Foreign Relations of the United States, 1952–1954, Africa and South Asia, Volume XI, Part 1

711.56373/3–2754: Telegram

The Consul at Benghazi (Summers) to the Department of State¹

secret priority

Benghazi, March 27, 1954—11 a.m.

70. From Villard. Reference: Deptel 51, March 23.² Am aware that one million dollars of USAF FY 1952 funds earmarked base rights will lapse if payment not made prior to June 30, 1954. Notwithstanding I believe it neither advantageous nor desirable that payment be made to Libyans prior to completion of base rights agreement. However the fact that the Libyans may lose one million dollars will be used as spur to obtain ratification prior to June 30, 1954. It is my understanding that if base rights agreement were ratified prior June 30, 1954, I am authorized to offer five million dollars as an initial payment (this amount predicated on basis one million dollars for fiscal year 1952, two million dollars for fiscal year 1953, and two million dollars for fiscal year 1954 accrued) and two million dollars annually for 17 years. Request that my understanding as indicated above be confirmed soonest.

Inasmuch as it appears likely that discussion of financial arrangements will begin next week I propose that Department consider and make every effort to provide an arrangement attractive to Libyans along one of the following lines:

1. Initial payment of eleven million dollars and two million dollars for 14 years thereafter.

2. Initial payment of seven million dollars and two million dollars for 16 years thereafter.

Request Department’s views soonest.³

Summers

1. This telegram was repeated to Tripoli.
2. Not printed; it informed the Legation that $1 million of USAF funds for fiscal year 1952, which the Legation was authorized to pay Libya, would lapse if not paid by June 30, 1954. It requested the Legation’s views as to how the payment could be made prior to June 30 to obtain the maximum advantage and also prevent lapse. (711.56373/3–2354)
3. Telegram 54 to Benghazi, Mar. 31, reported the Air Force was authorized to pay up to $40 million for a 20-year base agreement, at a rate of not more than $2 million annually. A formal commitment to the Libyan Government was required to obligate the funds. If negotiations were completed by June 30, Libya could thus receive $4 million for calendar years 1952 and 1953, and on July 1, 1954, could receive another $2 million for calendar year 1954. The Legation was informed that it would not be possible to make the payments suggested in paragraphs numbered 1 and 2 of telegram 70. (711.56373/3–2754)