182. Memorandum From James H. Critchfield, Special Assistant to the Deputy Director of Operations, Central Intelligence Agency, to Director of Central Intelligence Schlesinger1

    • White House Concern with the Foreign Policy Implications of the Energy Crisis
Early last week I met with Ken Dam to give him an appraisal of where relations stand among the producing countries, the oil companies and the consuming countries. He has said that the scope of his responsibilities are such that he cannot follow in any detail the continuing negotiations between the oil companies and OPEC but he does require periodic updating.
Later in the week I met with Charles DiBona and Hal Saunders of Dr. Kissinger’s office. Our discussions focused on the status of the effort within the administration to formulate policy concerning international energy problems. DiBona said that on the one hand he has a clear-cut responsibility in this field but on the other has a newly-assembled staff of six and an array of problems. On the domestic side the energy message had until now absorbed his entire effort.2
Saunders observed that we thus far had no well-defined mechanism for dealing with the many complicated energy problems that are before us.
Both Dam and DiBona are generally informed of the role that I play in energy affairs. Dam expressed the view that DiBona’s office and the NSC staff would have to carry the main burden in the foreign field. Until now the presence of James Akins from State at the White House has helped to keep State tied into this. Also, Deputy Under Secretary Casey has increasingly become involved in foreign energy problems.
I gave both DiBona and Saunders copies of a proposal developed by a Saudi entrepreneur named Adnan Kashoggi3 which has separately found its way to the President’s office through his secretary and through Bebe Rebozo, both of whom are known to Mr. Kashoggi. This is an imaginative proposal for marketing Saudi participation crude in [Page 471] the U.S. and for investing Saudi surplus oil money in the U.S. economy. We all agreed that it is illustrative of the kind of problem that must be followed by someone.
Comment: It was my impression that Mr. Ehrlichman was charged by the President sometime before the inauguration with pulling together a mechanism for examining the related problems of energy and our policies for dealing with the producing countries. I was initially told that the group would consist of Mr. Ehrlichman, Secretary Shultz and Dr. Kissinger. James Akins, Harold Saunders and I were identified as working members. Under Ehrlichman’s guidance we went through a briefing exercise which brought in Bill Simon from Treasury, Ken Dam, Peter Flanigan and several more junior aides. About the same time Mr. Ehrlichman established an ad hoc group for dealing with the transient crisis that followed the Shah’s announcement on 23 January that he was assuming full control of the oil operations in Iran.4 Since that time this arrangement has been dormant. In the meantime Dr. Kissinger has launched an NSSM5 focusing on the problem.
I have continued to keep both Secretary Shultz and Dr. Kissinger’s office generally informed on oil negotiations. The detailed material, however, has gone only to the NSC staff and, of course, the appropriate analysts in the Agency. The material sent to the NSC staff has been available to Jim Akins who continues to maintain an office in the Executive Office Building.
Late in December the President asked Ambassador designate Helms to submit to him an analysis of the Middle East in the context of our energy interests.6 This paper was given to DiBona by the President. Dr. Kissinger’s office also has the document. Neither has to my knowledge taken any action on the basis of it. It is my impression that there are people within the NSC staff who are following international energy developments in some detail. For this reason I am making a point in seeing that everything relevant that comes into my hands goes directly to them. It is now my impression that the NSC staff will carry the principal burden for formulating foreign policy relating to energy matters and that Ken Dam and Charles DiBona will play principal roles in pulling other interests in Treasury and the White House together. Presumably Casey, supported by Akins’ replacement George Bennsky and where applicable the regional offices, will be the focal point in State for energy affairs.
James H. Critchfield
  1. Source: Central Intelligence Agency, Executive Registry Files, Job 80–M01048A, Box 4. Secret; Sensitive. Sent through the Acting Deputy Director for Operations.
  2. See Document 177. On March 27, DiBona also complained of his staffing problems and the ambiguity of his position in a memorandum to Ehrlichman, Kissinger, and Shultz. (National Archives, Nixon Presidential Materials, NSC Files, Box 250, Agency Files, National Energy Office, Vol. II, March 73–July 73)
  3. Not found.
  4. See Documents 152 and 161.
  5. Document 171.
  6. See Documents 149 and 166.