CONVERSATION, 12 OCTOBER 1978

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01554R003200210017-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 3
• Document Creation Date: December 16, 2016
• Document Release Date: May 31, 2005
• Sequence Number: 17
• Publication Date: October 13, 1978
• Content Type: MFR

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To, P
13 O CT 1978
MEMORANDUM FOR THE RECORD
SUBJECT: Conversation, 12 October 1978
1. I discussed the budget. When I said that we'd only been
cut 3% and it didn't hurt particularly, the retort was that wasn't
what, .I had told the President (in the budget process). I emphasized
that-we weren't hurt with respect to what we had been allowed to ask
for but that as long as we found a couple of billion more we'd be all
right in the long run.
a. I explained the I Isituation. I drew the analogy
to the Surface Effect Ship. was clear to me that something
that went three times as fast as anything else was likely to
have a military application, but the Navy hadn't been able to
sell that to the Congress because they didn't have a specific
tactical plan for the Surface Effect Ship already in being.
I was persuaded we needed the new technology of the but
because we hadn't done all of the studies and analyses we'd
have a very hard time selling this. I was pleased we had been
able to come away with just a small delay. I believe we'd be
able by the FY 80 budget to make a reasonable presentation that
would be persuasive.
b. I explained that Congress had tried to put in extra
money forl We had turned that down because it
would have automatically given it a higher priority in the FY 80
budget than They have given us $25 million extra to use
we are going to have to decide how to do that and
then go back and get their approval.
I expressed thanks for the mention that had been made of this topic to
Gromyko.
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4. I went through the Panamanian presentation. When I got onto the
subject of Panama's opening the distance with us a little and doing more
with the Socialist states, the comment was immediately made that they
better not forget the treaty process still had another year to go.
I said that tied in with my comments on the $300 million for the hydro-
electric plant, though I did point out that this, had been promised once
before. I think there was a good deal of interest in the Eastern
European issue. There was a question as to why the oil exports dropped
off so rapidly in 1975. (I made a mistake.in not asking Marty to follow
up on why the Suez Canal opening had an impact on that. I did explain
that4traffic through the Panama Canal had dropped from 37 to 32 ships a
day.) There was interest in where the Panamanian oil came from. I was
able to explain that and general interest that they refined oil for
delivery to ships going through the Canal.
a. I was asked if Cuba had any exports that Panama didn't
have. I said I didn't think so. They both had bananas and sugar..
I had described the copper prospects and there was clear recognition
that that probably meant trouble ahead in marketing.
b. Overall, I think it was a very useful briefing and it
fit together well.
5. Soviet defense expenditures. Covered this one very much in
accordance with the outline. I had the feeling of keen interest all
the way along. There was a discussion of ruble conversion rates. The
question was asked what the 17 billion rubles corresponded to in dollars.
Brzezinski said 1.1 to a dollar; I said that was the official exchange
rate but that we estimated something more like 2.1 to a dollar. (Is
that correct?) There was a lot of attention to the second chart.
Brzezinski asked whether Brezhnev said one out of three rubles goes to
defense in an open or closed forum. I said open, but I'm not sure.
I left the classified study behind. Overall, I think the briefing was
useful particularly because the remark was made that Gromyko had
actually come back to this subject several times. Hence, we may see
more of it in the future.
7. I covered the
one easily.
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9. Overall, a good show. There seemed to be an enthusiastic response.
STANSFIELD TURNER
Director
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