376. Memorandum for the 40 Committee, Washington, July 9, 1971.1 2

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9 JUL 1971

MEMORANDUM FOR: The 40 Committee
SUBJECT: Status Report --[text not declassified] Support to the People’s National Congress Party of Guyana

1. Summary

A monthly subsidy of $5,000 has been paid to Prime Minister Forbes Burnham of Guyana [text not declassified] since 1 July 1969. The 303 Committee, on 17 June 1969, approved the subsidy for two years subject to review at the end of the first year. Renewal was approved by the 40 Committee on 27 June 1970 on the grounds that the PNC was making satisfactory progress toward establishing a permanent party mechanism. [text not declassified] has no plans to seek renewal of the subsidy which expires on 30 June 1971. The termination of this subsidy has been cleared with Ambassador King and the Department of State.

The purpose of the subsidy was to help Burnham build the People’s National Congress Party (PNC) into an effective, permanent political organization. With the continuing threat of pro-Communist leader Cheddi Jagan, whose supporters outnumber those of Burnham’s, the need was felt to assure the continuation of an effective party organization following the 1968 election victory by Burnham.

Burnham has understood from the outset that the subsidy would terminate this year. [text not declassified] in January 1971, Burnham was reminded of the [Page 2] termination date. At that time he stated that his party had improved its financial position considerably.

This report describes the progress that has been made by the PNC and notes the possibility that some other form of financial assistance to Burnham may become advisable with the approach of new elections, which must take place by March 1974 but can be called earlier at Burnham’s discretion.

2. Status Report

[text not declassified] With the help of the subsidy, Burnham has made progress in developing his party as an effective political force; probably the most impressive evidence of this is the victories won in local elections during the past year after considerable grass roots campaign effort. [text not declassified]

The groundwork has been laid to allow Burnham’s party to achieve relative financial solvency without resorting to schemes that entail unacceptable political risks. Burnham has succeeded in obtaining larger public contributions to the party from private sources. In addition, the PNC has continued to collect funds from the Greenland Investment Company, a holding company controlled by the party. There have been no politically embarrassing incidents connected with these fund-raising efforts by the PNC.

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The PNC has made some inroads, albeit slight, in winning support from the East Indian community. Burnham is hampered, however, by the overwhelming loyalty, for racial reasons, of the East Indians for Jagan.

The subsidy has also allowed the U.S. Government to keep open a direct channel of communication with Burnham. This has had special advantages during the past year when Burnham’s official relations with the U.S. have been somewhat strained as a result of his moving leftward in economic policy and towards a “Third World” position internationally. It is likely, for example, that the capability to present views directly to Burnham allowed us to moderate his outlook on the security dangers that would ensue if Burnham acceded to the Soviets’ request for a resident Soviet Embassy in Georgetown. This was done [text not declassified] by passing documented information to Burnham on Soviet clandestine activities in Mexico and elsewhere in the Free World. Although non-resident diplomatic relations between Guyana and Moscow exist, Burnham has shown definite signs that he is now less interested in allowing a permanent Soviet mission to be established in his country. This is subject to change, however, if Burnham should come to feel it politically or economically expedient to make a deal with Moscow.

While the present subsidy thus expires, it is unlikely that either Burnham or the U.S. Government will wish to dispense with [Page 4] this confidential relationship of many years or that some level of funds may not be highly useful in the future for both sides. A meeting is being sought at an early date [text not declassified] to discuss the next phase of this relationship. [text not declassified] It is also possible that the tour d’horizon which we expect from this meeting, including Burnham’s views of where he is going, will suggest that an insertion of funds is called for. In any event, Committee approval would be sought prior to any further commitments being made.

The outcome of the next election (which must be held no later than March 1974) would not be in real doubt; Burnham will win, if necessary by rigging the election. Our purpose in providing support would be to help make the voting result look more plausible through funding a sufficient level of pre-election organizational activity by Burnham’s party to lend credence to the victory. Burnham’s party will have to engage in a wide range of election campaign activity, including such things as a major effort in organizing the overseas vote in the United States and Great Britain as he did in 1968. The plausibility of the result will be important in gaining at least passive tolerance of Burnham’s government among the East Indian population, who constitute more than half of the population.

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3. Coordination

The conclusions in this status report have been cleared with Assistant Secretary of State for Inter-American Affairs Charles A. Meyer.

4. Recommendations

It is recommended that the Committee note the progress that has been made in strengthening the PNC and that the subsidy to the PNC will expire in June 1971 with no renewal requested. It is also recommended that the Committee take cognizance of the possibility that some different form of financial assistance to Prime Minister Burnham may be considered advisable in the near future. Cheddi Jagan, who is totally at Moscow’s bidding, still poses a serious threat in Guyana; his East Indian supporters comprise a majority of the population and are increasing in numbers at a faster rate than the negroes. Burnham is still clearly preferable from our point of view.

  1. Source: National Security Council, NSC Intelligence Files, Country Files, Guyana, 23 May 1969–6 February 1973. Secret; Sensitive; Eyes Only. A handwritten note at the bottom stated, “Telephonically approved by the 40 Committee on 3 April 1972.” In a memorandum from Jessup, Kissinger indicated his approval the same day. (Ibid.)
  2. Covert assistance to Prime Minister Burnham had strengthened his government, and helped to maintain communication between the U.S. Government and the PNC Party. Even though the assistance terminated as planned on June 30, it was expected that Burnham’s relationship with the U.S. Government would remain unchanged.