592. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon1 2

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  • Approach to Peru

At my request, Dick Helms has conducted [text not declassified] The study does not offer any singularly promising course of action; however, one initiative was presented which deserves exploration.

According to CIA, at the present time, Velasco’s overthrow and replacement by an element more amenable to meaningful negotiations does not appear possible. Should our assessment of the political atmosphere in Peru in the next few weeks show that Velasco continues to hold the dominating position in the Peruvian Government and that he is in for a prolonged tenure, one possible step could be that already advanced by Ambassador Irwin and not rejected out of hand by the Peruvians: The buying out of IPCs interest by a U.S. or internationally-owned consortium which would pay off both the IPC and the Peruvians over a period of years. This approach was suggested in mid-March to Messrs. James Cannon and Richard Aldrich, members of Governor Nelson Rockefeller’s staff, by Major Carlos Velasco Alvarado, the brother of the President who is assigned to Washington, with the implication that the President would be interested in a private cash settlement for himself in any such arrangement. Thus, while Major Velasco may not really be speaking for his brother in this matter, this avenue to solving the IPC problem—i.e., payment of a personal bribe to President Velasco—should be explored. [text not declassified]

Recommendation: I recommend that [text not declassified] explore this new [text not declassified] approach.

See me

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 794, Country Files, Latin America, Peru, IPC (DAD [Donald A. Dennis]). Secret. Sent for action. Nixon approved the recommendation. Helms’s study is published as Document 591. There is no evidence that the US Government explored the option of a cash payment to President Velasco. Although IPC never received direct compensation from the Peruvian Government, in early 1974 it agreed to give lump-sum payments to the U.S. Government with subsequent distribution to various companies who had lost assets through expropriation. For further information, see Shane Hunt, “Direct Foreign Investment in Peru: New Rules for an Old Game,” in Abraham F. Lowenthal, ed., The Peruvian Experiment—Continuity and Change under Military Rule, pp. 302–349.
  2. Kissinger requested that Nixon authorize the CIA to explore whether a large consortium could buy out IPC assets.