162. Action Memorandum From the Director of the Policy Planning Staff (Lord) to Secretary of State Kissinger1

Sale of Military Equipment to Chile

The Chileans are pressing us for a wide variety of weaponry to redress their military imbalance with Peru. Some of these weapons were initially offered for sale to the Allende government. Nonetheless, adverse public and Congressional reaction to expensive military sales is certain to be heightened by the current human rights situation in Chile. This reaction could jeopardize our capacity to help Chile in other areas, and might also threaten broader interests, such as the FY 75 security assistance legislation about to be presented to Congress, and our ability to deliver on the Mexico City pledge to maintain present aid levels.

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The basic issues, therefore, are:

—Can we meet our previous commitments for military sales and our assurances of support for the junta without running a serious risk of jeopardizing our relations with Congress and our broader interests?

—If we do sell, how much should we sell and when?

—Are any counterbalancing moves available to draw the political poison from arms sales to Chile?

Background

1. The Equipment Picture

Although our grant material program with Chile was terminated in 1968, the U.S. maintained a small FMS credit sales program during the Allende regime. On the day of the coup, September 11, 1973, sales of all lethal items to Chile were placed under review. Prior to the coup, we had officially notified the Allende government of our willingness to sell the M–60 medium tank and authorized release to Chile of price and availability data on the F–5E aircraft to preempt purchase of MIG-21’s from the USSR.

In August 1973 the GOC formally requested 15 M–60 tanks (cost: $7.5 million). Since the coup the GOC has advised the U.S. of its intention to request 18 F–5E’s on a cash basis (cost: $60 million). Delivery of these tanks and aircraft will lessen, but not close, Chile’s gap with Peru.

In addition, Chile has expressed interest in acquiring three major weapons packages (A–7D aircraft, extensive air defense including missiles and cannon, and the TOW anti-tank/assault weapon), a number of lesser items (air traffic control radar, vehicle mounted recoilless rifles, armored personnel and mortar carriers, anti-aircraft cannon and fire control radar, and riot control equipment), as well as a small package of non-lethal equipment. Neither the A–7D nor the TOW has previously been sold in Latin America.

The junta is convinced that Chile faces a major threat from Peru, which now enjoys significant superiority in both tanks and fighter aircraft. If we deny what the junta considers its minimal needs, Chile will make every effort to meet them elsewhere, and its disillusionment and frustration could have unpredictable long-term consequences.

2. The Economic Picture

Chile is seeking to reschedule its massive external debt obligations in order to help resolve the economic chaos inherited from the Allende period. On economic grounds alone, the expenditure of large sums on arms acquisitions at a time when Chile is pleading for concessional economic assistance and generous debt rescheduling is certain to increase criticism of Chile in the US Congress and elsewhere.

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3. The Congressional Picture

Military sales to Chile are unpopular with important members of Congress on three counts: (1) there is extensive distaste for the human rights record of the GOC; (2) opponents of US economic assistance criticize uneconomic use of limited resources by poverty-stricken regimes; and (3) there is concern lest military sales encourage arms races.

Congress has written all three counts into the legislative record. Of the many provisions in the Foreign Assistance and Foreign Military Sales Acts registering these concerns, only Section #4 of the FMS Act (the Conte-Long Amendment), which requires Presidential national security findings for sales of sophisticated equipment to Latin American countries, or interdepartmental findings that specific items are not “sophisticated”, is mandatory. However, taken together these provisions unambiguously state the trend of Congressional thinking on three issues unavoidably relevant to major arms sales to Chile at this time.

These Congressional concerns cannot be dismissed as those of a marginal group, for their most intense advocates are members whose support will be needed if we are to deliver on your pledge at Mexico City to “maintain, as a minimum, present aid levels.”

Bureau and Agency Views

With multiple caveats, predominant views support authorizing sale now of the F–5E, M–60 medium tanks, an anti-tank weapons system (not the TOW), armored vehicles, radar, mines, and certain other minor items, privately informing the GOC of the decision, and considering additional requests on a case-by-case basis.

This posture would arouse sharp Congressional criticism, would not satisfy all the GOC’s perceived needs, and could still result in acquisitions of other items from third countries. However, it would satisfy the GOC’s most urgent needs, would specifically address GOC concerns over Peruvian acquisition of Soviet tanks, and would permit the USG to honor prior commitments to Chile. It would also require no new findings or determinations under the Conte-Long Amendment.

In general, this posture is supported by ARA, PM, EB, and L in State and by DOD, CIA, and ACDA. No one strongly supports either holding all requests for FMS credit for major sales under review, or resuming normal FMS credit sales now.

Nonetheless, there are important dissenting views and refinements:

AID finds it difficult to support any option in view of their Congressional concerns. (Treasury has not commented.)

ACDA believes that after selling F–5E’s and M–60’s we should make a discreet approach to the GOC suggesting that it might wish to consult with Peru on the possibilities for exercising mutual restraint [Page 439] in arms acquisition. It argues that if we are reasonably forthcoming in meeting Chilean security needs, the GOC might be willing to approach the GOP along these lines.

—L would have preferred to keep all sales under review given human rights and economic considerations, but accepted the limited-sales option because of Peruvian purchases of Soviet tanks. PM reluctantly assented to the tank sale for the same reason.

EB, while endorsing limited sales because it sees “no viable alternative,” believes the Chilean authorities should be warned explicitly that significant military purchases by Chile will make it most difficult or even impossible for us to convince the Congress to authorize meaningful amounts of development assistance.

—H endorses an alternative option of first making strong representations to the GOC to defer purchases of major military items by stressing the compelling economic rationale against such purchases; coupling this with efforts to reduce tension between Chile and Peru; and falling back to limited sales to Chile only if this fails. It believes that timing is an important element: any delays would give the GOC more time to improve the human rights situation and thus reduce Congressional criticism.

S/P Views

S/P was not involved in preliminary work on this issue, (memorandum at Tab A) but after careful study of an admittedly complicated issue, it is our view that:

1. Sales of the F–5E aircraft (on a cash basis) and M–60 tanks (using FMS credit financing) would meet our previous commitments. Were we also to sell mines and an anti-tank system, these sales, whose total cost would approximate $70 million, with only about $10 million in credits, would meet Chile’s minimal perceived urgent defensive needs.

2. Resumption of additional sales may also prove desirable, but we should first get a better grasp on the overall West Coast security picture and on possible counter-balancing steps. The GOC is dependent on U.S. political support in many areas, and while the degree of dependence should not be exaggerated, it may permit us to defer resumption of further sales until mid-year, long enough to clarify the Chile-Peru situation, the possibility of countervailing steps, and the Chilean economic and human rights situation in Congress.

3. In any event, we need a better feel for the Chile-Peru situation. The junta feels Chile’s national security is in danger; Peruvian acquisition of Soviet tanks provides the immediate rationale for Chilean pressure to purchase; local arms races are a serious Congressional concern; ACDA recommends we push the Chileans to explore restraint with Peru after agreeing to resume sale to Chile. But we do not have a clear picture of what these tensions are, whether they are reducible by local or U.S. [Page 440] initiative, or, if so, whether such initiative would most effectively take place before or after resumed U.S. sales to Chile. A National Intelligence Study of arms acquisitions and the security situation on the West Coast of South America has begun but is unlikely to be completed before mid-May.

4. We could also usefully examine whether we can sensibly take other steps to preempt or counterbalance the certain adverse effects on other U.S. interests in Chile, the hemisphere and beyond (e.g. the security assistance program worldwide). The feasibility and desirability of such counterbalancing steps has not yet been examined at all.

Recommendations:

ARA, PM, and S/P recommend, in light of these considerations:

1. That you authorize immediate private notification to the Chileans that we are willing to sell now the F–5E’s and the M–60’s previously committed. We are also prepared to sell mines and the LAW anti-tank system, and will continue to examine their other arms requests on a case-by-case basis.

2. That, in informing the GOC of this decision, we explain the possible consequences of public and Congressional reaction, emphasizing that we are doing so only in an effort to share our concerns with the GOC, not lecturing them about what they consider to be their own needs.

3. That, before authorizing any additional sales, you direct an interagency task force chaired by State/ARA and consisting in addition of PM, S/P, INR, L, and H, in State, and of ACDA, DOD, AID, and CIA, to undertake a study of the possibilities and modalities for reducing tensions between Chile and Peru, including the role of possible arms control initiatives; taking into account the progress of the West Coast National Intelligence Study now underway. The task force should also explore possible steps the U.S. might take in the human rights field to preempt or minimize the adverse effects of resumed arms sales to Chile. The study should be submitted by April 12, 1974, in time for your consideration before your speech at the OAS General Assembly in Atlanta. (In view of the time pressure, we are moving ahead informally on this study now.)

  1. Summary: Lord outlined policy options for Kissinger regarding the sale of U.S. military equipment to Chile.

    Source: National Archives, Nixon Presidential Materials, NSC Files, Box 777, Country Files, Latin America, Chile, Vol. 8, 1 January 1973–31 March 1974. Secret. Drafted by Einaudi and Simons, and cleared by Bowdler and Stern. Attached but not published is Tab A, a March 14 memorandum from Bowdler and Weiss, through Donaldson, to the Secretary, which outlined options on arms sales to Chile. On April 25, Kissinger approved the first two recommendations and disapproved the third. Next to the first recommendation, he wrote, “But please check with Brent [Scowcroft] and make sure DOD is aboard.” A notation below Kissinger’s note reads, “Taken care of.” Low summarized the memorandum for Scowcroft on April 3. (Ibid.) Kissinger’s speech to the OAS General Assembly is printed in the Department of State Bulletin, May 13, 1974, pp. 509–515.