1964-1968, Volume XXXI, South and Central America; Mexico|
Released by the Office of the Historian
Bolivia 147. Editorial Note Covert financial assistance was a key element of U.S. foreign policy toward Bolivia during the Johnson Presidency. CIA documents have characterized the overall goals of the U.S. Government’s covert action programs in Bolivia during this period as follows: "The basic covert action goals in Bolivia are to foster democratic solutions to critical and social, economic, and political problems; to check Communist and Cuban subversion; to encourage a stable government favorably inclined toward the United States; and to encourage Bolivian participation in the Alliance for Progress. The main direction and emphasis of C[overt] A[ction] operations is to force Communists, leftists, and pro-Castroites out of influential positions in government, and to try to break Communist and ultra-leftist control over certain trade union, student groups, and campesino organizations." Covert action expenditures in Bolivia between fiscal year 1963 and fiscal year 1965 were as follows: FY 63-$337,063; FY 64-$545,342; and FY 65-$287,978. The figure for FY 65 included funds to influence the campesino movement, for propaganda, to support labor organizations, and to support youth and student groups. The FY 66 program also allocated funds to support moderate political groups and individuals backing General Barrientos for President. When he took office in November 1963 President Johnson inherited a longstanding U.S. Government policy of providing financial support for Bolivian political leaders. The policy was intended to promote stability in Bolivia by strengthening moderate forces, especially within the National Revolutionary Movement (MNR) itself, which had a strong left wing under the leadership of Juan Lechin Oquendo, General Secretary of the Mine Workers’ Federation. In August 1963 the 5412 Special Group approved a covert subsidy to assist the MNR to prepare for the presidential elections scheduled for May 1964. The Special Group agreed in March 1964 that the MNR receive additional financial support. Paz won the election; Lechin (who had been Vice President under Paz) left the government and founded a rival leftist party. On November 4, 1964, the new Vice President, General René Barrientos Ortuño (MNR), led a successful military coup d’état, forcing Paz into exile. In February 1965 the 303 Committee authorized a financial subsidy to the MNR under Barrientos (who was aware of U.S. financial support to the MNR) to help establish an organizational base for the presidential election scheduled for September. In May 1965 Barrientos responded to growing labor unrest by arresting and deporting Lechin and postponing the election. The 303 Committee, which considered a recommendation to support Barrientos as the best available candidate, agreed in July 1965 and March 1966 to authorize additional funds for MNR propaganda and political action in support of the ruling Junta’s plans to pacify the country and hold elections to establish a civilian, constitutional government. When the presidential election was finally held in July 1966, Barrientos won easily, and officials concerned with the covert operation concluded that the objectives of the program-the end of military rule and a civilian, constitutional government whose policies would be compatible with those of the United States-had been accomplished. 148. Memorandum Prepared for the Special Group
147. Editorial Note
Covert financial assistance was a key element of U.S. foreign policy toward Bolivia during the Johnson Presidency. CIA documents have characterized the overall goals of the U.S. Government’s covert action programs in Bolivia during this period as follows:
"The basic covert action goals in Bolivia are to foster democratic solutions to critical and social, economic, and political problems; to check Communist and Cuban subversion; to encourage a stable government favorably inclined toward the United States; and to encourage Bolivian participation in the Alliance for Progress. The main direction and emphasis of C[overt] A[ction] operations is to force Communists, leftists, and pro-Castroites out of influential positions in government, and to try to break Communist and ultra-leftist control over certain trade union, student groups, and campesino organizations."
Covert action expenditures in Bolivia between fiscal year 1963 and fiscal year 1965 were as follows: FY 63-$337,063; FY 64-$545,342; and FY 65-$287,978. The figure for FY 65 included funds to influence the campesino movement, for propaganda, to support labor organizations, and to support youth and student groups. The FY 66 program also allocated funds to support moderate political groups and individuals backing General Barrientos for President.
When he took office in November 1963 President Johnson inherited a longstanding U.S. Government policy of providing financial support for Bolivian political leaders. The policy was intended to promote stability in Bolivia by strengthening moderate forces, especially within the National Revolutionary Movement (MNR) itself, which had a strong left wing under the leadership of Juan Lechin Oquendo, General Secretary of the Mine Workers’ Federation.
In August 1963 the 5412 Special Group approved a covert subsidy to assist the MNR to prepare for the presidential elections scheduled for May 1964. The Special Group agreed in March 1964 that the MNR receive additional financial support. Paz won the election; Lechin (who had been Vice President under Paz) left the government and founded a rival leftist party.
On November 4, 1964, the new Vice President, General René Barrientos Ortuño (MNR), led a successful military coup d’état, forcing Paz into exile. In February 1965 the 303 Committee authorized a financial subsidy to the MNR under Barrientos (who was aware of U.S. financial support to the MNR) to help establish an organizational base for the presidential election scheduled for September. In May 1965 Barrientos responded to growing labor unrest by arresting and deporting Lechin and postponing the election. The 303 Committee, which considered a recommendation to support Barrientos as the best available candidate, agreed in July 1965 and March 1966 to authorize additional funds for MNR propaganda and political action in support of the ruling Junta’s plans to pacify the country and hold elections to establish a civilian, constitutional government.
When the presidential election was finally held in July 1966, Barrientos won easily, and officials concerned with the covert operation concluded that the objectives of the program-the end of military rule and a civilian, constitutional government whose policies would be compatible with those of the United States-had been accomplished.
148. Memorandum Prepared for the Special Group/1/
Washington, March 10, 1964.
/1/ Source: Department of State, INR/IL Historical Files, 5412 Special Group Meetings, S.G.114, March 12, 1964. Secret; Eyes Only.
1. Background: On 8 August 1963, the Special Group approved a request to provide a covert subsidy in the amount of [1 line of source text not declassified] to take the necessary covert actions to overcome the emergency situation which existed in Bolivia at that time and, once the situation normalized, to enable Paz to consolidate his control. In late December, the United States Ambassador and the CIA [less than 1 line of source text not declassified] requested an additional sum of [2 lines of source text not declassified] to wrest control of labor organizations away from Juan Lechin Oquendo, the MNRI, and the PCB. On 8 January 1964, the CIA [less than 1 line of source text not declassified] discussed the request for additional funds with Assistant Secretary Edwin W. Martin,/2/ and it was mutually agreed that an increase in the subsidy was justified./3/ The United States Ambassador was informed that Special Group approval would be requested at the earliest possible date.
/2/ As of January 3 Thomas Mann was Assistant Secretary of State for Inter-American Affairs.
/3/ A discussion of this plan is contained in a January 9 memorandum prepared by J.C. King, Chief of the Western Hemisphere Division in CIA (DDP). (Central Intelligence Agency, Job 80-01690R, Directorate of Operations, Latin America Division, WH/1/Bolivia, [file name not declassified])
2. Accomplishments: The first [less than 1 line of source text not declassified] provided [less than 1 line of source text not declassified] the following major accomplishments:
a. Eliminate Communist control over the National Campesino Federation.
b. Meet the necessary expenses in connection with the establishment of the new anti-left Confederation of Bolivian Workers (COB).
c. Provide support to democratic elements in an effort to unseat extremist leaders in the teachers, chauffeurs, and printers unions.
d. Break the power of the Communists over the Railroad Confederation and subsequent congresses of the flour, construction, and factory workers unions.
3. Recommendation: That the Special Group approve an increase [less than 1 line of source text not declassified] to the authorized subsidy being provided to the Bolivian Government. The requested funds are available within [less than 1 line of source text not declassified] authorized budget./4/
/4/ The recommendation was endorsed by Assistant Secretary of State for Inter-American Affairs, Thomas C. Mann, on March 10. (Department of State, INR/IL Historical Files, 5412 Special Group Meetings) According to minutes of the March 12 meeting, the Special Group approved the recommendation. (Ibid., Bolivia, 1962-1980)
149. Memorandum From the Executive Secretary of the Department of State (Read) to the President’s Special Assistant for National Security Affairs (Bundy)/1/
Washington, May 28, 1964.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. I, Memoranda, December 1963-July 1964. Secret. According to a State Department copy, this memorandum was drafted by Nicholas V. McCausland (ARA), cleared by Henry E. Mattox (INR) and Allen D. Gordon (AID), and approved by Deputy Assistant Secretary of Inter-American Affairs Robert W. Adams. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 14 BOL)
Government Party in Transition
When President Paz decided that it was time for the Bolivian revolution to enter a new, "constructive," development phase, internal stresses in the governing National Revolutionary Movement (MNR) which had grown over the years since 1952 were intensified. These tensions were brought to the breaking point late last year by United States pressure on the Government to carry out reforms in the state-owned tin mines, since these reforms tended to undercut the power base of leftist Vice President Lechin, his followers in the MNR, and the Communists who support him./2/ The result was Lechin’s expulsion from the MNR, and his own candidacy against Paz for election to the Presidency on May 31.
/2/ In particular, the United States pressed for better financial management of the Bolivian tin mines. The issue was discussed in a meeting between President Kennedy and President Paz on October 23, 1963; see Foreign Relations, 1961-1963, American Republics and Cuba, Microfiche Supplement.
In April, former President Siles (1956-1960) returned from his ambassadorial post in Spain to reenter politics as a champion of party unity (presumably under his leadership). He advocates the return of Lechin and other splinter elements to the MNR. Paz has resisted this, and so far opposition groups have been unable to unite against him.
Military Appear Loyal to Paz
Former Air Force Chief Rene Barrientos is Paz’ vice presidential running mate. He was involved in a plot to overthrow Paz earlier this month but now seems to have abandoned his anti-Paz activities./3/ Paz believes the military high command is loyal and able to control sporadic violence by the opposition as well as any further attempts by Barrientos or Siles to use middle and junior grade officers to advance their personal ambitions. President Paz has declared that the elections will be held on May 31 even though all of the opposition parties which had presented presidential candidates have announced their intention to abstain.
/3/ Information on Barrientos’ role in the alleged coup plot is in telegrams 575 to La Paz, May 4; 1515 from La Paz, May 16; and 1547 from La Paz, May 25. (All ibid.) On May 15 Lieutenant Colonel Edward J. Fox, Jr., the Air Attaché in La Paz, met with Barrientos at the Bolivian’s request to discuss relations with Paz. Fox told Barrientos to "use his head for something other than a hat rack. He [Barrientos] agreed and stated that he would get with the program and even though he would lose many Paz-haters, he would positively support Paz." (Department of the Army cable IN 293440, May 18; Central Intelligence Agency, Job 90-1156R, Directorate for Operations, Latin America Division, [file name not declassified])
Implications for the United States
Instability in the months following the elections is very likely. There will be continuing resistance within the party and outside it to the course Paz has set, especially to his close association with the United States and the Alliance for Progress. Lechin, Siles, and other opposition leaders will probably continue to plot a coup d’état since they do not believe the way to power is open to them by constitutional means; and Paz’ decision to succeed himself poses the question of personal as distinct from party dictatorship. If, on election day, Paz is the only candidate as now seems likely, the validity of his claim to a popular mandate will be suspect./4/
/4/ The Embassy in La Paz reported Paz’s victory in the Presidential election in telegram 1580, June 1. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 14 BOL)
Paz seems committed to Bolivia’s economic and social development under the Alliance for Progress. Now outside the government party, Lechin is in a less advantageous position to obstruct Government efforts to rehabilitate the state-owned tin mines and in other ways to strengthen Bolivia’s economy. Nevertheless, Paz’ government inevitably will have further clashes with the Lechin and Communist-led miners if it is determined to carry out its rehabilitation program. If Paz is resolute, however, our aid policy should begin to show dramatic results in the near future and forces of political instability may be weakened.
Benjamin H. Read/5/
/5/ Printed from a copy that indicates Grant G. Hilliker signed for Read above Read’s typed signature.
150. Memorandum From Gordon Chase of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)/1/
Washington, October 28, 1964.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. II, Memoranda, July-November, 1964. Secret.
I talked briefly to Bill Dentzer, the Office Director for Bolivian/ Chilean Affairs, about the current goings-on in Bolivia. Here are some points of interest.
1. Bill said that the present disturbances can be characterized as a popular reaction to repressive government. The students are a big factor in this reaction./2/ Much of the leadership for the disturbances is coming from the Falangists (a leftist but tolerable party) and the Communists.
/2/ The Embassy reported on the student demonstrations and their political implications in telegram 426 from La Paz, October 24, suggesting that the demonstrations were in part a response to the shooting of a student in Cochabamba, and in part by the climate of political agitation and discord between Paz and the military. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL-8 BOL)
2. I asked Bill what the disturbances could leave in their wake./3/ He described the following alternatives:
/3/ A separate assessment of the political unrest in Bolivia, which focused on the prospects for a military coup, is in an October 29 memorandum from Lieutenant General Alva R. Fitch, Deputy Director of the Defense Intelligence Agency, to Secretary of Defense McNamara. (Washington National Records Center, OSD Files: FRC 330 68A 306, Bolivia 000.1, 1964)
(a) Paz could stay on. This looks like the most likely alternative; Paz seems to be keeping the support of the military.
Bill went on to say that, while Paz is not particularly popular with the people, they probably like him "best." The people see no clear alternative and, under Paz, they at least get less instability.
(b) The military could capitalize on the present disturbances and take over the government. The leader of a military government could be Barrientos, but it could also be someone else; in this regard, it should be noted that Barrientos is not all that popular with the military.
Bill does not regard a military takeover as highly likely; however, it is in the ball park.
(c) Paz could get killed and there could be a state of anarchy for a while, followed by some sort of coalition. Bill feels this is not a likely alternative.
(d) Bill said that the possibility of a Communist takeover is nil. The Communists do not have enough popular following or acceptability. In addition, the military is violently opposed to them.
Bill went on to say that the main threat that the Communists pose is that, in a state of instability or transition, other parties will be looking around for support. In such a situation, the Communists, while not being able to take over the country, will be in a position to exert significant influence.
3. The upshot seems to me to be that there is little likelihood of something happening in Bolivia which we cannot live with. Given our "druthers," however, we would probably just as soon see the disturbances end with Paz still in the saddle.
151. Telegram From the Department of State to All American Republic Posts/1/
Washington, November 4, 1964, 9:22 p.m.
/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 BOL. Secret; Priority. Drafted by William L.S. Williams and Roger Brewin (ARA/BC) and approved by Adams. Also sent to Paris for TOPOL.
836. Subject: Bolivia. President Paz Estenssoro has fled the country and arrived in Lima with his family afternoon November 4. General Ovando Candia, Commander-in-Chief of the armed forces, announced today the formation of a military junta which he would head, but full junta has not been named./2/ General Suarez, Army Commander, announced he was a member. The situation is extremely fluid, reports indicating the possibility that Vice President Barrientos and Ovando may vie for the leadership of the military government, possibly through force./3/ There is thus some uncertainty regarding the unity of the armed forces as well as over the relationship of Communist-led miner militia to army units in Oruro, leading mining center. The relationship of pro-Communist workers in La Paz to the junta is also uncertain. Fighting between pro-Paz militia and the Army broke out November 4, but has subsided. Sporadic rioting and sacking of buildings continues, however. The military possess only a limited capacity to preserve public order./4/
/2/ A November 4 situation report from Mann to the Special Group (Counter-Insurgency) indicated that the coup began when pro-Barrientos commanders of the Ingavi Regiment in La Paz rebelled early on November 3. By late evening military garrisons in all major cities except La Paz had joined the Barrientos cause. When the army high command in the capital told Paz that the army would no longer support him in office, the President fled. (National Archives and Records Administration, RG 59, ARA Files: Lot 70 D 443, Political Affairs and Relations, 1964, Pol 23, Internal Defense Plan)
/3/ In a conversation with Bolivian Ambassador Enrique Sanchez de Lozada on November 4, Mann expressed the view that "it was not at all clear who was in control." (Memorandum of conversation; ibid., Central Files 1964-66, POL 15 BOL) Reporting in telegram 496 from La Paz, November 4, Henderson indicated that "Ovando claim to government has no color of constitutionality while Barrientos’ does," and that Barrientos had referred to the Bolivian Government as "his government." Following a demonstration at the presidential palace that day, Ovando allowed Barrientos to assume leadership of the junta while he took on the position of commander in chief of the armed forces. (Ibid., POL 23-9 BOL)
/4/ Two separate reports prepared on November 5, one by the Central Intelligence Agency ([text not declassified]), and one by the Defense Intelligence Agency, provide details on the political situation and prospects in Bolivia resulting from establishment of the military junta. Both reports projected that the newly established junta would maintain the pro-U.S. position of the Paz government. (Johnson Library, National Security File, Country File, Bolivia, Vol. II, Memoranda, July-November 1964)
We are principally concerned by the extent of Communist power in the country and the possibility that in the developing situation the Communists may gain control of the government. Our overriding objectives in the present situation, therefore, are to prevent the collapse of authority, civil war and a Communist takeover, and to protect U.S. lives and property. We have no present intention of recognizing any group which may be contending for power, and would wish at appropriate time to consult with other American governments this subject. We are, however, endeavoring to maintain informal contact with the military leaders and Barrientos with a view toward learning their intentions and the likely orientation of a successor government./5/
/5/ The Department instructed the Embassy in La Paz to "take every appropriate action to ensure continuation of a non-communist Barrientos government during this interim period." It stated that the Barrientos government should be encouraged to consolidate and strengthen itself by reaching a political truce with key non-Communist parties and leaders in order to ensure a Lechin defeat in future elections, which "should be scheduled for such time as Barrientos or other non-communists are confident they can win." (Telegram 267 to La Paz, November 4; NationalArchives and Records Administration, RG 59, Central Files 1964-66, POL 15 BOL)
In discussing the Bolivian situation with officials of other American governments you may in your discretion say that the U.S. government supported the constitutional government of Bolivia until it fell and that just prior to his departure President Paz through his foreign minister conveyed to our ambassador his thanks for the support and assistance we had given him during recent crisis.
For Lima, Buenos Aires, Santiago, Rio de Janeiro, Caracas: Embassies should make special effort brief appropriate officials because situation might arise in which we would wish consult on urgent basis on situation and attitude toward successor government.
152. Memorandum From Acting Secretary of State Harriman to President Johnson/1/
Washington, December 3, 1964.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. III, Memoranda. December 1964-September 1965. No classification marking. The Department of State copy indicates it was drafted by Brewin (ARA) on December 2. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 16 BOL) The following handwritten note is at the bottom of this memorandum: "Mr. President: Rusk, Mann, and I concur-the plan is to deal with this in State Department-from press point of view. McG.B." Sayre recommended the President concur in a December 3 covering memorandum to Bundy. (Johnson Library, National Security File, Country File, Bolivia, Vol. III, Memoranda, December 1964-September 1965)
I recommend that the United States recognize the military junta headed by General Barrientos as the government of Bolivia, and that our Embassy in La Paz be instructed to acknowledge the junta’s note of November 7 requesting recognition./2/
/2/ The President approved the recommendation.
President Paz of Bolivia fled the country on November 4 and a military junta headed by former Vice President Rene Barrientos was installed on November 5. The new regime is in control of the country, has encountered no resistance, has reestablished constitutional liberties, and has reiterated its intentions to hold elections. Barrientos and his principal advisers have privately pledged that communist influence will be reduced and eventually eliminated, and that they will not reestablish relations with Cuba or Czechoslovakia. While the new government may not be able to fulfill completely all of its assurances, unless we resume normal relations with the Barrientos government, the possibilities for communist influence and chaos increase. Congressional leaders have been consulted and concur that recognition is desirable and U.S. performance on existing aid commitments should be resumed. The AFL-CIO has been reassured on labor rights by recent actions of the new government. The Barrientos government has been recognized by seven countries in Latin America, by most of the NATO powers, and by others including India, Japan, Israel, and the Republic of China.
W. Averell Harriman
153. Memorandum Prepared for the 303 Committee/1/
Washington, January 29, 1965.
/1/ Source: Department of State, INR/IL Historical Files, 303 Committee Special Files, January-June 1965. Secret; Eyes Only.
It is proposed to provide in appropriate stages the total sum of [2 lines of source text not declassified]. Barrientos, due to his popularity and power position, appears to have the best chance for organizing behind him a national consensus which would provide the needed unity to proceed with the development of Bolivia. [less than 1 line of source text not declassified] this sum of money will expedite and help other negotiations currently being undertaken by the Embassy and the AID program. Barrientos has requested U.S. Government help in his election campaign. [2 lines of source text not declassified] The Embassy in La Paz, the Department of State, and the CIA all concur that in the present circumstances the best possibility for stability in Bolivia is the ascendency to the Presidency of Barrientos with a return to constitutionality. It is important that he have a strong organizational base in order to bring in with him a Congress which would be cooperative. This proposal has been fully coordinated with and concurred in by Ambassador Henderson and Assistant Secretary Mann./2/
/2/ Acting Deputy Under Secretary for Political Affairs Llewellyn E. Thompson concurred on February 3, but according to a February 5 handwritten note by Murat W. Williams (INR): "In approving this paper Ambassador Thompson remarked that he thought the whole question of this type of support in elections should be reviewed on a general basis. A distinction must be drawn between action to check communism and other activities in internal political affairs." (Memorandum from Mann to Thompson; ibid.) At a January 6 meeting of CIA and ARA officials Mann had suggested that, in response to a request for financial aid, "Barrientos should be told we do not like to intervene in an election of this nature, however if it were a ‘matter of Bolivian independence,’ we might do something." Mann thought it was time for Bolivia "to stand on its own feet." (Memorandum from Carter to Hughes, January 8; ibid., ARA/CIA Weekly Meetings, 1964-1965) A message was sent to La Paz apparently turning down Barrientos’ request for financial aid, but with a proviso that the question could be reopened if events made it necessary. (Draft message to La Paz with handwritten note by Carter, January 14; ibid., Bolivia, 1962-1980)
a. To strengthen the organizational base of General Barrientos within all sectors of the population through aid to his newly organized political vehicle-the Popular Christian Movement. This movement will be used to make inroads into the crucial areas where the communists and leftist followers of Juan Lechin are strongest, thus undercutting their natural support.
b. To indicate to General Barrientos that the U.S. government is in support of him personally and of his efforts to create the conditions for stability and unity which are essential for the return to constitutional government.
3. Factors Bearing on the Problem
(1) Because of the constitutional provision that anyone holding public office must resign from that office 180 days prior to an election, General Barrientos must step down from the Junta in order to run for the office of the presidency. General elections have been called for September 1965. When Barrientos does step down he will no longer have access to the facilities of the government such as air transport, vehicles, and even government funds. Thus he is seeking an alternate source of funding for his campaign. He [1 line of source text not declassified] provided a detailed budget of his requirements to establish his organizational base. He also provided a statement of his principles and program together with a listing of the individuals who would constitute his top command.
(2) [8-1⁄2 lines of source text not declassified]
(3) Barrientos is a long standing friend of the United States.
He received a good portion of his military training in the United States. He was Air Attaché to Washington, attended American University, and is a close friend of many high officials in the United States Government.
[Omitted here is further discussion of the proposal.]
This proposed activity has been fully coordinated with and approved by the U.S. Ambassador, Assistant Secretary Thomas Mann, and has been discussed in detail with appropriate officials of the Department of State.
That the 303 Committee approve the covert subsidization of the Popular Christian Movement which will be the vehicle [1 line of source text not declassified] upon which to effect a return to constitutional government in Bolivia. The total sum requested for this program is [less than 1 line of source text not declassified]./3/
/3/ The 303 Committee approved the recommendation by a vote by telephone on February 5. (Memorandum from Williams to Mann, February 16; ibid.) According to a February 10 memorandum [text not declassified] to ARA, Barrientos was informed on that date of the decision and of the U.S. Government view "that relations between sovereigns should be based upon dignity and mutual respect rather than financial considerations; but in order to dispel any doubts" in Barrientos’ mind "of our attitude toward him, his request was approved as a one-shot affair." (Ibid.) Privately the [text not declassified] assessment of the operation was more positive, pointing out that "the risk of exposing U.S. participation in the MPC program is probably worth taking, especially if the operation helps to unify the country, reduces political turmoil, and helps Bolivia along the road to economic and social progress. The exposure of U.S. participation would, undoubtedly, be embarrassing, but it probably would not lead to serious repercussions." (Memorandum from FitzGerald to Helms, March 3; Central Intelligence Agency, Job 80-01690R, Directorate of Operations, Latin America Division, WH/Bolivia, [file name not declassified])
154. Telegram From the Embassy in Bolivia to the Department of State/1/
La Paz, March 29, 1965, 6 p.m.
/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15 BOL. Secret; Limdis. Repeated to USSOUTHCOM for POLAD.
966. At President’s request, had four hour interview at his home with him and MinEconomy Berdecio March 28. Barrientos in apparent good health, disposition good, not suffering much pain from wound. (From other reports we understood Barrientos had been extremely anxious and depressed that wound might have caused permanent nerve damage. Since securing medical advice that no permanent damage will result, his attitude has improved remarkably. We are now reasonably sure wound not self-inflicted, though many politicians choose to believe it was.)
Barrientos said wished to inform me of fundamental change of policy and tactics to be followed by him and entire junta. In extended meeting night of March 27, well into morning March 28, junta agreed it imperative armed forces remain united to protect their existence./2/ This required that Barrientos resign as candidate, which he agreed to do. Also required that Ovando stop flirting with political parties, which Ovando agreed to do. Junta would henceforth devote itself to substantive governmental accomplishments.
/2/ In a meeting between State and CIA representatives in Washington on March 31 FitzGerald remarked that although Barrientos and Ovando "don’t like each other, the truth is they are necessary to each other and recognize it." Ovando and Barrientos "say harsh words about each other from time to time, but often have a beer together at night." (Memorandum from Carter to Hughes, April 2; Department of State, INR/IL Historical Files, ARA/CIA Weekly Meetings, 1964-1965)
President explained logic of new position by admitting that his efforts to get political parties work together had failed. His efforts increase his own popularity had also failed. Since a political solution through conciliation not possible, a solution would have to be imposed. This means junta will remain in power for indefinite period, devote itself to governing effectively, without trying to win favor of all sectors of population. Admitted has made error in neglecting economic issues while trying achieve political compromises, but said he now could not be criticized for having failed try achieve political consensus.
Political and economic issues are, under the new "tough line," to be faced forthrightly. For instance, if miners give trouble, GOB will go in and seize mines. Army is now in process taking over refineries in face of YPFB strike. Said Communists active in sabotaging economy, and GOB would deal with them forcefully, though would not make indiscriminate arrests or use documents mentioned Embtel 957./3/ Juan Lechin Oquendo of PRIN is apparently to be among junta’s first targets for neutralization. Barrientos said junta would do whatever necessary to get country straightened out and on road to recovery.
/3/ In telegram 957 from La Paz, March 26, the Embassy reported that the junta planned to arrest "300 Communists and leftists" and exile them to Paraguay as political asylees. The documents in question were three letters from the Italian Communist Party to Lechin regarding $25,000 that it allegedly sent him." (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15 BOL)
President said trouble could ensue as result implementation new policy and junta would need military support./4/ He argued that best method of avoiding a shooting situation is for armed forces present formidable appearance. Simplest way in his view would be through use armored personnel carriers. Felt they would so intimidate possible demonstrators that bloodshed could be avoided. Barrientos added that junta does not trust most of police officer corps, thus could not rely on police to handle serious public order problems.
/4/ At the same March 31 meeting between State and CIA officials (see footnote 2 above), Vaughn remarked: "You don’t have to go down many notches economically in Bolivia to be at the disaster point." Vaughn said that "we have been hard, we have demanded performance in return for aid. He questioned, however, whether Barrientos can deliver." The group decided to send an observer to Bolivia to "give Barrientos advice on current economic and political problems-particularly the question of whether or not to have elections, as scheduled." (Memorandum from Carter to Hughes, April 2; Department of State, INR/IL Historical Files, ARA/CIA Weekly Meetings, 1964-1965)
I limited my response to Barrientos to saying I would present his request to Washington, but at same time warned him APCS are not type of equipment which provided Latin America through MAP under current policy. (Country Team recommendations will follow.)/5/ Also, while assuring him US wants to assist his government, asked him realize that our requesting performance of GOB before extending further assistance was not evidence of plot against junta. He agreed that four months had been lost with little or no performance, and our position not unreasonable.
/5/ Not further identified.
Much of this extended conversation spent reviewing major economic issues such as COMIBOL, budget, railroads, Lloyd. Barrientos assured me he now prepared come to grips with these issues. Conversation also included some observations political scene, in which Barrientos said he less concerned by Falange plotting, believed Falange being led on by PRIN. He expressed some reservations about Siles and MNR as troublemaking element, and indicated he felt political parties largely limited their activities to conspiracy.
Comment: On March 28 ARMA found great relief expressed by general staff officers that divisive forces pressing on junta had been eliminated, a reaction which would tend confirm new line taken by Barrientos and junta. Believe we can expect a few more decisions from junta on economic and administrative problems. Though Barrientos may have lost some ground by having to agree to withdraw as candidate, he remains as junta president and could reconsider candidacy if public clamor for him became intense. Apparently junta has made no decision on further postponement elections at this time.
155. Editorial Note
On May 24, 1965, the Department of State reported to the White House that the military junta headed by General Barrientos had committed Bolivian armed forces against the miners in the state-owned tin mining enterprise, COMIBOL. The purpose of this action was to remove labor union leaders, "who are to a large extent either communist or far leftist, and practically all of whom are opposed to the Government of Barrientos," and who "have resisted reform and sabotaged the rehabilitation program" initiated by the junta to reduce labor costs and improve the ability of the government to manage the mines in order to ensure further U.S. assistance to COMIBOL. The report noted that although the junta "undertook its action without U.S. commitments for assistance, it has hoped for such aid." (Department of State Background and Situation Report, as of 1400, May 24, attached to memorandum from Read to McGeorge Bundy, May 24; National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 BOL)
Barrientos had requested such assistance, including arms, so he could move into the mines. The request was considered on May 19 at the weekly meeting of ARA and CIA representatives. According to ARA’s record of this meeting, prepared on May 20, FitzGerald asserted that providing arms to Barrientos to move into the mines "would make us ‘strike breakers,’ and ‘this we can’t do.’ " Sayre responded: "I think you’re right on the arms question. I think we’re really not going to finance it." A handwritten note in the margin, apparently made by Denney, said: "but we did!" (Memorandum from Carter to Hughes, Denney, and Evans, May 20; Department of State INR/IL Historical Files, ARA/CIA Weekly Meetings, 1964-1965)
The Department informed Ambassador Henderson that AID had authorized approximately $1.8 million in "special financial support for planned military intervention in COMIBOL mines." (Telegram 644 to La Paz, May 26; National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 BOL) The Department authorized Ambassador Henderson "to commit all funds requested and communicate this to GOB." In addition, the Department instructed Henderson to look into arranging for emergency military supplies and equipment, including ammunition and planes. (Telegram 624 to La Paz, May 24; ibid.)
Also on May 24 General Ovando signed, on his own initiative, cease-fire agreements with student and labor leaders representing the tin miners. Under the terms of the agreements, Ovando would halt troop movements on the mines and withdraw troops from the mines already occupied, while the workers agreed to return to work. The government and the miners were to negotiate their differences. This action, according to a Central Intelligence Agency report of May 26 ([document number not declassified]), "was a direct violation of junta policy and determination to follow through with military operations to gain control over the tin mines." As a result, the report indicated, "the military government of General Rene Barrientos is in serious danger of collapse." The report continued, "an assessment of those forces attempting to oust him reveals that a successor government would probably permit Communists and extreme leftists to consolidate and increase their power." (Johnson Library, National Security File, Bolivia, Vol. III, Memoranda, December 1964-September 1965) The report was forwarded on May 26 to McGeorge Bundy by CIA Deputy Director for Intelligence Ray Cline.
On May 27, with indications that Barrientos and Ovando were near an open split, Ovando became co-President of the junta along with Barrientos with both men having the right to exercise authority of commander-in-chief over the armed forces. According to a May 28 Department of State Situation Report, "Barrientos earlier had told our Ambassador that he intended to elevate Ovando to the co-Presidency in order to ‘keep an eye on him.’ " The report continued:
"We believe that relations between Ovando and Barrientos, never notably good, have now reached their nadir, though their differences are again momentarily plastered over. A split between the two would divide the Armed Forces, whose ability to act as a stabilizing anti-
communist influence over the near and longer term would be drastically diminished. We have instructed our Embassy to continue exerting every reasonable effort to prevent such a split, and that such efforts should be from a posture of neutrality as between the two men. A senior United States officer, who served in Bolivia for four years and is closely acquainted with both Barrientos and Ovando, will leave the United States for Bolivia Friday evening [May 28]. He will emphasize to both men the paramount importance which the highest levels of the United States Government attach to the preservation of the unity of the Bolivian Armed Forces."
The report was forward to the White House under cover of a memorandum from Read to McGeorge Bundy on May 28. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 BOL)
156. Memorandum From the Executive Secretary of the Department of State (Read) to the President’s Special Assistant for National Security Affairs (Bundy)/1/
Washington, June 5, 1965.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. III, Memoranda, December 1964-September 1965. Secret.
Lieutenant Colonel Wimert arrived in La Paz on May 29 and departed on June 2, arriving back in Washington on June 3 in the afternoon. His talks with Generals Barrientos and Ovando are reported in Exdis telegrams Numbers 1222 and 1227/2/ from the Embassy and in [1 line of source text not declassified]./3/
/2/ Dated May 31 and June 1. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 US)
/3/ Dated May 30 and May 31. (Ibid., POL 1 BOL; and Johnson Library, National Security File, Country File, Bolivia, Vol. III, Cables, December 1964-September 1965)
Assistant Secretary Vaughn and other officers have talked with Wimert since his return. We believe that he carried out his assignment fully in keeping with the instructions he was given, and chances are fair that there will not be a split in the Bolivian Government in the immediate future. Both Generals Barrientos and Ovando have been made unmistakably aware that the United States Government attaches the greatest importance to the complete unity of the Military Junta and of the Armed Forces in Bolivia. A Bolivian mission now in Washington/4/ has discussed in credible terms the relationships between Barrientos and Ovando and it has given assurances that they must and will keep together.
/4/ A record of meetings of the Bolivian mission with Vaughn on June 3 and Mann on June 4 was transmitted in telegram 670 to La Paz, June 7. The main points of the mission’s presentation were a request for immediate U.S. assistance to allow Bolivia to increase its armed forces by 10,000 to maintain security in cities where the army occupied the mines, to improve the image of the armed forces, and to provide funds for social and road projects so that surplus miners could be hired. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL BOL-US)
Wimert’s presence in La Paz was reported in today’s New York Times, the source being Bolivian. We are treating the article as inaccurate, as it is in a number of respects, and explaining, if asked, that Wimert was in La Paz in preparation for his imminent assignment to Santiago as Army Attaché.
On the basis of his talks and observations, Colonel Wimert believes that civilians and military alike realize the necessity of Presidents
Barrientos and Ovando sticking together. He says that General Ovando can be classified as a "conniver" who has always been known to play various parties against one another, and that Ovando has not been making key decisions and is not as forceful as Barrientos. He has, however, a fair knowledge of economic problems and government administration. General Barrientos, Wimert thinks, would best be described as a "can-doer", perhaps too impetuous, and not given to thinking out the entire problem. According to Wimert, Barrientos has matured and is becoming more aware of the economic problems of the country, and believes that the Junta now has to stop shooting and come up with positive programs, especially in the mines, to give the people something in return for having supported the Junta.
Wimert’s characterizations of the two men coincide with our own, but our problem will be to shape and make realistic the Junta’s generalized desires to move forward on the socio-economic front.
/5/ Hawthorne Mills signed for Read above Read’s typed signature.
157. Memorandum From the Executive Secretary of the Department of State (Read) to the President’s Special Assistant for National Security Affairs (Bundy)/1/
Washington, June 19, 1965.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. III, Memoranda, December 1964-September 1965. Secret.
Enclosed is a report on Bolivia prepared by the Latin American Policy Committee during the past two weeks. The Committee, chaired by State, includes representatives of DOD, AID, CIA and USIA. The report outlines actions that are now underway and that will be carried out during the next thirty to sixty days. Such actions are designed to prevent possibility of serious political, economic and social disturbances in Bolivia.
In our estimate, Bolivia is now in the process of making a promising, albeit precarious, transition. The Department deems the situation sufficiently serious, however, to warrant the preparation of contingency plans./2/ A draft plan has been prepared and will be considered by the Latin American Policy Committee during the coming week, prior to its scheduled transmittal to your office on June 25./3/ In addition, [less than 1 line of source text not declassified] is preparing biographic data on Bolivians who have or could assume key roles in the government. This biographic data will be forwarded to you on completion.
/2/ In a telephone conversation with President Johnson on June 5, McNamara stated that he was "worried" about a blowup in Bolivia. (Ibid., Recordings and Transcripts, Recording of telephone conversation between President Johnson and McNamara, Alpha Series, June 5, 1965, 4:50 p.m., Tape 6506.01, PNO 4) In a telephone conversation earlier that afternoon, Johnson told Mann that "he wanted to have a Task Force composed of high level people from CIA, State, Defense," to develop contingency plans for Guatemala, Colombia, and Bolivia. The President said "he would like to have a Task Force which meets regularly and to which he could look for advice and information." (Ibid., Mann Papers, Telephone Conversations with LBJ, May 2 1965-June 2, 1966) On June 8 Helms reported that Vance said he was going to phone Vaughn and "have him proceed immediately to set up a task force or task forces to develop contingency plans on Colombia, Guatemala and Bolivia." (Central Intelligence Agency, DCI Files, Job 80-B01285A, Helms Chrono as DDP and DDCI)
/3/ Transmitted to Bundy on June 24, the paper provides extensive coverage of seven possible contingencies for Bolivia. These included assassination of Barrientos, of Ovando, forced removal of either Barrientos or Ovando by pressures applied by the other, the onset of a political crisis in which the United States would be required to side with Barrientos or Ovando, Communist-supported disorder erupting in Bolivia and threatening the lives and property of non-combatants, non-Communist political elements seeking to topple the Junta by an armed coup, or fighting erupting between the Barrientos and Ovando factions in the Bolivian military. In general the plan recommended supporting Barrientos, if possible, and seeking peaceful means-through unilateral and multilateral channels (such as the OAS)-to disarm any crisis. Direct use of U.S. forces was recommended only in the case of a Communist-supported coup, and only with close consultations with key OAS members. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 1-1 BOL)
The Department’s Director of Bolivian and Chilean Affairs departed for La Paz June 17 to discuss implementation of the enclosed report with the Ambassador and the Country Team./4/
/4/ Dentzer reported on his impressions about Bolivia based on his trip in a June 25 memorandum to Vaughn. (Ibid., POL 15 BOL)
Benjamin H. Read/5/
/5/ Initialed for Read in an unidentified hand.
This paper considers the short-term outlook for Bolivia and United States actions over the next 30 to 60 days. It has been approved in substance by the Latin American Policy Committee.
[Omitted here are a "Background" section on political events leading up to the crisis in Bolivia’s mines and a "Current Developments" section dealing with the events of May and early June 1965.]
Aims and Outlook
Our short-term aim is to take advantage of GOB willingness to bring stability to the mining areas, in order to gain what progress we can for COMIBOL and the increased political stability for Bolivia which could grow out of successful action. This is the first time in more than a decade, and perhaps the last time for a long while, that a Bolivian government has a chance to bring law and order to the mines. We seek to attain these ends, however, without unduly jeopardizing the status quo, since any change now in the situation which finds the Armed Forces in power could have unpredictable consequences. We also seek to achieve these goals without decreasing the financial incentive for the government to take a variety of actions which would improve the development and long-term stability of the country. With the expulsion or voluntary exile of many communists and extreme leftists, and the split within the PCB, communist influence is now weaker than it has been for some time. To keep the extreme left from regaining its organized base in the mines, GOB policies affecting them must be sound and workable. Meanwhile, with no viable alternative to the Junta now on the Bolivian political scene, the principal danger to the Junta lies from within; Barrientos and Ovando must be given strong encouragement to stick together. These are the principal problems lying immediately ahead. Beyond that are our longer-term goals. These involve getting the Armed Forces to retire from running the government before they fail, seriously damage their influence, or are torn asunder. To accomplish this, a viable political alternative to the Junta government must be present within a year or so. That alternative may be General Barrientos as a civilian candidate for the Presidency, especially if the mine rehabilitation scheme goes well.
The entry of government troops into the potentially most rebellious mines on June 11 and 12 without bloodshed was a great victory for the government. If the Junta successfully completes the operations in which it is now engaged, its prestige will be greatly enhanced. If something goes wrong, that is, if it stops now or fails in the attempt-and we do not think the Junta is out of the woods yet-its claim to the reins of government will be jeopardized and it will face bloody skirmishes with its enemies. We are cautiously optimistic that the Barrientos-Ovando relationship will hold together for a while. We do not think anything has happened to change the underlying causes of differences between the two; they both reached the brink and, looking over it, retreated from it; realizing that the abyss below represented, in all likelihood, a suicidal split in the Armed Forces and the removal from the Bolivian scene of the only force for order and stability, given present political and economic conditions. Their relations probably will come under more intense strain, as the COMIBOL reorganization progresses, and the question of whether and when to call for elections becomes again a divisive issue for the Junta. Elections originally were called for May, postponed until September, delayed until October, and most recently postponed indefinitely.
The following special actions are underway to carry out U.S. objectives:
a. Advice to the GOB, directly from Embassy/USAID and through the Triangular Operation’s Advisory Group, on COMIBOL policy and operations. U.S. financial and recruiting assistance to obtain competent non-Bolivian nationals to manage individual mines.
b. Undertake a $1 million P.L. 480 Title IV wheat program to stock COMIBOL commissaries with cheap flour for the miners.
c. Prepare special projects, as requested by the recent GOB mission to the U.S., which increasingly can absorb unemployed miners and which manifest GOB and U.S. desire to assist the mining areas. Embassy/USAID to make initial recommendations by June 17.
2. Internal Security
a. Report by CINCSO and the MilGroup in La Paz by June 16 on whether Bolivian force levels should be increased, whether additional needs for military hardware exist, and whether the discipline and reliability of the Armed Forces can be improved by any short-term measures.
b. Insure stepped-up delivery of the two T-28D aircraft is arranged for June 17.
c. Improve GOB capacity to deter and control riots through the supply of a limited number of personnel-carrying armored cars.
d. Encourage the GOB to intensify its drive to collect weapons from the miners and to insure their destruction so that they do not get back into circulation.
a. Reiterate through various channels to key leaders the importance attached by the U.S. to Junta unity.
b. Continue discussions with governments of countries adjoining Bolivia on the significance of developments there to the hemisphere and to their national interest.
c. Seek to influence union elections and developments, including action by American trade union contacts.
d. Increase through all official U.S. sources the quality and quantity of political biographic data on individuals who may become important in the near future.
e. Complete contingency plans to deal with possible emergencies.
158. Memorandum Prepared for the 303 Committee/1/
Washington, July 13, 1965.
/1/ Source: Department of State, INR/IL Historical Files, 303 Committee Special Files, July-December 1965. Secret; Eyes Only. This is a revised version of a draft prepared in the CIA on June 7. (Ibid., 303 Committee Files, c. 21, June 25, 1965)
/2/ Document 153.
It is proposed to expand up to [less than 1 line of source text not declassified] already approved on 5 February 1965, and [less than 1 line of source text not declassified] more to be used upon exhaustion of the original sum) for propaganda and political action in support of the ruling Bolivian military junta’s plans to pacify the country and eventually hold elections to establish a constitutional government. This support would be designed (a) to promote an eventual transfer of power to a government more stable than the present provisional military regime and potentially capable of meeting the country’s pressing problems; (b) to bolster the junta’s unity and stability through discreet aid to political groups and key individuals who will support continuation of the regime and of the required power balance within it for as long as may be necessary or desirable, as instruments for the achievement of U.S. policy objectives in Bolivia, and (c) to provide levers with which the two co-presidents of the junta, Generals Rene Barrientos and Alfredo Ovando, can be restrained from ill-judged or precipitate action that might split the Bolivian armed forces and plunge the country into political and economic chaos. The present proposal has a much broader purpose than that presented last January as regards ultimate objectives, and differs chiefly in the amount of funds now required because of changed circumstances, the mechanisms to be used, and the variety and scope of activities to be funded. It is possible that further expenditures may later become necessary, but specific requirements cannot yet be accurately predicted in view of the highly fluid Bolivian situation. This proposal has the concurrence of Embassy La Paz, the Department of State, and CIA./3/ Implementation will be [1 line of source text not declassified] in coordination with Ambassador Henderson in the field and with appropriate officers of the Department of State in Washington.
/3/ The June 7 draft proposal occasioned considerable discussion before and after its preparation. When FitzGerald stated at a June 2 meeting of representatives of the ARA and CIA that it might be an ideal time to "give [less than 1 line of source text not declassified] a little covert support," Denney replied that "it seems like a waste of money to me." (Memorandum from Carter to Hughes, Denney, and Evans, June 4; Department of State, INR/IL Historical Files, ARA/CIA Weekly Meetings, 1964-1965) At the June 25 meeting of the 303 Committee the draft proposal was criticized by the participants because it openly supported Barrientos. There was a difference of opinion expressed concerning the relative merits of Barrientos and Ovando and the risk, according to Deputy Secretary of Defense Cyrus Vance, that supporting one over the other could cause a "ruinous civil war." The 303 Committee agreed to postpone decision on the proposal pending further study. (Ibid., 303 Committee Files, c. 22, July 26) The revised July 13 proposal reflected a U.S. policy decision, according to Sayre, "to encourage moderate and responsible civilian political organizations looking to the time when pressure will greatly increase on the junta to make concessions to the desire of political groups to participate in the government or to hold elections." (Memorandum by Sayre, July 7; National Security Council 303 Committee Files, Subject Files, Bolivia, 1962-1980) This memorandum was addressed to the Acting Deputy Under Secretary (Thompson) and was marked "not sent."
a. To help create the conditions for an orderly transfer of power to a constitutional government which would have reasonable prospects for stability.
b. To maintain in the meantime the stability of the junta government through aid to political groups and individuals who will support continuation of the present regime until the orderly transfer of power can take place, which may not occur for a year or two.
3. Factors Bearing on Problem
(a) The present situation in Bolivia is different from that prevailing at the time the referenced memorandum was prepared and approved. The chief new developments have been (1) the failure of Barrientos’ effort to have himself elected president quickly and the indefinite postponement, announced on 7 May 1965, of the national elections previously scheduled for October of this year; (2) the mid-May decision of the junta to carry out drastic reforms in the operation of the state mining corporation known as COMIBOL, including the use of force to extend governmental authority to the mining areas; (3) the subsequent arrest and deportation to Paraguay of the extreme leftist labor leader and politician Juan Lechin and later of other troublemakers of the far left; (4) the ensuing increased tensions and stresses within governmental, military and political circles, heightened by public disturbances which occurred during the last half of May and (5) the naming on 26 May of Ovando as co-president of the junta.
(2) The present co-presidential arrangement is regarded as essentially unstable over the long term. There appears to be strong sentiment within the junta in favor of keeping Ovando from ousting Barrientos and vice-versa, since any such move by either might irreparably damage the solidarity of the armed forces and split them into irreconcilable factions. This could in turn destroy both the junta’s ability to govern and public acceptance of the military establishment. The regime would rapidly collapse under those circumstances. The Embassy and the CIA [less than 1 line of source text not declassified] believe that such a collapse would entail passage of the political initiative to extremist groups of both the Right and the Left, with a high probability that a prolonged period of chaotic civil disturbance and/or civil war would ensue.
(3) The Popular Christian Movement (MPC), regarded in January 1965 as the main vehicle for the promotion of Barrientos’ presidential candidacy, has come to play a definitely secondary role. It lacks political sophistication and good leadership, and has remained essentially a rural, peasant organization without substantial appeal to urban elements of the population. In view of this and of the indefinite postponement of elections, the MPC is no longer considered adequate as the primary focus of the political action program although it remains a useful instrument for mobilizing peasant support. Of the [less than 1 line of source text not declassified] approved on 5 February 1965, [less than 1 line of source text not declassified] had been expended as of the end of June 1965, directly for MPC organizational, propaganda, and administrative expenses and indirectly for related support to the regime.
(4) The essential factors in the present situation lead to the conclusion that the present regime should continue, as the only apparent feasible alternative for the time being to chaos and the eventual dominance of extremist groups, pending the holding of elections and installation of a constitutional government. There are strong feelings among junta members as well as subordinate officers of the armed forces in favor of the indefinite maintenance of military pre-eminence in Bolivia, as insurance against a resurgence of the sentiment that resulted in the downgrading of the military establishment during the 12-year tenure of the National Revolutionary Movement (MNR). Coupled with this is a realization that strong-arm tactics are not enough and that the military must work to establish broadly-based support-passive if not active-for its chosen role. There are political elements also which appear willing to back the military for the time being, by non-opposition if not by any overt act, lest a worse fate befall them. The U.S. Government’s role should accordingly be that of encouraging the emergence of a national consensus along these lines. It will be necessary to provide covert support to these individuals and groups that can be mobilized behind U.S. policy objectives, since overt action, or even inaction, on the part of the U.S. which appeared to favor one faction or another would imperil the unity of the regime.
(5) The fluidity of the situation in the country makes it impossible at this time to identify all elements to be aided through covert channels. [11 lines of source text not declassified] There will necessarily be flexibility in the extent of the covert funding to be provided each of these and other groups, in view of the rapidity with which Bolivian events tend to move.
b. Origin of Requirement
[1 paragraph (6 lines of source text) not declassified]
c. Pertinent U.S. Policy Considerations
Bolivia needs a moderate and effective government. There is neither a single party nor a likely combination of parties capable of forming a viable government with which we could cooperate. Hence, for the present, there is no acceptable alternative to the junta, and there may be none for a year or more. The unity of the armed forces is the key factor in the continued strength of the government. The armed forces could be split by the rivalry of Barrientos and Ovando, both of whom desire to be the constitutional president. Meanwhile there is increased maneuvering among civilian parties and groups who are looking toward the time when they can play a more meaningful role in governmental affairs. In the long run there must be a civilian government, and we should encourage the growth of conditions which will make this possible. As the civilian political situation unfolds we should identify that group which gives promise of being most viable politically and most energetic in attacking developmental problems, and give it our support. Under present circumstances we must carefully assess the relative strengths of Barrientos and Ovando as well as other leaders. We are inclined to favor Barrientos at this time, but we must not antagonize Ovando, about whose orientation and motivations we should know more, by playing favorites in such a way as to set Ovando against us or to cause him to bring his differences with Barrientos to a head.
[Omitted here is additional discussion of the proposal.]
This proposal has been coordinated with and approved by the U.S. Ambassador in La Paz and has been discussed in detail with appropriate officials of the Department of State.
That the 303 Committee approve the covert political action program outlined above. The total sum requested at this time is [less than 1 line of source text not declassified], of which [less than 1 line of source text not declassified] is covered by a previous approval. [less than 1 line of source text not declassified]/4/
/4/ The recommendation was endorsed by Thompson on July 19. (Ibid., 303 Committee Files, c. 23, August 9, 1965) In a July 21 memorandum to McGeorge Bundy, Executive Secretary of the 303 Committee Peter Jessup indicated that "both State and Vance have approved" the proposal and wrote "I have no magic formula either and recommend working along with Barrientos as the only semi-competent available." Bundy initialed his approval. (National Security Council, 303 Committee Files, Subject File, Bolivia) The 303 Committee approved the recommendation on July 26. (Memorandum for the Record, July 27; ibid.) At the request of Ambassador Henderson, the 303 Committee on March 28, 1966, approved a request for [text not declassified] additional funding to strengthen the political coalition backing Barrientos in the upcoming election, with the stipulation that such requests would "be frowned upon" in the future. (Memorandum from Koren to Gordon, March 28; Department of State, INR/IL Historical Files, 303 Committee Special Files, January-June 1966). The CIA paper, February 26, proposing the extension of the political action program is ibid., c. March 28, 1966)
159. Letter From the Ambassador to Bolivia (Henderson) to the Assistant Secretary of State for Inter-American Affairs (Gordon)/1/
La Paz, May 31, 1966.
/1/ Source: National Archives and Records Administration, RG 59, ARA Files: Lot 70 D 443, Def 19, Military Assistance, 1966. Secret; Official-Informal.
The short run Country Team objective in the domestic political field has been to foster the circumstances in which elections can be held. In this effort, we have held no brief for, and we have tried to avoid identification with any particular candidate.
The Armed Forces must eventually transfer power. This can be done by violence, or by elections.
The civilian political parties must eventually accept responsibility for governing the country, and for engaging in political activities, as contrasted with quasi-military activities. This can only come about by holding elections.
We have used our resources to further this objective of elections, both with the Junta, and with the leaders of the political parties (with the sole exception of the extreme left). We have encouraged the Junta to stand firm on the date of elections, once chosen; and have encouraged political leaders to take a positive attitude towards the elections.
Any slate of candidates for the Presidency must include Barrientos, both because he is willing to fight to be included, and because he has genuine popular support. He can be eliminated by physical violence, or by political chicanery, but as long as he lives, he will return to the fight. He could also lose at the polls, although at present writing this seems unlikely, but in that event, the new government would face a formidable opposition.
Since Barrientos is a necessary element to holding elections, but not because he is our "chosen candidate", we have used some of our resources with him. He will not be an easy president to deal with, and his regime may not live out its term. Much will depend on his cabinet, and the degree of influence individual ministers are able to exercise. But if there are to be elections, he has to be there, and we have to deal with him.
Elections with Barrientos as the sole candidate, however, with the major traditional political parties abstaining, would increase the probabilities of post-election instability. The Falange would certainly abstain if their candidates were running only against Barrientos. We, therefore, encouraged Andrade to take a chance (he didn’t really need much persuasion) in order that the MNR (as still the major political force in the country, even though presently divided) would be represented at the polls. This has caused the Junta and the Armed Forces some serious doubts, since they regard the MNR, however represented, as their mortal enemy (shades of 1946 and 1952).
The Andrade candidacy, and some behind-the-scenes maneuvering, (and, modestly, our own conversations with Falange leaders) has now brought the Falange into the campaign. The conditions are therefore present for a (relatively) meaningful election.
Some flies, of course, remain in the ointment, this being Bolivia. If the Junta plays too many tricks on Andrade, he will either throw his support to a unified MNR, or be discredited. In either case, the hand of the more extreme elements of the MNR will be strengthened, and Bolivia will face a prolonged period of civil unrest.
It is one thing to win an election in Bolivia, it is quite another to govern this country. Any administration needs an organization with workers everywhere; a political philosophy responsive to popular demand however imperfectly expressed; and skill in the arts of government. The MNR, disregarding for the moment its present plight, could muster these elements. Barrientos’ present political coalition can not, although he has personal charisma and political flair. The Falange has few assets in this respect, and would quickly polarize the political scene.
This means to me that after the election will come a period of political jockeying for new, more meaningful alignments. We hope that this jockeying will be in purely political terms, and that violence can be avoided. But uncertainty and a certain amount of boiling and bubbling cannot be avoided.
Finally, there is always the enigma of Ovando. We know very little certainly about him. We do know that he is unlikely to precipitate a showdown; that he is a master of devious maneuver; that he puts the unity of the Armed Forces above everything else; that he avoids imposing a decision (which has resulted in vacillation and indecision on many trying occasions); and that he has told us on a number of occasions that Barrientos must be a candidate for the Presidency, against moderate opponents, naming Andrade of the MNR and Romero of the Falange.
This leads us to conclude that Ovando now wants elections, with Barrientos winning. He could then retire with glory, to command a unified Armed Forces, free from the divisive threat of Barrientos, and thus control the only real unified force in the country. If Barrientos succeeds in governing the country for four years, he will have resolved at least some of the sticky problems which now confront the government, and Ovando could easily succeed him. If Barrientos does not do what the Armed Forces thinks he should do, Ovando could remove him, although this would always be dangerous, both to the Armed Forces, and to the country.
If we are wrong, and Ovando intends to out-maneuver Barrientos, we will have little chance to anticipate his move. We have, therefore, been careful to keep a clear channel to Ovando, too.
I hope you concur, at least in major outline, in our strategy./2/ I would be pleased to have your comments.
/2/ In a June 3 memorandum to Morris commenting on Henderson’s letter, Williams wrote that this strategy was approved months ago and confirmed more recently in a 303 Committee paper. He went on to indicate that he was "puzzled that at this late hour, thirty days before the elections in Bolivia, the Ambassador should ask Mr. Gordon if he approves a strategy which we have been pursuing for many months." (Ibid.)
160. Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/
Washington, July 1, 1966.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Confidential.
Bolivia holds a national election on Sunday.
It is not an interesting contest. The government candidate-General Rene Barrientos, who has headed the military junta for the past 18 months-is almost certain to win./2/ The opposition is weak and divided. As many as four of the six opposition parties may pull out of the race at the last minute. There may be some violence. The OAS is sending observers, which should provide some stability and help reduce the traditional electoral manipulations.
/2/ Results of the Bolivian election, in which Barrientos won handily, are reported in airgram CA-219 to all ARA posts except Caracas, July 8, 1966. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 14 BOL)
The best that can be said for the elections is that it will serve to put Bolivia back in the ranks of constitutional government-in form, if not in substance.
W. W. Rostow/3/
/3/ Printed from a copy that bears this typed signature.
161. Memorandum Prepared for the 303 Committee/1/
Washington, July 15, 1966.
/1/ Source: National Security Council, Files of the 303 Committee, Subject File, Bolivia. Secret; Eyes Only. A handwritten notation on this memorandum reads: "Distributed to members of 303 Committee for information on 21 July 1966. Not reflected in 303 Minutes."
/2/ William V. Broe, chief of the Western Hemisphere Division of the Deputy Directorate of Plans, briefly summarized the covert action program for Bolivia in a July 15 memorandum to Helms: "With the election of Rene Barrientos as President of Bolivia on July 3, 1966 this action was brought to a successful completion." Broe continued, "in view of President-elect Barrientos’ arrival in Washington next week, it might be appropriate to remind the Committee of [less than 1 line of source text not declassified] actions undertaken with Committee approval in Bolivia." (Department of State, INR/IL Historical Files, Bolivia, 1962-1980) A separate undated briefing memorandum on [text not declassified] support for Bolivian Presidential candidate Barrientos was forwarded by the CIA to Rostow on July 14 (Johnson Library, National Security File, Intelligence Files, Guerrilla Problems in Latin America) under cover of a memorandum from Broe to Jessup. (Ibid., National Security File, Memos to the President, Walt W. Rostow, Vol. VIII) On July 16 Rostow provided President Johnson a copy of this briefing memorandum, with the following note: "This is to explain why General Barrientos may say thank you when you have lunch with him next Wednesday, the 20th." (Ibid.)
/3/ Document 153.
B. Memorandum for the 303 Committee Subject: "Expansion of Political Action Program in Bolivia," dated 13 July 1965/4/
/4/ Document 158.
C. Memorandum for the 303 Committee Subject: "Additional Financial Support for Political Action Program in Bolivia," dated 26 February 1966/5/
/5/ Not printed. (Department of State, INR/IL Historical Files, 303 Committee Files, c. 35, March 28) Also see footnote 4, Document 158.
1. Purpose of the Political Action Program
The referenced memoranda, the most recent of which was approved by the 303 Committee on 28 March 1966, concerned a political action program for Bolivia. The purpose of this [less than 1 line of source text not declassified] program was through covert means to ensure the orderly transfer of power via elections to a civilian, constitutional government whose policies would be compatible with those of the United States by:
(1) Providing covert financial assistance to the groups supporting the candidacy of General Barrientos.
(2) Providing covert financial encouragement to opposition groups who might otherwise abstain and endanger the legitimacy of the elections.
(3) [3 lines of source text not declassified]
2. Results of the Political Action Program
The objectives of this program have been accomplished. A new political party was built to provide the platform for General Barrientos. This base was reinforced by a coalition of already existing parties. Despite many internal stresses, this pro-Barrientos complex was held together during the crucial pre-electoral period by [1 1⁄2 lines of source text not declassified] covert financial support. At the same time covert financial assistance was given to [less than 1 line of source text not declassified] a rival party to ensure its participation in the elections. In addition, a [less than 1 line of source text not declassified] subsidy payment was made to [less than 1 line of source text not declassified] a second important opposition party which was considering withdrawing from the electoral process. When these two most important opposition parties would not abstain from elections, three other groups made [less than 1 line of source text not declassified] entries into the race, with the result that the election contest took place between the Barrientos coalition and five opposition slates.
The combination of providing money and covert guidance to [less than 1 line of source text not declassified] contending parties changed the political climate from a volatile, conspiratorial atmosphere with little discussion of peaceful resolution through elections to a full fledged electoral atmosphere with the traditional violence and conspiracy thrust into the background.
While the very final count of the elections is not in at this writing, it can be said that General Barrientos has won by the impressive majority of about 60% of the vote in an election praised by OAS observers as democratic and honest. [2 lines of source text not declassified] The inauguration on 6 August 1966 will mean the end of 21 months of military rule and the beginning of what hopefully will be a four-year term of office for the desired civilian, constitutional government.
It is obvious that the recent election of this government is but the first step towards establishing political stability in Bolivia. Much depends on the political acumen of Barrientos himself, who is faced with the task of manipulating and maneuvering the many divergent political forces which now may be expected to turn their energies to toppling him. The military, suppressed since 1952 by the previous regime, has obtained another taste of power during the past 21 months, and although its announced intention is to withdraw from politics, this may be only temporary. The opposition parties will not want to depend on honest elections in 1970 and can be expected to begin the anti-government scheming which is endemic to Bolivian politics. The economic problems continue to be as serious and extensive as ever. In summary, while the above described political action program has returned Bolivia to a constitutional government headed by a popular president, the prognosis whether Barrientos can last out his term of office must be one of cautious optimism.
162. Memorandum of Conversation/1/
Washington, July 21, 1966, 5:30 p.m.
/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 BOL. Confidential. Drafted by Patrick F. Morris (ARA/BC) and approved in S on July 27. The meeting was held in Rusk’s office immediately following a meeting between Barrientos and Gordon that focused on the status of negotiations with the Export-Import Bank, the delay in U.S. disbursements for a loan for COMIBOL, and U.S. supplying Bolivia with helicopters under the MAP program. (Ibid.)
President-elect Barrientos visited Washington July 19-23, in a private capacity, primarily to address the International Platform Association, a public speaking group, on July 22. He had lunch with President Johnson at the White House on July 20 and according to the President’s Daily Diary, there was an exchange of gifts, followed by luncheon in the State Dining Room at 1:50 p.m. (Johnson Library) No further record of discussions has been found. In telegram 7236 to La Paz, July 14, the Department had instructed the Embassy to inform Barrientos not to expect substantive discussions nor concessions during his trip. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 BOL)
The Secretary opened the meeting by congratulating the President-elect on his successful electoral campaign. He indicated that he and President Johnson had followed developments in Bolivia with a great deal of interest and were happy to see a return to a constitutional government in that country. He said that General Barrientos’ election victory was impressive.
General Barrientos thanked the Secretary and said that Bolivia was a democratic country; that he had won the election but now he had to win at successfully governing his country. He said that Bolivia made common cause with the United States in upholding the democratic processes, improving economic conditions and in countering communism.
The Secretary asked the General what he considered his three most important problems. The General answered that the first was tin; Bolivia must increase its production and at the same time must receive adequate prices for the tin it sells. The second most important concern of his Government is transportation; Bolivia must construct a road network so as to integrate the national territory. The General and Ambassador Henderson described to the Secretary the road projects which were either under way or under consideration for United States assistance. General Barrientos said that the third area of importance was the connecting of Bolivia with outside world by better means of transport. He said that on his way to the United States he had stopped in Peru and talked to President Belaunde about the necessity for a road from the Peruvian port of Ilo to the Bolivian border near Lake Titicaca. He said the Peruvians have agreed to request assistance from the Inter-American Development Bank to construct this road. He said that this road was of primary importance for Bolivia.
The Secretary then asked about Bolivia’s food production capacity. He wanted to know whether Bolivia was dependent upon large food imports or whether it was comparatively self sufficient. It was explained to the Secretary that a large segment of the indigenous population lived from subsistence agriculture with potatoes as a staple; that in recent years Bolivia had become self-sufficient in rice and sugar, but that it was a net importer of wheat and wheat products.
The Secretary then asked about educational problems. Ambassador Henderson explained that the United States Government was assisting the Bolivians in defining their educational needs through a contract with Ohio State University.
General Barrientos explained that there was a need for technical education especially in the agricultural sector since campesinos who were taught to read and write but who were not taught how to be better farmers usually became migrants to the cities. He said it was absolutely necessary to educate the campesino in practical agriculture so that they would stay on the land.
The Secretary asked about health problems and was informed that tuberculosis and silicosis were serious problems in the country especially in the high lands. The high incidence of tuberculosis was related to malnutrition. It was also explained that the anti-malaria campaign begun initially by the Rockefeller Foundation in 1949 has been very successful, continuing under the Bolivian Government with some assistance from the United States.
The Secretary asked General Barrientos about the kind of cabinet he thought he would have. The General answered that he hoped to have a competent cabinet composed of men dedicated to the solution of the nation’s problems. He said he hoped to avoid choosing representatives of various political groups in order to satisfy partisan demands. He said that he realized that he would have problems with the political groups by doing this but that his main interest was in satisfying the people, not political parties.
The Secretary said that President Kennedy set an example by choosing people on the basis of their reputations. He said that he did not know personally practically anybody in his first cabinet except his brother Robert Kennedy who became Attorney General.
The Secretary then asked about Bolivia’s relations with its neighbors. The General answered that Bolivia was on good terms with all of the neighboring countries with the exception of Chile. He said that there was a very deep feeling that Bolivia should have access to the sea.
The Secretary asked whether or not joint economic projects developing contiguous border areas might not be an indirect way of lessening tensions so that an eventual solution could be worked out.
Ambassador Henderson asked General Barrientos whether some kind of regional development wasn’t the answer. General Barrientos responded that the northern part of Chile was very poor; that regional development projects would only improve the economic condition of that area and would make Chile more determined to keep it than it is now.
The Secretary said that accelerated economic growth in border areas have proved to be one way of lessening the possibility of border problems. He used the Saar region as a specific example.
General Barrientos said that he thought the Bolivian situation was different since Bolivia was seeking access to the sea.
Ambassador Sanjines then described a plan of providing Bolivia with a port within an enclave of ten square kilometers between the present cities of Tacna and Arica. He said he did not believe that there was need for a corridor from Bolivia to the sea, if Bolivia could have a port on the ocean which was duly recognized as Bolivian territory, this would be sufficient. He said with air transport becoming more and more important such an enclave was sensible since one would be able to take off from La Paz and land on Bolivian territory on the Pacific Ocean.
The Secretary suggested that such a port might be multi-national or perhaps an Alliance for Progress port.
The Bolivian Ambassador insisted that the only way that Bolivia would be interested was if the Bolivian flag would fly over the territory.
The Secretary concluded the meeting by emphasizing President Johnson’s dedication to the Alliance for Progress and his specific interests in agriculture, education and health. He said that the President had a passion for performance; that he was interested not in just words but deeds. He wanted to see concrete accomplishments under the Alliance as the result of United States assistance as well as the result of the efforts of the various countries themselves.
163. Editorial Note
On March 16, 1967, the Embassy in La Paz reported that President Barrientos had personally informed Ambassador Henderson that two guerrilla suspects had been detained by Bolivian authorities and, upon interrogation, had admitted association with a group of 30 to 40 guerrillas "led by Castroite Cubans" and other foreigners. The suspects reportedly mentioned that Che Guevara was leader of the guerrilla group, but they had not seen him. Barrientos urgently requested U.S. communications equipment to enable the Bolivian Government to locate reported guerrilla radio transmitters. Henderson made no commitments beyond a promise to look into what the United States could do. (Telegram 2314 from La Paz, March 16; National Archives and Records Administration, RG 59, Central Files 1967-69, POL 23-9 BOL)
A year earlier there were intelligence reports that Che Guevara was in South America, but U.S. analysts found little supporting evidence. In a March 4, 1966, memorandum concerning rumors of Guevara’s presence in Colombia, FitzGerald noted that "penetrations of insurgent groups had revealed no indication of Guevara’s presence in any of these groups." (Central Intelligence Agency, DDO/IMS, Operational Group, Job 78-5505, Area Activity-Cuba) Further analysis by the Agency identified seven conflicting rumors of Guevara’s whereabouts. A March 23, 1966, memorandum prepared in the Western Hemisphere Division noted that Guevara’s usefulness had been reduced to his ability as a guerrilla, and that "with his myth he is ten feet tall; without it, he is a mortal of normal stature." Under the circumstances, the Agency concluded:
". . . it is not believed justifiable to divert considerable amounts of time, money and manpower to an effort to locate Guevara. It is considered far more important to use these assets to penetrate and monitor Communist subversive efforts wherever they may occur, since Guevara’s presence in an area will not affect greatly the outcome of any given insurgent effort." (Ibid.)
On March 24, 1967, the Embassy in La Paz reported that Barrientos met with the Deputy Chief of Mission on March 23 to advise him that the guerrilla situation had worsened and that this deterioration caused him increasing concern. Barrientos believed the guerrilla activity was "part of a large subversive movement led by Cuban and other foreigners." He pointed out that Bolivian troops in the area of guerrilla activity were "green and ill-equipped," and reiterated his urgent request for U.S. assistance. The Embassy told Barrientos that "our military officers were working with the Bolivian military to ascertain facts relating to requirements." (Telegram 2381 from La Paz, March 24; National Archives and Records Administration, RG 59, Central Files 1967-69, POL 23-9 BOL) Two U.S. military assistance advisory group officers reported that on March 23 guerrillas had ambushed a 22-man Bolivian Army patrol near Nancuahazu, prompting the Embassy to report to the Department on March 27: "There is now sufficient accumulation of information to bring Country Team to accept as fact that there is guerrilla activity in area previously mentioned, that it could constitute potential security threat to GOB." (Telegram 2384 from La Paz, March 27; ibid.)
In a 90-minute meeting with Ambassador Henderson on March 27, Barrientos appealed for direct U.S. budgetary support for the Bolivian armed forces to meet the "emergency and one in which Bolivia was ‘helping to fight for the U.S.’" In reporting this discussion to the Department, Henderson observed:
"I suspect that Barrientos is beginning to suffer some genuine anguish over the sad spectacle offered by the poor performance of his armed forces in this episode; i.e., an impetuous foray into reported guerrilla country, apparently based on a fragment of intelligence and resulting in a minor disaster, which further tended to panic the GOB into a lather of ill-coordinated activity, with less than adequate professional planning and logistical support." Henderson continued, "pressed by his military he may seek resort to the lobbying talents of Ambassador Sanjines in Washington in an effort to end-run proper channels of communication with U.S. authorities." (Telegram 2405 from La Paz, March 29; ibid.)
On March 29, the CIA reported that two guerrillas captured by the Bolivian Army had furnished information that the guerrilla movement "is an independent, international operation under Cuban direction and is not affiliated with any Bolivian political party. The Agency had received information about the development of other guerrilla groups in Bolivia. "Should these other groups decide to go into action at this time, the Bolivian Government would be sorely taxed to cope with them" in addition to the Cuban-backed group. (Memorandum from [name not declassified] to the Chief, Western Hemisphere Division, March 29; Central Intelligence Agency, DDO/IMS, Job 88-01415R, [file name not declassified])
On March 31, the Department responded to Henderson’s concerns: "We have no evidence ‘end runs’ being attempted here." The Department instructed the Embassy in La Paz:
"You may at your discretion inform Barrientos that we most reluctant consider supporting significantly enlarged army, either thru provision additional material or thru renewal budget support. We fully support concept of providing limited amounts of essential material assist carefully orchestrated response to threat, utilizing to maximum extent possible best trained and equipped troops available. Should threat definitely prove greater than capacity present forces, Barrientos can be assured U.S. willingness consider further assistance." (Telegram 166701 to La Paz, March 31; National Archives and Records Administration, RG 59, Central Files 1967-69, POL 23-9 BOL)
Also on March 31, the Department informed U.S. posts in neighboring countries to Bolivia that the current plan "is to block guerrilla escape then bring in, train and prepare ranger-type unit to eliminate guerrillas." The Department also indicated that the United States was considering a special military training team (MTT) "for accelerated training counter guerrilla force." (Telegram 16641 to Buenos Aires, et al., March 31; ibid.)
On May 11 Rostow reported to President Johnson that "CIA has received the first credible report that ‘Che’ Guevara is alive and operating in South America." The information had come from interrogation of guerrillas captured in Bolivia. "We need more evidence before concluding that Guevara is operational-and not dead, as the intelligence community, with the passage of time, has been more and more inclined to believe." (Memorandum from Rostow to Johnson, May 11; Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968) According to the CIA report, May 10, Che Guevara told [text not declassified] that he had come to Bolivia "in order to begin a guerrilla movement that would spread to the other parts of Latin America." (CIA Information Cable TDCS 314/06486-67; ibid.)
164. Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/
Washington, June 23, 1967.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Secret; Sensitive. The memorandum indicates President Johnson saw it.
This is what is going on with guerrillas in Bolivia:
Last March 24 Bolivian security forces were ambushed in a remote area of southeastern Bolivia as they were investigating reports of a guerrilla training camp. Since then 6 other skirmishes have been fought. The Bolivian forces have come off poorly in these engagements, losing 28 of their men to 2 or 3 known rebels killed.
Interrogation of several deserters and prisoners, including a young French communist-Jules Debray-closely associated with Fidel Castro and suspected of serving as a Cuban courier, strongly suggests that the guerrillas are Cuban-sponsored, although this is hard to document. There is some evidence that "Che" Guevara may have been with the group. Debray reports seeing him. A highly sensitive source [less than 1 line of source text not declassified] reports a recent statement by Brezhnev that Guevara is in Latin America "making his revolutions"./2/
/2/ In a June 4 cable to President Johnson, Rostow noted that "CIA believes that ‘Che’ Guevara has been with this group." He also indicated that "we have put Bolivia on top of the list more because of the fragility of the political situation and the weakness of the armed forces than the size and effectiveness of the guerrilla movement." (Ibid., Latin America, Vol. VI, June-September 1967) The CIA received information, reportedly based on a document written and signed by Che Guevara, in which the revolutionary stated that "revolt started in Bolivia because wide-spread discontent there and disorganization army." ([text not declassified] Central Intelligence Agency, DDO/IMS Files, [file name not declassified])
Estimates of the strength of the guerrillas range from 50 to 60 men. It appears that they were flushed out while still in a preliminary training phase and before they intended to open operations. Despite this, they have so far clearly out-classed the Bolivian security forces. The performance of the government units has revealed a serious lack of command coordination, officer leadership and troop training and discipline.
Soon after the presence of guerrillas had been established, we sent a special team and some equipment to help organize another Ranger-type Battalion. On the military side, we are helping about as fast as the Bolivians are able to absorb our assistance. The diversion of scarce resources to the Armed Forces could lead to budgetary problems, and our financial assistance may be needed later this year.
The outlook is not clear. The guerrillas were discovered early before they were able to consolidate and take the offensive. The pursuit by the government forces, while not very effective, does keep them on the run. These are two pluses.
At their present strength the guerrillas do not appear to pose an immediate threat to Barrientos. If their forces were to be quickly augmented and they were able to open new fronts in the near future, as now rumored, the thin Bolivian armed forces would be hard-pressed and the fragile political situation would be threatened. The hope is that with our help Bolivian security capabilities will out-distance guerrilla capabilities and eventually clear them out.
State, DOD, and CIA are following developments closely./3/ As I mentioned, Defense is training and equipping additional forces. CIA has increased its operations.
/3/ A June 14 memorandum prepared by the CIA focused on Cuban sponsorship of the Bolivian guerrillas and the failure of the Bolivian Government to meet the insurgency threat. (Johnson Library, National Security File, Intelligence File, Guerrilla Problem in Latin America)
The Argentines and Brazilians are also watching this one. Argentina is the only other country with a military mission in La Paz. Close military ties between Argentina and Bolivia are traditional. The Argentines have also furnished military supplies to the Bolivians.
W. W. Rostow/4/
/4/ Printed from a copy that bears this typed signature.
165. Memorandum of Conversation/1/
Washington, June 29, 1967.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Secret. Prepared by Bowdler. Copies provided to Rostow and Sayre.
Mr. William G. Bowdler
At the invitation of the Bolivian Ambassador, I went to his residence this afternoon to discuss the Bolivian situation.
Most of the one-hour conversation was a monologue by the loquacious Ambassador describing the background to the Barrientos administration and the present political situation. Toward the end of the conversation, he got around to the two points he had on his mind.
The first was increased external assistance. I asked him what specifically he had in mind. He replied that he was not thinking of budgetary support since Bolivia had passed that stage and was proud of its accomplishment. I then asked him what type of project assistance he had in mind. On this he was very vague, saying that we should send a special mission from Washington to study what additional projects might be started to further Bolivia’s development.
The question in which he was most interested-and obviously the main purpose for the invitation-was to ask for our help in establishing what he called a "hunter-killer" team to ferret out guerrillas. He said this idea was not original with him, but came from friends of his in CIA. I asked him whether the Ranger Battalion now in training were not sufficient. He said that what he has in mind is 50 to 60 young army officers, with sufficient intelligence, motivation and drive, who could be trained quickly and could be counted on to search out the guerrillas with tenacity and courage. I asked him whether such an elite group would not cause problems within the army and perhaps even political problems between Barrientos and his supporters. The Ambassador said that these problems could be minimized by rotating a fixed number of the team back into the army at regular intervals. The rotation system would have the added benefit of bringing a higher degree of professionalism into the officer ranks of the army. I told him that his idea may have merit, but needs further careful examination.
Before leaving, I told him that I had seen reports that Bolivia might be considering declaring a state of war against Cuba. I asked him whether he had any information to substantiate these reports. He expressed complete surprise and strong opposition, pointing out that such action would expose Bolivia to international ridicule. He speculated that these reports might have been planted by Cuban exiles. He said that some Cubans had approached him along this line and there may well be Cuban exiles in Bolivia who are doing likewise with other Bolivian officials. I told him that I also thought that this action would be a serious mistake not only because of the light in which it would cast Bolivia, but also because of the serious legal and practical problems which would arise from being in a state of war with Cuba.
Upon departing, he said he appreciated having the opportunity to talk frankly with me and expressed the desire to exchange views on his country from time to time. I told him I would be happy to do this whenever he thought it useful.
166. Editorial Note
In a July 5, 1967, memorandum to Special Assistant Walt Rostow, William Bowdler of the National Security Council Staff summarized the current U.S. military training role in Bolivia: "DOD is helping train and equip a new Ranger Battalion. The Bolivian absorption capacity being what it is, additional military assistance would not now seem advisable. [3 lines of source text not declassified]" Bowdler recommended that "a variable of the Special Strike Force acceptable to the Country Team be established. It might be part of the new Ranger Battalion." (Johnson Library, National Security File, Intelligence File, Guerrilla Problem in Latin America) The Country Team objections were transmitted in telegram 2291 from La Paz, May 24. The team stated that a strike force would be viewed by the Bolivians as a "magical solution" and a "substitute for hard work and needed reform." (National Archives and Records Administration, RG 59, Central Files 1967-69, POL 23 BOL)
At 4:30 p.m. on July 5 Rostow, Bowdler, and Peter Jessup met in the Situation Room of the White House with representatives of the Department of State including Assistant Secretary of State Covey Oliver, Deputy Assistant Secretary Robert Sayre, and Ambassador Hender-
son, with William Lang of the Department of Defense, and Desmond FitzGerald and William Broe of the Central Intelligence Agency. The group agreed that a special strike force was not advisable because of the Embassy’s objections. They decided that the United States should "concentrate on the training of the Second Ranger Battalion with the preparation of an intelligence unit to be part of the Battalion." They also agreed to look into expansion of the rural police program, prepare contingency plans to cover the possibility of the insurgency getting beyond the control of Barrientos and the Bolivian armed forces, and suggested that Barrientos might need $2-5 million in grant or supporting assistance in the next 2 months to meet budgetary problems resulting from the security situation. (Memorandum of meeting; Johnson Library, National Security File, Country File, Latin America, Vol. VI, June 1967-September 1967) The gist of these decisions was relayed to the President in the context of a broader policy for counterinsurgency in Latin America; see Document 61.
U.S. efforts to support the counterinsurgency program in Bolivia against Cuban-led guerrillas followed a two-step approach. To help overcome the deficiencies of the Bolivian Army, a 16-man military training team of the U.S. Special Forces was sent to Bolivia to support the Bolivian Second Ranger Battalion in the development of anti-guerrilla tactics and techniques. The United States also provided ammunition, rations, and communications equipment on an emergency basis under MAP and expedited delivery of four helicopters. (Paper by W.D. Broderick, July 11; National Archives and Records Administration, RG 59, ARA Files: Lot 70 D 443, POL 23-4, 1967, IRG Counter-Insurgency Subgroup) A July 3 memorandum prepared by the CIA reads: "Although original estimates were that the battalion would not be combat ready until approximately December 1967, the MILGROUP now believes that this date can be advanced to mid-September 1967." (Central Intelligence Agency, Job 88-01415R, DDO/IMS, [file name not declassified])
As the training of the Ranger battalion progressed, weaknesses in its intelligence-collecting capability emerged. The CIA was formally given responsibility for developing a plan to provide such a capability on July 14. (ARG/ARA/COIN Action Memo #1, July 20; National Archives and Records Administration, RG 59, ARA Files: Lot 70 D 122, IRG/ARA/COIN Action Memos) The planned operation was approved by the Department of State, CINCSO, the U.S. Ambassador in La Paz, Bolivian President Barrientos and Commander-in-Chief of the Bolivian Armed Forces Ovando. A team of two instructors arrived in La Paz on August 2. In addition to training the Bolivians in intelligence-collection techniques, the instructors-[text not declassified]-planned to accompany the Second Ranger battalion into the field. Although the team was assigned in an advisory capacity, CIA "expected that they will actually help in directing operations." The Agency also contemplated this plan "as a pilot program for probable duplication in other Latin American countries faced with the problem of guerrilla warfare." (Memorandum for the Acting Chief, Western Hemisphere Division, August 22; ibid.)
167. Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/
Washington, September 5, 1967, 3:30 p.m.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Secret. The memorandum indicates the President saw it.
During the past few days there have been two significant developments in Bolivia’s efforts to deal with communist guerrillas:
1. Bolivian security forces have discovered caches of documents belonging to the guerrillas. These include passports, identity cards, codes and photographs. The documents have been turned over to us for analysis./2/ A preliminary reading from CIA shows rather conclusively that "Che" Guevara travelled to Bolivia via Spain and Brazil in late 1966 using false documents./3/ The other passports and ID cards are expected to give the identity of additional Cubans active in the Bolivian guerrilla movement. I will send you the CIA report as soon as received.
/2/ As reported in telegram 408 from La Paz, August 25. (National Archives and Records Administration, RG 59, Central Files 1967-69, POL 23-7 BOL)
/3/ This information was based on an early CIA assessment of the documents captured by Bolivian anti-guerrilla forces in late August. ([text not declassified] Central Intelligence Agency, DDO/IMS Files, [file name not declassified])
2. After a series of defeats at the hands of the guerrillas, the Bolivian armed forces on August 30 finally scored their first victory-and it seems to have been a big one. An army unit caught up with the rearguard of the guerrillas and killed 10 and captured one, as against one soldier killed. Two of the dead guerrillas are Bolivians and the rest either Cubans or Argentines. CIA believes that several of the captured false passports they are now analyzing may have been used by the Cubans to get to Bolivia.
The Bolivians want to use the information on "Che" Guevara in the trial of Regis Debray, a young French Marxist intellectual, who is close to Fidel Castro and strongly suspected of being on a courier mission when he was caught in guerrilla territory in Bolivia last April. It is not in our interest, or the Bolivians’, to have the U.S. appear as the sole authenticating agent for the documents. Tomorrow in the 303 Committee we will consider how best to handle the authenticating aspect.
The victory of the Bolivian army over the guerrillas should do much to bolster the morale and determination of the Bolivian troops and their officers. The second Bolivian Ranger battalion which we have been training since June will give them added capability to pursue the guerrillas. The new unit will go into operation late this month.
168. Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/
Washington, September 6, 1967, 1:30 p.m.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Secret. The memorandum indicatesthe President saw it.
CIA’s interim technical report on the guerrilla documents found by Bolivian security forces in early August, 1967 is attached./2/
/2/ Not attached. The undated report was a preliminary technical analysis of the documentation and other material found in five caches in various parts of Bolivia in early August. The material included 21 different passports, 5 Bolivian internal documents, photographs, notebooks, maps, and 7 reels of magnetic recording tape. The report contained an inventory of the materials. (Department of State, INR/IL Historical Files, 303 Committee Files, c. 58, September 8, 1967)
The report focuses on the evidence pertaining to "Che" Guevara. The other material is still being analyzed. The documentation on Guevara-two passports, identity cards, health certificates and snapshots-show the following:
-the two passports bearing different names carry the same photograph and fingerprints.
-the fingerprints are identical to examples of prints of Guevara furnished to CIA [less than 1 line of source text not declassified] in 1954 and [less than 1 line of source text not declassified] in 1965.
-a CIA photo comparison analyst is of the opinion that the photographs are "most probably" photographs of Guevara in disguise.
-the passports show that Guevara most likely travelled legally from Madrid to Sao Paulo, Brazil at the end of October, 1966, and from there to La Paz on November 3, although the documents do not indicate arrival in La Paz.
-certain snapshots of what looks like Guevara in the jungle give no evidence of a montage.
These findings lead to a strong presumption that Guevara arrived in Bolivia last November, but they are still short of conclusive proof. The CIA report does not draw conclusions at this stage.
In furnishing us the documents, the Bolivians asked that we give them the results of our analysis so they could use the information in the impending trial of Regis Debray-the young French Marxist intellectual who is known to be close to Fidel Castro. He was arrested in Bolivian guerrilla territory last April after having entered the country clandestinely.
We do not want to become this closely involved with the Debray trial, which has already become a cause celebre in France. The nature of the evidence is such that it can be attacked as fabrication. Exclusive US analysis will add credibility to the almost inevitable charge that CIA planted the material. Debray, echoed by the French press and the Communist propaganda mill, is already claiming CIA and FBI involvement./3/
/3/ In an August 24 memorandum to Oliver, James R. Gardner (INR/DDC) had urged that the Department be prepared to address charges by Debray of CIA involvement: "Normally the Department and CIA have taken the line that we should neither confirm nor deny charges about CIA activities even though in some cases the temptation to deny is strong. (The Secretary has asked, incidentally, that in no case should such a denial be made without consulting him if there is any chance whatever that such a denial might later be exposed as false or misleading.)" (Ibid., Bolivia, 1962-1980) INR was aware "that CIA agents have participated in some of the Debray debriefings." (Memorandum from Gregory B. Wolfe (INR/RAR) to Hughes, August 23; ibid.)
To get around these problems, the 303 Committee has decided that we should tell the Bolivians to surface the documents and request the assistance of several governments in analyzing them. This could include Argentina where Guevara was born, Peru, Guatemala and Mexico where he resided; Uruguay, whose passport he used; and Brazil through which he travelled enroute to Bolivia. We would, of course, also cooperate. By broadening the analysis base, we narrow our exposure and enhance credibility of the evidence./4/
/4/ The 303 Committee decided this on September 8. (Minutes of September 8 meeting of the 303 Committee, September 12; ibid., 303 Committee Files, c. 58, 9/8/67)
169. National Intelligence Estimate/1/
NIE 92-67 Washington, September 14, 1967.
/1/ Source: Central Intelligence Agency, Job 79-R01012A, O/DDI Registry. Secret; Controlled Dissem. According to a note on the cover sheet this estimate was prepared in the Central Intelligence Agency with the participation of the intelligence organizations of the Departments of State and Defense and the National Security Agency. The United States Intelligence Board concurred in this estimate on September 14.
THE SITUATION IN BOLIVIA
To estimate the situation in Bolivia and the probable impact of the present insurgency on it, over the next year or so.
A. The present insurgency in Bolivia is organized and supported by Cuba. Its seriousness lies in the possibility that the insurgents may eventually provide a rallying point for many disaffected elements which hitherto have been unable to coalesce. The threat posed is more a function of the inherent fragility of Bolivia’s political, economic, and social structure than of the insurgents’ own strength and capabilities.
B. Over the next year or so, there is little chance that the insurgents will be able to bring about the overthrow of the Barrientos regime, but it is also unlikely that the regime will be able to stamp out the insurgency.
C. A prolongation and expansion of the insurgency would impose severe financial and psychological strains on Bolivia, greatly hindering the economic development and social amelioration that are essential to the achievement of stability in that country. Defense costs for a protracted guerrilla war would add heavily to the already serious deficit in the national budget, would further limit public investment, and would threaten the government’s stabilization program. In these circumstances, Barrientos would become increasingly dependent on US aid. Although eager to obtain technical and material military aid, he would be extremely reluctant to sanction a military intervention in force by the already concerned neighboring states or by the OAS.
D. If the government’s counterguerrilla operations are protracted and unsuccessful, that would encourage other disaffected elements to undertake more active opposition to the government. It would also seriously damage the morale of the military. In these circumstances, the tenure of the Barrientos regime would become precarious.
[Omitted here is the Discussion section of the estimate.]
170. Editorial Note
A significant counterinsurgency program was a key element of U.S. foreign policy toward Bolivia. The United States undertook in 1967 to help train and equip a Bolivian Ranger battalion as part of Bolivia’s counterinsurgency program aimed at Cuban-led guerrilla forces. In addition to military training and advice provided by a Green Beret team, the interagency Regional Group for Inter-American Affairs, which viewed the Bolivian program as a pilot program for other Latin American countries faced by guerrilla insurrections, approved in July 1967 the assignment of a team to provide intelligence and technical support to the battalion. The Bolivian Ranger battalion tracked down the guerrillas in October 1967. CIA contract personnel assigned to the Bolivian battalion as advisors unsuccessfully attempted to prevent the execution of Cuban leader Ernesto "Che" Guevara by the Bolivian military. These advisors provided on-scene reports of the execution to Washington. After Guevara’s death and the end of the danger from Cuban-led insurgency, U.S. officials responsible for coordinating covert activities took note of these actions in Bolivia as evidence of the excellent U.S.-Bolivian cooperation which supported efforts to acquire detailed intelligence on Cuban-sponsored insurgency throughout Latin America.
171. Memorandum From Director of Central Intelligence Helms/1/
Washington, October 11, 1967.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Secret. A copy of the memorandum in CIA files indicates it was drafted by W.V. Broe and [name not declassified] in the Western Hemisphere Division and approved by Thomas H. Karamessines, Deputy Director for Plans. (Central Intelligence Agency, DDO/IMS, Operational Group, Job 78-06423A, U.S. Government-President)
1. You are aware of the published accounts concerning the death of Ernesto "Che" Guevara which were based in essence on the Bolivian Army press conference on 10 October attributing Guevara’s death to battle wounds sustained in the clash between the Army and the guerrillas on 8 October 1967./2/ Guevara was said to be in a coma when captured and to have died shortly thereafter, the heat of battle having prevented early or effective treatment by Bolivian soldiers.
/2/ On October 9 Rostow informed President Johnson the "tentative information" that the Bolivian unit trained by the U.S. "got Che Guevara," but that information was inconclusive and based primarily on press reports from Bolivia. (Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968)
2. [1 line of source text not declassified] contrary information from [less than 1 line of source text not declassified] the Bolivian Second Ranger Battalion, the army unit that captured Guevara. According to [less than 1 line of source text not declassified] Guevara was captured on 8 October as a result of the clash with the Cuban-led guerrillas. He had a wound in his leg, but was otherwise in fair condition./3/ He was questioned but refused to give any information. Two Bolivian guerrillas, "Willy" and "Aniceto," were also captured.
/3/ According to the text of a message sent by [text not declassified] on the scene, Guevara’s fate would be decided on October 9 by the highest Bolivian military authorities. "I am managing to keep him alive," he reported, "which is very hard." ([telegram number not declassified]; Central Intelligence Agency, DDO/IMS Files, [file name not declassified])
3. At 1150 hours on 9 October the Second Ranger Battalion received direct orders from Bolivian Army Headquarters in La Paz to kill Guevara. These orders were carried out at 1315 hours the same day with a burst of fire from an M-2 automatic rifle./4/ [less than 1 line of source text not declassified] was an eye witness to Guevara’s capture and execution.
/4/ In an October 11 memorandum informing President Johnson of the killing of Che Guevara, Rostow remarked: "I regard this as stupid, but it is understandable from a Bolivian standpoint, given the problems which the sparing of French Communist and Castro courier Regis Debray has caused them." Rostow pointed out that the death of Che Guevara would have a strong impact in discouraging further guerrilla activity in Latin America. He also noted: "It shows the soundness of our ‘preventive medicine’ assistance to countries facing incipient insurgency-it was the Bolivian 2nd Ranger Battalion, trained by our Green Berets from June-September of this year, that cornered and got him." (Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memorandum, January 1966-December 1968) On October 13 Rostow informed Johnson of confirmation that Che Guevara was dead. (Ibid.)
/5/ Printed from a copy that indicates Helms signed the original.
172. Memorandum From Director of Central Intelligence Helms/1/
Washington, October 13, 1967.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Secret. Copies of this memorandum in CIA files indicate that it was drafted by Broe and [name not declassified] in the Western Hemisphere Division and approved by Karamessines. (Central Intelligence Agency, DDO/IMS, Operational Group, Job 78-06423A, U.S. Government-President)
1. Further details have now been obtained from [less than 1 line of source text not declassified] who was on the scene in the small village of Higueras where Ernesto "Che" Guevara was taken after his capture on 8 October 1967 by the Bolivian Army’s Second Ranger Battalion./2/
/2/ A full account of the capture and death of Che Guevara is in CIA Intelligence Information Cable [telegram number not declassified], October 12. (Central Intelligence Agency, DDO/IMS Files, [file name not declassified])
2. [less than 1 line of source text not declassified] attempted to interrogate Guevara on 9 October 1967 as soon as he got access to him at around 7 a.m. At that time "Che" Guevara was sitting on the floor in the corner of a small, dark schoolroom in Higueras. He had his hands over his face. His wrists and feet were tied. In front of him on the floor lay the corpses of two Cuban guerrillas. Guevara had a flesh wound in his leg, which was bandaged.
3. Guevara refused to be interrogated but permitted himself to be drawn into a conversation with [less than 1 line of source text not declassified] during which he made the following comments:
a. Cuban economic situation: Hunger in Cuba is the result of pressure by United States imperialism. Now Cuba has become self-sufficient in meat production and has almost reached the point where it will begin to export meat. Cuba is the only economically self-sufficient country in the Socialist world.
b. Camilo Cienfuegos: For many years the story has circulated that Fidel Castro Ruz had Cienfuegos, one of his foremost deputies, killed because his personal popularity presented a danger to Castro. Actually the death of Cienfuegos was an accident. Cienfuegos has been in Oriente Province when he received a call to attend a general staff meeting in Havana. He left by plane and the theory was that the plane became lost in low-ceiling flying conditions, consumed all of its fuel, and crashed in the ocean, and no trace of him was ever found. Castro had loved Cienfuegos more than any of his lieutenants.
c. Fidel Castro Ruz: Castro had not been a Communist prior to the success of the Cuban Revolution. Castro’s own statements on the subject are correct.
d. The Congo: American imperialism had not been the reason for his failure there but, rather, the Belgian mercenaries. He denied ever having several thousand troops in the Congo, as sometimes reported, but admitted having had "quite a few".
e. Treatment of Guerrilla Prisoners in Cuba: During the course of the Cuban Revolution and its aftermath, there had been only about 1,500 individuals killed, exclusive of armed encounters such as the Bay of Pigs. The Cuban Government, of course, executed all guerrilla leaders who invaded its territory. . . . (He stopped then with a quizzical look on his face and smiled as he recognized his own position on Bolivian soil.)
f. Future of the Guerrilla Movement in Bolivia: With his capture, the guerrilla movement had suffered an overwhelming setback in Bolivia, but he predicted a resurgence in the future. He insisted that his ideals would win in the end even though he was disappointed at the lack of response from the Bolivian campesinos. The guerrilla movement had failed partially because of Bolivian Government propaganda which claimed that the guerrillas represented a foreign invasion of Bolivian soil. In spite of the lack of popular response from the Bolivian campesinos, he had not planned an exfiltration route from Bolivia in case of failure. He had definitely decided to either fall or win in this effort.
4. According to [less than 1 line of source text not declassified] when Guevara, Simon Cuba, and Aniceto Reynaga Gordillo were captured on 8 October, the Bolivian Armed Forces Headquarters ordered that they be kept alive for a time. A telegraphic code was arranged between La Paz and Higueras with the numbers 500 representing Guevara, 600 meaning the phrase "keep alive" and 700 representing "execute". During the course of the discussion with Guevara, Simon Cuba and Aniceto Reynaga were detained in the next room of the school house. At one stage, a burst of shots was heard and [less than 1 line of source text not declassified] learned later that Simon Cuba had been executed. A little later a single shot was heard and it was learned afterward that Aniceto Reynaga had been killed. When the order came at 11:50 a.m. from La Paz to kill Guevara, the execution was delayed as long as possible. However, when the local commander was advised that a helicopter would arrive to recover the bodies at approximately 1:30 p.m., Guevara was executed with a burst of shots at 1:15 p.m. Guevara’s last words were, "Tell my wife to remarry and tell Fidel Castro that the Revolution will again rise in the Americas." To his executioner he said, "Remember, you are killing a man."/3/
/3/ The [text not declassified] on site, reporting on Guevara’s execution, indicated that "it was impossible keep him alive." ([telegram number not declassified] October 10; ibid., [file name not declassified])
5. At no time during the period he was under [less than 1 line of source text not declassified] observation did Guevara lose his composure.
/4/ Printed from a copy that indicates Helms signed the original.
173. Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/
Washington, October 14, 1967, 12:30 p.m.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Secret; Sensitive; Eyes Only. The memorandum indicates Johnson saw it.
Attached is a memorandum from Dick Helms describing the detention and execution of "Che" Guevara./2/
/2/ Document 172.
CIA has also obtained [less than 1 line of source text not declassified] messages sent from Havana to "Che" in January and February 1967 showing that the Bolivian guerrilla movement was a Cuban show designed to spark a movement of "continental magnitude"./3/ Several high ranking members of the Bolivian Communist Party were called to Havana to convince them that it would be an error to present the Bolivian operation as a national movement. These messages also indicate that the French pro-Castro communist theoretician Jules Debray was sent to Bolivia to contact "Che" Guevara in late February. He was arrested in March.
/3/ According to information provided to the CIA, Che Guevara stated that the ultimate purpose of the insurgency in Bolivia was to "create a Viet Nam out of South America." ([telegram number not declassified] Central Intelligence Agency, DDO/IMS Files, [file name not declassified])
[less than 1 line of source text not declassified] we gather that Cuban officials accept the fact that "Che" is dead and may be trying to recover the body. The communist-leaning President of the Chilean Senate, Salvador Allende, has sent a message to President Barrientos asking for the remains. This request, and one by the family-"Che’s" brother went to Bolivia to claim the body-probably led Barrientos to make the announcement that "Che" had been cremated. The Bolivians do not want an independent autopsy to show that they executed "Che" and they are intent on not permitting the remains to be exploited by the communist movement.
The death of "Che" and Debray’s dramatic public reversal of plea from innocent to guilty in the court case represents a serious blow to Castro. Both his leading guerrilla fighter and guerrilla theoretician have fallen in Bolivia. We do not know how he will react. Against the possibility that he might try to recoup lost prestige by some dramatic act against United States interests in Latin America-such as bombing of one of our Embassies or kidnapping of diplomatic personnel-we have instructed our missions to be on the alert and take necessary precautions./4/
/4/ This instruction was transmitted in telegram 54210 to all ARA posts, October 14; it also instructed the posts to refrain from any statements in which the United States takes credit for defeat of the Cuban-led insurgency in Bolivia. (National Archives and Records Administration, RG 59, Central Files 1967-69, POL 6 CUBA) In an October 10 memorandum Broe wrote that the defeat of the guerrillas and killing of Che Guevara in Higueras "not only wiped out the guerrillas active in Bolivia, but also probably uprooted a Cuban-directed guerrilla network which was destined to spread throughout Latin America." (Broe to the Deputy Director for Plans, October 10; Central Intelligence Agency, Job 88-01415R, DDO/IMS Files, [file name not declassified]) The CIA prepared a report on Cuban Subversive Policy and the Bolivian Guerrilla Episode, May 1968, that was forwarded to President Johnson on June 11, 1968, with the following comment by Helms: "This detailed study gives an insight into the doggedness with which Communist Cuba pursues its revolutionary aims in Latin America." (Johnson Library, National Security File, Country File, Cuba, Vol. IV, Bowdler File, 1965-1968)
174. Memorandum Prepared for the 303 Committee/1/
Washington, November 22, 1967.
/1/ Source: Department of State, INR/IL Historical Files, 303 Committee Files, c. 63, December 1, 1967. Secret; Eyes Only.
/2/ Document 161.
Reference memorandum reported the successful conclusion of a political action program for Bolivia. This program, approved by the 303 Committee on 5 February 1965, culminated approximately 18 months later in an orderly transfer of power via elections to a civilian, constitutional government and inauguration of President Rene Barrientos on 6 August 1966. [101⁄2 lines of source text not declassified]
2. Current Status
[6 lines of source text not declassified] This effort which was responsive to the IRG/ARA/COIN Action Memorandum number one dated 20 July 1967,/3/ entailed the dispatch to the area of guerrilla operations, by the Agency, of a highly professional and well equipped team using Bolivian Government cover. [41⁄2 lines of source text not declassified] It so effectively improved the intelligence capability of the Bolivian Second Ranger Battalion that elements of that unit acting on field acquired intelligence were able within a matter of days to establish contact with the main force of guerrillas and on 8 October 1967 eliminate all but six of the insurgents. Ernesto "Che" Guevara was among those who lost their lives. Clean up operations are continuing.
/3/ See Document 166.
[3 lines of source text not declassified] Specifically they were used to prevent the summary executions of Ciro Roberto Bustos, Jules Regis Debray and other guerrilla captives, and subsequently to arrange for their interrogation by experienced [less than 1 line of source text not declassified] interrogators. It was through information provided by Bustos that the Bolivian Army was able to recover documents and matériel cached by the insurgents. These were later used in the Bolivian presentation to the meeting of Foreign Ministers where Foreign Minister Guevara Arce surfaced participation of Ernesto "Che" Guevara in the guerrilla operations.
[1 paragraph (2 lines of source text) not declassified]
3. Future Plans
[1 paragraph (3 lines of source text) not declassified]
Assistant Secretary Oliver and Ambassador Henderson concur with the continuance of these operational relationships./4/
/4/ Oliver recommended approval in a memorandum to Kohler on November 29. (Department of State, INR/IL Historical Files, 303 Committee Files, c. 63, December 1, 1967) This approval elicited criticism, however, from within INR and ARA. In a memorandum to Trueheart on November 30, Gardner remarked: "we learn that CIA sent a CI team to Bolivia in August of this year, under Bolivian Government cover, [text not declassified]. I would have supposed that this matter was preeminently fit for 303 consideration." (Ibid.) [text not declassified]
It is recommended that the 303 Committee note and endorse this activity./5/
/5/ The 303 Committee approved the recommendation at its December 1 meeting. (Ibid.)
175. Letter From the Ambassador to Bolivia (Henderson) to the Assistant Secretary of State for Inter-American Affairs (Oliver)/1/
La Paz, January 5, 1968.
/1/ Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL 23-7 BOL. Confidential; Official-Informal.
As you know from your discussions with Bolivian Foreign Minister Guevara Arce and Foreign Minister Romero Loza, the GOB budget problem threatens the capacity of Bolivia to resist extremist subversion and move the country forward on its longer term development effort which I see as the best insurance against successful future subversion.
My approach to the threat of subversion has been the policy spelled out in our meetings last July. Acting on the understanding reached in our discussion at the White House with Walt Rostow, I have taken those measures which were necessary to insure the stability and continuance of the Barrientos Administration. At the same time, I have avoided precipitous, unnecessary military and/or financial aid which would have tended to reduce pressure on the GOB to look primarily to its own resources for dealing with the guerrilla/subversion threat.
Within this approach, I have carefully weighed the desirability and timing of extraordinary aid. As we agreed last July, when I felt the time had come for such aid, I would so advise you. I am convinced that this time has now come and request your support in obtaining immediate approval for $5,000,000 in supporting or similar aid for meeting this budget crisis.
Throughout the struggle against Che Guevara and his guerrilla movement, this Mission has used its influence and resources to eliminate this threat to Bolivia and hemisphere-wide stability. The immediate success of this policy is apparent, but it has left the GOB with a legacy of problems which I consider we must help the GOB resolve. The budget crisis is part of the legacy.
At the beginning of 1967, the GOB faced an uncovered budget deficit, after permissible borrowing from the Central Bank under the IMF ceiling, of about $7,000,000. My Country Team and I felt that this deficit was manageable by the GOB itself and put pressure on the GOB to accelerate measures for generating new revenues and for basic institutional reforms in its fiscal and budgetary practices. However, the injection of Che and his guerrillas changed this picture radically: Not only did the uncovered deficit double largely because of direct and indirect GOB expenditures required to meet the threat but revenue generating and reform measures were postponed in large part to avoid disaffecting key political groups.
Today, the Bolivian Government faces an uncovered deficit of between $12,000,000 and $15,000,000 which, under the IMF ceiling, cannot be met through borrowing from the Central Bank. Bolivia has pursued a policy of monetary stabilization since 1956 and has accepted the guidance of the IMF in carrying out this policy. Without raising questions here about the appropriateness of some IMF guidelines, I am convinced that violating the IMF ceiling and suspending the stand-by would create a most serious crisis in confidence and could lead to political and economic consequences which could pose as immediate a threat to Bolivian stability as Che did.
It seems to me to be incumbent upon us to take those actions, through financial and other assistance, which will prevent the emergence of conditions propitious to extremist subversion, particularly since some Cuban Communist elements and organized supporters still survive and there are, as you know, credible if inconclusive reports of guerrilla planning and training by pro-Chinese Communists.
In seeking this $5,000,000 aid-preferably in the form of Supporting Assistance, given the underlying political reasons for the problem itself and for responding to it-I am asking for an extraordinary injection of resources above the presently planned level of project spending. I continue to endorse the development strategy spelled out in our program documents, but I recognize that this strategy is seriously endangered if the recurring imbalance in GOB revenues and expenditures is not overcome.
As a result, this $5,000,000 request is not intended to be a one-shot palliative but part of a long-term strategy to help the GOB develop and install sound fiscal policies and institutional competence to administer these policies. The Country Team has been working on this approach for several years and on the basis of experience gained, can be expected to continue to press effectively for performance.
In view of the magnitude of the Bolivian problem and the need for sufficient leverage to accomplish the results we have in mind, we are developing a package of additional assistance over three years of about $7-$8 million beyond the $5 million now requested. We are satisfied that funding for this package can be provided from future PL 480 generations rather than additional dollar inputs. Our analysis of existing project commitments plus permissible counterpart drawdowns under the IMF ceiling have convinced us that the initial $5 million needed now cannot be provided from local currencies at our disposal.
The strategy will be presented to Mr. Richard Richardson for his analysis and evaluation when he arrives in mid-January. My Country Team and I are looking forward to discussions with him which can facilitate my negotiating with the Bolivians and expedite the processing of this extraordinary aid package.
Let me reiterate my concern for immediate action. In the framework of our discussions last July, this extraordinary $5,000,000 aid is required now to bolster the capability of the GOB to meet the after effects of the anti-guerrilla operation and to insure its capacity to move forward sound fiscal and development policies. The political climate, as reflected already to you by Ministers Guevara and Romero, requires prompt response by us if we are to retain our capacity to influence the course of political, military and economic events here, and not piddle away the goodwill we might have generated-and then later have to do the operation at greater cost./2/
/2/ In a January 10 response to Henderson, Oliver stated that Henderson had "definitely corroborated my hunches." Oliver indicated that "once decisions are made we ought to move very fast." (Ibid.)
With best personal regards and my best wishes for 1968.
176. Information Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/
Washington, June 26, 1968, 6:20 p.m.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, President Barrientos Visit. Confidential. The memorandum indicates that President Johnson saw it.
Bolivia had a $7 million deficit in 1967 and may have an additional $10 million in 1968. The deficits are due principally to a drop in tin prices, the cost of putting down the Guevara guerrillas, a decline in revenues from the nationalized mines, and delay in implementation of planned revenue measures.
The Bolivians asked us for budgetary help last year, and Covey Oliver reluctantly agreed to continue them on the dole (they were supposed to come off on January 1, 1968) provided they took self-help measures to cover part of the deficit. The deal worked out after months of negotiations has these elements:
1. The US would authorize a $4.5 million supporting assistance loan for budget support in 1968 and approve standby authority to use up to $9 million in 1969 and 1970 from PL 480 local currency generations.
2. The Bolivians would implement fiscal reform measures; increase revenues by 25% in 1968; reduce 1968 spending by 12% under planned levels; establish tighter controls over free spending autonomous agencies; and continue IMF drawing eligibility.
By late May, the loan was on the verge of being signed./2/ The Bolivians had taken all the self-help measures except the key revenue-raising 10% import surtax, but seemed ready to do that. Then President Barrientos ran into some political flak with students, teachers and military plotting. He did not want to increase political tensions with the surtax, so postponed action until he had the situation well in hand. But after taking care of his troubles, he continued to delay.
/2/ Details of the proposed U.S. aid package to Bolivia were transmitted in telegram 167959 to La Paz, May 21. (National Archives and Records Administration, RG 59, Central Files 1967-69, AID (US) 10 BOL) Further negotiations in La Paz on the loan agreement were reported in telegram 5287 from La Paz, June 25. (Ibid.)
From some of our special intelligence, we have the distinct impression the delay is related to Barrientos’ visit to the Ranch. We suspect his advisers have told him that by talking to you, he can probably get the budget support money without imposing the surtax. He may also think he can get you to move three development loans (roads, community development, aviation) which AID is holding back until Bolivia gets its financial house in order because each calls for a sizeable local contribution.
AID has told the Bolivians that the FY 1968 SA money must be obligated by June 30 or it lapses, and the prospects for FY 1969 money are most uncertain. Ambassador Henderson reports that even these facts of life have not persuaded them to move on the surtax.
Unless the Bolivians have a change of heart between now and Sunday,/3/ President Barrientos may try to use the Ranch visit to engage in substantive talks./4/ We will try to discourage this.
/3/ June 30.
/4/ According to the President’s Daily Diary of July 5, Johnson met with President Barrientos at the LBJ Ranch in Johnson City, Texas, from 1:23 to 2:29 p.m. A State luncheon followed. (Johnson Library) No memorandum of conversation of the Johnson-Barrientos meeting has been found. A White House press statement on July 5 indicates that in the discussion Barrientos "underlined the efforts that this government had made to create an environment of political and social stability as well as loyalty to democratic process." (Ibid., National Security File, Country File, Bolivia, President Barrientos Visit)
In reviewing the background, Bill Bowdler concludes that AID’s insistence on self-help measures is justified from an economic standpoint, but it does not give due weight to political factors. Bill thinks we should hold firm on the import surtax, but be more forthcoming on the three development loans since they would help to sugar-coat the surtax for Bolivian public opinion./5/
/5/ On June 28 the President approved Oliver informing the Bolivian Finance Minister that if they put through the import surcharge, the United States "would move right" with budget support and project loans. The President would not raise the issue with Barrientos. (Ibid.)
177. Action Memorandum From William G. Bowdler of the National Security Council Staff to President Johnson/1/
Washington, July 30, 1968, 4 p.m.
/1/ Source: Johnson Library, National Security File, Special Heads of State Correspondence, Bolivia, March 1, 1968. Confidential.
The Bolivian Embassy has delivered to State a long letter (Tab B)/2/ from President Barrientos thanking you for the invitation to the Ranch and discussing issues he did not have time to take up with you while there.
/2/ A Department of State translation is attached but not printed. The Barrientos letter, July 8, was sent from New York. (Ibid.)
The issues boil down to:
-recognition of Bolivia’s contribution to hemispheric security by eliminating "Che" Guevara.
-Bolivia’s willingness to cooperate in physical integration, but it also desires access to the sea.
-a request that GSA make its 3-month suspension of tin sales indefinite.
-United States approval of a loan to moderate Bolivia’s airports and airline.
At Tab A is a suggested reply prepared by State./3/ It compliments President Barrientos on his decision to work toward greater economic integration (i.e., Andean Common Market and the River Plate Basin Development) and his success in dealing with the Guevara guerrillas. On bilateral economic matters, the letter avoids getting into specifics because we do not know what use President Barrientos might make of it. He knows that since the Ranch visit, two loans (roads and agricultural cooperatives) have been approved, and the airport-aircraft loan will be completed when details on the down payment are worked out. We cannot agree to an indefinite suspension of GSA tin sales, but the letter makes clear we will consult fully with Bolivia on any significant actions we might contemplate taking.
/3/ Attached but not printed. The draft was prepared in the Department of State and transmitted to the White House on July 24, along with the Department’s translation of the Barrientos letter, under a covering memorandum from Read. (Ibid.)
I recommend you sign the letter./4/
/4/ The signed letter to Barrientos is ibid.
178. Information Memorandum From William G. Bowdler of the National Security Council Staff to President Johnson in Texas/1/
Washington, August 2, 1968, 3:30 p.m.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, January 1966-December 1968. Confidential. The memorandum indicates it was received at the LBJ Ranch August 3 at 11 a.m.
President Barrientos is facing the most serious political crisis of his two years in office. It stems from the publication of the "Che" Guevara diary, a copy of which was surreptitiously furnished to Fidel Castro by someone in Bolivia./2/
/2/ The Embassy at La Paz reported publication of the Che Guevara diary in Presencia on July 9. (Telegram 5629 from La Paz, July 10; National Archives and Records Administration, RG 59, Central Files 1967-69, POL 6 CUBA)
Since the diary was kept under lock and key by the Army, the finger pointed there, bringing into question the loyalty and discipline of the Armed Forces. This produced a political chain reaction of protest by opposition groups, a police crackdown, threats of strikes and student disturbances, unrest in the Armed Forces, and finally, replacement of the civilian cabinet with a mediocre military one./3/
/3/ On July 19 the Embassy in La Paz reported that "public criticism of armed forces for leak of Che Guevara diary has dragged their prestige to new low, putting irresistible pressure on them to find scapegoat." (Telegram 5812 from La Paz; ibid., POL 15-1 BOL)
In the midst of all this, Barrientos’ Interior Minister Antonio Arguedas took off for Chile where he announced that he had been the one that passed the Guevara diary to Castro. The circumstances of his "fleeing" Bolivia, his public statements, and his desire to come to the United States rather than go to Cuba which has been desperately trying to get him, all cast serious doubt on the bona fides of the Arguedas story./4/ It sounds to me as though he agreed to be the scapegoat for his old friend Barrientos in order to take the heat off the restive Armed Forces. Incidentally, Arguedas is due to arrive in the United States on Saturday, August 4.
/4/ At a meeting of the Interdepartmental Regional Group for ARA, the group concluded that the Barrientos government was in serious danger from a military coup and danger from students and labor should he prorogue the Congress. The Group agreed it was in U.S. interest for Barrientos to remain in power. They recommended the U.S. Ambassador persuade Barrientos to return to a civilian cabinet and maintain a functioning Congress. (National Archives and Records Administration, RG 59, ARA Files: Lot 70 D 122, IRG/ARA Action Memos, 1968)
Barrientos still confronts a difficult situation at home. The shift to a military cabinet has not really satisfied the Armed Forces and is being severely criticized by civilian elements. Fearing a congressional investigation of the diary episode if he allows Congress to convene on August 6, Barrientos seems inclined to delay its opening. There are also indications that ambitious officers in the Army would like to use the crisis to dump Barrientos.
Ambassador Henderson talked to Barrientos yesterday about our interest in seeing him complete his constitutional term. He gave him our impression that allowing Congress to convene on schedule and going back quickly to a civilian cabinet would help him hold to this objective. Barrientos agreed, but was vague on the timing.
So far, Barrientos has weathered the storm and probably has a better than even chance to see it through. Given the internal nature of his problems, there is little we can do but give him continued moral support. This we are doing. It is definitely in our interest that he remain in power, because it is doubtful that anyone else could make as good a showing in managing that difficult country./5/
/5/ [text not declassified]
179. Information Memorandum From the Acting Assistant Secretary of State for Inter-American Affairs (Vaky) to Secretary of State Rusk/1/
Washington, August 19, 1968.
/1/ Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL 30 BOL. Secret; Sensitive. The date is handwritten on the memorandum.
Former Bolivian Minister of Government Arguedas returned to La Paz on August 17. At press conferences held upon his arrival and again later in the day, Arguedas ascribed his action of providing the Guevara diary to Castro to his desire to rid Bolivia of "imperialism", as exemplified by the activities of the CIA. Arguedas claimed that he had been recruited by the CIA in 1965, and provided considerable information on names of CIA personnel and their alleged activities in recent years in Bolivia./2/
/2/ The Arguedas affair was the subject of a meeting on August 19 at the Department of State between CIA and representatives of INR and ARA. (Memorandum from William C. Trueheart (INR/DDC) to Hughes and Denney; Department of State, INR/IL Historical Files, ARA/CIA Weekly Meetings, 1968-1969) A separate record of this meeting, dated August 20, was prepared by the CIA. (Ibid., Latin America General, 1967-1968)
Embassy La Paz believes that Arguedas’ anti-CIA line may have been ordered by President Barrientos to place the onus of the diary scandal on the U.S., thereby diverting attention from the GOB’s shortcomings./3/
/3/ On August 22, in summarizing the Arguedas affair for President Johnson, Rostow reported: "At first, it appeared Arguedas and Barrientos were in league to make the CIA a scapegoat and deflect from themselves some of the criticism over the Guevara diary episode. But in an August 20 press conference, Barrientos defended Bolivia’s relations with the US and condemned Cuba as the real threat." (Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968)
Possible ramifications of this development are several:
1) Greatly increased press attention here to CIA "activities".
2) Possible public demonstrations against our Mission in Bolivia.
3) Possible intensification by radical student and labor groups of agitation against the GOB (a minor demonstration occurred in La Paz on August 16, but was easily broken up).
4) This raises the question of U.S.-Barrientos relationships if the Embassy’s belief is correct.
Regarding (1) above we are planning, at least for the time being, to adhere to our usual policy of declining comment on accusations about the CIA, no matter how absurd such accusations are.
Regarding point (2) above, our most recent information is that La Paz is calm. The Embassy has taken security precautions.
Regarding point (3), we continue to believe that the GOB can weather local threats as long as support from the military is forthcoming. The Barrientos-Military relationship, while uneasy since the onset of the diary scandal, is not yet at a point where military support seems likely to be withdrawn.
On point (4), it is too early to predict the effects of this incident on our relationship with Barrientos. We will be evaluating this question over the next few days.
Action Taken: I have instructed Ambassador Castro (who is in San Salvador making his protocolary goodbyes there) to delay his arrival in Bolivia (scheduled for August 20 but not yet announced publicly) for a few days. The Ambassador will return here for further consultations. This action is in accordance with the recommendation of Embassy La Paz which believes demonstrations against Ambassador Castro are likely if he arrives at the height of the present crisis.
180. Memorandum From Director of the Bureau of the Budget Zwick to President Johnson/1/
Washington, December 21, 1968.
/1/ Source: Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968. Confidential.
Bill Gaud and Orville Freeman request your approval to negotiate a $6.8 million P.L. 480 sales agreement with Bolivia for wheat/wheat flour and tobacco./2/ Repayment will be in dollars over twenty years with 5 percent down. There will be no currency use payment under the Purcell amendment since no additional currency is needed at this time.
/2/ Attached, but not printed.
Last June, AID authorized a $4.5 million Supporting Assistance loan to Bolivia as the initial budgetary support for an 18-month fiscal reform and stabilization program jointly developed among AID, the IMF, and the Government of Bolivia. This P.L. 480 agreement will constitute AID’s major 1969 resource input for Bolivia and as such forms an important continuing element in the fiscal reform program.
The local currency proceeds from this agreement will be earmarked on a standby basis for budget support in CY 1969should the need arise. Thus, the P.L. 480 agreement should eliminate the need for additional Supporting Assistance funds. If the need for budget support does not arise, the proceeds will be used in the agricultural sector.
State/AID has determined that Bolivia’s resources are not being diverted to unnecessary military expenditures to a degree which materially interferes with its development and that neither U.S. development assistance nor P.L. 480 sales proceeds are being diverted by Bolivia to military purposes.
Because this P.L. 480 agreement will support and reinforce the fiscal reform program and will substitute for dollar assistance, I recommend that you approve negotiation of the agreement./3/
/3/ The approve option is checked. Rostow appended a handwritten note to a December 24 memorandum to Johnson recommending approval of the package, indicating: "Final approval by telephone, 27 December, 1968." (Johnson Library, National Security File, Country File, Bolivia, Vol. IV, Memoranda, January 1966-December 1968)
Charles J. Zwick
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