Foreign Relations of the United States, 1977–1980, Volume XXIX, Panama

249. Memorandum From Secretary of State Vance to President Carter ¹

Washington, November 17, 1979

SUBJECT

• State Department Membership on the Panama Canal Commission’s Board of Directors

The Panama Canal Treaty provides for a Supervisory Board of Directors for the Panama Canal Commission consisting of five U.S. members and four Panamanians. The Treaty implementing legislation provides that you will appoint the Board members; the U.S. members will require Senate confirmation. Three of them must be drawn from private life, and a fourth, the Chairman, must represent the Secretary of Defense. In a letter to you dated November 3 Graham Claytor has proposed candidates for these positions.² He has further proposed a second Defense Department candidate for the fifth U.S. Board membership.

I believe that the fifth U.S. Director should be a representative of the Department of State, for the following reasons:

—The original Administration bill envisaged State participation on an inter-agency Board pursuant to your decision in 1978.³ Nothing in the implementing legislation as enacted precludes State participation; the legislative history indicates that it was contemplated. It is not in any way inconsistent with the lead role we have envisaged for DOD in Canal management, or affected by bloc U.S. voting at the direction of the Secretary of Defense.

—State representation will ensure effective coordination of the most sensitive policy problems arising under the Treaty.

—The new Board will be a bi-national agency, and the policy issues it will handle will importantly and perhaps critically affect our relations with Panama and our varied interests in the Canal.

—Since 1961, State personnel were consistently included in the Board of the old Panama Canal Company, even though we then exercised exclusive control of the Canal and exclusive jurisdiction in the Canal Zone.

I do not agree with DOD’s suggestion that the designation of an Embassy observer to the Board will adequately enable the Department of State to carry out its responsibilities. The Department needs a representative who can participate actively in meetings of the Board and its committees, and in preparation and follow-up activities. This is a separate matter from the agreed requirement that the Panama Canal Commission should keep the Ambassador fully informed regarding its work. Provision for an observer is not a satisfactory alternative to the full membership status enjoyed by Department Board members in the past.

Recommendation

That a State Department representative be appointed as a U.S. Director of the Board.⁴

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 60, Panama, 6/79–1/80. Confidential.
2. A copy of the letter is in the National Archives, RG 59, Central Foreign Policy File, P800052–1540.
3. See Document 188.
4. Carter did not indicate his approval or disapproval of the recommendation. In a December 6 memorandum to Vance, Tarnoff discussed an agreement made by Vance and Brown to raise with Carter the issue of whether the second official member of the PCC Board of Directors should be drawn from Defense or State. (Department of State, Records of Cyrus R. Vance, 1977–1980, Lot 84D241, Box 3, Pres Breakfast 9/1/79 thru 12/31/79) In a December 20 memorandum to Brown, Alexander, Jones, and McGiffert, Dolvin reported that the White House overrode the proposal of having two Defense nominees and that Carter had approved a list of nominees for the board. The nominees included State representative Bushnell for the second U.S. Government position on the board. (National Archives, RG 218, Records of David C. Jones, Box 47, 820—Panama 3JC/78–26 Nov 80)