299. Telegram 8043 From the Embassy in Peru to the Department of State1

8043. Subject: Démarche to President Velasco on arms purchases and other matters of mutual concern. USUN for Bill Bowdler. Refs: (A) State 193548, (B) Lima’s 7895, (C) Lima’s 8001, (D) Lima’s 8034.

1. In my call on President Velasco (September 23), I found the President to be unusually quiet, cold and uncommunicative during the first 15 to 20 minutes of our meeting. It was a rather uneasy monologue on my part as I went through a series of points I wished to make tailored insofar as possible to the existing climate here and in Washington. After referring to some of my recent travels around Peru, our last meeting during Army Secretary Callaway’s visit and the frank dialogue we wished to maintain, I launched into point number one, i.e. the current flurry of news stories about US involvement in the internal affairs of [Page 801] Chile under Allende and a wire service report carried in the local press about alleged CIA involvement through Peace Corps representatives in rural affairs in Paraguay. Without going into any detail regarding these stories, I assured the President that our policy is the same as stated in my arrival statement and during my credentials presentation when I told him we wished Peru and his government well and were prepared to cooperate in his developmental efforts to the degree that resource availabilities permitted and without treading in any way on Peru’s sovereignty or national dignity. I said this continued to be our policy and the implications or hints carried in the Peruvian press of CIA or other US interventionist efforts in aid or Peace Corps programs in Peru were absolutely untrue.

2. I then mentioned the Braniff/Aeroperu problem. I told the President of our efforts here, in Miami and Washington to assist Aeroperu in obtaining its unfettered flight permit, and of the myriad of steps leading up to the successful inauguration of its service to the US. I mentioned upcoming civil air consultations (with exact dates still being worked out), and expressed our hope that the new Braniff permit under consideration by the GOP would not place any further restrictions on Braniff which might be prejudicial to consultations, adding that the differences we might have over procedures, frequencies and routes could best be worked out during the consultations. In addition I told the President I would be discussing the same matter and making the same request to Transportation Minister Meneses a little later in the day (which I have done).

3. I next referred to the conversation that Admiral Grojean and I had Friday night (September 20) with Admiral Arce (reftel C). I told the President that I checked out the report his government had received concerning the alleged arrival of F–4’s in Chile and found them to be false. I said that this type of aircraft is destined largely for NATO use and has not been authorized for sale anywhere in Latin America.

4. I referred to Admiral Arce’s charge that the US was favoring Brazil and Chile over Peru, and said that this was not the case. I described to the President our even-handed policy and referred to the level of FMS credits made available to Peru and Chile (equal at $15 million each in FY 74), and told him we had asked for $20.5 million in credits each for Peru and Chile for FY 75: if cuts in these totals were to be made in Congress, it appeared from my reading they were more likely in the Chilean than in the Peruvian package. I told the President that we recognize that legislative and other restrictions on military sales in the past have frustrated Peruvian efforts to acquire matériel in the US (and for this reason Peru looked elsewhere) but added that since May 1973 we have been as responsive as possible and even-handed.

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5. I pointed out to the President that some requests will take time to process and some (such as certain types of missiles) might not be approved because of overall policy, but this does not represent a special negative treatment of Peru’s requests. I referred to Congressional interest in our arms sales and certain Congressional and press concerns over the possibility of an arms race or even a conflict between Chile and Peru. On the question of the two destroyers that Peru has requested and that Admiral Gearhard is trying to obtain for this country (which I also support), I said we were pushing this request but must recognize that there is also the question of availability, and interagency and congressional examination.

6. I congratulated the President on his arms limitation effort (moratorium), his exchange of high-level visits with neighboring countries, and his plans for a meeting of Presidents at the Ayacucho-Junin celebration scheduled for December. I allowed as how this would provide another opportunity to work out agreements and to reassure neighboring countries of Peru’s desire for peace in the area.

7. During most of the foregoing the President was quiet, reserved and unresponsive. Only at one point, when I referred to Arce’s charge of favoritism toward Chile did he chime in to support that charge, saying quote yes you are both feeding and arming Chile unquote. This gave me an opportunity to emphasize our even-handed policy and to point out again that except for the period of Pelly and other types of restrictions we have attempted to be as forthcoming with Peru as we have been with Chile (and this included wheat as well as weapons). Certainly we wish to do nothing to increase tensions or contribute to an arms race. To the contrary we would hope to the extent possible to help in efforts to reduce suspicions, and would be interested in any suggestions he may have in this regard.

8. After about 20 minutes’ time the President finally began to open up by stating that neither the Soviets nor the Cubans nor any others are going to dominate Peru. He said that the Soviets in Peru are under control and that Peru deals with Cubans because they speak the same language and are simpaticos. He added, however, that the Cubans have little to contribute to Peru despite the admittedly numerous exchanges of official visitors that have taken place in recent times. In this regard he referred to the visit of Raul Castro, described some of the tourist attractions that Raul was shown but said there was no special significance to the visit. He said that Fidel Castro wished to visit Peru but quote this we won’t permit unquote and indicated his belief that the reaction to such a visit would be negative to Peru’s interests. Then the President volunteered the information that his son was returning September 23 from a week’s visit to Cuba. He said, however, that this should not be given any ideological meaning because [Page 803] his son (21 years old) apparently has fallen in love with a Cuban girl (I understand the daughter of the Cuban Ambassador) and had gone to Cuba to visit her.

9. Earlier I had given the President an opportunity to comment about the size of the Soviet and Cuban presence in Peru by telling him what Arce had told us, i.e. that there were some four Soviet military advisers and no Cuban military advisers. The President said nothing to confirm or deny the Soviet figures (our information indicates there are 14 not 4), but seemed to agree with Arce’s statement on Cuba; he said there are no Cuban quote military advisers as such unquote. The President then reiterated what he had told me before that neither he nor his government is pro-communist. They are Nationalist Revolutionaries who get flak from both extreme right and extreme left. He said the communist party is legal but watched. He tended to attribute the noise bombs set off in Lima September 22 to the rightists—perhaps the same group that was behind the Miraflores rioting (reftel D). He then pointed to the Plan Inca which he said was not communist but a National Revolutionary effort. He said it was there for all to see and had some quote bad unquote and quote good unquote features depending on one’s point of view, but it was not communist. He said the press law for one has been attacked, especially from the outside, but added it is designed to achieve objectives of the revolution, and to bring into the main stream certain classes or groups of Peruvians. I told the President that through my prisms the press law was one of the features of Plan Inca that did not fit into my concept of communication with the people, but I could see what he was trying to do.

10. I took this moment to tell the President of the concern his Plan Inca statement, especially its reference to elimination of all foreign participation in Peruvian petroleum activities, had caused US oil companies drilling in the Amazon under contract with the GOP. I told him of a meeting I had with representatives of a number of such companies who had requested the meeing to discuss their concern. I said I was able to tell them of the reassurances I had received at the ministerial and sub-ministerial levels of his government to the effect that contracts negotiated under the present government would be respected, a position which the President had also stated in a subsequent press conference. The President said this was absolutely the case.

11. I told the President that in my travels around the country and in my calls on Peruvians of all walks of life, I had occasion to call on Victor Raul Haya de la Torre, head of the Aprista Party. The President said that was a good idea and took the occasion to tell me that his relations with existing political parties in Peru are good, that many of the Christian Democrats are cooperating with him in his government, and that only one party, Accion Popular, had been proscribed for acting [Page 804] outside the law. I also mentioned to the President my contacts at social and other occasions with several Ambassadors of neighboring countries from which I had been able to observe an undercurrent of some concern and suspicion with regard to other countries’ intentions. I told Velasco that where I could I attempted to add perspective and to work toward conciliation and understanding—but of course my role is very limited in this area. I said the problems seem to be complicated by psychological and historical attitudes which add to mutual suspicions, especially between Peru and Chile.

12. As I left, I assured the President that we do not consider him or his government to be communist; we are not favoring one country over another, but are following an even-handed policy and are ready to work toward conciliation and against a costly arms race. He said he too hoped to avoid such a race because Peru with all of its economic problems and developmental efforts could ill afford to spend excessive quantities on arms.

13. Comment: The initial coldness shown by Velasco could have been due to any one or a combination of the main subjects of the visit—arms purchases (especially Soviet), and Peru-Chile tensions and our concerns over them, or to the report of F–4 deliveries to Chile, or to the belief that we are favoring Chile over Peru (which President also shares fully), or perhaps to Velasco’s concern over Sunday night bombings, or to the press reports of CIA involvement in internal affairs of Hemisphere countries and to questions (almost allegations) re possible similar involvement here. In any case, the President thawed eventually and I am convinced that this conversation opened avenues for further discussions of these important subjects in the future and may have cleared the air somewhat. We can certainly expect the Peruvians to be alert both here and in Washington to any signs of discriminatory US treatment favoring Chile over Peru, especially in arms area. I personally believe we can be forthcoming in many ways, including supplying the two destroyers Peru has requested without upsetting the balance. In his conversation with Navy Minister Arce, Admiral Grojean pointed out that Chile got its two DD’s from US before Peru because that country asked first and at a time (before the Greene agreement) when there was in fact a hold on military supplies to Peru. As the Embassy has reported, we think the odds are low on an eventual conflict over Arica and do not believe an attack by Peru is yet anything more than a contingency plan—if that. Peru is concerned over ideological differences with its neighbors and is super-sensitive to criticism of its revolutionary measures (especially its new press law) in other capitals.

14. This concern is augmented by uncertainty over armed forces unity as well as evidence of increasing political and economic dissatisfaction. Opposition to the radical trend of the revolution resulted [Page 805] in the quote resignation unquote of former Navy Minister Vargas Caballero and led to rumblings within the navy. These rumblings continue below the surface and there are some signs of the same within the air force. The government must also be upset by the psychological campaign against it which followed the Miraflores riots. The September 22 noise bombs may possibly represent an effort to un-nerve the government; these bombings certainly displeased Velasco.

15. The army remains the key to Velasco’s power and while united by its desire to run the state and strong with respect to the other two services, the basically moderate elements in the army are believed to outnumber by quite a bit the leftists (although the latter are more outspoken and occupy the important commands) and one of the key ministerial positions, further indicates of relative strength of these two sectors within the army (and this division is admittedly an oversimplification) may come at the end of the year when important ministerial and command changes are due. This is not to imply that Velasco is losing his grip—he is still in very firm control—but these manifestations of domestic opposition add to his suspicions and concerns.

Dean
  1. Summary: Ambassador Dean reported on his conversation with Velasco regarding Soviet arms sales to Peru.

    Source: Ford Library, National Security Adviser, Presidential Country Files for Latin America, Box 6, Peru–State Department Telegrams–To Secstate–Exdis. Secret; Immediate; Exdis. Repeated to Santiago and USUN. In telegram 193548 to Lima, September 4, the Department, noting reports that the Peruvian Government had entered into new credit arrangements for further Soviet arms purchases, asked the Embassy to deliver a démarche to Velasco. (National Archives, RG 59, Central Foreign Policy File, D740245–0870) In telegram 8001, September 23, Dean reported his conversation with Grojean. (Ibid., D740267–0529) “Plan Inca” refers to Velasco’s plan for nationalization of significant commercial enterprises. (Telegram 6692 from Lima, August 13; National Archives, RG 59, Central Foreign Policy File, D740222–0421.) In telegram 8034 from Lima, September 24, Dean reported on three September 22 explosions in Lima on a pedestrian bridge. No damage was reported. (Ibid., D740268–0629)