197. Action Memorandum From the President’s Special Assistant (Rostow) to President Johnson1

Mr. President:

As the attached minutes of yesterday’s 303 meeting indicate, we now have firm agreement, including Secretaries Rusk and McNamara, on how to proceed with respect to Radio Free Europe and Radio Liberty.

Your decision is required over the weekend because the deadline for informing the organizations in New York is, apparently, December 18.

Under the proposal we would:2

  • —Provide [number not declassified] million in a lump sum payment (“surge funding”) to cover the two radios at present levels of activity down to the end of fiscal 1969.

    Under existing New York law the two organizations would not have to file with the New York Attorney General their revenues until December 1968.

  • —Inform the two radios that it is the intent of the U.S. Government to find in the year ahead an alternative way to keep them in business. For your information, the two major options are: the overt creation by the Congress of a special public corporation for this purpose, or an arrangement via USIA.

    With respect to questions at the end of the year about the implementation of the Katzenbach report,3 we agreed that, if asked, we would say that no exceptions were made to the recommendation of the Katzenbach committee; and, in certain cases, funds were provided to permit organizations to adjust to a new status; but we would make no breakdown as to what organizations were supported or what amounts had been given in surge funding.

  • —Inform the Radio organizations in New York that they were to maintain tight security about the method of financing through fiscal 1969; and we would request them to end the solicitation of small private donations via radio and television—a method which is in the [Page 648] process of ending in any case. Solicitation of funds from large corporations which are aware of government financing would continue.

Proposal approved4


See me


Memorandum for the Record5


  • Minutes of the Meeting of the 303 Committee, 15 December 1967


  • Mr. Rostow, Mr. Katzenbach, Mr. Nitze, and Mr. Helms.
  • Admiral R.L. Taylor and Mr. William Trueheart were present for all items.
  • Mr. Charles Schultze, Mr. Hugh Tovar, and Mr. John Richards were present for Items 1 and 2.

1. Radio Free Europe/Radio Liberty

The meeting began with a resume of the meetings and steps which began on 5 May 1967,6 resulting in today’s confrontation.
Mr. Rostow began by asking where State stood. Mr. Katzenbach replied promptly, “Behind Mr. Schultze’s recommendation for surge funding.”7 [This may be summarized as follows: surge funding both Radio Free Europe and Radio Liberty before December 31, 1967, at the FY–68 funding levels (no modernization) so that both can continue operation until July 30, 1969. This would give us another year to decide what to do with both RFE and RL. [less than 1 line of source text not declassified]]8
But what happens afterwards? Mr. Katzenbach alluded to special legislation towards a public communications authority or other overt or even possibly covert funding. The point was made that it would be less difficult to reconstitute covert funding after the election than it would be now.
Mr. Nitze interposed that the Secretary of Defense thought an announced exception to the Katzenbach formula would be the least difficult solution.
Mr. Helms said, o.k., if we accept surge funding, was the thrust toward continuation?
Mr. Rostow said yes and at least the staff work on the options had been performed (an allusion to the exhaustive Trueheart report),9 and one of the rejected paths, that of the public broadcasting authority or British Council approach, could be reopened in view of the new time available, i.e. one year, to resolve the problem.
Mr. Katzenbach agreed, but said we are face to face with the public relations aspect. He was in favor of a simple statement to the effect that with the terminations, certain funds had been provided, but there should certainly be no specific breakdown as to what organizations were supported or what amounts had been given.
Mr. Schultze provided an outline along the following: While it is not our policy to identify organizations, specific contributions had been made to various valuable institutions until such time as adequate legislation or new ways of funding from the private sector have been discovered.
Mr. Katzenbach elaborated that the Department had the choice, as the deadline neared, of waiting for questions or planting the question in advance.
The question was raised as to the timing of the two radios filing appropriate statements with the Internal Revenue Service. Mr. Schultze observed that the surge-funding figure would only appear in the 1968 declaration in early 1969. The inference here was that the main objective was to smoothly sail past the election date in the fall of 1968.
The point was made that the directors of the radios should be informed that their statements, preferably brief (left to their proven judgment in the past), should indicate they intend to continue.
[7 lines of source text not declassified]
[3–½ lines of source text not declassified]
On the question of fund raising, Mr. Katzenbach felt that witting corporate contributors presented no problems but that radio solicitation [Page 650] for individual donors should be stopped at once. It was agreed that the radios would be so instructed.
It was agreed that the statement for Mr. McCloskey should be drafted by Mr. Trueheart for submission to Mr. Katzenbach and general agreement by the principals.

2. Project Review

Mr. Rostow noted that we had ridden right into the middle of December and had a legal obligation to have covered all covert efforts which might possibly be construed to come under the aegis of the Katzenbach Committee rulings. He asked where we now stand. Mr. Tovar noted that every effort had been made to cover the field; he could assure the chairman that every major project and expenditure in this field had been examined, that there might be bits and pieces and marginal efforts which had not yet been prepared for screening. Mr. Rostow implied that in the marginal field there might be some potential cliff hangers, and Mr. Helms directed that a list of these be prepared promptly for Mr. Rostow so that he would know what could be expected on forthcoming agendas in the grey area. Mr. Tovar noted that the review of the marginal projects was a continuous year-round process and was not limited to a specific search scheduled to end 31 December.

[Here follows Item 3.]

Peter Jessup
  1. Source: Johnson Library, National Security File, Intelligence File, 303 Committee, Box 2. Secret; Eyes Only.
  2. The President wrote “Whose?” with an arrow pointing to the word “proposal.”
  3. See footnote 2, Document 176.
  4. This option is checked.
  5. Copies were sent to Katzenbach, Nitze, and Helms.
  6. Covert funding of private organizations first came before the 303 Committee at its May 5 meeting, but discussion of the subject was deferred until May 27. See Document 180.
  7. Schultze outlined his plan for surge funding in a memorandum to Secretary Rusk, dated early December 1967. (Johnson Library, National Security File, Intelligence File, 303 Committee, Box 2) In a December 13 memorandum to Rostow, Jessup wrote: “As it now stands, Mr. Rusk, at first reluctant, has bought the Schultze formula.” (Ibid.)
  8. Outside brackets in the source text.
  9. Not further identified.