255. Telegram From the Embassy in Haiti to the Department of State1

1323. Subject: Title III—Conversation With Antonio Andre. Ref: State 73043.2

1. Entire text Confidential.

2. I met privately for an hour with Antonio Andre on the Title III and other subjects.3 I told Antonio of our decision to set aside negotiations on Title III for the time being and to move to a new Title I.

We discussed the problems surrounding Title III, particularly the lack of progress in the area of fiscal reform.4 I stressed that we were not abandoning our efforts to have a Title III, but that since negotiations had not been completed, I thought it best to proceed with a Title I and that it would be at about the same level as Title I obligations this fiscal year. I was careful to make it clear that our actions were in no way punitive or related to any of Haiti’s other fiscal problems, particularly the current furor over Cement d’Haiti.

3. Antonio did not seem perplexed or upset, but rather relieved. He said he saw little possibility for any real fiscal reform in the present climate. He said that reform was a matter of integrity and he did not see this in several of the present Cabinet Ministers. He then went into a rather long tirade against Berrouet, Minister of Agriculture and Bauduy, Minister of Commerce.

4. I then asked about presenting the issue to President Duvalier and suggested that it might be well for the President to be aware of the situation before I met with him. Andre agreed and said he would informally raise our decision with the President when he talked with him by phone on March 27. Andre would then let me know the mood and reaction and advised me how to proceed with the President. However, Andre did not think there would be any significant problem as the President would probably be relieved at not being pressured to [Page 607] make reforms. Andre said several Cabinet Ministers had always spoken against the Title III.

5. Andre then went into a discussion of the various financial woes of Haiti. He is against the takeover of Cement d’Haiti. The new management group has asked for a $600,000 letter of credit to purchase fuel. Andre said that this makes the National Bank exceed IMF limits, but he has extended the credit. However, he is requiring pay back at $8,000 per day or $40,000 per week. He said that the IMF team coming down would surely object to the situation. Andre seemed to hope that the IMF would be tough to justify the warnings he has given the President. I emphasized that we had no direct interest in the Cement d’Haiti matter, but only hoped for a speedy and equitable settlement.

6. Andre concluded that the Bank now has only $18,000,000 in reserve and so cannot extend credit for other non-economic schemes put to the President by Guy Noel, Bauduy and other advisers. He mentioned a proposed new sugar mill which would be set up to run Hasco out of business, the second cement plant and the Spanish fishing boat scheme. Andre said the persons involved all stood to make handsome commissions on the deals and were only interested in feathering their own financial nest. Unfortunately, these people had the ear of the President and he had agreed to all of these projects.

7. We concluded the discussion with Andre again promising to get back in touch with me after talking with President Duvalier.

8. Comment: Andre, as usual, seemed on the verge of imminent physical collapse, but he spoke with vigor and determination. He is definitely in a life and death struggle with his enemies. I think he is personally relieved about not having to worry about a Title III at this time. He would like to see it proceed, but his major preoccupation now is with saving the Bank and coming out on top in the current power struggle. From Antonio’s description of things within top levels of the GOH, I am ever more convinced of the rightness of our decision. President Duvalier has not displayed the type of leadership or understanding that is needed to pull Haiti up economically.

  1. Source: National Archives, RG 59, Central Foreign Policy File, D790141–0758. Confidential; Priority.
  2. In telegram 73043 to Port au Prince, March 23, the Department informed the Embassy of the decision to substitute Title I PL–480 assistance for a Title III program, because of Haiti’s non-compliance with IMF conditions for fiscal reform. (National Archives, RG 59, Central Foreign Policy File, D790135–0738)
  3. Antonio Andre was the Director of the National Bank of the Republic of Haiti (Banque Nationale de la Republique d’Haiti).
  4. Telegram 941 from Port au Prince, March 6, set forth the Country Team recommendation for suspending the Title III program and continuing with the Title I program. (National Archives, RG 59, Central Foreign Policy File, D790103–0462)