LETTER TO HONORABLE RICHARD B. RUSSELL FROM [ ]

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP72-00337R000100040016-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 10
• Document Creation Date: December 12, 2016
• Document Release Date: March 22, 2002
• Sequence Number: 16
• Publication Date: May 26, 1970
• Content Type: LETTER

Approved For Release 2002/05/17 : CIA-RDP72-00337R00q
THE SECRETARY OF DEFENSE
WASHINGTON
MAY 16 1970
Honorable Richard B. Russell
Chairman, Committee on Appropriations
U.S. Senate
Washington, D.C. 20510
I am writing to you, to Senator Stennis, and to Senator McGee to
express my views on the serious effects that certain amendments to
the Foreign Military Sales Act now pending in the Senate would have
on the security of the United States. In addition to Section (7),
the so-called Cooper-Church amendment which is being addressed
separately, two sections give me particular concern. These are:
Section (9), which severely limits the amounts of items
excess to the needs of our armed forces which we can provide at no
cost or at nominal cost to our allies.
. Section (10), which requires that a recipient country provide
local currency of a value equal to 50% of the value of military grant
aid provided by the U.S. to that country. .
Detailed statements of the adverse effects these amendments would
have on our own security and that of our allies are attached. Taken
together, the amendments would severely limit the effectiveness of
our collective defense arrangements., probably result in increased
requirements for expenditures on U.S. military forces, and make more
difficult the withdrawal of U.S. forces from overseas while continuing
to meet our mutual defense obligations.
I urge your support on securing modification of the proposed amend-
ments along the lines suggested in the attached detailed statements.
Sincerely,
Attachment
As stated
cc: Honorable Milton R. Young
OSD AND JCS REVIEWS COMPLETED-
Approved For Release 2002/05/17 : C4A-RDP72-00337R000100040016-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
4
SECTION (9)
We do not object to a legislative limit on the value of excess
defense articles to be provided annually to foreign countries. The
ceiling proposed, however, will prevent the U.S. from making optimum
use of these assets in the achievement of its foreign policy objectives.
The level proposed ($70 million at acquisition cost) drastically
curtails the important contribution that excess articles make to the
Military Assistance Program.. For exbmple, of the $350 million
appropriated for FY'l970, onl''y $78'million is for modernization, the
remainder being needed for training, operation and maintenance of equip-
ment on hand, and for shipping materials programmed in prior years.
Unnecessary curtailment of excess issues will increase the need for
MAP funding of operating requirements and diminish our ability to use
these assets for modernization.
countries such as Turkey, China,
Curtailed use of excesses
materials have long ago been
needed to meet current
zation reserves of the U.S.
and shipping these articles
MAP appropriations. If not
The major impact will be felt by
and Korea.
will not produce savings to the U.S.
paid for by the Defense budget and are
operational requirements and mobill-
military services. Costs of repairing
are borne.by either the recipient or the
used to meet military assistance require-
ments, thky will be scrapped and useful defense resources will be wasted.
Much of the equipment furnished from excess is old and, by U.S.
standards, obsolescent and beyond the point of economical repair. But,
Approved For Release 2002/05/17 : CtA-RDP72-00337R000100040016-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
to the recipient country where materials are relatively scarce and
expensive while labor is relatively plentiful and inexpensive, these
equipments are extremely valuable and useful.
DOD calculations indicate that, if we take into account such
factors as age, condition, and actual usefulness to the recipient,
excess materials have a world-wide '"utility" value--or real value to
the recipient--of approximately 30% of acquisition cost. We believe
that a ceiling of'$152 million calculated at a "utility value" formula
of 30% of acquisition cost is essential to avoid wastage of valuable
defense assets, and urge that the following be substituted for the
"Section 9(a) Notwithstanding any provision to the contrary
in the Foreign Assistance Act of 1961, as amended, the utility value of
excess defense articles 'programmed to carry out part II of that Act for
the fiscal year 1971 shall not exceed $152,000,000. For the purpose
of this section, utility value means thirty percentum of the original
acquisition cost to the United States of the excess defense articles.
"(b) The President shall promptly and fully inform the Speaker
of the House of Representatives and the Commititee on Foreign Relations
and the Committee on Appropriations of the Senate of each decision to
Mti.Y
furnish on a grant basis to any country excess defense articles which
are major weapons systems to the extent such major weapons system was not
(2)
Approved. For Release 2002/05/1'7 : CtA-RDP72-00337R0O010004001-6-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
. 41
included in the presentation material previously submitted to the
Congress. Additionally, the President shall also submit a quarterly
report listing by country the total value of all deliveries of excess
defense articles, disclosing both the aggregate original acquisition
cost and the aggregate utility value at the time of delivery."
SECTION (10)
We agree in principle with the objectives set forth in the
report (No. 91-865) of the Committee on Foreign Relations. As written,
however, this provision would defeat the primary objective of military
assistance since its principal impact would be on the forward defense
countries such as Korea and Turkey, which receive the bulk of military
assistance and which have the most need for assistance but the least
ability to pay in either dollars or local currencies.
On the other hand, the amendment will have little effect on those
countries where MAP is small in comparison with their defense budgets.
As a consequence, the effect of the amendment is clearly contrary to
its purpose as stated in the report of the Foreign Relations Committee,
which is to discourage countries which do not need large military
--budgets from wasting their resources.
In those countries where there is no surplus of U.S. owned
{tiY
foreign currency (essentially those most needing U.S. assistance), the
amendment in effect requires the country to pay in dollars, rather than
(3)
Approved For Release 2002/05/17 : C-IA-RDP72-00337R000100040016-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
local currency, since the deposited currency could be used to meet local
U.S. obligations for which the U.S. now purchases local currency with
dollars. Ideally and normally, in reducing the MAP for a country the
transition is from grant aid to credit sales to cash sales as the economic
situation in the country improves. The proposed amendment would omit
the credit step and require the country to move precipitously from grant
aid to cash sales, with resulting disruption of their budgetary and
planning systems.
For recipients to obtain funds to make the required deposits,
they will have to divert funds from other purposes, such as economic
and social development, increasing the percentage of their budgets which
are devoted to military purposes. No-time is provided for them to make
the necessary budgetary adjustments or to assess impacts. Recipients are
thus placed in the position of turning over to the United States the
power to determine for what purposes their funds will be spent, and at the
same time, having to make hasty decisions on allocation of remaining
resources. In view of the large size of military assistance programs,
the impact is especially serious in Turkey and Korea. In the case of
Korea particularly, the impact will be very serious, since almost the
entire program is for items required for day to day operations. If the
Koreans cannot provide the required sum, combaft efficiency will be
directly effected at an early date.
In several countries, the provision of military grant aid assists
the U.S. to maintain bases and facilities that are important to U.S.
(4)
Approved For Release 2002/05/17 : CfA-RDP72-00337R000100040016-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
strategy and security. Imposition of a requirement for these countries
to deposit funds for the purposes set forth in this section would in
effect require the allied country to pay for allowing U.S. access to
its bases, or necessitate our doubling their present program levels
in order to maintain the existing amount of the MAP.
Limitations on access to certain bases will affect our ability to
support NATO, and in particular Turkey, with a resulting diminution of
our ability to maintain a presence in the eastern Mediterranean. Should
this occur, the adverse effect on our relations with the moderate Arab
states and on the position of Israel is obvious. As a consequence the
strategic balance of power in the area would be affected in favor of
the Soviet Union, and in addition, U.S. economic interests in the area
could suffer.
Withdrawal of U.S. troops from overseas areas such as Korea
without a decrease in deterrence against Communist attack will be more
difficult, since the demand on allied resources to fill the gap left
by such withdrawals will be greater. For the same reason, badly needed
modernization of allied forces will be more difficult.
(5)
Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
THE JOINT CHIEFS OF STAFF
WASHINGTON, D.C. 20301
26 May 1970
onorable Richard B. Russell
Chairman, Committee on Appropriations
U. S. Senate
Washington, D.C. 20510
On May 16, 1970, Secretary Laird wrote you concerning
the serious effects which certain amendments to the
Foreign Military Sales Act, now pending in the Senate,
would have on the security of the United States. He made
particular reference to those amendments which would
severely limit the existing authority in the Foreign Assist-
ance Act of 1961 to give excess defense articles to foreign
countries (Section 9) and which would require a foreign
country to pay, in its own currency, 50% of the value of
military grant aid provided by the United States to that
country (Section 10). Secretary Laird expressed the view
that taken together these amendments would severely limit
the effectiveness of our collective defense arrangements.'
I fully concur in this view and because of the nature of
the military consequences which could flow from the proposed
amendments, I am taking this opportunity to also urge your
support in securing a modification to the current Bill.
For some twenty years the Military Assistance Program
has been an important element in our national security
policy. Through it, we have been able to strengthen our
allies in those areas where we have mutual security inter-
ests, and we have thereby reduced the military requirements
for our own forces. The Joint Chiefs of Staff have consid-
ered the Military Assistance and Sales Program to be an
important aspect of the United States national security
and weakening this program can weaken our security. Of
particular concern to me are the serious consequences which
the proposed amendments could have upon the military capa-
bility of our Forward Defense Allies, such as the Republic
of Korea and Turkey.
As you are aware, the Republic of Korea is a key element
of the United States forward strategy in Northeast Asia.
If the Republic of Korea is to maintain her responsibilities
Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
for her own self-defense against aggression, she must have
enough modern military equipment to meet the military threat
currently posed against her by the North Korean military
forces. I had the opportunity to visit South Korea during
October of last year and I saw first-hand the condition of the
South Korean equipment. Their ground forces equipment is
antiquated, and they lack adequate force mobility. Their
Air Force needs additional resources, and their Navy needs
additional surface units. If we are going to place a greater
reliance on the indigenous forces of the Republic of Korea,
we must be sure they can cope with the threats to their
security, for their security is tied to the security of the
free world. If United States military equipment, which would
otherwise be scrapped, can be useful to enhance the'capabil-
ity of such indigenous forces, we ought not to permit these
defense resources to be wasted. We ought not to take unnec-
essary risks by adding to our scrap heap instead of adding to
an ally's strength.
One of the major objectives of our Military Assistance
Program is also to assist such countries as Turkey so that
she would be. able to resist a general Warsaw Pact aggression.
The Turkish military forces sit on the right flank of NATO,
and they are exposed on two fronts. Turkey does not have
the financial capability of equipping and maintaining a
sufficiently modernized military force to cope with a Warsaw
Pact forces attack against NATO unless the United States
continues to provide her with military assistance. If the
Turkish forces are to remain adequately equipped to cope
with the threat to the right flank of NATO, the United States
will have to continue to provide Turkey with a level of
support essential to the effective implementation of the NATO
strategies. Requiring Turkey and other Forward Defense
nations to pay for grant aid would not promote the effective
implementation of these strategies but, to the contrary,
they would substantially weaken Turkey's military posture
and hence weaken NATO and United States security.
The Military Assistance Program is a self-interest pro-
gram. As we place a new and greater emphasis on the contri-
bution'of allied forces to the free world security--and hence
to our security--we cannot allow it to wither away because of
arbitrary ceilings on excess defense articles or by requiring
foreign countries, who cannot afford to do so, to pay for
grants. Because of the obvious serious consequences which
Approved For Release 2002/05/17 : C4A-RDP72-00337R000100040016-7
 Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
the proposed amendments would have upon United States
security, I join with Secretary Laird in urging your
support on securing the modification of the proposed amend-
ments along the lines suggested in his letter of May 16th.
Sincerely,
EARLE G. WHEELER
Chairman
Joint Chiefs of Staff
Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
 STAT Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7
Approved For Release 2002/05/17 : CIA-RDP72-00337R000100040016-7