"The CIA official [Raymond] discussed the transfer with [CIA Director] Casey and NSC Advisor William Clark that he be assigned to the NSC as [Donald] Gregg's successor [as coordinator of intelligence operations in June 1982] and received approval for his involvement in setting up the public diplomacy program along with his intelligence responsibilities," the chapter said.
"In the early part of 1983, documents obtained by the Select [Iran-Contra] Committees indicate that the Director of the Intelligence Staff of the NSC [Raymond] successfully recommended the establishment of an inter-governmental network to promote and manage a public diplomacy plan designed to create support for Reagan Administration policies at home and abroad."
During his Iran-Contra deposition, Raymond explained the need for this propaganda structure, saying: "We were not configured effectively to deal with the war of ideas."
One reason for this shortcoming was that federal law forbade taxpayers' money from being spent on domestic propaganda or grassroots lobbying to pressure congressional representatives. Of course, every president and his team had vast resources to make their case in public, but by tradition and law, they were restricted to speeches, testimony and one-on-one persuasion of lawmakers.
But things were about to change. In a Jan. 13, 1983, memo, NSC Advisor Clark foresaw the need for non-governmental money to advance this cause. "We will develop a scenario for obtaining private funding," Clark wrote.
As administration officials began reaching out to wealthy supporters, lines against domestic propaganda soon were crossed as the operation took aim not only at foreign audiences but at U.S. public opinion, the press and congressional Democrats who opposed funding the Nicaraguan Contras.
At the time, the Contras were earning a gruesome reputation as human rights violators and terrorists. To change this negative perception of the Contras as well as of the U.S.-backed regimes in El Salvador and Guatemala, the Reagan administration created a full-blown, clandestine propaganda network.
In January 1983, President Reagan took the first formal step to create this unprecedented peacetime propaganda bureaucracy by signing National Security Decision Directive 77, entitled "Management of Public Diplomacy Relative to National Security." Reagan deemed it "necessary to strengthen the organization, planning and coordination of the various aspects of public diplomacy of the United States Government. "
Reagan ordered the creation of a special planning group within the National Security Council to direct these "public diplomacy" campaigns. The planning group would be headed by the CIA's Walter Raymond Jr. and one of its principal arms would be a new Office of Public Diplomacy for Latin America, housed at the State Department but under the control of the NSC.
CIA Taint
Worried about the legal prohibition barring the CIA from engaging in domestic propaganda, Raymond formally resigned from the CIA in April 1983, so, he said, "there would be no question whatsoever of any contamination of this." But Raymond continued to act toward the U.S. public much like a CIA officer would in directing a propaganda operation in a hostile foreign country.
Raymond fretted, too, about the legality of Casey's ongoing involvement. Raymond confided in one memo that it was important "to get [Casey] out of the loop," but Casey never backed off and Raymond continued to send progress reports to his old boss well into 1986. It was "the kind of thing which [Casey] had a broad catholic interest in," Raymond shrugged during his Iran-Contra deposition. He then offered the excuse that Casey undertook this apparently illegal interference in domestic politics "not so much in his CIA hat, but in his adviser to the president hat."
As a result of Reagan's decision directive, "an elaborate system of inter-agency committees was eventually formed and charged with the task of working closely with private groups and individuals involved in fundraising, lobbying campaigns and propagandistic activities aimed at influencing public opinion and governmental action," the draft Iran-Contra chapter said. "This effort resulted in the creation of the Office of Public Diplomacy for Latin America and the Caribbean in the Department of State (S/LPD), headed by Otto Reich," a right-wing Cuban exile from Miami.
Though Secretary of State George Shultz wanted the office under his control, President Reagan insisted that Reich "report directly to the NSC," where Raymond oversaw the operations as a special assistant to the President and the NSC's director of international communications, the chapter said.
"Reich relied heavily on Raymond to secure personnel transfers from other government agencies to beef up the limited resources made available to S/LPD by the Department of State," the chapter said. "Personnel made available to the new office included intelligence specialists from the U.S. Air Force and the U.S. Army. On one occasion, five intelligence experts from the Army's 4th Psychological Operations Group at Fort Bragg, North Carolina, were assigned to work with Reich's fast-growing operation."
A "public diplomacy strategy paper," dated May 5, 1983, summed up the administration's problem. "As far as our Central American policy is concerned, the press perceives that: the USG [U.S. government] is placing too much emphasis on a military solution, as well as being allied with inept, right-wing governments and groups. "The focus on Nicaragua [is] on the alleged U.S.-backed 'covert' war against the Sandinistas. Moreover, the opposition " is widely perceived as being led by former Somozistas."
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