308. Memorandum From Rear Admiral G.J. Schuller, Director, Inter-American Region to the Assistant Secretary of Defense for International Security Affairs (McGiffert)1

SUBJECT

  • Visit of Assistant Secretary of State for Inter-American Affairs

Terence A. Todman, Assistant Secretary of State for Inter-American Affairs, has requested a meeting with you at 1500, 4 January 1978, to discuss Barbados military facilities negotiations. He will be accompanied by Ms. Sally Shelton, Deputy Assistant Secretary for Caribbean Affairs, and Ashley Hewitt, Caribbean Country Director.

The Issue. Ambassador Todman will try to persuade you that DoD should increase the amount of money it is willing to pay for retention of the Naval Facility on Barbados.

USG Position. In direct talks with the Government of Barbados (GOB) on 12 October 1977, and by aide-memoire of 25 October 1977, the USG has requested an eleven year agreement for an annual rental payment of $750,000, plus payments for both past and future operation and maintenance (O&M) costs at Grantley Adams International Airport.2 Navy has offered $100,000 for past O&M costs, and future costs are to be determined, but will not exceed $20,000 per year.

Discussion. We do not know for sure how much additional money Mr. Todman will request but we think he will probably settle for an annual rent of $1 million. Since this is a relatively small amount of money to be quibbling over, particularly when Mr. Todman is sure to frame his request in terms of salvaging relations between Barbados and the United States, it may appear we are being unduly parsimonious in failing to accede to his request. However, we do not believe this is the case—there are good and sufficient reasons why we should hold the line.

—The Barbados situation cannot be considered in a vacuum and should be looked at in the context of our overall Caribbean negotiations. What we do in Barbados will have repercussions in Antigua where we have recently signed an agreement; in the Turks and Caicos where [Page 763]talks are temporarily suspended; and, most significantly, in the Bahamas, where we have our most important negotiations resuming after a two year hiatus.

—Our best estimates are that a simple raising of the annual rental from $750K to $1M for the Naval Facility in Barbados would escalate costs to us from $2.5M on the conservative side to $7M on the high side annually in our overall Caribbean negotiations.

—NAVFAC Barbados has only marginal value to Navy. The Navy has determined $750,000 to be the maximum it is willing to pay to remain in Barbados, and is content—indeed prefers—to close down and move out rather than pay any more. Since the Navy no longer needs NAVFAC Barbados, strict logic is on their side.

—The positive negotiating impact of the Navy shutting down in Barbados would not be lost on the other governments with which we are negotiating.

—We have officially told the Government of Barbados (GOB) twice that $750K rental is our absolute maximum for retention of the facility and that we will close down and move out rather than pay more. If we go back on our position now, our credibility as negotiators will be seriously impaired and will indicate that a hard line approach with us will cause us to come up with more. We can quickly expect the same tactic elsewhere.

—We promised the Premier of Antigua, as an inducement for him to sign, that we would pay Barbados no more for its one facility than we paid Bird for each of the two facilities on Antigua. Our signed agreement with him is for $750M per facility each year. If we renege now, we are bound (at least morally) to somehow make up the difference in Antigua; we also could cause political problems for Bird. Our credibility would assuredly be called into question.

—The Bahamas negotiations are by far our most important in the Caribbean context. Our offer has been tabled there for over two years and we are preparing to reopen talks commencing on 14 January. If we show weakness in Barbados where we have the option of closing down, we definitely will have serious difficulties in meeting Bahamian escalating demands where we cannot afford to move out.

—Mr. Todman’s request represents a reversal of positions in the fundamental debate between State and Defense over Latin American policy. Traditionally, State has accused DoD of inflexibility in desiring to retain our military relationships with Latin America as the paramount element in our bilateral relationships, whereas State has preferred aid or trade relations to be paramount (Alliance For Progress, etc.). Todman’s request, therefore, that we retain the facility—for which we have only marginal needs and increase the rent amount as a means [Page 764]of funneling funds to the GOB—is really a manipulation of DoD to serve State’s interests.

—Acquiescence in Todman’s request will tend to make the continuance of the Naval facility a symbol of continued strong US-GOB relations. DoD’s worldwide interests lie in treating these small technological facilities as apolitically as possible; in view of our intention in any case to close the Barbados station in the near future, we should be especially careful not to allow State to make the station such a symbol.

In order to amplify these points, Tab A3 provides you with a series of recommended questions to pose to Mr. Todman. Each question is followed by our position.

FYI. You should know that Mr. Todman recently completed a swing through the Caribbean during which, by admission of the State Department officials who accompanied him, he fueled expectations that he could get “more” for both the Barbadians and the Bahamians.4 In the case of the Bahamas, he opened the door for economic assistance being linked to our military facilities agreement (despite long-standing and specific policy by State and AID that this is not possible). We are told the Barbadians also gained this impression. We are told that Mr. Todman was exceptionally well received each place he visited in the Caribbean; the governments concerned were flattered that he spent so much time with them. He is, in the estimation of some, a “genius” in public relations, and is very concerned with creating the proper “atmospherics.” He is honestly concerned that the U.S. has ignored the Caribbean for too long and that the time has come to reverse the tide. We think he is concerned that even if we force an agreement for $750,000 rent, that Barbadian/US relations may suffer at least for the short term. This sentiment, along with the challenge to his personal credibility, will undoubtedly cause him to make the point that DoD can surely justify an additional $250,000 in terms of preserving and fostering our bilateral and regional relationships. End FYI.

Notwithstanding the above, there is a possibility of partially accommodating Mr. Todman; you may want to consider approaching the Navy to come up with an additional $150,000 to add to their previously tabled offer of $100,000 for past O&M costs at Grantley Adams Airport for a combined first year offer of $750,000 rent and $250,000 O&M cost payment—a total of $1 million. Future year payments would be $750,000 rent and O&M costs not to exceed $20,000—the specific latter figure to be determined at the negotiating table. This would permit [Page 765]Mr. Todman to reach his $1 million figure for at least the first year and would show he made good on his alleged promise to get “more.” The Navy will probably resist this approach, since, by its reckoning, past O&M payments by world-wide standards should only total about $70,000; therefore, it considers that it is already being magnanimous in its offer of $100,000.

In summary, it is recommended:

—That you resist Ambassador Todman’s request to increase the annual rental offer to the GOB to $1 million.

—That you suggest that State pursue other non-DoD avenues to increase the offer.

—If you wish to be responsive to Mr. Todman’s request, that you offer to try to increase the Navy’s one time payment for past airport O&M costs to $250,000 to make a first year total proposal of $1 million.5

G.J. Schuller 6 RADM USN
Director, Inter-American Region
  1. Source: Washington National Records Center, Official Records of the Assistant Secretary of Defense for International Security Affairs, FRC 330–80–0024, Barbados, January–December 1978. Confidential. A cover page from Schuller contains a summary of his memorandum.
  2. In telegram 240825 to Bridgetown, October 7, 1977, the Department transmitted the aide-mémoire. (National Archives, RG 59, Central Foreign Policy File, D770393–0585)
  3. Attached but not printed.
  4. See Document 307. Regarding Todman’s discussion with the Bahamians, see footnote 6, Document 251.
  5. No record of the meeting between Todman and McGiffert has been found. The U.S. negotiating strategy in 1978 indicates that McGiffert followed Schuller’s suggestion of “partially accommodating” Todman. The Department’s July 27 offer to the Government of Barbados consisted of $750,000 in yearly rent, plus a one-time $250,000 payment for past airport operation and maintenance. The Barbadian negotiators, however, requested a $5 million annual payment, along with $20 million in retroactive rent. (Telegram 2080 from Bridgetown, July 28; National Archives, RG 59, Central Foreign Policy File, D780310–1052)
  6. Schuller signed “Dutch” above this typed signature.