Created: 1/31/1984

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SUBJECT: House Permanent Select Committee on Intelligence (HPSCI) Hearing on the Central American Finding

1. Onearing was conducted with the HPSCI on the Central American Finding. The following Committee Members were present:

Chairman Edward P. Boland A) Anthony Beilenson, A) J. Kenneth RobinsonA) G. William Whitehurst A) Louie Stokes H) CW. Bill Young PL) Bob Stump Z)

Staffers present were:

Thomas Latimer, Staff Director Mike O'Neil, ChiefBush

RichardBerry, Minority


from the Department of State were:

Deputy Secretary, Kenneth Dam DAS, Bill Knepper, INR DAS, Jim Michael


John Wyant, INR

from the Central Intelligence Agency (CIA) were:

John Stein, Deputy Director for Operations (DDO) Duane Clarridge, Chief, Latin America DivisionA)

Deputy Director for Intelligence, Latin America (DDI/LA)


5, The hearing, inranscript was taken, was opened by Chairman Boland citing the fact that thereil cap on expenditures for the Nicaragua program and that over half of the funds had already been obligated. Mr. Boland said that during this hearing he would like to hear the witnesses give an assessment of the past four months of activity and to comment on how or if the Administration plans to seek additional funds. This Memorandum (MPR) should be read in conjunction with thePR covering the staff prebriefing on the same subject.

6. Ken Dam was the first witness who briefedrepared statement. policy in Central America, particularly Nicaragua, and how the State Department saw the Nicaragua program as an essential ingredient in this policy. Mr. Dam said that, at present, there were four main elements to our policy in Nicaragua; support of democracies, economic development,ettlement, andecurity shield around Nicaragua so that the other three Central American countries wouldhance to survive. The success of our policy depends on major changes taking place inside Nicaragua. Mr. Dam said. Government has four aims with regard to Nicaragua:

end Nicaraguan support to Salvadoran guerrilla


Nicaraguan military and security tiesand the Soviet Bloc;

(3) reduce the overall levels of military forces in the area; and.

(4) force Nicaragua to carry out their original promise of democratic pluralism.

Mr. Dam said Nicaragua has been intransigent. He said. was Nicaragua's principal supporter at the time of the successful revolution, but they have consistently rebuffed our economic incentives, which has led us toarder stand against the regime. Mr. Dam said the Nicaraguan program is responsible for pressuring the Nicaraguans toeaceful settlement. The Nicaraguans have signed onto the Contradora Twenty-One Points, are easing internal controls, and appear to be stepping away from Cuba. Mr. Dam said he was optimistic over the situation in Central America because other Central American countries are actively encouraging the peace process. anuary the "Core Pour" and Nicaragua formed three working groups to worklan which is due4 on what major steps will be taken in the peace process. Mr. Dam concluded by saying it was essential to continue keeping the pressure on Nicaragua and to. support for the entire region.


1_l John Steinour prime goal, at this point, ia

the PUN ana AKUE; both groups are separate

but they are jointly planning field activities.

8. Mr. Stein then briefed the Committee on the current atatua of the three groupst



(1) Activity among the Misura has not changed dramatically during the past four months.




General lower level of activity. In mid-January, Paatoratandown in an attempt to force. to designate hia as the overall commander and leader of the Contra forces.

Mr. Stein concluded by saying we will continue to apply overall pressure against the Nicaraguan regime r

hairman Boland opened the question and answer period by >aylng that as far as he waa concerned the key to Central

iroblem is El Salvador, not Nicaraqua.

rar as he was concerneq ei baxvadol

Boland aaid was critical and

assistance bo they can carry on with their election plans. Mr-Dam said that in talking with the leaders of Costa Rica and Honduras, they were concerned primarily with Nicaragua. He said that the pressure from the insurgency was an indispensible element in our policy in Central America. Mr. Dam also said that our Contra effort has costil, and this burden will eventually, we believe, force Nicaragua to change its policies. Q

10. The following points were madeide ranging question and answer period:

responding to Cor this program

question of why expenditures jumped5 toil in

Mr* Clarridoe said

is hard to project expenditures since we are basically reacting to the situation on the ground.

Icosts could increase



Mr. Clarridge said our instructions are to maintain pressure on the Nicaraguan regime, and we have not made any plans to slow up on our expenditures anticipationunding shortfall in funds.


We have notecision within the Administra tion whether to scale down activities, or seek additional funds beforeil runs out.

have not held discussionsthe shortage

(k) There has been public discussion in the We believe, however, that leaders In the

region have focused on the need for our Hicaraguan


(1) Nicaragua is supporting guerrilla movements in Costa Rica and Honduras, and has indirect links with tha Guatemalan insurgency.



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