Foreign Relations of the United States, 1969–1976, Volume E-15, Part 2, Documents on Western Europe, 1973–1976, Second, Revised Edition

175. 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, October 12, 1976.

SUBJECT

• Military Assistance for Portugal, FY 77 Budget Supplemental

Attached is a request from the Department of State for a fiscal year 1977 budget supplemental of $30 million to provide three C–130 transport aircraft to Portugal on a grant basis. This military assistance was originally requested in May (Tab A) to show political support for the newly emerging democratic forces in Portugal and as a catalyst for other NATO members’ contributions to the equipping of a NATO-committed Portuguese Brigade. OMB requested additional information concerning the entire modernization program, other NATO members’ proposed contributions, the Portuguese economic outlook, and the relationship of our aid to the Azores base negotiations.

In a September 15 letter (Tab B) the Departments of State and Defense outlined a Portuguese multi-year military modernization program currently estimated to cost over $350 million. State and Defense are not currently requesting approval of U.S. funding of any portion of this modernization program beyond the $30 million required for three C–130’s. Any future U.S. contribution to the total program will be developed based on other NATO contributions and the U.S.-Azores base negotiations, scheduled to begin in early 1977. Accordingly, your approval of this $30 million grant would not constitute approval of a multi-year commitment to fund the modernization program.

While OMB would normally recommend that a decision on this $30 million package follow the regular fall budget review process, the Departments of State and Defense and Ambassador Carlucci urge approval now and authority to inform the Portuguese of your decision. OMB has no objection to this timing, since all concerned agencies agree on the importance of showing support for the democratic elements in the Portuguese military now.

If you approve this assistance, authorizing legislation and a supplemental appropriation will be required. These can be transmitted to the Congress with the budget in January, 1977.

1. Summary: Lynn and Scowcroft sought Ford’s approval of a fiscal year 1977 budget supplemental of $30 million in military assistance for Portugal.

   Source: Ford Library, President’s Handwriting File, Subject File, Box 22, Foreign Affairs—Foreign Aid: Portugal. Confidential. Attached but not published is Tab A, a May 6 letter from Under Secretary of State for Security Assistance Carlyle Maw to Lynn; and Tab B, a September 15 letter from Maw to Associate Director of OMB Donald Ogilvie. Ford initialed his approval of the military assistance for Portugal.