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

80. Memorandum From the Director of the Office of Management and Budget (Lynn) and the President’s Assistant for National Security Affairs (Scowcroft) to President Ford¹

Washington, July 27, 1976.

SUBJECT

• Multiyear Budget Commitment for Narcotics Control Assistance to Bolivia

On June 6, Bolivian President Banzer presented Secretary Kissinger with a $96 million proposal for major enforcement ($51 million) and crop substitution ($45 million) programs to halt cocaine production and traffic in Bolivia. At that time, Secretary Kissinger assured Banzer that U.S. narcotics assistance would be increased and that an official response to his proposal would be forthcoming shortly.

State and AID request your approval of a response to Banzer that would include a commitment of “substantial” future assistance if justified by the results of a pilot crop substitution project now underway and enhanced enforcement efforts in Bolivia. State believes that the program would eventually include:

• 1. up to $8 million in narcotics assistance funds over a 5-year period for an enforcement program beginning in 1977, and
• 2. up to $45 million in AID funds for a 5-year coca crop substitution program beginning in 1979.

The State/AID recommendation sharply reduces Banzer’s request for enforcement assistance because of limited Bolivia absorptive capacity but attempts to obtain Banzer’s cooperation by pledging up to the full amount of the crop substitution aid he requested. If you approve, State will transmit an Aide-Mémoire which points out that assistance will depend on the willingness of Bolivian authorities to take firm enforcement action and to reduce coca production to legitimate levels. Although State does not plan to specify the precise amount of future assistance, our Ambassador would be authorized to inform Banzer orally that we were considering up to $45 million in aid if justified by the pilot program. State maintains that:

• • Failure to respond to Banzer’s request for crop substitution aid risks losing the opportunity to test Banzer’s commitment to move ahead with a tough narcotics program and might even cause him to relax what little enforcement he is currently undertaking.
• • The U.S. aid pledge can be sufficiently caveated to avoid locking the U.S. into a large program if the Bolivians do not undertake a meaningful enforcement program.
• • The U.S. should proceed with a multiyear commitment in Bolivia because of the unique opportunity, even though program details have not yet been formulated.
• • The proposed effort in Bolivia, a major producing country, would complement and strengthen the program in Colombia, a major trafficking country.

OMB and NSC have reviewed the State/AID proposal pursuant to your memorandum of April 21 regarding new foreign commitments.

OMB recognizes the State arguments but has a number of reservations about a large multiyear commitment to Bolivia at this time.

• • Cocaine is a lower priority drug (after heroin, amphetamines, and barbituates) as reported in the Domestic Council’s White Paper on Drug Abuse.
• • [less than 1 line not declassified] raises major questions about Banzer’s ability and desire to undertake a meaningful narcotics program given political and family constraints.
• • Results from a U.S.-sponsored pilot crop substitution project currently underway will not be known for two years; it is premature to make a multiyear commitment before we know whether the program makes sense.
• • The Bolivians would resent efforts to reduce this commitment even if they did not perform.
• • A program for Bolivia would not be particularly effective in reducing the flow of illicit cocaine into the U.S. unless production could also be reduced in Peru which is the other major producer.
• • A large multiyear commitment to Bolivia would set a precedent leading other narcotic producing countries to expect sizable forward U.S. commitments in advance of completed planning.

In view of these reservations, OMB believes that it would be unwise to make a multiyear commitment at this time. Accordingly, OMB recommends a second approach which would:

• 1. Provide modest increases in enforcement assistance within existing budget levels to test Bolivian political will, capability, and performance.
• 2. Increase funding to accelerate the pilot crop substitution project now underway, but avoid promising any substantial increases or discussing any particular funding level until a specific program can be developed based on the results of the completed pilot project.

If you approve this option, State will transmit an Aide-Mémoire which points out that the U.S. Government endorses the current Bolivian resolve and is ready to support the Bolivian government in its effort immediately with increased enforcement assistance and funding for the pilot crop substitution project. Funding consideration of a multiyear crop substitution program in the future, however, must be based on the results of the pilot project.

NSC believes that it is imperative to be responsive to the Banzer initiative. Failure to make a commitment to a multiyear effort would be perceived by the Bolivians as a rebuff and would have unfortunate consequences for our efforts to interest leaders throughout Latin America in joint narcotics control programs. Moreover, State’s proposed careful response would make the commitment contingent on Bolivia’s ability and willingness to use the funds effectively. There is no question of being locked-in to a multiyear program that does not achieve its goals. Accordingly, NSC recommends you approve the State proposal.

Recommendations:

Option I: Authorize commitment to Banzer of “substantial” AID funds, if justified by the results of the pilot project, and up to $8 million of enforcement assistance. Authorize our Ambassador to indicate to Banzer that up to $45 million could be made available over a five-year period. (State/AID and NSC recommendation)

Option II: Limit commitment to increases that can be funded within 1977 budget totals while expressing support for longer term aid based on results of the pilot project. (OMB recommendation)

1. Summary: Lynn and Scowcroft outlined the Department of State/Agency for International Development multiyear option and the OMB 1-year option for funding narcotics control in Bolivia. The National Security Council Staff recommended the State/AID proposal.

   Source: Ford Library, President’s Handwriting File, Box 22, Foreign Affairs, Foreign Aid. Confidential. Sent for action. A stamped notation on the first page reads, “The President has seen.” On August 11, Harrison informed Scowcroft that this memorandum reflected Kissinger’s views. (Ibid., National Security Adviser, NSC Latin American Affairs Staff Files, Box 1, Bolivia, Economic, Social) Ford initialed his approval of Option I and his disapproval of Option II.