Office of the Historian

145. Telegram From the Department of State to the Embassy in Saudi Arabia1

Washington, June 7, 1975, 2353Z.

133649. Subject: Northrop’s “Commission” Problems. Ref: Jidda 4028.

1. After careful review of issues, Department requests Ambassador provide May 23 letter to Prince Sultan. In doing so, you should state regret over troubling Sultan with another letter but explain that for legal reasons, USG needs a written response from Sultan specifically addressing Commission in Peace Hawk IV program.

2. FYI: Should Sultan’s response disapprove all or part of Commission, DOD would have basis for action and Northrop, according to its counsel, would have legal argument in effort to avoid liability for payment of all or part of balance of Commission to Triad. Northrop has already paid $6 million. Sultan’s response, however, will not eliminate likely Northrop-Triad legal dispute. End FYI.

3. Because Sultan’s May 17 letter is unclear with regard to retroactivity intended for policy statements regarding Commission, it is not useful with respect to programs prior to Peace Hawk V program. Accordingly, specific letter regarding Peace Hawk IV program is essential.

4. We do not wish you to request Prince Sultan’s permission at this time to release text of May 17 letter as statement of SAG policy in all cases. We believe SAG should issue clear policy statement prohibiting agent fees unless they are reasonable, justifiable and clearly identified in contract. However, we would prefer to transmit to you our views on this matter in greater detail for you to discuss with Sultan at a later date.

Kissinger

  1. Summary: The Department directed Akins to request a letter from Prince Sultan specifically clarifying the retroactive nature of his denial of agents’ fees associated with the Peace Hawk IV program.

    Source: National Archives, RG 84, Jidda Embassy Files: Lot 79F80, DEF 12–5.13 Northrop. Secret; Immediate; Exdis. Telegram 4028 from Jidda, June 7, is in the National Archives, RG 59, Central Foreign Policy File, D750199–1183. For Prince Sultan’s May 17 letter and Fish’s May 23 reply, see Documents 131 and 137.

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