Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

298. Memorandum of Conversation¹

Washington, August 22, 1974, 5 p.m.

PARTICIPANTS

• PERU:

  • Foreign Minister de la Flor
  • Minister of Energy Fernandez-Maldonado
  • Ambassador Berckemeyer
  • Foreign Ministry Spokesman Faura

• U.S.:

  • The Secretary
  • Deputy Assistant Secretary Shlaudeman
  • Sandy Pringle, ARA/EP, Notetaker
  • Neil Seidenman, OPR/LS, Interpreter

Secretary Kissinger greeted the Foreign Minister and, after photographs of the two were taken, the group was seated.

Foreign Minister de la Flor: It is a great pleasure for me to see you again and to express, as I did by letter, my great pleasure that you are remaining as Secretary of State in the Ford administration. I am gratified personally, and I am pleased as Foreign Minister—it means the new dialogue will continue.

The Secretary: I called attention to the new dialogue in my speech to the American Legion Convention a few days ago. I didn’t say much about it, but it was a key point.

I hope to arrange a dinner with all of the Latin American Foreign Ministers at New York next month. When will you be in New York?

Foreign Minister de la Flor: About the 19th to the 26th. And you?

The Secretary: On the 21st or 22nd for about three days and again the following week for about three days.

Foreign Minister de la Flor: Do you speak on the 23rd?

The Secretary: Yes, do you speak right after me again?

Foreign Minister de la Flor: I don’t want to speak right after you. You’re hard to follow—you get too much applause.

The Secretary: Yours was a bloodcurdling speech—and given in uniform.

Foreign Minister de la Flor: I have to wear my uniform for speeches.

The Secretary: You addressed yourself to the subject of imperialism, as I recall.

Foreign Minister de la Flor: I remember our meetings in Atlanta with pleasure.

The Secretary: Yes, and I remember our private talk there also.

Foreign Minister de la Flor: I greatly appreciate, as I wrote you, your help in arranging the CCC wheat credit for Peru.

The Secretary: One of the important things about personal relationships is that we can cut through bureaucratic redtape.

Foreign Minister de la Flor: Yes, we have had long talks about bureaucracy.

You’re very busy, so I’ll get right down to business.

The Secretary: In contrast to the usual mode of procedure.

Foreign Minister de la Flor: First I wish to repeat the invitation to you and Mrs. Kissinger to visit Peru. We hope you will definitely come later this year.

The Secretary: I will visit Peru on my first trip to South America.

Foreign Minister de la Flor: This year?

The Secretary: I hope it will be late this year or early next—certainly before the Meeting of Foreign Ministers in March.

Foreign Minister de la Flor: I am in Washington accompanying a mission headed by the Minister of Energy and Mines; our purpose is to obtain financing for a petroleum pipeline. We will go from here to San Francisco and Tokyo. We are arranging for an important loan from Japan. However, due to inflation, higher petroleum costs and other factors, we will also need additional credits of approximately $250 million. We have talked to the Export Import Bank, which is well disposed toward helping us, and with private American banks. The private banks have made known to us the importance which they attach to the participation and support of the Export Import Bank.

The Secretary: Is there any problem?

Mr. Shlaudeman: There may be with respect to lack of data, but we are prepared to move the matter along toward a decision.

Energy Minister Fernandez-Maldonado: I wish to express my pleasure in meeting you and my satisfaction that you are continuing in office. Warm congratulations.

The Secretary: This will bankrupt me.

Foreign Minister de la Flor: No, never.

Energy Minister Fernandez-Maldonado: The construction of the petroleum pipeline from the jungle to the coast is of greatest importance to Peru. We hope to complete it by July 1976. In this regard we will be gratified for any help from the Export Import Bank.

The Secretary: I will have to look into this matter from the financial point of view.

From the foreign policy point of view, I will support it strongly.

Is there a problem?

Mr. Shlaudeman: Only with respect to data regarding proven oil reserves, as far as I know.

The Secretary: What is the cost?

Mr. Shlaudeman: It is a major project. The cost is over $500 million, of which about $200 million would be U.S. goods and services.

Energy Minister Fernandez-Maldonado: We will be providing additional data to the Export Import Bank. U.S. experts have worked on this, and Petroperu is preparing reports on reserves which I am sure will justify the loans.

The Secretary: When do you need a decision?

Energy Minister Fernandez-Maldonado: The matter is very far advanced. The pipe has been purchased, and some equipment has already arrived in Peru. We are fighting against time and need a decision as soon as possible.

Foreign Minister de la Flor: There was a meeting with the Export Import Bank today. The Bank has two questions for us: 1) Exactly what U.S. private and Export Import Bank participation is Peru seeking? 2) Precisely what information does Peru have on oil reserves? There is some uncertainty in the Bank as to these matters. We will be able to answer the first question after we return from Japan at the end of the month. Our technical experts will be able to provide the data on reserves by mid-September.

The Secretary: We will keep a friendly eye on it. “Friendly eye” means we will hold down the number of committees. I don’t know how your Ministry works but let me tell you about mine. I received a memo a few days ago signed by seven officers recommending that I call a Senator on some matter. Then I learned they had already called the Senator’s assistant to tell him what I was going to say.

That’s the truth—my imagination isn’t up to inventing it.

Foreign Minister de la Flor: The fact that we have two ministers on the mission shows the importance we attach to the pipeline and how much we wish to avoid all possible delay—time is money.

The Secretary: We will give you any support we can.

Foreign Minister de la Flor: We are grateful. It shows once more how important Dr. Kissinger is to Latin America and to Peru.

The Secretary: I have very deep feelings for Latin America as well as personal respect for the Foreign Minister—partly because he intimidates me.

Foreign Minister de la Flor: But I have come without my uniform.

With your moral and material support we feel much better.

There is one more matter of great importance to Peru and the Hemisphere which I wish to raise. At the present time the region is polarized into two groups because of two rival candidacies for the OAS Secretary Generalship. At Atlanta I spoke to you about Peru’s very distinguished and able candidate, Carlos Garcia Bedoya, whom you know. He could give strength and leadership to the OAS. We have promises of some votes for him on the first ballot and others for the second ballot. In the present polarized situation, we would very much like to have U.S. support for Peru’s candidate.

The Secretary: Do we have a candidate? When is the vote?

Mr. Shlaudeman: No candidate and no position. The vote is in April.

The Secretary: I will look into it and let you know. Nobody has put up my name as a candidate?

Foreign Minister de la Flor: You are our permanent candidate. Permit me to give this small remembrance to you and Mrs. Kissinger. It is a book about ancient Peruvian ruins.

The Secretary: Thank you very much. We can talk in New York about OAS matters.

Foreign Minister de la Flor: Also MFM matters—and I hope you will be able to give us a date for your trip.

The Secretary: It may be too soon for me to be able to do that.

Foreign Minister de la Flor: (As the group reached the door to depart), I hope you are now a serious family man.

The Secretary: I’ll talk to you in private about that; I don’t want to loose your respect.

1. Summary: Kissinger, de la Flor, and Fernández Maldonado discussed the future of U.S. policy towards Latin America and a possible Export-Import Bank loan for a pipeline project in Peru.

   Source: National Archives, RG 59, Central Foreign Policy File, P820097–1190. Confidential; Exdis. Drafted by Pringle. The meeting took place in Kissinger’s office at the Department of State. In telegram 185626 to Lima, August 23, the Department sent a summary of the memorandum of conversation to the Embassy. (Ibid., D740233–0926) Kissinger’s September 23 speech is in the Department of State Bulletin, October 14, 1974, pp. 498–504.