356. Memorandum of Conversation0

SUBJECT

  • Corruption in the Garcia Administration

PARTICIPANTS

  • Mr. Myron Cowen, Former Ambassador to the Philippines
  • Mr. James D. Bell—Director, Office of Southwest Pacific Affairs

Ambassador Cowen, during a visit to the Philippines about four months ago, held a long private conversation with President Garcia at Garcia’s request. Garcia was concerned about the image of the Philippines in the U.S. and asked Ambassador Cowen for his recommendations as to how to improve the U.S. attitude toward the Philippines and more specifically toward the Garcia administration.

Ambassador Cowen stated that he was brutally frank with Garcia and told him that he could not achieve the prestige which he would like to enjoy in the U.S. or in Asia until he was able to gain the respect and confidence of his own people. Ambassador Cowen went into some detail [Page 778]with respect to the graft and corruption in the Garcia Administration which he views as the principal cause for the low state of Garcia’s public image. He told Garcia that during his short visit to Manila he had found an atmosphere of unrest and uneasiness. Pressed for specific recommendations, Ambassador Cowen suggested that Garcia go to the IMF and ask for consultants to be placed in key ministries such as the Ministry of Finance, Internal Revenue, Central Bank, etc. Although these people would likely be technicians, their functions would in a sense be that of watchdogs to try and develop techniques of preventing graft and corruption.

During the past week Jose Yulo (Garcia’s opponent in the 1957 presidential election), who has been in Washington, has conveyed a message from President Garcia to Ambassador Cowen to the effect that he, Garcia, is prepared to accept this suggestion but that he cannot put it into practice until after the November elections because “Ambassador Cowen will understand that I need money for the elections.” Ambassador Cowen is convinced that it is worthwhile to try and persuade Garcia to institute such a program prior to the elections and has suggested to Yulo that he, Yulo, return to the Philippines (Yulo had planned to go to Europe and stay out of the Philippines until after the election) and persuade Garcia to hire such consultants immediately. Ambassador Cowen has discussed this matter with former Ambassador Merle Cochran of the IMF, who says that the IMF would be prepared to provide such consultants as Garcia requests. Ambassador Cowen asked Mr. Bell’s views.

Mr. Bell said that he believed almost any action which would cut down graft and corruption in the Garcia Administration is highly desirable and that of course it would be best if the initiative came from Garcia himself, as it would in this instance. Mr. Bell further observed that he had heard of no other suggestions which seemed to offer much hope of success, and that he felt this was certainly worth trying.

  1. Source: Department of State, Central Files, 796.00/7–2861. Official Use Only. Drafted by Bell on July 29. Cowen also met with U. Alexis Johnson, McConaughy, and Bell on August 7. Johnson expressed concern about the corruption problem and asked for Cowen’s advice. Cowen provided similar suggestions to the ones he had given in this meeting and suggested that Johnson meet with Jose Yulo. (Ibid., 796.00/8–761) Regarding the Yulo–Johnson meeting, see Document 358.