181. Memorandum From the Deputy Director for Coordination, Bureau of Intelligence and Research (Koren) to the Director (Hughes)1

SUBJECT

  • Mr. Berger’s Meeting with Mr. Colby, December 4, 1965

PARTICIPANTS

  • Messrs. Berger, Cuthell and Moore for FE
  • Messrs. Colby, [names not declassified] for CIA
  • Messrs. Cooper and Thomson for WH
  • Mr. Stuart for INR/DDC

Indonesia

The meeting was called for the purpose of discussing the latest developments in the project to supply medicines and medical equipment to the Indonesian Army [less than 1 line of source text not declassified]. Attached at Tab A is a lengthy report of conversations between [less than 1 line of source text not declassified] and [less than 1 line of source text not declassified] which were held in [less than 1 line of source text not declassified] on December 1 and 2.2 At Tab B is a short paper suggesting alternative methods for providing medicines and medical equipment to the Indonesian Army.3

Mr. Berger said that as a result of his reading of the conversations with [less than 1 line of source text not declassified] he had come to the conclusion that the Department and perhaps CIA too had been “conned” into taking on this project. It was perfectly obvious that Nasution knew nothing of the financial arrangements that were to have been made as cover for the project, despite the Department’s insistence that he be advised. It was clear that Sukarno had sent Sukendro out to get medicine, but hadn’t given him any money. Did this mean that Sukarno was merely trying to get rid of Sukendro and had no idea that the latter would take his supposed mission seriously? There was also the possibility that this whole project was a provocation. Instead of considering alternative methods of getting medicines to the Indonesian Army, what we ought to be considering was how to drop the project. Mr. Colby attempted to counter all of these assertions, but was hampered [Page 382]somewhat by necessity of arguing on policy rather than on intelligence grounds. He cited a number of times our need to show the Indonesian Army that we supported them in their campaign against the PKI, [less than 1 line of source text not declassified]. In addition, the Army really needed the medicines. We didn’t know but what a civil war was in the offing in Indonesia. The Indonesians needed to know who their friends were.

Mr. Cuthell said it was quite obvious that the Indonesian Government could scrape up a half million dollars easily if they really believed the medicines were necessary. He cited the fact that the Indonesian Navy was buying two Aero Commander planes at a cost of 575 thousand dollars, and that DC–8s which would cost 50 million dollars were also on order.

At this point Mr. Colby found support from unexpected quarters. Mr. Cooper, backed by Mr. Thomson, argued the necessity of indicating approval in a practical way of the actions of the Indonesian Army. The [less than 1 line of source text not declassified] that the medicines would cost was a mere pittance compared with the advantages that might accrue to the US as a result of “getting in on the ground floor.” Mr. Thomson added that he believed that the request by Sukendro offered us an unparalleled opportunity to give an earnest of our intentions toward an Indonesia in which a moderate army leadership held the balance of power.

[2 paragraphs (16–1/2 lines of source text) not declassified]

After considerable further discussion it was agreed on suggestion of Mr. Cuthell that we probably had to go through with this project only because it had gone beyond recall. Mr. Berger insisted, however, that nothing further be done until [less than 1 line of source text not declassified] a detailed step-by-step plan for covering the extension of the line of credit [less than 1 line of source text not declassified], and had submitted that plan for the Department’s approval. Indicating that there was some urgency about getting the matter settled, since [less than 1 line of source text not declassified] was shuttling about various European capitals with considerable rapidity, Mr. Colby said that such a plan would be presented to Mr. Berger within the week.4

  1. Source: Department of State, INR/IL Files, Indonesia, 1963–1965. Secret. Also sent to Denny and Evans. Drafted by Koren on December 8.
  2. Not printed. (FE-239; ibid.)
  3. Dated December 3. (Ibid.)
  4. This was done in a memorandum from Colby to Bundy, FE-244, December 7. (Ibid.)