SUNDAY, NOVEMBER 20, 1966
'THE MICHIGAN DAILY
THE M1CHI~AN DAILY £ £3~JI~e ££aL~ILR~
rAUrr. "ttin ts
EDITOR'S NOTE-While Am
ican and South Vietnamese s
diers fight in the jungles, a sm
minority of South Vietnamese a
Americans are making a profit
of the war by at least half a m
lion dollars daily-perhaps mt
more. Profiteering, graft and c
ruption are costingU.S. taxpay
millions. A team of Associa
Press reporters wor king
months has uncovered numer
cases of graft, theft, and bribe
SAIGON, South Viet Nam (R
Among the traditional by-produ
of war are theft, bribery, bl1
marketeering, currency manipu
tion and waste.
In the Vietnamese conflict th
corrosive influences on the cc
science and economy of a nat
have developed on an unpre
dented scale for the size of
A two-month study by a te
of Associated Press reporters fou
that hundreds of millions of U
taxpayer dollars have gone, a
are going, down the drain.
Despite several congressional
vestigations and many lesser s
dies, no offical measure of sa
losses has so far emerged.
On just economic imports a
er- post-exchange supplies alone the
sol- loss figure which crops up most
nall often is 20 per cent.
ind The figure of five per cent is
out consistently cited as the probable
nil- loss in straight military aid items.
uch Based on the $715-million an-
or- nual economic aid and surplus
ers food programs and a PX supply
ted inflow of nearly $150 million a
for year, a 20 per cent loss in those
ous areas alone would mean a U.S.
y taxpayer bill of $175 million in
) thefiscal year that ended in June
lcts or nearly half a million dollars
ack daily. And that was only one year.
ila- A five per cent loss on military
aid would translate into even more
ese colossal sums.
on- In the past 10 years, the United
ion States has spent more than $5 bil-
ce- lion in direct economic and mili-
the tary aid to South Viet Nam. That
does not include the billions now
an being spent on the massive Amer-
nd ican involvement in the fighting.
.S. Within the past fiscal year, U.S.
ind aid to keep the South Vietnamese
army in the field and to prop up
in- the civilian economy has drawn
tu- about $1.2 billion from the U.S.
Losses have reached such high
ind proportions that the problem was
reported by several sources to have'
been the subject of a secret meet-
ing between President Johnson,
Premier Nguyen Cao Ky of South
Viet Nam and top U.S. aid offi-
cials in Manila during the Presi-
dent Far Eastern trip last month.
At the conference, a single in-
surance company reportedly was
cited as having received $4 million
in loss claims for economic aid
items alone in a 120-day period.
There were suggestions that a
smuggling ringwas at work, with
tentacles extending to Singapore,
Burma and other Asiatic points.
In Washington, an official of
the U.S. Agency for International
Development -- AID - discounted
the smuggling ring idea, insisting
that the evidence pointed to R a
multitude of small, independent
But the spokesman said no pos-
sibility was being ruled out in at-
tempts to plug the leaks.
An Associated Press team found
a wide range of open theft, cur-
rency, manipulation, black mark-
eting, bribery, profiteering, pay-
offs scrounging and similar ma-
chinations both petty and vast.
Episodes covered a spectrum from
South Vietnamese "ghost battal-
ions" with padded payrolls of the
disappearance of cases of beer-
and an entire coastal freighter
loaded with cement possibly by ac-
cident, possibly by design.
Clearly the great majority of the
people in Viet Nam were figthing
the war and'trying to make an
honest living. The malefactors
were the minority, but a busy one.
A few examples of what the AP
" A stolen U.S. Army generator
lighting a Saigon night club.
" U.S. irrigation pumps intend-
ed for the rice-growing delta in
use by privately owned car wash
" A truck piled high with PX
goods wending its way through a
narrow alley, where a wire strung
overhead lops off the top packing
" Counterfeit U.S. militar y
scrip and bogus PX cards appear-
ing almost as fast as the real
" A minority of unscrupulous
Americans, both civilians and sol-
diers, skimming off millions wheel-
ing and dealing in U.S. dollars and
Vietnamese piasters while the
majority of American soldiers
fought and died in jungles and
* Pilferage - by both Viet-!
namese and Americans -- adding
millions to the cost of projects
undertaken by private U.S. con-
* Persons in high and low
places in the South Vietnamese
military structure feathering their
nests by siphoning off U.S. aid
0 One small ship loaded with
cement and other building ma-
terials simply disappeared some-
where off the Viet Nam Coast.
Whether it was boarded and seized
by thieves, deliberately diverted
from its Saigon destination or
went to the bottom accidentally
is still officially unknown.
0 Across the river from Saigon
is a pirate peninsula called Ah
Khanh which provides an open
base for receiving stolen and
smuggled goods free of interven-
tion by customs agents.
Two salient points emerged
from the AP study:
1. The United States probably
will never know how much of its.
goods have been stolen, how much
of its supplies, materials, food-
stuffs and direct financial aid has
been misused in Viet Nam.
The reason? Until recently, rec-
ord keeping was haphazard or
nonexistent. Audits now getting
under way are considered with the
present and the future, not with
In the case of military aid to
South Viet Nam, there has not
been an audit since 1960, a period
in which $2 billion was spent
training and equipping the Viet-
namese army, navy, and air force.
"I would shudder at the prob-
lem of trying to reconstruct what
happened to all that tonnage we
pumped into Viet Nam during the
buildup last fall and winter," said
a top investigator for the General
"There was an almost total lack
of record keeping."
The GAO acts for Congress as
a watchdog over the spending of
2. No matter how many con-
trols and safeguards the De-
fense Department and AID ap-
ply, the South Vietnamese gov-
erinent, -military and business
structures are likely to continue
as sieves through which millions
of American dollars will leak out
In rice imports paid for in Amer-
ican dollars, to cite just one ex-
ample, there are no real Ameri-
can controls-only occasional spot a week in the jungles along bit-
checks once the bags clear the terly contested Highway 13, risk-
customs house. There are indi- ing ambush and sniper fire, mines
cations that much food, lumber, and mortars, to protect the long
medicines and fertilizers never line of more than 700 trucks.
reach the poor, but go to enrich The strategic convoy should have
provincial and district officials. made the French planters in the
And some items reach the Viet border provinces happy.
Cong. The trucks brought rice to feed
Why such slender U.S. control the thousands of people living off
over so vital a program? Because the plantations, and they brought
South Viet Nam is still regarded nearly a third of the area's an-
as a sovereign country, despite the nual rubber production to the Sai-
overwhelming American presence. gon docks, 80 miles away, without
Short of abrogating this sov- a cent of "taxes" being levied by
ereignty, an AID official said. "the the Viet Cong.
only way to plug the leak would But the planters were far from
be to post an American at the happy. They told the Associated
side of virtually every South Viet- Press investigators that officers of
namese official or businessman the South Vietnamese forces had
involved-an obvious impractical- extracted a rakeoff equal to about
ity, an impossibility." $10,000 in American money.
Waste and corruption have been In addition, a delegation of non-
a part of, every war, but Viet commissioned officers called at the
Nam provides some bizarre and office of one plantation and de-
startling touches of its own. manded a contribution to the di-
In the second week of October, vision's "social welfare fund."
the biggest convoy of the Viet± Plantation officials declined to
Nam war moved several hundred say how much was coughed up,
truckloads of rice to the rubber- but one indicated the combined
growing provinces on the Cambo- payoff more than tripled the cost
dian border and 2500 tons of rub- of getting the rubber out. The only
ber back to Saigon. consolation was that the Viet Cong
Four battalions of infantrymen would have taken twice again as
from the U.S. 1st Division spent much in tribute.
SOFIA, Bulgaria (P)-Bulgaria
claimed yesterday that its proposal
to hold a conference of the world
Communist movement for denoun-
cing Red China's leaders had won
The claim came at the close of
the Bulgarian party congress that
had drawn representatives of
Communist parties from around
the world. It indicated that the
Soviet camp in the divided world
Communist movement intended to
press ahead with the controversial
One informed Bulgarian said,
however, that there were signs the
Soviet Union might hesitate to
keep up the pressure for a confer-
ence that was generated at the
past week's congress No date of
site for the conference has been
However, teonid I Brezhnev,
General Secretary of the Soviet
Communist party, endorsed the
conference call in a' speech Tues-
day, saying a conference was "a
vital necessity today"
Another Communist source said
the next big gathering of Com-
munist parties, beginning Nov. 28
at a Hungarian party congress,
would not emphasize the confer-
At least six important parties-
those of Romania, North Viet
Nam, . North Korea, Cuba, Italy
and Japan-oppose the idea. They
do not want to be forced to choose
between Moscow and Peking.
The conference opened last
Monday with the Bulgarian par-
ty's First Secretary Todor Zhivkov
calling for a conference and closed
yesterday with his claim of ap-
Reshuffle Predict UN General Assembly
Viet Military,To Conduct 'Peking Seat' Study
Cabinet Posts UNITED NATIONS, N.Y. (;P) -
Some diplomats saw a chance
Report Transfers jyesterday that the current General
Assembly would call for a commit-
In Official Positions tee study of the U.N. China-seat-
ing problem in spite of the ex-
To Occur in Future pressed opposition of many in the
SAIGON p)--The South Viet- pro-Peking faction.
namese government yesterday an- A resolution for that purpos,
nounced the transfer of eight high promoted by Italy, will be submit-
military officers, including the-
appointment of one to Premier
Nguyen Cao Ky's cabinet.O a e
A new Ministry of Planning
and Development was created for
Lt. Gen. Dang Van Quang whoI
had commanded the 4th Corps By The Associated Press
in the Mekong Delta. WARSAW.Poland--Sen. Joseph
ted tomorrow. Delegates working
on it would have the assembly
elect a still unspecified number
of high-level world statesmen to
study the question of China's U.N.
representation and report back
next year with proposals for a
One of them told a reporter he
believed the resolution would get
MOSCOW-The Soviet Union
will sart a series of rocket tests
in the Pacific today, the official
Tass news agency announced.
It warned ships and aircraft to
keep out of an area 80 nautical
miles in diameter, roughly 200
miles east of the American Jarvis
Tass said the tests will last until
* * * '
CHICAGO-A second union, the
Brotherhood of Locomotive Fire-
men and Enginmen, voted accept-
ance yesterday of a five per cent
wage boost offer from the nation's
a passing majority of the votes in
the 12-nation assembly. He said
the majority would include some
of the 47 countries that voted last
year for seating Communist China
in the United Nations; a substan-
tial part of the 47 that voted
against that, and a substantial
part of the 20 that abstained,
Other diplomats said the United
States would accept the resolution
and it probably would pass if lan-
guage was eliminated from pre-
liminary drafts that might look
like an order to the committee to
recommend the seating of Com-
Those drafting the proposal re-
ported that its preamble still call-
ed for U.N. membership and for
a solution of the Chinese repre-
sentative question that would take
into account "the political reali-
ties." They said they would meet
again early Monday to put the text
into final form. The vote is ex-
pected a week later.
A U.S. delegation spokesman
would say only that Arthur J.
Goldberg, U.S. ambassador, was
"continuing his consultations" on
the China issue and would "reflect
our well-known position" on it in
a speech to the assembly tomor-
PRESIDENT GOES HOME. President Johnson leaves Bethesda Naval Hospital, with a daughter
Lynda, after undergoing surgery Wednesday. The President took a helicopter to his Texas ranch
for a brief rest.
U.S. AidsGovernment Uni
In Fight Against. Communists
The military shifts came one
day after appointment of new
ministers of youth, education and
social welfare, the creation of a
new Ministry of Culture and split-
ting the Economy Ministry into
separate ministries of Commerce
and Handicraft and of Industry.
Reports circulated in Saigon
that further cabinet changes were
As 4th Corps commander, Qu-
ang wielded considerable local
power and was regarded as a
possible threat by some in Ky's
regime. Informed sources say Qu-
ang, who is an able combat com-
mander, has national political am-
There has been speculation that
a change of command in the 4th
Corps area might open the way
for U.S. troops to start opera-
tions in the strategic delta.
rvCiW.L r, +vwau + a. w a
S. Clark, D.-Pa., quoted Polish of-
ficials yesterday night as having
said they believed Hanoi would
agree to negotiate for peace in
Viet Nam if the United States.
again stopped bombing North Viet
"Their general view is that if
we stop the third time, the North
Vietnamese would agree to nego-
tiate," Clark said.
* * *
LAS VEGAS, Nev.-The Atomic
Energy Commission yesterday
postponed indefinitely the large
underground nuclear test sched-
uled for tomorrow morning at its
Nevada test site.
BANGKOK, Thailand OP)-U.S.
helicopters and advisers-without
getting involved in actual fighting
-are helping Thai government
units battle Communist forces
operating within Thailand, reliable
informants said yesterday.
The informants indicated that
U.S. support to the Thai counter-
insurgency forces had been going
on for some time. They added that
there were Americans in the field
serving as battalion advisers. The
informants added these advisers
sometimes went out on operations
with the Thai battalions chasing
Fear of Neo-Nazismn
the roving Communist bands'
notably active in the country's un-
The informants said, however,
that this arrangement was not
new and said that three yearsl
ago there were more American ad-
viers with Thais than now.
These advisers are attached to
the joint U.S. Military Advisory
Group USMAG to Thailand.
The advisers serve with the Thai
army, navy, air force and police.
The informants said a group of
365 U.S. Special Forces - Green
Barets - arrived in Thailand
nearly a month ago and are now
headquartered at Lop Buri, 75
miles north of here. Their mission,
the informants explained, is to
train the Thai regional and border
police as well as the army on
The sources said American-pi-
loted helicopter companies based
at Udorn and Nakhon Phanomare
were airlifting Thai counterin-
surgency units to operational zones
to fight the.Communists.
The sources, however, reported
that these helicopters were un-
armed and so far there were no
reports that any of these choppers
had been hit by Communist fire.
American helicopter companies
based at Udorn and Nakhon Phan-
om are also engaged in rescue
operations to recover American
pilots downed over North Viet
It was explained that these hell-
copter airlifts were only a tem-
porary arrangement that woud
continue until. enough Thai crew-
men had completed their training
on the handling of their Amer-
The latest involvement of a U.S.
helicopter. airlift was reported to
have taken place the past week
where a fairly large Thai military
operation was reported under way
in the jungles of Nakae district, in
the northeast. The operation was
launched after a band of Commu-
nists had attacked a Thai police
unit last weekend.
MUNICH, Germany (P) - The
rightist National Democratic par-
ty predicted yesterday it would
win 8 to 10 seats in Sunday's
Bavarian state legislative election.
Such a result would touch off a
new wave of concern at home
and abroad that neo-Nazism was
on the rise.
Party leaders, though preach-
ing a nationalist line with Nazi
echoes, have denied allegations
that the party was a Nazi suc-
cessor organization. No secret has
been made, however, of the for-
mer Nazis in party ranks.
The . Bavarian election comes
just two weeks after the National
Democrats s h o w e d surprising
1 strength in the Hesse state elec-
tion, polling 7.9 per cent of the
vote and winning its first seats
in a state legislature.
Adolf von Thadden, the party's
deputy national chairman, told a
newsman the party was confident
of winning 6 to 7 per cent of the
total Bavarian vote and of clear-
ing the 10 per cent hurdle in
two of Bavaria's seven election
districts. The rightists are ex-
pected to gain chiefly at the ex-
pense of the smaller parties in
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