36. Memorandum From the President’s Counsel (Lipshutz) to President Carter1
SUBJECT
- International Financial Institutions Authorization Bill
Reference is made to the April 15 memorandum from Cyrus Vance to you regarding this matter.2 I recommend strongly that you withhold action on his two proposals until you have reviewed observations which both Frank Moore and I wish to make. Further, I suggest that you meet with representatives from Treasury, State and NSC, along with Frank, myself, (perhaps) Senator Humphrey, and such others as you deem advisable; at such a meeting all points of view can be fully aired and debated.
I personally wish to present a perspective in this matter which, in several ways, is different from that presented heretofore. I believe that Frank Moore will emphasize other factors of importance.
1. Should we oppose the substance of the “Harkin Amendment,” (i.e., mandatory action on our part based upon carefully described conditions and according to properly established procedures) we well might undermine much of our credibility in our espousal of Human Rights as a fundamental cornerstone of our foreign policy.
As I understand the situation, we have only a few means of implementing this policy: speaking out consistently (which we certainly are doing); diplomatic actions (which I understand we also are doing); overt physical actions (which we properly have discarded); and financial leverage (which is the subject of this pending legislation).
I was concerned to note in staff memos prepared for Zbigniew and forwarded to you,3 a statement that “. . . we do not like any of the amendments . . .” (Harkin, Badillo, Humphrey, Reuss). The perception which I received from this was that we should give only lip service and diplomatic efforts to the goal of Human Rights.
2. We can support the substance of the Harkin Amendment—mandatory action—and still retain:
[Page 107]a. A clear definition of what constitutes a consistent pattern of deprivation of these rights (torture; inhumane or degrading treatment or punishment; prolonged detention without charge; flagrant denial of the Right to Life, Liberty, and the Security of Person; and providing refuge to individuals committing international acts of terrorism.)
b. An established and fair procedure for ascertaining facts, for rebuttal, and for removing valid charges against a proposed borrower, all in advance of voting against a loan application.
c. Adequate flexibility to protect our national interests and further our foreign policy goals. The Harkin Amendment still would have a “needy peoples” exception available for the President to use at his option. Bilateral agreements would be available. And of course in “important” or “urgent” matters, Congressional-Presidential action always is available.
3. A number of statements made in memoranda advocating opposition to the Harkin Amendment are presented as though they were unquestionable conclusions of fact. Actually, several of them are no more than arguable opinions and should be considered as such. Examples are:
a. Treasury memo of April 14:4 “. . . no real economic pressure since other governments will not vote with us and most loans will be approved . . .” (except IDB FSO, which is subject to U.S.A. veto).
“. . . automatic ‘no’ votes would eliminate any negotiating flexibility on our part, reducing any incentive . . . to work with us on improving human rights situations . . . sterile, ineffective position . . . isolating ourselves from other governments . . .”
[But, note: Zbig refers to “our voice and vote” as a major bargaining chip.]
b. Same Treasury memo: “. . . (such human rights violations considerations) are inconsistent with the IFI charter requirements that lending decisions shall be made only on the basis of economic considerations . . .”
[Note: If this is accurate, then presumably the U.S.A. could never consider Human Rights violations relative to a loan application—whether our vote was mandatory or discretionary under our law.]
c. Same Treasury memo: “Badillo approach . . . undesirable . . . it undermines integrity of the institutions . . . would represent unilateral amendment of the bank charters. Our major policy interest in enhancing the role of the banks would be set back severely . . .”
[Note: the foregoing statement contains three “conclusions” stated as “facts”: “. . . it undermines integrity . . .”; “. . . unilateral amendment . . .”; and, “our major policy interest . . .”]
Finally, the Treasury memo points out what percentage of loans in the past would not have been approved had there been such a law on the books. Its representatives pointed out that Congress would be sorely tempted to reduce appropriations to these banks if we elimi [Page 108] nated a significant number of borrowers who “consistently deprived their people of basic human rights.”
This argument seemed to suggest that not only was the past practices of the banks inviolate, but also that the reduction of their budget was inconceivable.
Summarizing, I again urge that these observations, along with those of Frank Moore, et al., be considered prior to your final decision.
- Source: Carter Library, Staff Office Files, Counsel’s Office, Robert J. Lipshutz Files, 1977–1979, Box 19, Human Rights (Re International Financial Institution Legislation), 4–8/77. No classification marking. All brackets are in the original.↩
- See Document 35.↩
- Presumable reference to Brzezinski’s April 13 memorandum to the President, printed as Document 33.↩
- Not found. See footnote 7, Document 35.↩