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176. Memorandum From the Central Intelligence Agency to the 303 Committee1

SUBJECT

  • Termination of Covert Funding Relationship with The Asia Foundation

1. Summary

Pursuant to the recommendations of the Katzenbach Committee, as approved by the President of the United States,2 the Director of Central Intelligence has ordered that covert funding of The Asia Foundation (TAF) shall be terminated at the earliest practicable opportunity. In anticipation of TAF’s disassociation from the Agency the Board of Trustees on March 21, 1967, released to the American and foreign press a carefully limited statement of admission of past CIA support.3 In so doing the Trustees sought to delimit the effects of an anticipated exposure of Agency support by the American press and, if their statement or some future expose does not seriously impair TAF’s acceptability in Asia, to continue operating in Asia with overt private and official support. To date, the March 21 statement has produced no serious threat to TAF operations in Asia, and the Trustees are now prepared to attempt to acquire the necessary support for TAF to go on as a private institution, partially supported by overt U.S. Government grants. This will take time and TAF meanwhile faces the immediate problem of the need for funds during FY 1968.

[Page 551]

TAF’s present resources are sufficient to sustain operations through July 31, 1967, the end of the Foundation’s fiscal year. [4–1/2 lines of source text not declassified] To meet these obligations, and to allow TAF management to plan rationally for FY 1968, immediate firm commitments must be acquired on future levels and sources of support. This Agency is prepared to provide whatever assistance remains within its authority and competence to offer. To undertake further necessary action, however, the Agency requests that the Committee now designate the Agency or official to whom TAF management should look for future guidance and direction with respect to United States Government interests.

2. Problem

Immediate Requirements

a. With the encouragement and support of CIA, and the guidance of other elements of the United States Government, the Trustees of The Asia Foundation on March 21, 1967, publicly declared that TAF is a private organization; that its Trustees have accepted funds from CIA intermediaries in the past and, by inference, can no longer do so; and that they fully intend to continue programming in Asia with support from both private and overt official sources. It is imperative that this declaration be supported by normal or near–normal TAF operations in Asia over the months ahead. [4 lines of source text not declassified] It has further authorized the Trustees to seek pledges of support from heads of private foundations and other prospective private donors; but, as a practical matter, no immediate results can be anticipated.

[4 paragraphs (22 lines of source text) not declassified]

Long–range Requirements

c. The above immediate arrangements would insure the continuance of TAF programs at near–normal levels during the critical year ahead, during which time TAF Trustees and appropriate agencies of the U.S. Government can endeavor to arrange adequate permanent sources of support from private and official sources for FY 1969 and beyond. If by December 31, 1967, it becomes apparent that adequate support is not forthcoming, the Agency recommends that serious consideration be given to phasing down or terminating the Foundation.

[Here follow paragraphs 3. “Factors Bearing on the Problem,” and 4. “Coordination.”]

5. Recommendation

The Agency recommends that actions proposed in paragraphs one and two above be approved.

  1. Source: Department of State, INR/IL Historical Files, 303 Committee, May 27, 1967. Secret; Eyes Only. No drafting information appears on the memorandum, which forms Tab A–1 to the proposed agenda for the May 27 meeting of the 303 Committee.
  2. On February 15 President Johnson appointed a committee composed of Under Secretary of State Katzenbach (Chairman), Secretary of Health, Education and Welfare John W. Gardner, and Director of Central Intelligence Helms to inquire into the relationships between government agencies and private organizations operating abroad. The panel was established in response to press reports, particularly Sol Stern’s article, “A Short Account of International Student Politics & the Cold War with Particular Reference to the NSA, CIA, etc.,” Ramparts magazine, 5 (March 1967), pp. 29–39, of CIA secret funding over the years of private organizations, which became involved in confrontations with Communist–influenced groups at international gatherings. (The New York Times, February 16, 1967, pp. 1, 26) Text of an interim report, February 22, as well as the final report of the Katzenbach Committee, March 29, are in American Foreign Policy: Current Documents, 1967, pp. 1214–1217. For text of the President’s statement accepting the committee’s proposed statement of policy and directing all agencies of the U.S. Government to implement it fully, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1967, pp. 403–404.
  3. This statement is summarized and quoted in part in The New York Times, March 22, 1967, p. 15.