54. Editorial Note

A draft of George Shultz’ March 9, 1971, memorandum to the President (Document 53) was sent to the NSC on March 5 by James Schlesinger with a request for Alexander Haig’s comments. No record of Haig’s response to Schlesinger was found, but attached to the OMB draft is the following handwritten note by Richard Kennedy:

“Al—Argument 2 for option A is hardly an argument at all. Merely organizing by statute will not persuade ‘Congress to refrain from applying to the Corporation and Institute various limitations and restrictions that have burdened AID.’ Congress will have to put up the money and Congress will put such restrictions on the use of the money and how it is administered as Congress believes the situation demands.

“Moreover, organizing by statute will not give greater assurance to Congress that their management will be sounder than if created by executive action. This is fatuous—the people appointed to the Boards and the executive management and the way they perform will be the basis for Congress’ judgment on this issue—not whether they are organized by statute or executive order.

“The most important reason for going with option B is only alluded to in my view. Whatever the importance of our Development Goals (which the Corporation and Institute are to serve) they cannot be developed or pursued in a vacuum—they are an important if not essential ingredient of our foreign policy posture. They cannot be pursued without careful integration with our foreign policy machinery—total independence which option A suggests would lead inevitably to serious conflicts within the Government and Congress not the President would be the body to resolve them. As creatures of Congress (under option A) the Corporation and Institute would have the opportunity to pursue courses at variance with our basic objectives. This may be unlikely but it is not impossible. Even with AID in the Executive Branch and subject to State, the level of independence was often a source of concern.

“There is no question in my mind but that we should go with option B.” (National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 323, Foreign Aid, Volume I 7/70-1971)