299. Telegram From the Department of State to the Embassy in Peru1

25339. Subject: Cut in FMS for Peru; Invitation to Peruvian Foreign Minister

1. February 3 Peruvian Ambassador Garcia Bedoya was called in by Acting Assistant Secretary Luers and given original of Secretary’s response to congratulatory message from Peruvian Foreign Minister, inviting de la Puente to a working luncheon in Washington February 10 while latter in U.S. en route back from visit to Spain. Luers stated invitation was important signal of U.S. interest in warm relations between our two countries. Texts of messages exchanged being sent Lima by septels.2 (Luncheon being scheduled in State Department for 12:30, Thursday, February 10.)3

2. Shifting to decision to cut FMS for Peru for FY 77 from $20 million budgeted to $10 million, Luers advised Garcia Bedoya of action taken early December4 and also mentioned that projected level for FY 78 was likewise $10 million. Explained that it had been impossible for USG to maintain level of $20 million for Peru for this fiscal year in face of continuing Peruvian military buildup, capped by purchase of aircraft from Soviet Union. Such would not have been understood in Congress. As it was, there were those within USG who argued for total elimination of FMS for Peru.

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3. Luers continued that remaining $10 million should tide Peru over (following utilization of $20 million from FY 76 funding for which Garcia Bedoya signed agreement late October 76, at end of transitional quarter). Indicated that possibility of increase later in fiscal year should not be totally precluded, provided funds were available and political environment permitted. Cut was to be seen only as an expression of USG concern over continuing Peruvian military buildup.

4. As expected, Garcia Bedoya reacted adversely. USG decision was “difficult to understand”. Wasn’t it a form of pressure to accomplish “other purposes” (referring to further purchases from USSR). Luers denied this, pointing out that there was still some FMS being provided for FY 77. Scale of military acquisitions was Peru’s business; USG decision reflected our preoccupation with it.

5. Garcia Bedoya spoke of improved relations between militaries of Peru and U.S. and indicated that cut decision was “very disappointing”. . . also “contradictory”. Luers asked Garcia Bedoya to convey sense that USG does not want any significant diminishment in military relations and pointed to continued training program. (Later Garcia Bedoya was told that program would continue at previously projected level of $900,000. It too had at one point been cut for FY 77—to $700,000—but had later been restored to $900,000.)

6. Garcia Bedoya returned to his interpretation that the U.S. was cutting off FMS because of Peruvian purchases from the USSR and referred to section in annual DOD military posture statement relating to Peru’s purchase of Soviet aircraft (see septel). Ambassador argued that it had been “impossible” to buy such a plane from the U.S.; therefore Peru “forced” to turn to USSR. Cut in funding was “not important economically” but was important psychologically.

7. Luers reiterated that cut reflected concern over unfortunate environment in Andean region and mentioned similar concern re Peruvian military buildup on part of neighboring countries. Garcia Bedoya rejoined by stating U.S. is here agreeing with those neighbors.5

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8. Meeting ended with Luers’ assurance USG wished to continue with military relationship appropriate to interests of both countries.6

  1. Source: National Archives, RG 59, Central Foreign Policy File, D770039-0945. Confidential; Immediate. Sent for information immediate to Santiago and for information to Quito. Drafted by Fuller; approved by Luers.
  2. In telegram 25612 to Lima, February 4, the Department transmitted the text of de la Puente’s message to Vance. (National Archives, RG 59, Central Foreign Policy File, D770041-0131) In telegram 25613 to Lima, February 4, the Department transmitted the text of Vance’s reply to de la Puente. (National Archives, RG 59, Central Foreign Policy File, D770041-0132)
  3. For Mondale’s meeting with de la Puente, see footnote 3, Document 300. In telegram 950 from Lima, February 4, the Embassy provided background information for the scheduled working lunch: “the hemisphere-wide chorus of press and public concern heard during the month of December regarding tensions, reported troop movements, Soviet arms purchase, and the possibility of a Peruvian attack on Chile” had “forced the GOP to examine more realistically the generally accepted but usually unspoken assumption that Peru, especially under the revolutionary government of the armed forces, would eventually right the wrongs of the past century and adjust accounts with Chile.” (National Archives, RG 59, Central Foreign Policy File, D770041-0221)
  4. Not further identified.
  5. In telegram 25380 to Lima, February 4, the Department reported that the political counselor in the Peruvian embassy had expressed “Peruvian unhappiness” with an AP story “concerning ‘new’ Peru-USSR arms deal,” and had asked for the U.S. military posture statement for FY 78. The telegram included the following excerpt from the statement: “The principal potential threat to U.S. interest in Latin America is the Soviet and Cuban efforts to establish power bases which exploit prevailing unstable social/economic conditions and interfere with U.S. access to strategic materials. Cuba is successfully penetrating the infrastructure of Caribbean states. The Soviets see the sale of arms as an effective means of entry. They recently were unsuccessful in the sale of missile-firing gun boats to Colombia, but have sold a highly sophisticated aircraft to Peru. With this sale will come Soviet technicians and an opportunity for increased influence.” (National Archives, RG 59, Central Foreign Policy File, D770041-0164)
  6. For the U.S. concern with the military balance in the Andes, see Document 2.