525. Telegram From the Embassy in Venezuela to the Department of State 1

1255. In my first substantive interview with President Leoni late last week,2 I found him very in command of situation and fully informed [Page 1091] on such varying subjects as Venezuela’s counterinsurgency efforts, its military equipment procurement program, its requirements for foreign loans for housing and other social development projects, and its aspirations for better treatment in US oil import policy. President was remarkably forthright and outgoing for first interview and obviously at present intends, within limits his domestic political situation, cooperate with us on give and take basis to improve US–Ven relations.

In response to my expression of our concern about possibility of increased Castro Communist emphasis on and support to guerilla movement, President expressed realistic assessment of situation, saying he had no allusions about sustained character of Communist subversion program so long as Castro in control of Cuba. He said he was being kept informed of developments and his info agreed substantially with ours.3 He was familiar with attempted arms smuggling from Colombia but interested in possible smuggling from Algeria. He described continuing measures being taken against guerillas to keep them off balance and efforts to control border and maritime provinces. He further acknowledged he had been criticized for releasing a few unimportant prisoners but said this done to sow dissension among Communists and he had no intention at present of releasing important and dangerous prisoners. He welcomed my assurance that he could continue to count on US collaboration in meeting Communist insurgency threat and specifically expressed appreciation for prompt delivery HU 1B helicopters.

I questioned President about aircraft procurement program, pointing out that while Venezuela military was indicating interest in stepping up credit sales purchases from $10 to $20 million annually from US it was also purchasing Canberras from UK causing US some problems. President was fully familiar with Canberra purchase, underscoring it was necessary purchase for replacement, but was less sure about other negotiations (presumably for Hawker Hunters) although he knew question was one of price and availability as between US and UK. He appeared fully to accept that Venezuela needed improve aircraft inventory for coastal surveillance and for defense against Cuba.

[Page 1092]

As conversation turned to economic subjects, President welcomed my statement to American Chamber of Commerce that Venezuela (like other less developed countries) would not be prejudiced by US balance of payments measures and, while recognizing reasons why aid concessional loans would no longer be available, he gave great importance to having continued access to long term IDB loans especially for housing. With respect to US investment, President acknowledged difficult position in which oil companies and Orinoco Mining had been put as result uncertainties about taxes and expressed hope that compromise could be reached by mutual concessions.

Leoni hit question of “discrimination” in our oil import policy hard (it is favorite theme of his) emphasizing it was political as well as economic question. He said he had sent President Johnson letter on subject through Minister of Mines Perez Guerrero and thought it essential that some progress be made at least on some aspects of problem.4 He also urged revision of trade agreement, which he believed archaic, through quiet negotiations.

Range of subjects covered, some at my initiative and some at his, impressed me that Leoni is pretty well on top of his job, knows what he wants, and has a practical politician’s rather than a theoretician’s approach. It is, of course, too early to form a firm judgment but, this first interview gives basis for hope this is someone we can work with.

More detailed memcon follows.5

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 1 VEN. Confidential; Immediate. Repeated to USCINCSO.
  2. March 18. Bernbaum first met Leoni on March 4 to present his credentials. The Embassy reported that “Leoni instead of limiting himself to the diplomatic pleasantries normal to such occasions lost no time in making a lengthy statement concerning US petroleum restrictions and the forthcoming US–Venezuelan petroleum discussions.” (Airgram A–591 from Caracas, March 10; ibid., PET 17 US–VEN)
  3. Reference is to a U.S. Government memorandum on Cuban subversion. Bernbaum told Leoni “that prior to leaving Washington, I had had a productive talk with President Johnson regarding United States-Venezuelan problems. I had found him greatly interested in the Venezuelan situation and in the solution to these problems. He had just read a memorandum covering the likelihood of a new Communist drive through Cuba against Venezuela and other Latin American countries and asked that I give a copy of this memorandum to President Leoni.” (Airgram A–627 from Caracas, March 24; ibid., POL 23 VEN) President Johnson met Bernbaum and four other U.S. Ambassadors in Latin America February 8, 5:31–6:25 p.m. (Johnson Library, President’s Daily Diary) No substantive record of the meeting has been found.
  4. Leoni claimed that “he had attempted in this letter to make President Johnson aware of the necessary relationship between a satisfactory solution [of the petroleum problem] and Venezuela’s ability to reach a successful conclusion against the Communist threat emanating from Cuba.” (Airgram A–635 from Caracas, March 24; National Archives and Records Administration, RG 59, Central Files 1964–66, PET 17 US–VEN) Leoni’s letter to Johnson, however, deals exclusively with petroleum; it does not refer to Cuba or communism. A copy of the letter, dated March 13 and delivered to the Department of State on March 19, is ibid., PET 1 US–VEN.
  5. Memoranda of conversation are attached to airgram A–627 from Caracas, March 24 (ibid., POL 23 VEN); airgram A–632 from Caracas, March 24 (ibid., DEF 19–3 US–VEN); and airgram A–635 from Caracas, March 24 (ibid., PET 17 US–VEN).