CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022000030001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 14, 2016
• Document Release Date: June 24, 2003
• Sequence Number: 1
• Publication Date: May 27, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 42
27 May 1972
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No. 0127/72
27 May 1972
Central Intelligence Bulletin
VIETNAM: Situation report. (Page 1)
WEST GERMANY: Cabinet dispute compounds Brandt's
problems. Page 2)
URUGUAY: Bordaberry may form coalition government.
Page 4)
CHINA-AFGHANISTAN: Peking bids for influence with
new credit. Page 5)
WEST GERMANY: Bombings of US military installations
(Page 6)
USSR-UN: Soviet threat to boycott environment con-
erence (Page 6)
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C VIETNAM:. Government troops have beaten off
Communist attacks on Kontum City and along the north-
ern approaches to Hue.
The. Communists mounted a heavy, tank-led as-
sault on Kontum City on 26 May, but the South Viet-
namese, aided by heavy air strikes, drove them back.
Government troops spent the rest of the day clearing
sappers from around the city's airfield, and by late
afternoon they were said to be conducting limited
clearing operations, outside of town.
The Communists also attacked with tanks and
infantry along the My Chanh defense line north of
Hue, and one spearhead almost captured a key bridge
on Route 1. The South Vietnamese had driven the
enemy back by mid-day on 26 May, however.
The Saigon government continues to work to mo-
bilize the populace. It has announced a revision
in the system of student deferments that is designed
to permit the drafting of 6,500 students by late
summer. Students who lose their deferments will be
sent to officer and NCO training schools; those still
eligible for deferment will be organized to perform
civic action, refugee relief, and first aid duties.
At President Thieu's request, the Senate vote
on the emergency decree powers bill has now been
postponed until after 29 May. Thieu reportedly has
agreed to an amendment that would limit his powers
of decree, but this has produced only a few extra
Senate votes. The bill's passage therefore remains
in doubt. F7 I
27 May 72 Central Intelligence Bulletin
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WEST GERMANY: Finance and Economics Minister
Schiller 's memorandum to the cabinet proposing sig-
nificant budget cuts has been leaked to the press.
This will compound the problems of the beleaguered
Brandt government.
Schiller proposes less spending on defense,
transportation, education, and science in an effort
to control inflationary pressures. His recommenda-
tions also raise the specter of tax increases, a
politically distasteful prospect to the governing
coalition. Other cabinet ministers are fighting to
preserve their budgets and, ostensibly, Chancellor
Brandt's long-delayed program of socio-economic re-
forms. The controversy has been bitter, particu-
larly between Schiller and Defense Minister Schmidt.
Brandt and Schiller are meeting this weekend in
an attempt to resolve the cabinet dispute. Both men
will meet with other top coalition leaders on 1 June
to plan the over-all timing of the Bundestag's debate
on the 1972 budget.
The leak of the memorandum has provoked a flood
of press comment. Speculation about the source of
the leak centers on Schiller. Schiller
is well aware of his political and psychological
value to Brandt at a time when the coalition has
lost its parliamentary majority and the opposition
is eager to resume debate on the budget. Much to
the dismay of Schiller, Brandt has given him no sup-
port. Other ministers have deplored the chancellor's
lack of leadership on this issue. Brandt, however,
wants to keep the matter from assuming crisis pro-
portions and hopes to postpone the budget debate be-
yond the summer recess of parliament scheduled for
25 June.
Brandt should be able to keep the budget off
the Bundestag agenda. The parity existing between
the government and the opposition in the agenda-
setting Council of Elders will prevent any Christian
27 May 72 Central Intelligence Bulletin
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fidence motion, against Brandt.
make his task more difficult and may encourage a
sustained attack, if not another opposition no-con-
Democratic Union attempt to force the debate. Be-
cause Bundestag deputies from West Berlin can vote
on procedural matters, Brandt's coalition will have
a slight majority in the Bundestag should the oppo-
sition raise objections on the floor. The exposure
of the cabinet dispute to public view, however, will
27 May 72 Central Intelligence Bulletin 3
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URUGUAY: President Bordaberry may achieve his
goal of forming a national coalition government.
Since taking office on 1 March, Bordaberry has
been pressing Blanco leaders to join his minority
Colorado administration. The Blancos have generally
supported the President in his efforts to suppress
violence. Last week conservative Blanco legislators
reached a compromise with Bordaberry to grant him
more time to secure the passage of a national secu-
rity law. This 45-day extension of the state of
internal war was opposed by liberal Blancos.
If some Blancos agree to come into the adminis-
tration, it is likely Bordaberry will have to move
toward legislative reforms in education, banking,
and agriculture. The cabinet probably will resign
in order to give the President a free hand in re-
structuring his administration. Bordaberry's sup-
porters have expressed the hope that the conserva-
tive Blanco leader, retired general Mario Aguerrondo,
will be asked to participate.
Opposition support for Bordaberry has increased
in recent weeks because of the administration's suc-
cess in repressing the Tupamaros. The terrorists
apparently have lost the initiative since the vio-
lence last month. Security forces have been unusu-
ally effective in capturing valuable Tupamaro as-
sets as well as taking a roximately 65 prisoners.
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CHINA-AFGHANISTAN: Peking probably hopes its
willingness to provide a new $44-million interest-
free credit to Kabul will increase its influence in
Afghanistan.
Despite Afghan denials, the Chinese may be con-
cerned that Kabul may press its policy of independ-
ence for Pakistani-ruled Pushtunistan, thus further
underminin Pakistan, Peking's major ally in the.
region.
Although the new aid will permit Peking to re-
tain an economic foothold in Kabul, China can not
hope to compete with Moscow. China's only other
aid financed $28 million worth of agricultural and
light industrial projects, now almost completed.
The new credit is the first foreign commitment for
Afghanistan's 1972-77 development plan. Despite
extensive aid negotiations with Moscow during the
last six months, the Soviets have not yet extended
any new aid for the plan, although they are likely
to do so.
27 May 72 Central Intelligence Bulletin 5
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WEST GERMANY: Chancellor Brandt is directing
an investigation into the recent wave of terrorist
bombings of US military and West German police and
publishing installations. The government also is
increasing its two-year old nation-wide effort to
run to ground the anarchistic Baader-Meinhof gang,
which the government believes is responsible for
the bombings. The gang recently adopted the name
Red Army Faction and has claimed responsibility for
some of the bombings as a gesture of support for the
"revolution" in Vietnam. The faction promises more
action against US installations on 2 June, the anni-
versary of the founding of the Viet Cong's so-called
Provisional Revolutionary Government. West German
officials, meanwhile, are taking extraordinary pre-
cautions to guarantee the security of the NATO min-
isterial meeting in Bonn on. 30-31 May.
USSR-UN: The UN Conference on the Human Envi-
ronment opens in Stockholm on 5 June, and the USSR
has not lifted its threat of a boycott unless East
Germany is given full participatory status equiva-
lent to that of West Germany. Since the recent WHO
Assembly vote postponing East German membership in
WHO for another year, Moscow has made no subsequent
overture to work out what it would regard as a
palatable solution, such as an agreement that all
decisions at Stockholm be based on consensus rather
than voting. A Soviet broadcast on 24 May denied
press speculation that the US-Soviet agreement on
environmental co-operation would affect the USSR's
position on the Stockholm conference. The USSR may
judge that the West is sufficiently anxious to have
the Soviets at Stockholm that it will move to break
the impasse, but the Soviets are likely to await
the results of the summit before making any basic
decision.
27 May 72
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The United States Intelligence Board has ap-
proved the following national intelligence estimate:
NIE 65-72 "The Outlook for Zaire"
27 May 72 Central Intelligence Bulletin 7
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Secret
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