255. Telegram 203504 From the Department of State to the Embassy in Nicaragua1

203504. Subject: Jack Anderson’s Articles.

1. Ambassador Sevilla Sacasa called on CEN Director Lazar this morning (August 26) to leave a copy of the press release he had issued the previous afternoon and to set forth his government’s concern that Anderson possessed confidential USG reports critical of General Somoza. He later called to say that President Somoza was also concerned with Anderson’s remarks implying diversion of AID funds to Somoza’s businesses or personal benefit. Sevilla Sacasa asked that the Department deny in writing that it had passed on confidential information to Anderson and that AID funds to Nicaragua were improperly used.

2. Sevilla Sacasa will meet with Acting Secretary Ingersoll tomorrow to reiterate his government’s concerns. Bureau is recommending that the Acting Secretary sign and deliver a letter to the Ambassador at that time stating that the USG has not released any confidential information to Anderson and that intensive audits have not revealed misuse of AID funds in Nicaragua. Text of letter, if approved, will be cabled.

3. Lazar told Sevilla Sacasa that further publicity, such as publication of a letter to Somoza, would only serve to awaken further interest and would likely result in another Anderson column. It is obvious, however, that Somoza’s overriding concern is the need to counter internal opposition speculation that the USG is in fact shifting position and is feeding information to Anderson in this connection. Bureau’s recommendation to Acting Secretary is based on this view.

4. Part of our difficulty in handling this matter derives from the fact that Anderson does have a State Department document detailing [Page 680] some of Somoza’s financial holdings. We obviously don’t know how he got it, but want to avoid prodding him into going into more detail, in print, on the exact nature of the document or other information it might contain. Equally obviously we cannot make any flat assertions, such as Somoza might wish, regarding improper use of AID funds. Anderson’s phrase, “syphoning off,” covers a multitude of activities not all of which are sins.

5. We have counselled Sevilla Sacasa to let sleeping dogs lie. He is not in a position to accept the advice. However, Carlos Dubon appears to be thinking along the same lines. At your discretion you might wish to encourage him in this view or even, if you can find an appropriate way to do so, suggest to Somoza that overreaction to Anderson allegations may in itself be newsworthy.

  1. Summary: Sevilla Sacasa asked the U.S. Government to state publicly that it had not passed confidential information to Jack Anderson and to deny the journalist’s claim that AID funds had been improperly used in Nicaragua. The Department noted that Somoza was concerned that opposition groups might see the Anderson articles as evidence of a shift in U.S. policy towards him.

    Source: National Archives, RG 59, Central Foreign Policy File, D750295–0754. Confidential; Niact Immediate. Drafted by Lazar and Bova and approved by Lazar. In telegram 3364 from Managua, August 27, the Embassy reported that it had encouraged Somoza not to make a public issue of the articles but that Somoza saw the Department’s response to the articles as a test of U.S.-Nicaraguan relations. (Ibid., D750297–0050) In telegram 212569 to the Embassy in Managua, September 8, the Department summarized Kissinger’s note to Sevilla Sacosa assuring the Ambassador that no U.S. agency had provided documents to journalists and that AID had no claim against the Nicaraguan Government for improper use of funds. (Ibid., D750309–1112)