131. Memorandum From the Special Assistant to the Attorney General (Clegg) to the Executive Secretary of the National Security Council (Kimmitt) and the Deputy Executive Secretary of the Department of State (Covey)1
SUBJECT
- Meeting Between Algerian Ambassador Yaker and Attorney General William French Smith
You had requested2 that I give you an account of the meeting—held in the Attorney General’s office on November 9 from 11:00 a.m. to approximately 11:30 a.m.—between Algerian Ambassador Layachi Yaker and Attorney General William French Smith. (Also present at the meeting were Second Secretary Ahmed Boutache and myself, but we said nothing.)
The meeting began with a lengthy exchange of pleasantries, focusing especially on the Attorney General’s past trips to northern Africa. This culminated in the Ambassador inviting the Attorney General to visit Algeria, an invitation which was repeated twice more in the course of the meeting. The invitation was made with special reference to meeting with the Algerian Minister of Justice. The Attorney General expressed interest in visiting Algeria.
The Ambassador then stated that only the United States can bring a just and comprehensive peace to the Middle East, and that if our forces there were replaced by U.N. forces or the forces of a neutral country (he suggested a Scandinavian country) then we would be free to deal with the various actors involved in the conflict. But, he said, this was not what he came to talk about.
Rather, he said what he came to talk about was, first, the Iranian claims situation and, second, natural gas. On the Iranian claims matter, the Ambassador said he hoped Algeria would be able to work things out in its dealings at The Hague soon, and that he was always available to discuss any problems arising from the claims with the Attorney General. He expressed the hope that relations between Iran and the United States would improve, though he recognized this might not be immediately possible. The Attorney General said that the United States greatly appreciated the “essential and valuable” role that Algeria played in getting the hostages released. The Ambassador added that [Page 296] this was done not for any hope of gain, political or economic, but for humanitarian reasons.
Most of the meeting was spent discussing natural gas issues. First, the Ambassador stated by way of introduction that the Vice President’s trip to Algeria was viewed positively. He then began discussing the contract between Sonatrach and Trunkline/Panhandle. The Ambassador said that the situation in Congress was complicated by the fact that so many of its members were already running for reelection. The legislation proposed by Senator Percy and Congressman Young was discussed.3 Later, references were also made to the efforts of Congressmen Dingle and Sharp, and Senator McClure.4 The Ambassador said that a $1.5 billion investment was made by Algeria pursuant to this contract, which was negotiated in good faith, and that Algeria had borrowed a great deal from the Export-Import Bank and commercial banks (including Chase Manhattan). In order to service this debt, Algeria must continue its exports, which the proposed legislation threatens. The Ambassador said that there was no problem with the contracts in the Boston area, because there is no other potential supplier there, but the Midwest contracts pose problems. Singling out the Algerian companies, he said, was like a bill of attainder, violates the sanctity of contracts, and would force Algeria to submit the matter to arbitration, which Algeria has no desire to do. Algeria has already agreed, for the first time ever, to waive the take-or-pay clause in the contract, costing them $250 million a year and reducing the volume they supply by half.
The Ambassador said that this legislation, then, is a very serious matter, which could affect our relations a great deal; it implicates international law and international relations, and will damage American credibility. Algeria has refrained from making an issue of this in the press, but, considering the legal issues involved, his government thought that the Ambassador should raise the matter with the Attorney General.
The Attorney General, who let the Ambassador do most of the talking throughout the meeting, thanked the Ambassador for his views. He observed that this Congress has not passed much of anything, especially in the House. The Attorney General said that he understood Algeria’s concerns and what the problems were. He added that the [Page 297] legislation is not yet so far along that the Department of Justice has been asked to render a legal opinion on its constitutionality.
The Ambassador said that their lawyers were looking at the constitutional issues raised by the bill. He said that Algeria does not have lobbyists, that it doesn’t want to use them, but that American officials should be aware of what the risks in the bill are. That, he said, was why he had asked to meet with the Attorney General. This is a long-term, 20-year contract, he said, and though it may seem you are oversubscribed now, with a recovering economy you may soon want more gas again, as indeed was the case a few years ago. The companies involved here are getting along fine, the Ambassador said; it is only the interference of Congress and the regulatory agencies which has created problems.
These are the problems I wanted to raise, said the Ambassador, and they must be worked out in our countries’ common interest.
The Attorney General again thanked the Ambassador for his thoughts. The legislative process is hard to predict, he said, and he did not know yet what involvement the Department of Justice would have. In any event, he was pleased to have the Ambassador’s views.
The Ambassador then said that the Secretary of State was also aware of Algeria’s views, and was sympathetic. He alluded to the Secretary’s recent trip,5 and the upcoming trip of Secretary Hodel as well. Secretaries Baldrige and Brock are also sympathetic, he said; we have been keeping in touch with the Administration.
The Ambassador said a formal invitation for a visit by the Attorney General to Algeria would be forthcoming. He mentioned explicitly the possibility of working out a U.S.-Algerian mutual assistance law enforcement treaty, similar to the one recently signed with Morocco. The Ambassador was profuse in his thanks to the Attorney General for meeting with him.
NOTE: IF EITHER OF YOU BELIEVE THIS INFORMATION SHOULD BE CLASSIFIED, PLEASE LET ME KNOW. Thank you very much for the information, written and oral, you supplied us in such timely fashion before the meeting.
- Source: Reagan Library, Near East and South Asia Affairs Directorate, Algeria 1983 (2). Confidential.↩
- Not found.↩
- Senator Charles Percy (R-Illinois), Chairman of the Senate Foreign Relations Committee, and Representative Bill Young (R-Florida), introduced a bill requiring the Department of Energy to suspend Trunkline’s authorization to import high-priced Algerian LNG within ten days after enactment of the bill.↩
- Representatives John Dingle (D-Michigan), Philip Sharp (D-Indiana), and Senator James McClure (R-Idaho) supported efforts to force U.S. companies to import lower-priced Algerian LNG based upon fair market conditions.↩
- Reference is presumably to Shultz’s October 26–27 visit to Paris to discuss Lebanon with the French, Italian, and British Foreign Ministers.↩