan ad-
ministration should seek a direct
U.S.-Nicaraguan agreement that
would end American pressure on
the Sandinista government and
allow it a free hand in internal
policies in exchange for Nicara-
gua's ceasing aid to leftist guer-
rillas in El Salvador. -
The alleged dispute has serious
implications for President Rea-
gan's reelection efforts as well-as
for overall U.S. foreign policy.:,
The debate has been held so
closely that while some senior
officials say it is a bitter battle
over Central America policy, oth-
ers deny that major changes are
contemplated. The issue is so
sensitive that some senior offi-
cials who initially confirmed that
,there are disagreements later
contacted Washington Post :re-
porters to . minimize. their earlier
remarks.
At the center of the controver-
sy is the negotiating channel jre-
cently opened with Nicaragua by
U.S. special envoy Harry W.
Shlaudeman following _ the, visit to Nicaragua by Sec-
retary of State George P., Shultz
on June I.
In recent days, at least one
highly placed administration of-
ficial has charged privately that
Shultz is leaning toward an ac-
commodation with the Sandinistas
despite fierce opposition to the
idea from Defense Secretary Cas-
par W. Weinberger CIA Director
4
lane and U.N. Ambassador Jeane J.
Kirkpatrick.
Other senior officials, represent-
ing- several government agencies,
said that Shultz's trip to Managua
and the. decision to have 'Shlaude-
-man begin talks with Nicaraguan
Vice Foreign Minister Victor Hugo
Tinoco was strongly opposed by the
administration's more hard-line fac-
tions.
Some of these officials also said
that the failure of U.S. efforts to
produce clear-cut results in Central
America is causing dissent within
the administration.
But, several senior officials who
spoke on the condition that they not
be identified said it is not clear how
high the dissent has reached within
the administration or that there is
evidence of Shultz advocating a re-
versal of existing policy.
. Some said reports that Shultz
favors trying to make a deal with
Nicaragua might represent a "pre-
emptive strike" by those who are
suspicious of the Shlaudeman mis-
sion and who want to kill it or en-
sure that it cannot be used in ways
that. they' consider detrimental to-
U.S. interests.
A direct U.S.-Nicaraguan accom-
modation would bypass the so-
called Contadora process that has
involved several Latin American
countries in trying to work out a
comprehensive peace agreement
subscribed. to by all countries in
Central America. Current U.S. pol-
icy is to support anti-Sandinista
"contra" rebels and to isolate Nic-
aragua by strengthening El Sal-
vador, Honduras and Costa' Rica
militarily and economicaliv.
The United States has-been de-
manding that Nicaragua permit an
internal system of pluralistic de-
mocracy; sever its ties to Cuba and
the Soviet Union; halt its aid to the
Salvadoran rebels and other leftist
insurgency 'movements in the .re-
gion, and substantially reduce its
large military establishment.
These points would be covered
under a comprehensive regional
agreement that the Contadora ne-
gotiations are trying to achieve. For
that reason, the United States has
been prodding Nicaragua toward
participating in Contadora fully and
in good faith.
The administration has said that
Shlaudeman's function is to give the
flagging tontadora process "a shot
in the arm."
Of the four U.S. aims, the issue
of "internal democratization" has
been regarded as especially impor-
tant by policy-makers advocating a
tough approach.
One senior official acknowledged i
that administration dissent centers
on that question.
The official said "there are some
in the Department of State who
have the view" that Shlaudeman
should pursue an agreement dealing
solely with Nicaragua's activities
outside its borders. According to
this view, Shlaudeman should offer
to end U.S. support for the "con-
tras" and other incentives like in-
ternational funding for Nicaragua's
hard-pressed economy in exchange
for an end to Nicaragua's support
for revolutionaries in El Salvador
and elsewhere.
William Casey
J. , national ecurit
affairs a vfser Robert CARP 9r'ed For Release 2005/12/23 CIA-RDP91-00901 R000400020005-0
 AKfI APPEARED HTJMAN EVENTS
ON PAGE nnroved For Release 20ti5/4.2i23 5 CAA-RDP91 -
Media Intervene
Sld &-1-7W
In "Contras" Debate.
During the. week immediately preceding the
critical Senate vote to shelve President Reagan's re--
quest for S21 million in aid to the "Contras" in
Nicaragua, the media focused a curious amount of
attention on the charges leveled `by former CIA
analyst David C. MacMichael that the Administra-
tion has "no proof" ,that -the Sandinistas are;
.funnelling arms,. ammunitIon aid direction to_th.e_
ill i Ell
guerrasn Savador
Leading the pack was the New York .Tmes,
which promoted MacMichaels a man "in from the cold and hot for the truth." In the Times arti-
cle,. MacMichael accused the Administration of .
fabricating Sandinista- complicity to- bolster 'sup
port, for' its anti-Communist posture -in Central
America.
"The whole picture that the Administration has
presented of Salvadoran insurgent operations be-
ing planned, directed and supplied from Nicaragua
.is.simply..not. true,''.MacMichacl.said.._`_`.. The-_
Administration and the CIA have systematically
misrepresented Nicaraguan involvement in the sup-
ply of arms to Salvadoran guerrillas to justify its
efforts to overthrow the Nicaragua Government."
Within two days of the Times article, two of the
three major networks had MacMichael on the air,
and the Washington Post, following suit, featured
his charges on the front page.
Both CIA director William Casey and Secretary.
of State George Shultz immediately dismissed
MacMichael's charges, . with Shultz telling '50
reporters over a two-hour lunch that the "evidence
is everywhere" on the Sandinistas. But the Post,
finding it nowhere, bolstered MacMichael's claim,
insisting:
"Neither Shultz nor Casey provided
evidence to refute MacMichael's challenge.-
The State Department, which has been asked
repeatedly'to make public its evidence that fl-
licit arms are flowing,'has not provided such,
information."
John M. Goshko, a Post reporter who co-wrote
the article, told HUMAN EVENTS that the Admin-
istration's assertions "have been --a,continuing
source of controversy since President Reagan took
,
p
o
e
office, and the AdA li? 3 rFb ?4La C'0 %12/23 ?. CWR(0P8rlr 09 ?f)0~ '
believe these c arges or to?those viho say they want
to see proof to document it."
Goshko said;;."Our ..position is, given .past
experience going back to. the Vietnam War, that
you don't necessarily take things on faith.".If the.
Administration refuses to make public CI.4 'docu-
ment.ation, Goshko said,,"then they have to. face:
the consequences of the fact that.. a large body-of
people in this country-do not believe their conten-
tions and 'are not convinced."
Goshko's position _is'untenable, however" -..Our.
intelligence community-precisely because :itt
does'n't want to reveal to.theenemy the sources'we
rely: on and our methods of obtainuig infor-:
oration-must not be required to. "go public with
its evidence: . ? -
The intelligence community is not a judge unto`
itself, moreover. It must convince Congress' -..
through both the Senate and House intelligence
panels - that it possesses convincing' evidence.
And the evidence it -has. repeatedly laid .out before:
those two panels has persuaded. even those liberals;
who vigorously oppose theAdministration's.:Cen
tral American policies that_the Sandinistas pIay:_a"
critical role in El Salvador's insurgency;
Thus . the House Intelligence : Com-
mittee-chaired by Rep. _Edh'ard Boland
(D.-Mass.), -'who'- opposes aid 'to the
"Contras :stressed in, a ` report: issued last ..
May: "A major portion of the arms and'other
material sent by Cuba and other Communist
countries to the Salvadorani insurgents trans:
Nicaragua with the permission snd assistance: .
of the Sandinistas.
"The Salvadoran insur~en.ts_:rely:on the ,use of
sites inicaragi a, some of'whichare-located'in
Managu4 itself;-'for.' comrnutij'cazion's; coiiiriand.'
and-control,`and fot? ~: -the'logis__ `' 'd .. .-.
tics'{o"C-onduCitfieii
financial, material and' pro'p'aganda activitiesTlie
Sandinista leadership' sanctions and '.di'rectly
facilitates all the above functions."
Sen. Danref'Patrick Moynihan (D -N:Y.), a vice
chairman of the Senate Intelligence; panel, -entered
this considered statement on Sandi
nistasupport
for' the insurgents on March 29:0'f this Year-just.
three
months ago: '" ~ ' _ ?. ; : :: ?_ =M.
".What the House Intelligence Committee stated
last May' is iii our judgment still true: [The in'-_
-in ' El Salvador]
de
ends f
r 'Alf
g, ogst,cs,
past three years, responded to those who..:don't~ an d.command-and-control facilities - upon out-.
side assistance from'Nicaragua and Cuba." He' also
~
 ARTICLE AP
ON PAGE
ed For Release Tuly 9$4t~901
L
policy infl,, h IM-15
refle-ets deep d4lvlsloris
By Juan 0. Tamayo
Knight-Riddcr Ncns Service
WAS= GTON - President Reagan
may insist that there are no plans to
deploy U.S. combat forces in Central
America, but at the same time an
Army general is proposing covert
use of US. warplanes to strafe Salva-
guerrillas. .
doran
Secretary of State George P. Shultz
arranges a surprise June 1 visit to
Nicaragua, but. he. hides, his plans
frcm other high-level administration
officials, reportedly out of .fear that
they would veto the initiative.' "
. Seen from afar, these discrepancies
and myriad others like them have
given Reagan policies toward Cen-
tral America a tinge of the sinister,
hinting at a "secret agenda" that
talks of peace but girds for war.
? But up close,. the disharmony
shows up clearly for what it is: fall-
out from an unremitting struggle
between "moderates" and "hard-lin-
ers" within the administration; each
side prescribing substantially differ-
ent policies, for Central America's
ills. -
A detailed examination of adminis=
tration policy shows that it is mainly
the result of day-to-day debate, in-
fighting and 'lobbying by strong-,
willed officials throughout the gov.
ernment,.rather than a reflection of
a detailed plan set down,in the Oval
Office.
This picture emerged from dozens
of interviews with current and for-
mer government officials, many of
whom refused to be identified, and
many with vested interests. To many
of those officials, the situation is so
murky that they are not certain ex-
actly where US. policy is heading.
For instance, one. official who has
been privy to inside information at
the top levels of the administration
said. "if Reagan had to make a deci-
sion today on whether to go in with.
troops, I think he'd be against it.
"'After the elections, I don't know."
Moderates like Shultz agree that
tie administration must squeeze Nic-
aragua's Sandinista government and
El Salvador's leftist rebels to force
them to sue for peace. But they argue
that the United States need not send
combat forces to the region.
Sandinistas in Nicaragua and the Sal- America was ''"sideshow '... that
vadoran rebels are a "cancer" that diverted attention from more impor-
trust be cured, through pressure if tant.matters such as the economy."
possible, through direct military in- Since then, Baker has been urging
tervention if necessary. moderation because of the concern
;Occasionally the bard-liners pre- by top Reagan political aides that the
wail, and war fever mounts. Occa- President is perceived by too many
sionally the moderates get their way, voters as trigger-happy.
gad peace seems within grasp. More This was Haig's first experience
Iten, the two. sides compromise. ,with what he described as "the con-
"There are two souls in this admin- . slant bugaboo of the administra.
itration, and two definitive posi-. tion's foreign policy" - a president
tions on virtually all foreign and . who kept his distance from the is;
defense policy issues," said a senior sues and gave way to "divided coun-
S.ate Department official. "Neither cils, different voices." These would
school has a dominant position. become the enduring characteristics
Washington veterans say the clash of the Central America debate.
as over Central America are the Though Reagan in the early days
worst in years. was not ready to make Central Amer-
; Much of the infighting stems from ice an administration priority, his
the anticommunist philosophy that policy makers needed something to
Reagan brought to -government mollify the hard-line conservatives
hen he took office in 1981. who had enthusiastically backed his
'.-In Reagan's first 13 months, the campaign: -
State Department fired, sent to far- "Haig tried to appease U.S. conser-
away posts or forced into early re- vatives by throwing them a bone -
tirement at least seven Latin Ameri- Central America," said John Car-
can '.experts' that the new baugh, then an aide to conservative i
administration saw as tainted by in- Sen. Jesse Helms (R., N.C.) and now a
volvement in President Jimmy Car- Washington lawyer with close ties to
Per's human rights policies and by administration hard-liners. -
the "loss" of Nicaragua -in the Sandi- The administration chose Thomas
vista revolution in 1979.
0. Enders as its assistant secretary of
Moved out were William Bowdler, state for inter-American affairs. He
assistant secretary of state; James had no experience in Latin America,
Cheek and John Bushnell, his deputy though be was widely regarded as a I
assistant secretaries; Robert White, ? brilliant diplomat
mbassador to.E1 Salvador; Lawrence.
yezzullo, ambassador to Nicaragua; His credentials as a hard-liner
hack Bums, ambassador to Honduras, were impeccable. As the number-two
official in the. US. Embassy in
and Wayne Smith, head-of the U.S; Phnom Penh from 1971 to 1974, he
)interests Section in.Cuba directed the secret U.S. bombing of
TTheir replacements had little expe- Cambodia.
rience in the region, but, they shared Both administration hard-liners
several traits: conservative ideology; and moderates were initially satis-
military or intelligence back- fied with Enders. U.S. military aid to
grounds; Vietnam "experience, and a El Salvador soared while pressures
preference for the nuts-and-bolts of ..eased for agrarian and human rights..
policy rather than the grand design. reform. In Nicaragua, a "carrot and
? First among them was Secretary of stick" policy sought peace talks with
State Alexander M. Haig Jr., the re-. the Sandinistas while the CIA fi-.
tired Army general.who urged Rea nanced anti-Sandinista guerrillas.
gan only two days after his inaugura Enders was finally dismissed in
lion to put Central America "on the early 1983, after he proposed negotia.
front burner" and "go to the source" tions with the Salvadoran rebels and
of the'region's'turmoil ' Cuba. endorsed the regional peace drive
t
id hi
, sa
Haig, in his book Cavea
s . undertaken by the Contadora Group
-ideas drew a nod ffom. Reagan but no - Mexico, Venezuela, Panama and
immediate response. White House Colombia His "carrot" and "stick"
chief of staff James A. Baker 3d was ,
which had evolved into the well-
fensetners like Und~r ec etal~yy,, or ReleA?~'21009r11 213e`' l `: 3 f "0090.1 ROOOa4fl00 050policy of negotia-.
Defense Fred C. Ikle cofit ~ ~t`~h proposals on t e groan a en ra
 Approved For Release 2005q jg/2 j lA fA 91-OO9O1 ROO
ARTICLE APPEARED 4 July 1984
ON PAGE A1P
VI
AS HI TON TALK
Briefing
,A'AttackoranAd?
-tration of employing "snore scandal-
tinted officials than we've seen since
-.Richard Nixon and Watergate," con-
,tjrjues to attract attention.
-The 30-second commercial' showed.
.pictures of President Reagan and a
cumber of his appo.'ntees while it
vice observed:. "Ronald Reagan -
he said he'd bring a new morality to
,government. But look at the list of
charges." With a picture of Edwin
,Deese M, the White House counselor,
,;the voice said, "Sweetheart loans";
-for W
William J. Casey, Director of Cen-
_
t TnteIligence, "Hidden financial
,national security adviser, "Secret
gifts," and so on. Then the voice con.
ckuded by saying: "This is moral
,leadership? Vote Democratic."
The American'Legal Foundation, a
!d nservative press monitor, asked
,the Federal Communictions Commis-
ston last week to declare the adver-
,iisement:`a "personal attack" on
_Psesident Reagan and.the 16 others
,named.
If the commission agrees, any
t-broadcaster who wants to run the
=fall, would have to notify those men-
;tned in advance and provide them
--with a copy of the script and an oppor-
tunity to, respond. _ ...:
"We sure touched a nerve v ith that
ad," said Mark Johnson of the Demo-
ctatic Congressional Campaign Conh-
mittee, recalling that the total invest-
ment was $5,000 for production and
-$10,000 for air time. He said the coni-
,,,mittee had not received notice of the
,,F-.C.C. proceeding.. 7 _
:W-arren:Weaver Jr0
Approved For Release 2005/12/23 : CIA-RDP91-00901 R000400020005-0
 ARTICLE Al ' k ,
The Other Side of
the Coln
By The Honorable William J. Casey,
Director of Central Intelligence, United States
Assessing Soviet science and technology and the
potential therein for military and strategic surprise.
is perhaps the most critical and difficult challenge i
we in the U.S. Intelligence Community face. As
of now the U.S. still appears ahead in most of the
critical technologies we survey but the Soviets
have pulled even in some areas and are out in front
in others and our margins of advantage and the
lead times we possess, have shrunk. Even more.
troubling, however, is that recent assessments
show that the ability of the Soviet military-indus-
trial complex to acquire and assimilate Western
technology far exceeds previous estimates.
Just how do the Soviets get so much of our
.,technology? First of all this is not a haphazard
program but one endorsed at the highest levels in
the Kremlin. Significantly, a single organization-
the Military Industrial Commission (VPK) -is
responsible both for supervising the collection of
Western technology and for coordinating all
Soviet military research and production. The
VPK, therefore, is well positioned to know what
the military needs are in the way of Western tech-
nology and to ensure that this technology is used
effectively.
Defectors have told us that the search for
Western technology commands the highest prior-
ity in the KGB and the GRU. As a result, there are
several thousand Soviet-bloc collection officers at
work primarily in the U.S., Western Europe and i
Japan. In addition to engaging in the more classic
forms of espionage, these Soviet agents comb
through our open literature, buy sensitive technol-
ogies through legal channels and religiously
attend our scientific and technological confer-
ences. Students sent by the Soviets aftd their allies
to study in the West also serve as transmission
belts for technological data that is easily obtained.
The Soviets also use dummy firms in sophis-
ticat
d i
e
nternational operations to divert and steal
Western technology. We have identified some 300
firms engaged in diversion schemes operating
from more than 30 countries - and there are prob-
ably many more. Most diversions occur via
Western Europe, which is why we have sought the
h
el
f
The Soviefs pinpoint and target small, highly
innovative companies in the computer and micro-
electronics field not only because they are at 'the
leading edge of the technologies that Moscow
most needs but also because the security proce-
dures at such firms are. usually inadequate to the
threat of penetration posed by a determined, hos-
tile intelligence service.
U.S. micro-electronics production
technology is the single most'significant industrial
technology acquired by the USSR since World
War II. In the late 1970s alone, Moscow acquired
thousands of pieces of Western micro-electronic
equipment worth hundreds of millions of dollars
in all of the major processing and production
areas. On this basis, the Soviets have systemati-
cally built a modern micro-electronics industry.
The Soviet equivalent of Silicon Valley, the Zele-
nograd Science Center was equipped, literally
from scratch, with Western technology.
Two Objectives
What can we do to stem this tide? We already have
had a fair number-of successes in frustrating the
Soviet technology search. The West still needs to
organize more effectively to protect its military,
industrial, commercial and scientific communi-
ties. In so doing, we ought to keep two objectives
clearly in view. First, the West must seek to main-
tain its technological lead over the Soviets in vital
design and manufacturing know-how. Second,
manufacturing, inspection and most importantly,
automatic test equipment - which can alleviate
acute Soviet deficiencies in military-related manu-
facturing areas - must be strictly controlled.
Western governments not only have powerful
incentives to stop the hemorrhage of their technol-
ogy, they also have substantial potential for
controlling and restricting its flow. The laws
necessary to accomplish this are largely in
place - stricter enforcement of the existing laws,
however, is needed. To this end greater coopera-
tion among states will lead to greater effective-
ness. A cooperative intrastate approach - if it is to
be successful - must also serve to alert the private
businessman to the nature and extent of the prob-
lem. Similarly, if the West is to be successful, our
intelligence services will also have to increase their
joint efforts to meet this challenge.
In the final analysis the threat posed by grow-
ing Soviet technological absorption will not soon
disappear and-certainly not because of any self-
induced change of heart by Kremlin leaders. The
p o
our European flPoc vedrhl? tRglg 12005/12/23: CIA-RDP91-00901 R000400020005-0
July, August, Septemher 198
trade activities. Continued