Foreign Relations of the United States, 1969–1976, Volume XLI, Western Europe; NATO, 1969–1972

236. Minutes of a Senior Review Group Meeting¹

Washington, October 5, 1971, 3:35–3:57 p.m.

SUBJECT

• Malta

PARTICIPATION

• Chairman—Henry A. Kissinger
• State
• U. Alexis Johnson
• Russell Fessenden
• Ronald Spiers
• Herbert Spiro
• Defense
• Armistead Selden
• Brig. Gen. Harrison Lobdell
• Col. Marshall Baker
• JCS
• Admiral Thomas H. Moorer
• Brig. Gen. Francis J. Roberts
• CIA
• Lt. Gen. Robert E. Cushman
• James Hanrahan
• Treasury
• Paul Volcker
• John McGinnis
• OMB
• Kenneth Dam
• AID
• John Hannah
• NSC Staff
• Col. Richard Kennedy
• Helmut Sonnenfeldt
• A. Denis Clift
• R/Adm. Robert Welander
• Mark Wandler

SUMMARY OF CONCLUSIONS

It was agreed that:

—The primary objective of U.S. policy toward Malta is the successful renegotiation of the UK-Malta defense and financial agreement. A successful agreement would: (1) safeguard U.S. strategic interests; (2) deny Malta’s military facilities to the Soviet Union; and (3) keep Malta from becoming dependent on Libya for financial assistance. If the negotiations fail, we would not let them disintegrate completely without giving the President the option of taking such actions as may be required to ensure an outcome satisfactory to the U.S.

—The Agency for International Development should provide the U.S. share of the funds pledged by the UK for the Malta negotiations.

—The Under Secretaries Committee should monitor the UK-Malta negotiations.

Dr. Kissinger: I suggest that we move on to Malta now.

Mr. Johnson: I might as well lead off the discussion since I have been so involved with Malta. In fact, I’ve practically been the desk officer for the last few months.

Dr. Kissinger: Could you sum up the situation for us?

Mr. Johnson: I think we can point with pride to recent developments. We and the British were engaged in some brinksmanship, and a lot of people were getting nervous at Mintoff’s threats. Now we can point to some results. We have the Mintoff-Heath agreement to negotiate for six months on a more detailed defense and financial agreement.

Mintoff had originally demanded 18 million pounds, and the British offered 10 million pounds. We contributed $5.4 million, or about 2.25 million pounds, to the British package of 10 million pounds. The British also agreed to make the first payment on September 30. We told them we would be prepared to transfer our contribution when things were fixed on the Hill.

In effect, we have a six-month truce, and I hope we will be able to maintain the status quo. We must, however, develop contingency plans for the future. The British said they would try to round up all the bilateral offers within three months. Would we consider making a bilateral offer to Mintoff? Right now we have an AID program of very modest size in Malta.

Dr. Kissinger: What about the ship that went to North Vietnam? Is that no longer a problem?

Mr. Johnson: It’s not a problem. If you permit, I will return to it a little later. As I was saying, we have a small PL 480 program on Malta. We also have a $150 thousand oceanographic cooperation package which we offered to former Prime Minister Borg Olivier before the election. He refused it, but we can still offer it to Mintoff.

We have some CCC loans and a couple of other items which could be put into one package. The problem in trying to put a package together, though, is to decide how substantial it should be. Should we try to put together a relatively large aid program in three months? Our general conclusion is that this is not the time to do that. What we have done so far should be satisfactory. Anyway, at the end of six months, we may very well face the same situation we did three months ago. The negotiations may break down, with Mintoff saying he needs more money, and with the British saying they have put up all the money they can. If that happens, will we be willing to put up 8 million pounds, or $20–25 million? Would we take over completely from the British if the negotiations break down and if they [the British] are kicked out of Malta? If that were the case, would we set up a major aid program? Or would we let the British play chicken and brinksmanship again with Mintoff, on the assumption that Mintoff will at the last moment settle for whatever he can get?

If Mintoff kicks the British out, the move would create additional unemployment. With no more British presence on Malta, Mintoff could turn to Libya or the Soviet Union. He may have gotten money from Qadhafi [Libyan Prime Minister]. Nevertheless, it is difficult for us to see the Libyans putting up as much money as the British. But assuming they do, just for the sake of argument, they will probably demand that the British and Soviets be kept out. From our point of view, this is tolerable. If we fail to keep the British in, our primary goal is to keep the Soviets out.

If Mintoff fails to make a deal with Libya, will he turn to the Soviet Union? We are just speculating, of course, but we are inclined to be doubtful that the Soviet Union would put up a substantial amount of money. We also doubt that Mintoff could remain in office if he were to make a deal with the Soviets.

We don’t need to face any of these issues now. They will come before us in six months.

Dr. Kissinger: Why in six months?

Mr. Johnson: That’s where the Heath-Mintoff agreement ends, assuming they can’t reach a new one.

Mr. Fessenden: The issue is 10 million vs. 18 million pounds. There is a good chance the negotiations will fail.

Mr. Johnson: In summary, we recommend that we be prepared to play brinksmanship again, but there is no need for a final decision now.

Dr. Kissinger: Our problem, as I see it, is to make up a difference of 8 million pounds, if it ever comes to that. This could be done by us or by NATO.

Mr. Johnson: The British will try to stay in at 10 million pounds, and 2.25 million of those pounds are our contribution. If the negotiations break down, we must pick up at least 18 million pounds.

Dr. Kissinger: I don’t understand why we would have to pick up 18 million. It would only be 8 million if the British stay in. If Mintoff tells the British he accepts their 10 million pounds, the British will stay in. Once the negotiations look like they are breaking down, we can save them by giving 8 million pounds to the British. With skill, we should be able to handle this. If we faced the issue of 18 million pounds, we can face the issue of 10 million.

We could, for example, tell the British to go as close to 18 million pounds as possible and that we will make up the difference. We could have some kind of understanding with the British.

Adm. Moorer: For whatever it’s worth, the NATO Military Committee which met in Toronto² heard a very optimistic report on the Maltese situation.

Mr. Johnson: We need to keep a close watch on the situation, and we will do so. This is also a NATO problem. We have received contributions from the FRG and Italy.

Dr. Kissinger: I would like to make a couple of observations. First, we obviously have a significant interest in Malta. Second, we want to keep the Soviets out. Therefore, we want the Heath-Mintoff negotiations to succeed. If the negotiations fail, we will not let them disintegrate completely without giving the President the option of filling the gap, if he wishes. Third, we are not willing to let Libya come in, if this can be prevented at a manageable cost. The maximum price now seems to be 10 million pounds.

Mr. Johnson: Assuming the British are out completely, the maximum price is 18 million pounds.

Dr. Kissinger: But I am assuming that with skill we can keep the British going. If we assume Mintoff will settle at 18 million and the British will be willing to stay at 10 million, we can keep them in the negotiations.

Mr. Spiro: Mintoff, as you know, has asked that Dr. Kissinger come to Malta.

Dr. Kissinger: That’s right. We thought of informing him that it might be possible for me to see him if he came to the UN meeting in New York.

Mr. Fessenden: We just received word today that he is not coming to the UN.

Dr. Kissinger: I don’t want to go to Malta. If my seeing him will make that much of a difference . . .

Mr. Johnson: That hasn’t come up.

Dr. Kissinger: It has in the back channels.

Mr. Johnson: Now isn’t the time for a meeting. It’s best that the British deal with him. They have known him for a long time, and they know how to handle him.

Mr. Selden: That’s right. The chief British negotiator was so sure of himself that he took time off to go sailing for two weeks in Greece.

Mr. Johnson: The British have done well.

Dr. Kissinger. Does everyone agree on the principle that before the negotiations break down, you will come back here?

[All agreed]

Are there any other matters we should bring up? Hal [Sonnenfeldt]?

Mr. Sonnenfeldt: There are two things: (1) where will the $2.25 million come from; and (2) what about Sixth Fleet visits?

Dr. Hannah: We have a problem. This project has not been justified to Congress. If we decided to provide Supporting Assistance funds, Congress would have to be informed, and I would have to lift the Foreign Assistance Act restrictions now in effect. These restrictions were applied, as you know, because a Maltese ship owned by a Greek called at Communist ports.³

Dr. Kissinger: Are we still having trouble with that ship? I thought we had a scheme to buy it.

Mr. Johnson: Mel [Laird] had a scheme, but it didn’t work out. [1 line not declassified]

Dr. Hannah: The ship had visited ports in North Vietnam and North Korea. State said we should forget about it because the ship has not made such calls in 18 months.

I just learned today, though, that the ship had been in dry dock. It is now at sea again. Malta, I understand, has done nothing to prevent the ship from calling at Communist ports. The problem is that in order for Malta to qualify for Supporting Assistance, I must find that the proper action has been taken by Malta.

An alternative way of lifting the restrictions would be for the President to issue a Determination stating that this action is in the national interest. It also seems to me that we must justify this project to Passman and Proxmire.⁴ It will be difficult with Proxmire.

Dr. Kissinger: Why will Proxmire be difficult?

Dr. Hannah: He is difficult on everything.

Dr. Kissinger: But in this case we are giving aid to a left-wing government. He would not be able to say that we are supporting a military regime.

Mr. Johnson: That’s one reason we told the British to try to get an agreement before we go to the Hill.

Dr. Hannah: If we want to take quick action, I think we must go the Presidential waiver route.

Mr. Johnson: Our lawyers feel that since the ship has not called at the ports in 18 months, it’s grounds to take them [the Maltese] off the list. We would, of course, have egg on our faces if we take them off the list and the ship calls at the ports one week later.

Dr. Hannah: But the ship was in dry dock, and it is now at sea. The Maltese did nothing to prevent it from calling at those ports again.

Mr. Johnson: We certainly can’t expect to get a firm commitment from the Maltese. I think we should get our lawyers together and make a finding to take them off the list. We have done this in the past.

Dr. Kissinger: Either way—the legal way or the Presidential Determination waiver—we can take them off the list.

Mr. Johnson: I prefer using the legal way.

Dr. Kissinger: Yes.

Mr. Johnson: I thought the legal people of AID agreed with this action.

Dr. Hannah: We were in agreement—until today, when we found out the ship was on the high seas again.

Dr. Kissinger: I think we need new lawyers.

Dr. Hannah: The lawyers can argue about it. Congressional consultation won’t be so simple. We thought we were in good shape, but now Fulbright⁵ has started out with a 30 percent cut on the authorization bill.

Mr. Johnson: This is also a political matter, and we can give you some help.

Mr. Sonnenfeldt: What about the Sixth Fleet visits?

Mr. Johnson: We sent out a telegram, which was cleared by all the agencies, saying there should be no Sixth Fleet visits, if the price is Soviet visits.⁶ Everyone agreed with that position.

Adm. Moorer: The British haven’t talked to them about visits of NATO ships yet, only about British ships.

Mr. Johnson: I don’t think the British should push on this.

Adm. Moorer: I agree.

Mr. Johnson: There’s one other point I should bring up. Our annual commitment to the British is for five years. The Maltese are talking about a seven-year agreement, though. If they do agree on seven years, we are prepared to go along with it. Don’t you think that’s right?

Dr. Kissinger: Yes, no question about it.⁷

1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–060, Senior Review Group Meetings, SRG Meeting—Malta 10/5/71. Top Secret. The meeting took place in the White House Situation Room. All brackets are in the original. The meeting focused on the response to NSSM 135, Document 232.
2. The Military Committee is NATO’s highest military authority, composed of the chief of staff of each member country except France.
3. Reference is to the Timios Stavros. See footnote 3, Document 225, and footnote 5, Document 228.
4. Representative Otto E. Passman (D–LA) and Senator William Proxmire (D–WI).
5. Senator J. William Fulbright (D–AR), Chairman of the Senate Foreign Relations Committee.
6. Document 228.
7. A summary of the decisions taken at the meeting were sent to the Embassy in Valletta in telegram 190144, October 14. (National Archives, RG 59, Central Files 1970–73, POL 1 MALTA–US)