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167. Memorandum From the Director of the Office of Management and Budget (Lance) and the President’s Assistant for National Security Affairs (Brzezinski) to President Carter 1

SUBJECT

  • Additional Military Assistance for Greece

In accordance with your recent directive on new commitments to foreign governments, Deputy Secretary Christopher requests authority to increase the Ford Administration’s offer of $700 million in military assistance to Greece by $25 million in the course of on-going negotiations to conclude a Defense Cooperation Agreement (DCA). The proposed increase, to be provided out of 1979 funds, consists of two elements:

• $5 million grant military assistance (MAP) for an airborne intelligence package in addition to $140 million previously offered.

• $20 million in foreign military sales (FMS) financing for Greek communications facilities in addition to $560 million previously offered.

Airborne Intelligence Package

The proposed $5 million airborne intelligence package grew out of efforts to ensure that critical U.S. intelligence activities [less than 1 line not declassified] could continue. With the concurrence of the negotiating team, [less than 1 line not declassified] originally offered to provide the Greeks with a package made up of excess equipment valued at almost $5 million. When the Greeks rejected this offer, [less than 1 line not declassified] agreed to contribute $5 million from available funds toward a more sophisticated package. [less than 1 line not declassified] now argues (1) that it cannot divert $5 million from [less than 1 line not declassified] other intelligence community funds without seriously compromising other U.S. programs, and (2) that the $5 million should be considered a part of the overall Defense Cooperation Agreement, not an intelligence community activity.

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We understand the [less than 1 line not declassified] commitment to provide $5 million in funding was made without seeking advance Presidential approval. Nevertheless, because the Greeks regard the [less than 1 line not declassified] offer a commitment, to disapprove the $5 million now could interfere with prompt conclusion of the negotiations.

The commitment could be met, however, by directing [less than 1 line not declassified] to reprogram $5 million for the airborne intelligence package within its 1978 budget. [less than 1 line not declassified] has considerable reprogramming capabilities and has often provided equipment to allied services as part of mutual arrangements. This approach would avoid a dispute with the Greeks and could be done apart from the formal Defense Cooperation Agreement, which would avoid antagonizing the Turks who are aware of the previous quid pro quo offer.

OMB recommends the alternative of [less than 1 line not declassified] funding in order to minimize the budget impact and encourage greater budgetary discipline.

NSC defers judgment on the method of providing the funds but endorses State’s request that they be provided so that the process of negotiating the Greek-U.S. DCA can be concluded as soon as possible.

Decision

Approve $5 million MAP in 1979 as part of DCA quid pro quo. (State recommendation)

Direct [less than 1 line not declassified] to reprogram $5 million in 1978 separate from DCA. (OMB recommendation)2

Approve no U.S. funding for airborne intelligence package. (State, OMB, and NSC all recommend approval)

Greek Communications Assistance

In the Defense Cooperation Agreement negotiations, the Greeks were offered, as part of the total $700 million base agreement quid pro quo, FMS financing for establishing a Greek telecommunications facility and expanding a separate Greek Defense Communications System paralleling similar U.S. facilities. Because the Greeks have sought a U.S. Government guarantee of the prices for these facilities—a guarantee the U.S. Government cannot legally offer—State is concerned that this issue may cause the Greeks to stall the negotiations or press again for joint use of U.S. facilities. To meet this contingency, State requests authority to offer an additional $20 million in FMS credits.

OMB believes the $700 million in MAP and FMS credits offered by the Ford Administration to be sufficiently generous to meet legitimate [Page 510]needs for a quid pro quo. If the Greeks wish to stall the negotiations, they will find other ways and are not likely to be bought off by another $20 million in FMS credits. Moreover, any increase in the military assistance offered in the Greek DCA could create problems with the Turks.

Accordingly, OMB recommends you disapprove the additional FMS and that State be directed to stick to the $700 million total previously offered.

NSC endorses State’s request, believes that the additional $20 million in FMS credits is justified to bring the DCA negotiations to a successful conclusion and does not believe that the additional authorization will create problems with the Turks because the U.S.-Turkish DCA has already been signed. NSC does not believe the Turks would wish to reopen the DCA to renegotiation because of this issue.

Decision

Approve $20 million increase in FMS financing as part of DCA quid pro quo. (State and NSC recommendation)3

Approve no increase in FMS financing as part of DCA quid pro quo. (OMB recommendation)

  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 26, Greece: 1/77–4/78. Confidential. Brzezinski signed and forwarded this memorandum to the President on June 6, along with separate memoranda from Christopher and Brown, dated May 13 and May 27, respectively. In a covering memorandum to Carter, Brzezinski noted: “OMB gives too little weight, in my view, to the political dimension of this problem and to the fact that getting a Greek DCA is an essential part of the whole process of moving toward settling Greek-Turkish differences and restoring our relations in this part of the world to a normal condition.” (Ibid.)
  2. Carter chose this OMB recommendation and initialed “JC” in the margin.
  3. Carter chose this State and NSC recommendation and wrote at the bottom of the page, “Only if this item concludes the DCA treaty. Let me know personally when the agreement is reached. J.C.” In an undated memorandum, Brzezinski notified Henze of Carter’s decision and added the following instructions: “Please give special attention to the President’s note. He feels very strongly that this is our final position on the Greek DCA and that we should now move rapidly to a successful conclusion. All interested agencies should know this.” Henze wrote in the margin: “Being done, PH. 7 June 77.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 26, Greece: 1/77–4/78)