Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

55. Information Memorandum From C. Fred Bergsten of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)¹

Washington, March 12, 1971.

SUBJECT

• Presidential Authority or Direct Congressional Authorization of the New Aid Institutions?

You indicated yesterday that you agree with George Shultz that the new development assistance institutions should be created via delegation of authority to the President, rather than directly by statute.²

I fully understand the reason for your judgment. However, I disagree with it and am not sure that you have considered all aspects of the issue.³

A paramount question is whether the Shultz option is legally possible. His own memo to the President indicates that he prefers the Presidential route “subject to satisfactory resolution of the legal issue”. The AID lawyers argue that it is impossible for Congress to delegate power to create a Government corporation. On the other hand, the Treasury lawyers feel that it can be done.

Since this issue is crucial, and in fact determines whether Shultz would even stick by his own recommendation, I have sought a legal opinion from the Department of Justice. It would obviously be extremely embarrassing to attempt the Presidential route and be faced later with a legal impossibility of carrying out our own intent. I will therefore hold off giving you a memorandum to submit to the President on the issue until we get the opinion from Justice early next week.

My guess is that Justice will support the Shultz view that it is possible to go the Presidential authority route. Even with the legal hurdle out of the way, however, I feel that our trying to do so would be a major mistake—if only because it will almost certainly not work.

Numerous Congressional leaders raised the issue with Rudy Peterson during his recent consultations. Dave Abshire’s report to Secretary Rogers on the consultations (Tab A)⁴ indicates “every member consulted evidenced deep concern that the new units be established by statute rather than by Executive Order.” Peterson met with the Chairmen and sixteen senior members of the Foreign Relations, Foreign Affairs, and Appropriations Committees.

The Shultz option thus looks like a non-starter. This is especially true since there is widespread feeling on the Hill that we have not lived up to your commitment last September for thorough consultations on the new aid program.⁵ If we stonewall their clear and unanimous views on an issue like this, we will obviously jeopardize the legislative chances of the whole program.

In response to these Congressional views, in addition, Peterson indicated institutions would be established by statute. To whatever extent we regard Peterson as our spokesman, he has therefore already committed us to that course of action. And his role as our spokesman would obviously be compromised if we repudiate him by going the other way.⁶

If we do decide to try the Presidential authority route, despite the considerations cited here and the others mentioned in my earlier memo, I would certainly hope that we would be prepared to switch gears gracefully—and accept the creation of the institutions by statute—in response to the Congressional insistence on doing so which is virtually certain to emerge. How could we refuse without raising serious doubts about our sincerity in creating “independent” institutions? I fully share your objective of retaining effective Presidential control over development assistance, but feel that a better way to do so is to minimize suspicion of our intent by avoiding such a line of questions.

In short, why butt our heads against a stone wall and exacerbate Congressional suspicion of the Executive in the process? I urge you to re-consider your position on the issue before you have to make a firm recommendation on it.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 195, AID 1/1/71-12/21/71. No classification marking. Kissinger wrote at the top of the page: “What a fanatic.”
2. Kissinger’s comments are not further identified. Shultz’ opinion is in Document 53.
3. In a March 8 memorandum to Kissinger, Bergsten had strongly argued that the International Development Corporation and the International Development Institute should be created by statute rather than by the President. (National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 195, AID, 1/1/71-12/31/71)
4. Document 52.
5. In his September 15, 1970, statement, the President said: “I look forward to consultations with the Congress on our aid objectives and the ways in which we can achieve them, as a solid foundation for the legislative proposals which I shall submit next year.” (Public Papers of the Presidents of the United States: Richard Nixon, 1970, p. 757)
6. Kissinger wrote in the margin next to the paragraph: “Not decisive.”