28. Memorandum From Acting Secretary of State Johnson to the President’s Assistant for National Security Affairs (Kissinger)1
SUBJECT
- Foreign Military Sales Act
I had a meeting Wednesday with DOD, including DOD and State Congressional people, on the foregoing subject. Unfortunately Mr. Timmons was not able to attend, but Mr. Abshire has now talked to Bryce Harlow. From this, as I see it, the following issues emerge with respect to the Administration’s attitude as the bill goes to conference. Naturally this is a subject in which I am sure the President will want to make his own decisions, and I offer the following for any possible help in this regard. Chairman Morgan of the House Committee is very cooperative and is waiting to hear our views.
The major issue is whether it would be possible to achieve the complete deletion of both Cooper-Church and sections 9 and 10 of the Act. This would obviously be the ideal. The question is whether the Senate has painted itself into such a corner that insistence on this by the House will result in such an impasse that no FMS legislation is passed this year.
The consequences of no legislation would be inability to fulfill our commitment to finance $100 million in both 1970 and 1971 for Iran and $44 million in 1970 and $75 million in 1971 for Israel; and to carry out planned programs of $20 million in 1970 for Greece, $15 million in both 1970 and 1971 for Jordan, $35 million for Taiwan in 1971, $15 million for Korea in 1971, and $48 million for four Latin American countries in 1970. These countries are by law unable to obtain credits from the Exim Bank.
If the House should compromise by exchanging deletion of Cooper-Church for retention of sections 9 and 10 as they now stand, the [Page 65] practical effect would be virtually to nullify all of our major MAP programs. This is because our major programs are based upon the use of both MAP appropriations and excess stocks, and the necessity under section 9 of charging excess stocks against MAP appropriations virtually wipes out one or the other. In addition, the requirement under section 10 for recipient countries to deposit counterpart funds against both MAP and excess equipment that they receive is clearly unmanageable in the budgets of such major recipients as Korea and Turkey.
In this connection it is the judgment of State and Defense that we could accept section 9 if amended to raise the present limitation of $35 million to $150 million and reduce the valuation basis from 50% to 30%.
With respect to section 10, the entire concept is unsound, and the section should be deleted. However, if this is entirely out of the question, obviously the lower the percentage of counterpart, the less harmful it is. The present 50% figure is entirely unrealistic and if it is not possible to obtain deletion of this section, we should seek to obtain a nominal figure, such as 5%.
Putting aside the domestic and international political factors of Cooper-Church, from an administrative point of view DOD and State feel that we could live with it if paragraph 4 were amended by the insertion of “United States” before “combat” so as not to prohibit our support of Vietnamese and Thai Air Forces in Cambodia. Legislative history indicates that such an amendment should not present serious difficulty.
With respect to other objectionable concepts of the bill we would hope to be successful in deleting the section cutting off economic aid to Korea unless the President certified that they are “not fishing for salmon east of 175° west.” We would also hope to deal with the “gas amendment” by having the conference report interpret “the United States” as used therein as applying only to the 50 states; thus, protecting our plans to move gas from Okinawa to Johnston Island.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 193, AID, Volume II 1/70-8/10/70. Secret. Copies were sent to Laird and Harlow. Attached is the typescript of a July 3 memorandum from Kennedy, Lehman, and Saunders to Haig and Kissinger alerting them to the dangers the Cooper-Church amendment posed for the Foreign Military Sales bill, and the difficulty the President would have in meeting commitments to Iran, Israel, and others if the bill died. They noted that the FMS program went hand in hand with the Nixon Doctrine and was designed to help allies defend themselves by providing credits as well as equipment to ease the financial strain of modern defense establishments. The Cooper-Church Amendment, which went through a number of iterations, aimed at restricting U.S. involvement in Cambodia. Several memoranda from May 1970 regarding its politics and potential impact are ibid., NSC Files, Subject Files, Box 318, Cooper-Church Amendment.↩