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

292. Memorandum From the Assistant Secretary of State for European and Canadian Affairs (Hartman) to the Deputy Under Secretary of State for Management (Eagleburger)¹

Washington, September 30, 1975.

SUBJECT

• Some Findings of the Church Multinational Subcommittee Staff

Jim Lowenstein and David Anderson have been talking separately with Jack Blum of the Church Subcommittee staff about Blum’s investigations into Lockheed payoffs in Western Europe. Blum has some fairly explosive stuff, which he has already informed the Subcommittee about. Following are the highlights:

A. During the early 60’s, Lockheed paid bribes to Franz Josef Strauss, his wife and the CSU. Such payments coming when Strauss was Defense Minister paved the way for the sale of the Starfighter to the FRG. Every time the West Germans became nervous about the costs of the Starfighter and then its flightworthiness, Lockheed poured more money into German hands. There is apparently a retired CIA agent in Phoenix who is aware of the procedures for paying Strauss. There is a German investigative group which also has some information on Lockheed’s various bribery efforts. The Subcommittee has already asked the German Government to provide it with the information available to that investigative group.

B. According to Blum, in late 1962 or thereabouts, i.e. while Strauss was still Defense Minister, two German auditors were in Burbank, California to go over Lockheed’s books concerning Starfighter overruns. One of the auditors found the CSU connection and informed Strauss. The Germans allegedly sent a military aircraft to Burbank with some agent aboard who took the auditor forceably from Burbank, put him aboard the airplane and flew him back to Germany. In Germany, the auditor was put in an insane asylum for about one year. He was released after he signed various papers to the effect that he would not discuss any of his findings. An unlikely story, I admit, but Blum is not one to exaggerate.

C. At another point during German dissatisfaction with the Starfighter in the early 60’s, Lockheed decided that the way to put pressure on the Germans was via the Dutch. At that point apparently, Lockheed bribed Prince Bernard to weigh in with the Germans. According to Blum, Lockheed paid Bernard for years. Blum has discussed this matter with Ambassador Gould.

D. Blum said there may also be a Swiss connection, with a German lobbyist having paid off certain Swiss officials or parliamentarians to buy from American aircraft companies. This particular aspect is rather fuzzy since the Swiss authorities have refused Blum access to Americans residing in Switzerland.

Comment: All of this stuff could have serious repercussions—most notably Prince Bernard’s role—should it become public. Blum has told us that so far the Subcommittee is unable to decide whether to pursue this subject. Blum has told us that he would be in touch with us once he knows how the Subcommittee intends to act, if at all.

I frankly do not believe that there is anything useful we can do at this point. Nonetheless, I thought you should be aware of the dimensions of the potential problem with a view to your possibly briefing the Secretary on it.

1. Summary: Hartman reported some findings of the Church Multinational Subcommittee staff concerning West Germany.

   Source: National Archives, RG 59, Records of Secretary of State Henry Kissinger, Entry 5403, Box 24, Classified “C” Material. Secret; Eyes Only. Drafted by David Anderson in EUR/CE. At the end of the final sentence of the final paragraph, an unknown hand added the word “orally.”