CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A013200030001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 15, 2016
• Document Release Date: December 15, 2003
• Sequence Number: 1
• Publication Date: February 28, 1969
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
5fl
28 February 1969
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State Dept. review completed
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No. 0051/69
28 February 1969
Central Intelligence Bulletin
CONTENTS
South Vietnam: Situation Report. (Page 1)
Laos: Souvanna Phouma is opening a diplomatic offen-
sive to stop the fighting. (Page 2)
Berlin: Bonn still hopes to make a deal. (Page 4)
Israel: The political struggle is intense. (Page 5)
France: Yesterday's shooting could ignite large-scale
demonstrations during President Nixon's visit. (Page 6)
Czechoslovakia: Political rehabilitation. (Page 7)
Hungary-USSR: Talks on CEMA may be under way. (Page 8)
USSR: Huge tanks will advance naval research. (Page 9)
Chile: Legislative election inspires apathy. (Page 10)
Brazil: The government tightens the screws. (Page 11)
Guatemala: The ruling party's new presidential candidate
does not appear to be a strong contender. (Page 12)
South Korea: Presidential third term (Page 13)
Finland--USSR: Economic relations reviewed (Page 13)
Peru: Sugar workers feel pinch (Page 13)
Brazil: Jet fighters sought (Page 14)
Ecuador: Leftist students triumph (Page 14)
Indonesia: Communist leaders captured (Page 14)
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Bien Hoa
CAM
i11R ANN
SOUTH VIETNAM
o ~a
MILES
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C South Vietnam: The pace of the Communist
offensive fell off significantly on 27 February.
Sharp ground fighting was confined to Tien
Phuoc District in Quang Tin Province. All four
corps areas received some light enemy shellings.
.A five-round rocket attack in Da Nang set off
numerous explosions and fires at a docking facil-
ity. Saigon and Hue remained quiet with no ter-
rorist incidents reported.
The enemy has not pressed the expected as-
sault on the Bien Iloa base. Prisoners captured
in the attack on 26 February claim that it was
planned as a full regiment operation, but two
Communist battalions committed to the operation
failed to reach their objective. The one battal-
ion which assaulted the base was pulled back after
losing more than 200 killed.
Comparisons with the opening phase of the
1968 Tet offensive suggest the effectiveness of
the enemy's current economy-of-force tactics. This
year the Communists have not yet committed any
significant numbers of troops to attacks on well-
defended urban areas. Although allied military
casualties are running at about the same rate as
in the initial stages of the 1968 Tet offensive,
comparable enemy losses are estimated to be about
half of last year's. F7 I (Map) 7
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Laos: Prime Minister Souvanna Phouma is
opening a diplomatic offensive aimed at stopping
the fighting in Laos.
I
Souvanna said that his present strategy was to
bring pressure to bear on the North Vietnamese,
through the French and other intermediaries, to
scale down hostile military operations in Laos.
He said he was sending a letter to President de
Gaulle asking for French assistance in this regard,
while at the same time trying to arrange talks with
North Vietnamese representatives in Vientiane.
Souvanna indicated that he views these meas-
ures as only the beginning of the effort to achieve
a political settlement. He made no mention of
opening preliminary discussions with the Pathet
Lao; such talks in past years have foundered on
procedural questions.
The reason for Souvanna's move at this time is
far from clear, but he may feel under some pressure
as a result of recent Soviet and other Communist
statements calling for a bombing halt and negotia-
tions. Souvanna cited the Soviet ambassador's re-
cent trip to Hanoi and the Pathet Lao's up-country
headquarters as providing the background for a
fresh Lao diplomatic initiative. Although he did
not indicate that any new Communist proposals or
feelers had resulted from the ambassador's trip,
the Communists, for their part, have given some
signs that they hope to get preliminary talks going
between the contending factions before too long.
(continued)
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Although the Communists have been moving gin-
gerly, they may calculate that talks between Sou-
vanna and the Pathet Lao would undercut the US po-
sition that the Laos and Vietnam questions are in-
extricably connected. They may also hope that the
prospect of new talks will cause Souvanna to take
steps to limit the bombing campaign in
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C Berlin: Despite East German obduracy, Bonn
has not entirely given up hope of trading its pres-
idential election in Berlin for concessions by
Pankow.
The East Germans yesterday again informed the
West Berliners that they would not agree to further
negotiations unless Bonn first announced that the
Federal Assembly would not meet in West Berlin.
Despite this rebuff, the West Berlin negotiator is
considering proposing to his East German counter-
part that they meet again for talks.
A last-ditch effort may also be undertaken in
Bonn. According to a West German foreign office
official, Chancellor Kiesinger is likely to ap-
proach Soviet Ambassador Tsarapkin. The official
thought the situation was still completely open as
regards the final decision on the Federal Assembly.
This opinion, however, is at odds with the views
of other well-placed Bonn officials, all of whom
have appeared to assume that the presidential elec-
tion would be held in Berlin unless the Soviets un-
expectedly advance major concessions. Kiesinger
said last night in a television interview, "I have
the impression that we shall be in Berlin on 5
March."
Moscow yesterday resumed its attack on the
Berlin site. Pravda reiterated the warning con-
tained in the Soviet protest of 13 February that
the planned election would lead Moscow to consider
"strict observance" of decisions made with the Al--
lies on West Berlin. The reference presumably is
to Russia's claim that Potsdam and other postwar
agreements obligate it only to assure the three
Western allies of access to Berlin.
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Israel: An intense political struggle for
control of the ruling Labor Party is in course.
The "old guard" which controls the machinery
of the party--led by Secretary General Pinhas Sapir
and former foreign minister Mrs. Golda Meir--is
trying to draw up a scenario that would block a
bid for power by Minister of Defense Moshe Dayan.
As the old guard member most likely to be "accept-
able" to Dayan, Mrs. Meir is reportedly to be put
forward as the head of a caretaker government un-
til parliamentary elections are held. Scheduled
for October, the elections may be advanced to min-
imize the effects of a bitter power struggle. Mrs.
Meir is 70, not in good health, and not a contender
for the premiership over the long run.
Sapir himself is viewed as a weak candidate
by the party leaders, and they fear that naming
acting Premier Yigal Allon to the top post might
provoke an immediate bid for power by the Dayan
forces. Like Dayan, Allon is young, Israeli-born,
not a member of the party establishment, and could
be expected to use even an interim appointment to
further his personal ambitions.
The chances of an immediate all-out struggle
are still very high, and if Dayan does not make
his play now he can be expected to do so in the
coming weeks or months. Dayan's great strength
lies in his immense national popularity and his
power to break up the Labor Party coalition by with-
drawing from it and stumping the country on his own
behalf. He has given no indication of what he in-
tends, but the US Embassy believes there are strong
tactical factors militating against his making a
bid for the party leadership now, even though he is
under great pressure from his followers to "go for
broke."
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France: Yesterday's shooting of a 17-year
old student putting up anti-Nixon posters could
ignite large-scale student demonstrations during
the President's visit.
Although student protests since last spring
have been mainly aimed at goals directly connected
with educational reform, the issue of "police bru-
tality" is extremely sensitive. Police excesses
against students last May and June touched off
massive demonstrations and tended to link workers
and students in a common cause.
Before yesterday's incident, extremist groups
had planned small "guerrilla" type actions and
France's largest student organization had been
planning protests against the presidential visit.
Reacting to the shooting, ultramilitant high school
action committees have called for a strike today.
Since last year's crisis, police reserves have
been expanded and riot squads retrained to enable?
them to move in quickly on demonstrators. The
security services have been successful in obtaining
advance information about organized demonstrations.
The government is thus in a good position to keep
in hand an demonstrations arising from yesterday's
incident.
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Czechoslovakia: Despite possible Soviet em-
barrassment, the Czechoslovak Government is contin-
uing with the rehabilitation of former political
prisoners victimized during the Stalinist era.
The authorities are proceeding to reopen the
cases of nearly 9,000 persons still seeking reha-
bilitation, taking care to avoid any publicity that
would offend the Soviets, who were heavily involved
in various Stalinist trials in Czechoslovakia in
the early 1950s.
Dubcek originally included among his liberal
reforms an elaborate rehabilitation plan, and early
in 1968 sanctioned the establishment of Club K-231,
comprising former political prisoners, to promote
the rehabilitation process. The Czechoslovaks,
bowing to Soviet pressure, banned K-231 shortly
after the invasion but its functions were taken
over by the Union of Anti-Fascist Fighters (SPB),
a progressive, sociopolitical mass organization.
A special section in the SPB has been set up to
ensure that the judges will be objective and to
hire lawyers who will handle cases throughout the
country free of charge.
Most of K-231's 50,000 members, however, did
no transfer over to the SPB. According to General
Vaclav Palecek, former president of the club, many
who suffered during the late 1940s and early 1950s
have lost interest in rehabilitation, fearing the
Soviets might later compile a blacklist. Some of
them also may be discouraged by the continued pres-
ence of some Stalinist security officials in the
Interior Ministry. Palecek said he knew that three
of the police officials responsible for his long
jail term were still on the job.
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Hungary-USSR: Party and government directors
of the Hungarian economy left for Moscow on 26 Feb-
ruary at the invitation of the CPSU central commit-
tee, probably for talks on problems related to the
oft-postponed but still pending summit of the Coun-
cil for Mutual Economic Assistance ((,EMA).
That the talks will be on CEMA's problems
rather than on bilateral matters is suggested by
the absence of foreign trade officials from the
Hungarian delegation and by the fact that the 1969
trade protocol has already been negotiated. The
Soviets may want to examine recent Hungarian pr o-
posals on the integration of national economies
within CEMA.
Janos Kadar has moved to reassure the Hungar-
ian public that the trip to Moscow does not signify
any imminent change in Hungary's economic reform.
A few hours after the trip was announced, Budapest
Radio broadcast a speech by Kadar in which he re-
committed himself to the reform course. The speech
was delivered at the Gyor factory works, the test-
ing ground for some of the more radical reform
measures, and Kadar roundly praised "the ma nifi--
cent work" of the Gyor employees.
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USSR: Two sophisticated naval research facil-
ities being built near Leningrad will significantly
advance Soviet hydrodynamic research and develop-,
ment capabilities.
The primary purpose of the two testing tanks
at the Krylov Ship Research Institute is to develop
designs for improving propulsion efficiency and for
increasing surface ship speed. Research on sub-
marine propulsion and on silencing for submarine
operations at shallow depths can also be conducted
at the installations.
Both tanks are considerably larger than com-
parable facilities in Western countries. One tank,
which may already be complete s 200
meters long and permits ship m e s to e moved
through noncirculating water. The other tank, first
identified in 1964 and now nearing completion, cir-
culates water around a stationary model. The at-
mospheric pressure above the surface of the water
can be adjusted in both facilities to allow accurate
simulation of environmental conditions.
The construction of the facilities demonstrates
the continuing willingness of the Soviets to invest
in naval research and development, and probably
will result in improved designs for both nd
merchant ships.
28 Feb 69 Central Intelligence Bulletin
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Chile: Abstentions due to public apathy may
affect the outcome of the legislative elections to
be held on 2 March.
I Ithe governing
ris ian Democrats, the Radicals, and the Social-
ists are the most likely to be affected adversely.
the lack of precise and skillful
erection of the Christian Democratic campaign has
caused confusion in party ranks as well as among
the electorate. The Radical Party has lacked the
money and cohesion to mobilize its traditional
grassroots strength among the middle classes, while
a deep internal split will also reduce votes for
Socialist candidates.
The Communist Party, already well established
on the Chilean political scene attaches s ecial
importance to these elections
and has mounted an integrated and well-or-
ganized campaign. I the conservative Na--
tional Party's campaign has also been relatively
effective. F7 I
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Brazil: The Costa e Silva government has
once more tightened the screws on active opposition.
On 26 February the President decreed Institu-
tional Act No. 7, suspending all "partial" elec-
tions--those in which only part of the officials
are elected--and giving himself the sole power to
call new elections. Apparently the act will in-
itially affect mainly local administrations; it
specifically gives the federal government the power
to appoint mayors and vice mayors. The act may
well be only a prelude to a complete restructuring
of the party and electoral systems.
C The government immediately closed down two more
state assemblies. Almost one third of the 22 state
assemblies have not been recessed since the govern-
ment assumed dictatorial powers in December. I
The government also took steps to avert stu-
dent troubles when the schools reopen in March.
Costa e Silva has decreed stiff penalties for any
professors, teachers, or students who engage in
demonstrations or other political agitation.
"Guilty" teachers will be prohibited from teaching
for five years, students will. be expelled and barred
from entering any school for three years, and for-
eign students will be deported. This will probably
quell student enthusiasm for taking to the streets,
but it is likely to drive top-flight students and
teachers abroad and to have an adverse effect on
attempts to reform the outmoded educational system.
Both measures indicate the government's pre-
occupation with rooting out "subversion" and oppo-
sition at any cost. Continued purges and restric-
tions seem likely to be the order of the da for
some time to come.
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Guatemala: The ruling Revolutionary Party has
selected Finance Minister Fuentes as its new stand-
ard bearer for the presidential elections to be
held in March 1970.
Wary because of the contention that arose over
the party's tentative first choice, Defense Minis-
ter Chinchilla, party leaders took extensive nation-
wide soundings before deciding on Fuentes. He has
been involved in party affairs for many years and,
has represented the party in Congress on various
occasions, but does not appear to be a particularly
strong contender. Fuentes has previously called
for moderate reform and espouses an agrarian reform
program for the Indians, who constitute half of
Guatemala's population.
His strongest opponent at present appears to
be Colonel Arana, the candidate for the two rightist
parties. Arana's success against guerrilla forces
during the counterinsurgency campaign in 1966-1967
is likely to gain him extensive support from right-
ists and voters concerned with law and order.
Candidates are not official until they are
selected by party conventions, which cannot be
legally held before October 1969.
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South Korea: Proponents of another term for
President Pak in 1971 have postponed an attempt to
amend the constitutional ban on a third term until
at least the end of this year, according to the
South Korean prime minister. The delay apparently
is intended to give Pak's supporters time to de-
velop new tactics for overcoming opposition both
within the ruling party and among the general
population. Methods employed thus far have been
heavy-handed and counterproductive. The postpone-
ment may, however, encourage critics of the third
term, who can now claim that they forced Pak's sup -
porters to back down.
Finland-USSR: Economic relations of the two
countries were reviewed during the visit of Finnish
Foreign Minister Karjalainen to the USSR last week.
The Soviets reportedly did not take a stand on the
proposed Nordic Economic Union. In an effort to
head off possible Soviet objections, however, Kar-
jalainen pointed out that it would have no adverse
effects on trade with the USSR or on Finnish neu-
trality. According to Karjalainen, the only concrete
items raised, all at Finnish initiative, were the
opening of a third vehicular border crossing point,
extension of fishing and seal hunting agreements, and
the problem of the return of migratory reindeer in
the far north.
Peru: The leader of the National Federation
of Sugar Workers has told the US Embassy that the
expected loss of Peru's US sugar quota is already
resulting in lay-offs. and bogged-down salary nego-
tiations. He estimated that 40 percent of his
workers are now unemployed and predicted an indus-
try-wide strike if the workers are not given a
substantial wage increase soon.. He stated further
that the sugar workers, the only national labor
group to strike in protest against the coup last:
October, might turn to violence if their families
are threatened with economic disaster by a suspen-
sion of US sugar purchases.
(continued)
28 Feb 69 Central Intelligence Bulletin 13
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Brazil: A team of air force officers is sched-
uled to wave on 8 March to evaluate jet fighter
aircraft in Britain and France. The air force pre-
viously had been interested in the French Mirage
III, and the team also will particularly examine
the British Hawker Siddeley Harrier and the British
Aircraft Corporation MK-6 Lightning. When the
mission returns, the air force minister reportedly
plans to ask for a decision from the US Government
on the availability of the A-4F, and if the response
is negative, will proceed to purchase aircraft else-
where, probably from Britain or France.
Ecuador: The appointment of leftist Luis
Verdesoto as acting rector of Central University
is a significant triumph for extreme leftist stu-
dents, who now control most Ecuadorean student or-
ganizations. Verdesoto, who also heads the Commu-
nist-controlled cultural center, maneuvered himself
into the university post after the rector, vice
rector, and 48 engineering professors resigned to
protest violence perpetrated by engineering students
who have been striking since December. The students
termed the resignations a victory and may be able
to ensure the election of Verdesoto or another
leftist as rector.
Indonesia: The army's capture last week of
two of the few remaining senior Indonesian Commu-
nists will further set back the fragmented party's
efforts to choose a new leadership and establish
new tactics. Captured were special bureau deputy
chief Pono and Central Java leader Bigo Pranowo.
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NATIONAL INTELLIGENCE ESTIMATES
The United States Intelligence Board on
27 February approved the following national in-
telligence estimates:
NIE 11-69 "Basic Factors and Main
Tendencies in Current Soviet
Policy"
NIE 41-69 "Prospects for the US-Japa--
nese Security Relationshi
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