335. Memorandum From William G. Bowdler of the National Security Council Staff to the President’s Special Assistant (Rostow)1


As Covey puts it: “Arosemena flunked his course”.

From the attached cable you will see that last Tuesday he picked up where he left off at Punta del Este in attacking the Alliance for Progress.2

Covey has taken these actions:

  • —instructed Wym Coerr to go play golf and negotiate no aid agreements.
  • —delayed action on two pending loans in the IDB.
  • —asked Jim Fowler to background Ben Welles (NY Times) on the speech and refute each charge made.

Arosemena seems to be in the final stages of negotiating a $30 million loan with a consortium of European banks—at 8½% interest with “no strings attached”—and therefore thinks he can thumb his nose at us again.

I want to wait until next Monday3 to see how this business shakes down before reporting to the President.4

  1. Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Confidential.
  2. Reference is to telegram 1154 from Quito, September 27; not attached. At a reception for Latin American journalists on September 26, Arosemena called the Alliance for Progress “a frustrated hope,” a criticism that was widely reported in newspaper accounts the following day. (National Archives and Records Administration, RG 59, Central Files 1967–69, AID(AFP))
  3. October 2.
  4. Rostow relayed a brief report to the President on September 30. (Telegram CAP 67847 to the LBJ Ranch; Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68)