245. Memorandum From Walter Raymond of the National Security Council Staff to the President’s Assistant for National Security Affairs (McFarlane)1


  • Soviet Covert Action Program

My understanding from former colleagues is that the Soviet/East European Covert Action Program was budgeted at $8.3 million for FY 84. The program managers projected funding needs at $9.1 million for FY 85, however the “bureaucracy” (probably including John McMahon) has cut the figure to $7.6. Some of my figures may not be totally accurate but the bottom line is that there is a projected cut in this program. I do not believe that this issue has been brought to Bill Casey’s attention. I have a personal interest in this program, not only because I was responsible for it before, but also because I worked very closely with the Agency on this activity. I have been trying to generate a parallel non-covert dimension in the field of political action toward the target. I think it is vital that funding be continued. Indeed, more could and should be more meaningfully spent on this program.

I would urge you to raise this with Bill Casey privately and insure that he sees the program is continued without reductions.

Attached at Tab I is a bootleg copy of a recent letter from Secretary Shultz to Bill Casey underscoring the importance of the program and the need for it to be expanded.2 Ken and I and others share this view.

FYI: [2 lines not declassified] This is a second item I believe you should raise with Bill Casey in order to develop a Congressional strategy designed to reverse this HPSCI position.


That you underscore to Bill Casey your commitment that the Soviet/East Europe Covert Action Program continue at equal or greater funding levels in FY 85.3

[Page 873]

That you raise [less than 1 line not declassified] funding with Bill Casey to develop strategy for use with HPSCI.4

Ken deGraffenreid concurs.5

Tab I

Letter From Secretary of State Shultz to Director of Central Intelligence Casey6

Dear Bill:

I know that you see the US-Soviet relationship as a long-term struggle. Some of our most important allies in that struggle ultimately may prove to be the various peoples of the Soviet Union. For that reason, this Administration’s basic policy document on the Soviet Union (NSDD–75)7 set out as a major objective encouraging the internal liberation of that society and penetrating the controls set up by the system.

We have limited means to pursue this process. The CIA’s programs designed to get materials to the Soviet and East European peoples and to support groups there and in exile are among the most important. I have in mind such programs as the dissemination of books and other publications within the Soviet empire, letters by Soviet emigres to their contacts in the Soviet Union, [1 line not declassified].

It is sometimes difficult to measure results in our penetration efforts, to know precisely what materials get through. But at a time when the KGB has managed temporarily to stifle most organized dissent inside the USSR, keeping the struggle going outside is even more significant as it preserves hope.

Similar programs directed at Eastern Europe are also important. Poland is only the latest demonstration of the fundamental instability of these systems, of the strong desire of Eastern Europeans for the lifestyles and basic freedoms of the West. Also, dissent in Eastern Europe has some spill-over influence inside the Soviet Union.

[Page 874]

Recognizing the difficulty of measuring results but also emphasizing the long term benefits, I urge that you sustain the existing programs designed to increase Soviet and East European preoccupation with the aspiration of their own peoples. For a variety of reasons I do not advocate an immediate expansion of these programs, and I understand and agree with your desire to avoid additional controversy now with such pressing priorities as Nicaragua facing us. But looking towards the future, I believe that we should be thinking about a new and more ambitious finding in this field. I suggest that our staffs get together as soon as possible to develop plans for additional and increased activities over the next four to five years that might usefully be undertaken vis-a-vis the Soviet Union and Eastern Europe.


George P. Shultz


Memorandum From Director of Central Intelligence Casey to Secretary of State Shultz8


  • Suggested Response to Letter dated 19 April 1984 Regarding US-Soviet Relationship

I very much appreciate the interest and support you express for our covert action programs directed at the Soviet Union and its East European allies. You can be sure that I take a personal interest in preserving the momentum they have developed over the past many years and will continue to give high priority to finding ways in which these programs can be sharpened and eventually expanded, within our current overall budgetary constraints.

I find your idea of beginning staff planning in this field now for the next four to five years an excellent one and have initiated action through our International Activities Division to pursue this proposal from our side. [name not declassified] who heads the [less than 1 line not declassified] within IAD, will start the process with your European Bureau. Deputy Assistant Secretary Mark Palmer knows both [name not declassified] and our existing programs well and will be our initial point of contact.

William J. Casey9
  1. Source: Reagan Library, System IV Intelligence Files, 1984, 400684. Secret; Eyes Only. Sent for action.
  2. Raymond called this a “bootleg copy” because the letter from Shultz to Casey is undated and unsigned. The single attachment is referred to as “Casey-Shultz correspondence” but is printed below as two enclosures.
  3. McFarlane approved the recommendation.
  4. McFarlane approved the recommendation.
  5. DeGraffenreid initialed his concurrence and wrote in the margin: “Strongly agree with Walt that we must not let these programs be reduced.”
  6. Secret; Sensitive. See footnote 2, above.
  7. See Foreign Relations, 1981–1988, vol. III, Soviet Union, January 1981–January 1983, Document 260.
  8. Secret; Sensitive.
  9. Casey signed “W.J. Casey” above his typed signature.