Foreign Relations of the United States, 1969–1976, Volume XXXVIII, Part 2, Organization and Management of Foreign Policy; Public Diplomacy, 1973–1976

183. Action Memorandum From the Assistant Secretary of State for Politico-Military Affairs (Vest) to Secretary of State Kissinger¹

Washington, April 15, 1976.

Establishment of an Arms Transfer Board

The Problem

In a recent inspection report of “The National Security Function in the Department of State”,² S/IG has included the following recommendation: “The PM Bureau propose to the Secretary the establishment of an interagency Arms Transfer Board, with the Under Secretary for Political Affairs as chairman, to decide or make recommendations to the Secretary on all major arms transfers, following NSC-style procedures with staff support provided by PM or its successor”.³

Discussion

In the general area of military relationships between the United States and foreign governments, there are basically two separate, but often related, processes. One concerns availability of funds, either grant or credits, to be used by the foreign government to acquire military equipment and services from the USG. The other process concerns the provision of the equipment and services.

The funds allocation process is based on that provision of the Foreign Assistance Act which specifies that “Under the direction of the President, the Secretary of State shall be responsible for the continuous supervision and general direction of economic assistance and military assistance programs, including but not limited to determining where there shall be a military assistance (including civic action) program for a country and the value thereof, to the end that such programs are effectively integrated at home and abroad and the foreign policy of the United States is best served thereby.” Allocations of FMS credit and guaranty funds are made under authority of a similarly worded provision in the Foreign Military Sales Act.⁴ Several years ago, we established, under the chairmanship of the Under Secretary for Security Assistance, an interagency board called the Security Assistance Program Review Committee (SAPRC). All major program recommendations on military assistance and FMS to you and the President have emanated from this body. The day-to-day program decisions have been made by the Under Secretary, with PM functioning as his staff.

By contrast to the highly structured mechanism for allocating security assistance funds, procedures for approval of arms transfers are varied and disparate. Decisions on sales to most countries under the Foreign Military Sales Act are cleared with State, but some sales are made by DOD without our prior knowledge. Most individual transfers under the grant military assistance program are not cleared with State, although the general composition of each country program is approved in the SAPRC.

There is no central board or committee which acts in this way to monitor or control the commercial sale of arms. There is no comparable body to the SAPRC in the FMS sales process. The Inspectors believe that “a forum for systematic interagency deliberations leading to arms transfer decisions by the Secretary is urgently needed”, that is, a forum responsible for military sales and assistance.

The Department’s involvement in arms transfers has increased dramatically in the last two years. The Inspectors’ criticism that we have not performed in a comprehensive manner is probably justified. Not only are the number of agencies legitimately interested in the issue increasing, but within the Department, there are also more factors (e.g. human rights, UN votes, etc.) which must be taken into consideration.

In addition to the issues raised by the Inspectors, we face further difficulties in light of the 1976 Security Assistance bill, which will probably be passed by Congress in the very near future.⁵ Included in that legislation are a number of reporting requirements, which although singly applying to differing aspects of arms sales, in total must present a comprehensive and cohesive picture. We have no single reporting channel from the Administration to the Congress, but the recommended Arms Transfer Board could serve as the organizational vehicle to review the reports before transmission and thereby insure some consistency.

The new legislation also mandates a ceiling of $9 billion in 1975 dollars on FMS sales and on defense articles and services that are licensed or approved for export by PM/MC. Central management of this ceiling is essential if we are to avoid major difficulties and embarrassments. This is another function that could be handled by the Arms Transfer Board.

We must expect some resistance from other agencies if we attempt to structure the present system. Some (particularly DOD) will see it as a further encroachment on their responsibilities. Within the Department itself, the Board will not be received unanimously as a great blessing.

Options (on establishment of Board)

1. Reject specific S/IG recommendation, but improve coordination in the sales process to insure that at least all relevant Department organizations and ACDA are involved in the decision-making process.

Pro

• —Would be least disruptive to present arrangements and therefore would not create bureaucratic conflicts.
• —Would still achieve the minimal coordination required.

Con

• —Would not be the most effective mechanism.
• —Might not be entirely satisfactory to Congress.

2. Establish an Arms Transfer Board consisting only of State Department and ACDA.

Pro

• —Would at least increase the viability of the State position in any interagency forum.
• —Would make a rational case for our use with any critics.

Con

• —Would not be as comprehensive as might be desirable.

3. Accept S/IG recommendation.

Pro

• —Would make the most organizational sense.
• —Would insure that all relevant views be taken into account.

Con

• —May create bureaucratic frictions.

Options (if Board and Chairmanship to be established)

1. Combine Board and SAPRC, with chairmanship rotating between P (for arms sales) and T (for security assistance programs).

Pro

• —Probably simplest approach.

Con

• —Does not fully resolve question of chairmanship.

2. Maintain separate Board and SAPRC with

• (a) SAPRC chaired by T and Board by P; or
• (b) both chaired by T;
• (c) both chaired by P.

Recommendations:⁶

1. That you authorize us to proceed with interagency negotiations for the purpose of establishing an interagency Arms Transfer Board.

2. That you designate the Under Secretary for Security Assistance (Mr. Maw) as the chairman of this new Board.

1. Source: Department of State, RG 59, Central Foreign Policy Files, 1976, P760070–2328. No classification marking. Sent through Sisco, Maw, and Eagleburger. Drafted by Thomas Stern (PM) on March 16 and retyped on April 15. A draft was cleared by Assistant Legal Adviser for Politico-Military Affairs James H. Michel (L/PM).
2. Not found.
3. The bureau proposal has not been found, but see Document 181.
4. S. 2662, the FY 1976 Foreign Military Aid bill, capped all arms sales at $9 billion per annum and gave Congress the power to terminate aid to nations found in violation of internationally accepted human rights standards. This followed the 1974 passage of P.L. 93–559, legislation that gave Congress the authority to reject government-to-government weapons contracts of $25 million or more proposed by the Executive Branch. (Congress and the Nation, Vol. IV, 1973–1976, pp. 874–875)
5. The conference report for S. 2662 was approved by the House and the Senate on April 28 but vetoed by President Ford. Realizing that it did not have the votes to override the veto, the Congressional leadership introduced a new bill (H.R. 13680) removing, among other things, the $9 billion ceiling. The revised bill was signed into law as P.L. 94–329 on June 30. (Ibid., pp. 875–876)
6. Kissinger initialed his approval of both recommendations on May 7.