CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A012700120001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 15, 2016
• Document Release Date: August 7, 2003
• Sequence Number: 1
• Publication Date: December 14, 1968
• Content Type: REPORT

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D
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
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Secret
50
14 December 1968
State Department review completed
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No. 0339/68
14 December 1968
Central Intelligence Bulletin
CONTENTS
South Vietnam: Situation report. (Page 1)
Laos: The Communists are pressing their offensive
in the south. (Page 3)
Brazil: Congressional defiance of the President and
military has created a major crisis. (Page 4)
Peru: The prime minister appears to be setting the
stage for a bid for the presidency. (Page 5)
Communist China: Circulation of a draft party con-
stitution is a further sign that a party congress
will be convened soon. (Page 6)
Czechoslovakia: Any moves toward decentralization
of the economy are likely to come slowly. (Page 8)
Italy: The new government marks a slight shift to
the left. (Page 9)
Algeria: Algiers breaks off bilateral economic ne-
gotiations with both the USSR and France. (Page 10)
South Korea - West Germany: Spy-abduction issue
again threatens relations. (Page 11)
Okinawa: Demonstrations (Page 12)
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C South Vietnam: There is more evidence that the
Communists xnten to kick off a new round of offensive
activity soon, but so far enemy initiatives remain
limited to scattered harassing actions.
Several Communist shellings of allied military
installations in III and IV Corps occurred on 12-13
December and an enemy force launched a ground probe
and mortar attack on a US infantry field osition
south of Saigon, F77 I
Central Intelligence Bulletin
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Southern Laos: Ban Thateng Under Attack
SavannaWhet
Meung
Nong
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THAILAND
Matt-
hatefig
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ti 25 50 75 Kilometers
C nmunist-controlled territory
Contested territory
t Government-held town
Tic But!
4A Shau
Govern enttde en$NS
hit by Si baitafions of
13iort/r lJ,ifnarncse on
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Laos: The Communists are pressing their offen-
sive i tthe Bolovens Plateau area.
On 13 December, the enemy launched the second
heavy ground assault on the strategic government po-
sition at Ban Thateng since late November. With ap-
parent disregard for casualties, a three-battalion
North Vietnamese force drove government troops from
two outlying defensive positions in the face of
heavy air strikes. At last report the enemy had
taken the village itself, but government forces were
holding the main base just south of Thateng.
The latest
attack
against Thateng appears to be
the sharpest the
enemy
has made in the Bolovens area
since early this
year.
It tends to support the
statements of a
North
Vietnamese prisoner captured
during the assault in November that the troops were
told that North Vietnamese forces would take both
Thateng and the provincial capital of Saravane in
December.
The prisoner also claimed that the offensive--
which apparently was being conducted with North Viet-
namese troops long associated with Laos operations--
was designed to protect the infiltration corridor.
The loss of Thateng would not only further
weaken the government's tactical position in the
Bolovens, but it would also come as a severe psycho-
logical blow at a time when the government is al-
ready questioning whether it ought to continue its
efforts to hold the provincial capitals of Saravane
and Attopeu.
14 Dec 68 Central Intelligence Bulletin
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Brazil: Congressional defiance of President
Costa e Silva and the military establishment has
created a major government crisis and forced the
President to institute severe repressive measures.
On'12 December the Chamber of Deputies refused
by a wide margin to lift the immunity of opposition
Deputy Marcio Moreira Alves so that he could be tried
for a speech he made in Congress attacking the gov-
ernment and military. Top military leaders, who
have committed their prestige to punishing the dep-
uty, yesterday forced Costa e Silva to declare an
Institutional Act suspending Congress for an un-
determined period of time.
The military ministers had warned Costa e Silva
some time ago that if Alves were not tried, military
personnel might physically attack the deputy. The
government has clamped on strict press and radio
censorship, and has already seized issues of an im-
portant conservative newspaper.
Some moderate officers may well believe that
this issue should never have reached crisis propor-
tions, but now that the military's prestige is on
the line, they will probably back the government's
action. Domestic and international reaction is
likely to be highly condemnatory of this "dictato-
rial" process. Costa e Silva had exhausted his
legal options. His resort to extraconstitutional
measures indicates the depth of his commitment to
his military backers and the military's determina-
tion to hew to the goals of the revolution that
brought them to power in 1964.
14 Dec 68 Central Intelligence Bulletin
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Peru: General Montagne appears to be setting
the stage for assuming the presidency when President
.Velasco retires from the army at the end of January.
Montagne, who
is e prime minister, minister of war, and the com-
mander of the army, is transferring officers known
to support Velasco to outlying districts and assign-
ing officers he trusts to key posts in Lima. There
has been considerable friction between the so-called
moderate forces in the cabinet led by Montagne and
the group of more radical and nationalistic colonels
serving as advisers to President Velasco.
It remains to be seen what the Velasco group
may try to do to counter Montagne's move. The highly
nationalistic and anti-US tone of Velasco's speeches
in recent weeks may be designed in part to gain ad-
ditional support to head off any attempt to remove
him from office.
14 Dec 68 Central Intelligence Bulletin 5
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Communist China: Circulation at local levels
of a draft revise constitution for the Chinese Com-
munist Party is a further indication that Peking in-
tends to convene the ninth party congress within the
next few months.
Diplomats in Peking have dust obtained the full
text of the draft that was worked out at the 12th
plenum of the central committee in October. A "de-
cision" of the plenum, attached to the draft, states
that revisions are based on proposals by Mao and
from various regions, departments, and masses. The
draft is to be discussed at the local level and opin-
ions are to be reported back shortly. The central
committee may then amend the draft and submit it to
the ninth party congress. As there will almost cer-
tainly be no major changes, this congress could be
held early in 1969.
The new constitution is greatly condensed--down
to 12 articles from 60--compared with the existing
version and is much less precise. As expected, it
enshrines Mao's thought, designates Lin Piao as his
successor, and declares that class struggle will
continue throughout the socialist period.
Some principal changes are that the probationary
period for new party members has been dropped and
admission of new members will not be subject to ap-
proval by mass meeting. These changes should make
possible a rapid buildup of the new party. Proce-
dures for dismissal from the party have also been
simplified.
Party organizations at all levels will no longer
go through the pretense of being elected, but will
be "produced" by an unclear process termed "demo-
cratic consultation and election." This change may
be intended to justify the extralegal destruction
of the party apparatus in the past two years. As
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in the present constitution, party members who dis-
agree with directives from above will'be allowed to
appeal to the central committee and its chairman..
There is no longer, however, the requirement that,
in the meantime, they obey~the directives, a change
that would seem to legalize insubordination.
According to the old constitution, the national
party congress should meet every year and be re-elected
every five years. The new one stipulates only that
it meet every five years and leaves its term open-
ended. The central committee, its politburo, and
the standing committee of the politburo will be re-
tained as the highest party bodies, but--as noted
above--will be "produced", not elected. There will
be only one vice chairman of the party--now Lin
Piao--and there will no longer be alternate members
of the central committee.
The new constitution reaffirms the party's dom-
inant role in China's political structure through
provisions that its central organs have the power
to deal with the daily work of the party, government,
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Czechoslovakia: Any moves toward decentraliza-
tion of the economy are likely to come slowly despite
Premier Cernik's recommendation that urgent measures
be taken to rectify serious economic problems.
In his opening speech to the central committee
plenum on Thursday, Cernik said that economic condi-
tions are deteriorating. He cited increased infla-
tionary pressures which resulted from wages rising
faster than labor productivity and consumers' scare-
buying since the intervention.
Cernik called for immediate measures to counter
inflation. To increase production, he also urged the
granting of some additional autonomy to industrial
enterprises, but such moves are not likely to be
pushed, in view of Soviet concern that the party
keep control of economic as well as political af-
fairs.
The plenum is expected to deal principally with
immediate economic questions and probably will lay
the groundwork for a later full-scale review of the
economic reform program.
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Italy: The new governments headed by Christian
Democrat c leader Mariano Rumor, marks a slight shift
to the left, particularly in domestic policy.
Formation of the cabinet is evidence of the de-
termination of the major center-left parties to work
for stability. Factional disputes within the parties
and labor-student unrest continue, however, and will
oblige the new coalition to move quickly to implement
its program.
Especially notable is the appointment of a left-
wing Christian Democrat, Fiorentino Sullo, to the
Education Ministry and the replacement of Minister of
Industry Andreotti, a perennial right-wing appointee,
by a socialist, Mario Tanassio
The new foreign minister, 77-year-old Pietro
Nenni, is a strong advocate of European integrations
His Socialist party opposed Italy's NATO ties in the
1950's but he has since supported membership as nec-
essary for Italy's security, Premier Rumor has for
some time advocated an increased role for Europe in
the development of Latin America and may be particu-
larly interested at this time because Italian Chris-
tian Democratic financing played a role in the recent
election of Venezuela's President Rafael Caldera0
All Christian Democratic factions are represented
in the new cabinet list, but the party's left wing has
increased its number of posts at the expense of the
right. Among the Socialists, three of the five fac-
tions, which control about 85 percent of the party's
central committee membership, are included; the small
farthest left factions have been omitted, Given this
broad degree of factional representation, the pros-
pects for the new government appear good, at least
over the short termro
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Algeria: The Boumediene government has suspended
bilateral negotiations on economic matters with both
the USSR and France,
Algerian-Soviet negotiations under way in Algiers
since mid-November to spell out the details of the com-
mercial protocol signed in Moscow last July were broken
off early this week, Two areas of friction contributed
to the impasse, One involved the modalities of Alger-
ian payment of the salaries of Soviet civilian techni-
cians assisting in economic development. The Soviets
refused to agree to the Algerian proposal that proceeds
from Soviet wine purchases be used to pay the salaries.
The second issue involved spare parts for Soviet ma-
chinery supplied for development projects. The Soviets
demanded detailed requisitions but the Algerians, be-
cause of bureaucratic inefficiency, were unable to
supply specific information..
Meanwhile, the second round of French-Algerian
commercial talks, which opened in Paris on 3 December,
were broken off at the end of last week, largely over
the issue of wine purchases. France refused to agree
to the long-term purchase commitment demanded by Al-
geria, although it was willing to continue buying Al-
gerian wine at the rate of 3.6 million hectoliters
annually. This is about half the quantity called for
under an earlier purchase, The Algerians were not
prepared to discuss the question of indemnification
for certain nationalized French properties or the
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South Korea - West Germany: The issue of the
abduction from West Germany-[ast year of South Ko-
reans alleged to be North Korean agents once again
threatens relations between Seoul and Bonn.
The West German ambassador was recalled after a
lower court in Seoul on 5 December reaffirmed the
death penalty for two of the abducted South Koreans
and long prison terms for others despite a recent
South Korean Supreme Court ruling that the heavy
sentences were unwarranted. Bonn heretofore has
pursued a moderate approach to securing the group's
release in the belief that the abducted men would
ultimately be treated leniently.
The German authorities now apparently see them-
selves vulnerable to growing public charges of fail-
ing to stand up to Seoul. A senior member of the
German Embassy in Seoul fears that Bonn may well
adopt a more tight-fisted attitude on economic aid
to South Korea, although a diplomatic break seems
unlikely.
Seoul's temper also appears to be growing
shorter. President Pak Chong-hui has indicated that
he will not be intimidated by threats of worsened
relations. The prime minister also is taking a
harder line, claiming that the Germans have mis-
handled the whole issue and have made no effort to
understand the gravity of the security situation in
Korea. Recent German demonstrations against Seoul's
embassy in Bonn are likely to make the South Koreans
even more intransigent.
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Okinawa: Radical elements could spark a vio-
lent incident at a demonstration against the pres-
ence of US B-52s scheduled for today in the vicinity
of the US base at Kadena. The rally has broad ap-
peal and could attract a turnout of perhaps several
thousands. Broad opposition to the B-52s since
their deployment to Okinawa early this year was in-
flamed by the crash of one of the bombers in mid-
November.
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