LEADER IN HOUSE ACTS TO COMPEL ARMS SALE STUDY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP69B00369R000100240021-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 15, 2016
• Document Release Date: April 13, 2004
• Sequence Number: 21
• Publication Date: July 24, 1967
• Content Type: NSPR

iC '-t! i (11-, e '2- ''7..e-(fi- d'
Approved For Release 2004/05/05 :.(
The >mnority Ieader. of the)
LEADER IN HOUSE louse committee, William -
Widnall, Republican of New Jer-
sey, said the bill to increase the f
ACIS .ll,mo COMPF14 contribution to the Inrl to
ican Bank from $760-million ion to
$900-million over the next three
ARMS SAhE S1Yyears should be paned is
the Administration n clarified d its
arm sales policies.
Widnall Seeks to Bar Rise
in Latin Aid and Force
a Weapons Review
SYMINGTON JOINS FIGHT
Says He Will Support Move
to Drop Pentagon's Fund
That Helped Purchases
Excerpts from Senate hearing
.will be found on Page 2.
Action Due Tomorrow
The House is scheduled to
act on the bill Wednesday.
President Johnson wants the
increase to support a pledge
made at the Punta del Este
Conference in April that he
would seek more American aid
to help in forming a Latin-
American common market.
Mr. Widnall noted state-
ments Senator Symington made
at a news conference this
morning that the Administra-
tion might have used "back-
door" financing to circumvent
Congressional limitations on
arms shipments to Latin Amer-
ica.
"Unless final House floor
By NEIL SHEEHAN debate on the Inter-,Aingriegni
Special to The New York Times B -ak `bill is delayed pending
WASHINGTON, July 24-The
minority leader of the House f*lnued on Page 2, Column $
Banking and Currency Commit-clarification of this question,
tee' sought today to force'aMr. Widnall said in a state-
policy review of United States meat, "I have serious doubts
arms sales by attempting to whether the Administration
delay an Administration bill tclwill find a majority of the
increase economic aid to Latir.
America.
The move in the House came
as Senator Stuart Symingtor
announced his support fol
abolition of a $383-million re,
volving credit fund that the
Defense Department has been
using to guarantee loans for
the purchase of American arms
by underdeveloped countries.
Mr. Symington is chairman
of the Senate Foreign Relations)
Subcommittee on Near Eastern).
and South Asian Affairs. Yes-'i
terday the subcommittee re-'.
House ready to vote for a sub-
stantial increase in long-term
development lending through
the Inter-American Bank."
Bank Is Supported
Mr. Widnall also said he was
r" of the In
o
t
p
n
"
r
e
ch su
p
stau
a
ter-American Bank and that he
would "hate to see it threatened
by debate over recent Export-
Import Bank arms sales to Latin
America."
Mr. Widnall already has
forced a delay on House action
to extend the life of the Export-
Import Bank for another five
years and, to increase its lend-
ing authority.
He won the delay after senior
Administration officials ac-
knowledged in closed hearings
before the committee last Mon-
day that the bank had indirectly
lent $591-million in the last two
fiscal years to 14 under-devel
leased testimony by Administra
tion officials and the world's
leading private arms merchant.
It disclosed that United States
controls over surplus American
weapons in the hands of Euro-
pean nations were breaking)
down.
oped countries to buy American
arms. ;
Subsequently, Mr. Widnall
called fora Congressional re-
view of aims. sales. It is under-
stood that` he is attempting to
delay both bills to force the
review.
-F? 6A PR~? 0a1W,24003lr ian Plans Cited
fending the arms sales program The Senator cited the report'
vigorously. Last week Secret that Peru intended to purchase
tary of Defense Robert S. Mc' supersonic Mirage jet fighters
Namara called on Mr. Widnal froFrance as support for, his
and today Deputy Secretary o amendment to empower the
Defense Paul Nitze visited Rep President to reduce or elimi-
resentative Henry S. Reuss o nate economic aid to nations
Wisconsin. making large arms purchases
Mr. Reuss, a senior Democra from third countries.
on the banking committee an Peru, he said, is a "poor coun-
a respected liberal, has sharpl try" that has no need for such
criticized the arms sales.
ircraft
d
hi
ti
t
.
e
a
ca
s
sop
Mr. Nitze also told the banl= "If they are going to buy
ing committee last week the them I don't think we should
the sales were good for Amer continue economic aid," he !said.
ican industry. The Senator cited India and
Senator Symington said toda: Egypt as examples of countries
that he had presented ai that had been able to spend for-
amendment to the Senate For sin 'exchange for armaments
eign Relations Committee tha, because they were receiving
would empower the Presidem conomic aid from the United
to reduce or to cut off Unitec States.
States economic aid to count India has obtained its aircraft
tries such as India. that make largely from Britain and the
large arms purchases from thirc Soviet Union, while, Egypt has
countries. -eceived its planes entirely from
The Missouri Democrat ac; Woscow.
cused the Administration of Senator Symington con-
trickery in financing arms sales,
r
and other tremendous eco-
through the Export-Import anmooununt" of that food d "the
eco
Bank. t
"We were assured," he said, nomic aid "we've given India
has made it possible for her
"
the Central and South
that
Anerican development was eco-1 to have the largest air force
in that part of the world." He
"
nomic-not an arms race.
"Then we find there's this
trick of back-door financing
through the ex-int bank. All ;I
can say is that we [Congress]
have been taken.'.'
Informants have disclosed
that about $100-million of the
$591-million in so-called "Coun-
try-X" arms loans from the
Export-Import Bank in the
1966 and 1967 fiscal years went
to five Latin-American coun-
tries - Brazil, Argentina
Venezuela, Chile and Peru.
Under the Country-X proce~
dure, the bank simply open:
a line of credit to the Defens(
Defense Department arm!
salesman, Henry J. Kuss Jr
Mr. Kuss then lends it to th(
country involved for the arm:
purchase.
The loans are guaranteed b3
the Pentagon's $383-million re
volving fund under a law tha~
requires that only 25 per cep
of the loan must be coverer
from the fund.
Congress has imposed limita?
tions of $30-million a year it
arms sales to Latin AmericE
and $55-million a year in mill
tary assistance grants. The rat(
of loans, however, indicate
that the Administration ha
been selling about $50-milliol
ica.
Mr. Symington said the eco
nomic aid programs, for Lath
America ? "have. been sold [tc
IGong_ressJ on the basis that thi:
Is where we're not going tc,
have another arms race."
!
said the thing had resulted from
American food shipments to
Egypt.
can't help but believe;
that if we hadn't given the aid'
there wouldn't have been wars'
in those areas," he said.
An amendment to abolish the
Pentagon's revolving arms sales
credit fund, which Senator Sy-
uington said he would support,
is scheduled to be presented to
,he Senate Foreign Relations
.ommittee later this week'by
rank Church, Democrat of
daho.
Approved For Release 2004/05/05 : CIA-RDP69B00369R000100240021-6