Foreign Relations of the United States, 1969–1976, Volume XX, Southeast Asia, 1969–1972

201. Telegram From the Embassy in the Philippines to the Department of State ¹

Manila, December 1, 1969, 0440Z.

12150. Subj: PHILCAG Overseas Allowances. Ref: State 198599² and 199807.³

1. Regret delay in replying to State 198599. It arrived during my absence at Baguio, and senior staff here so unanimous in feeling suggested second démarche to Marcos on subject would be so counterproductive that they decided to await my return. I share view and hope you can satisfy your requirements at home on this subject through Lagdameo and Melchor. If you feel strongly otherwise, I will of course see Marcos.

2. A peripheral reason for my reluctance is that almost without exception I have tried to handle some aspect of Symington Report in each visit I have had with him. It is by now a sore and dreary subject.

3. A far more important reason is that I think he would feel that I was returning to suggest a formula to him which I had previously given him. When I saw him on November 14 I suggested that he might want to handle the subject matter involved in a statement before actual release of the testimony based on the various reported leaks out of the Committee. I suggested that he might note that expenses of the operation were overburdening as far as the Philippine Government was concerned, and that he had felt it necessary to mitigate these extraordinary costs in same manner as some other troop contributing countries by accepting US offer to pick up expenses for equipment and supplies for PHILCAG in Vietnam and to offset costs of necessary special overseas allowances by other arrangements. I suggested that he could also say that he and we had felt it in our mutual interests to accelerate normal deliveries of US military assistance for badly needed domestic Philippine programs. I told him that the testimony would show that these latter were unconnected so far as he was concerned with PHILCAG itself but were needed on their own merits for mutually agreed objectives in promoting meritorious Philippine domestic programs. After suggesting the above, I left it in written form with him for his consideration. Your new formula is somewhat better now that the text is public but it does not seem sufficiently so to make any great difference.

4. I am equally concerned about dangers in the formula you suggest if we press it upon him too hard. I feel sure that Marcos at this point would not be willing to make such a statement and let it go at that because it will raise anew the unsettled question as to “where the money went.” I feel he would almost certainly add a long and detailed (and exaggerated) account of expenditures involved in heretofore secret attempts to serve as peace maker on Vietnam. This would be unfortunate in my opinion and would leave things no better off than they were.

5. We here find it difficult to understand why you place so much importance on this particular point. The public record is quite specific on the question of funds and the word of US Executive Branch officials will be generally accepted here, even though GAO has the problem now in Washington. To that extent it seems to us that Marcos has a problem far greater than we do. But Filipinos are not noted for and do not expect perfect consistency. Marcos plainly prefers to see things remain as fuzzy as they are at present and to ride it out. To that extent, if we are searching for precision, we are definitely at cross purposes.

6. Even if he made suggested statement, we feel it would do very little to help us here. The bitterness over PHILCAG is not the exact amount of money nor how it was used. It was rather the biting and sarcastic approach to the Philippines and PHILCAG itself by the two Senators involved and particularly Fulbright’s implication that “the PHILCAG was nothing but hired mercenaries.” He might be reminded that his approach was a classic example indeed of “The Arrogance of Power.”⁴

7. We will be sending you in a few days our attempted assessment of the damage done here by this whole exercise. We may be somewhat over the hump on the first issue which was PHILCAG. It drew the first attacks because it was the first item reaching here through press reporting in the States. The fact that that reporting was distorted and superficial only served to make it worse. We are now starting up the second hump as the local press has finally had actual texts long enough to start dealing with the remainder of the report.

Byroade

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 556, Country Files, Far East, Philippines, Vol. II. Secret; Nodis.
2. In telegram 198599 to Manila, November 26, the Department expressed bewilderment at Philippine Presidential Press Secretary Tatad’s November 20 press statement that “Philippines has received no ‘payments of any kind in support of the PHILCAG or its personnel.’” It advised Byroade to “let Marcos know that we foresee trouble with this” and that “it is most important that Marcos not reiterate these statements in face of contrary testimony from Hearings. If pressed, he must continue to support official testimony as it appears in the transcript.” The Department then proposed a scenario in which U.S. payments would be described as offset-type funds: “The funds which the United States did provide to cover the costs of overseas allowances for PHILCAG went directly to the Philippine Government. These offset funds made it possible for the Philippine Government to provide for this contingent without curbing important domestic programs.” (Ibid.)
3. Telegram 199807 to Manila, November 29, reported Usher and Moore’s November 26 conversation with Philippine official Alex Melchor about the PHILCAG overseas allowances payments, with the latter stating that he did not think that U.S. accounting of the amount of the funds provided was correct. (Ibid.)
4. Reference is to J. William Fulbright, The Arrogance of Power (New York: Random House, 1967).