Pacification and Development Programs in Vietnam

Published by the Government Accountability Office on 1971-07-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)


                                              UNITED STATES GENERAL ACCOUNTING OFFICE
                                                      WASHINGTON, D. C.,20548

                                                                                                        FOR RELEASE ON DELIVERY
                                                                                                        Expected at 1O:OO a.m. EDT
                                                                                                        Friday,  July 16, 1971

                                            OYE V. STOVALL
                                               BEFORE THE

               Mr.     Chairman        and Members of the Subcommittee:

                         We are appearing             here     today         in response     to your       request         concerning

               the pacification                and development               programs     in Vietnam.

               ‘Origin          of CORDS

                         The operating            arrangement,              now known as ‘the Civil          Operations          i-ml
               Rural           Development       Support      (CORDS), grew out of an effort                      in 1967 to
               improve           the U.S.      capability           for     management of its       pacification             efforts

               by establishing                a single       line         of management responsibility               for     U.S.      teams

               and advisors            out in the regions,                   provinces     and districts          throughout


                         Previously           there   had been no effective                 mechanism       for    coordination

              .of the U.S,            pacification          activities           in the field      among the various

               military           and civilian        chains         of responsibility.            It was stated             at the

               time       it     was initiated        in May 1967 to be an arrangement

                          “to .provide for the integration    of Civil Operations    and
                          Revolutionary   Development Support activities      within MACV
                          -- to provide for single manager direction      of all U. S.
                          Civil/Military   Revolutionary   Development activities    in
                          the Republic of Vietnam.”
       It    was placed      under     the managerial          responsibility            of a Deputy,

with   the rank        of Ambassador,          responsible       directly         to the Commander,

U.S.   Assistance         Command, Vietnam             (COMUSMACW, for            the following         stated

reasons :

       “There were two basic reasons for giving the responsibility
       for the performance        of United States Mission field           programs
       in support of Revolutionary           Development to General Westmore-
       land.     In the first     place, it is the United States Military
       Assistance      Command, Viet-Nam,        which performs the supporting
       advisory    role to the Republic of Viet-Nam Armed Forces, who
       are primarily      responsible     for providing      continuous    local    .
       security,     the indispensible       first    stage of pacification.         In
       the second place, the greater             part of the United States
       advisory    and logistic      assets involved       in support of Revolution-.
       ary Development are controlled              by and provided through MACV.
       Therefore,      if unified    management of United States Mission
       assets in support of the Vietnamese programs is desirable,
       COMUSMACVis the logical           choice to direct       it.”

       Looking      back after        four     years     to the conditions            that   prevailed       in

,1967, the sometimes          conflicting         advice,      the uncoordinated             actions,       and

the lack      of any unified          management mechanism,                 the CORDS arrangement            that

was established           has in my view,         even with          all    its   imperfections,         provided

a vastly      improved      management.mechanism.

GAO Staff Document Titled      “Background    Information
on United States Participation       in Pacification      and
Development Programs in Vietnam”,        Dated July 1971

       On July      2, 1971, we transmitted                 to your        Subcommittee      a GAO staff

document,,     classif     ied “Secret,        I’ developed      from a survey          by our staff         in

Vietnam      concerning      United     States         involvement         in Vietnam’s      pacification

and development           programs     during     the period          from July.196.7        through

September      1970.

       Our efforts        were directed          toward      the development           of a working         docu-

ment which       would contain         facts     obtainable          for   a rather     complete


    description           of and perspective                     on the various             pacification            and development

    programs,          the extent          of CORDS participation                        in the programs,                the amounts

    and sources           of financing             for     such activities,                 and whatever            information            was

    available          to our staff              in Vietnam         concerning            progress         toward        achieving

    program       objectives.

              The document’is              being         used to provide                background         information            needed

    by our staff               for,developing             plans     for        more detailed         reviews            of specific

    CORDS activities                in ‘the future.                It        should     not be construed                as an audit

    ‘report      of the General             Accounting             Office        but as a useful             information             docu-

    ment 6       It    has not and will                  not be subjected                to the strict             review        processes

    normally          applied       to our reports,                and it        has’ not been submitted                    to the

    ‘responsible              agencies     for     official             comment.         The security             classification

    applied           to the document             is based primarily                    on the classification                    shown in

    source       documents          from which            the,information                was obtained             in Vietnamc

              Normally          a document‘of             this     type        is not released             for     use outside

    our’ office.               However,         because       of the current               significance            of these

    activities           it     occurred         to us that             it    might     contain      information            of present

    value      to personnel              in the Departments                    associated         with     CORDS activities                 and

    to those           Committees         of the Congress                    having     need for         such background

    information               and perspective             on the CORDS activities.

              When we transmitted                  copies         of the classified                document             to the

    Secretaries               of State     and Defense             and the Administrator,                        AID,     on July      1,

     1971, we requested                  that     we be advised                of any inaccuracies                 which     the staffs

    of those           agencies       might       observe         in it.

              Our statementshere                  today       are drawn primarily                  from that             document      which

    is classified               and accordingly               is subject              to restrictions             on release          of

    classified           information.

Pacification            ProPramS

         Basically,         the pacification                  programs         are programs         of the Republic

of Vietnam.             As previously             stated,       much of the monetary                 support     for      the

programs        comes from            the United        States         but the programs             are Vietnamese


         The 1969 Pacification                    and Development               Plan was the first             attempt        by
the Government            of Vietnam          to pull          all     elements       of pacificationtogether.

The Plan was a continuation                        of the prior               pacification        campaigns      and

placed        special     emphasis         on the role               of all      the people       as participants             in

the military,            political,         economic,           and social           efforts,        These efforts

were aimed at defeating                    the enemy, restoring                    public       security,      and

ultimately         in establishing                stability           in the Republic            of Vietnam.         ‘Under

the    1969 Plan,         the Government              of Vietnam              deployed       the Regional       Forces,

Popular        Forces,      and Rural         Development              Cadre in as many contested                    or

Viet     Cong controlled               villages       as possible,

         The 1970 Plan was directed                         toward      involving        people      in the Villages

and Hamlets           in the national              struggle.            The Plan has eZght              objectives         as


         1.      Territorial       security
         2.      Protection      of the people against        terrorism,
         3.      Peoples self defense
         4.      Local administration           of government
         5.      Greater national         unity
         6.      Brighter    life    for war victims
         7.      Peoples information
         8.      Prosperity      for all
        These objectives               are aimed at achieving                       a smooth continuation                 of

 the 1969 Plan,             but with         renewed effort               to:

           --eliminate           the remaining           Communists             political        and military

        --provide          effective          security          for      100 percent          of the people;

        --increase           the quality          in performance                 of the main tasks;

        --build  and develop                  the rural          areas,         cities       and areas       bordering
           them; and

        --vigorously              develop      a local          community          development          spirit.

        The 1970 Plan was divided                        into         three     phases:        Phase I ran from

 January         1, 1970, to June 30,              1970; Phase II                  ran from July            1, 1970, to

'October         31, 1970; and,the             Supplementary                  Phase covered          the    last    two months

 of the year         and was extended              into         the first          two months          of 1971.

        On May 30,           1970, the Government                      of Vietnam           issued     a Special      1970

 Pacification          and Development             Plan.              The Special           Plan set forth          two


           (1)     complete in four             months          all     the works           included       in the
                   1970 Plan, and

           (21     develop morale and material  factors to assist    the village
                   on its way to future economic and financial    self-sufficiency,

        The Government              of Vietnam           stated         that     the Special           Plan was issued

-I'* * * to restore              the momentum that                    characterized           the implementation               of

 the programs          in 1968 and 1969."

        The 1971 Plan,              titled      "Community              Defense          and Local      Development        PlanIt

 is a follow-on            to the      1970 plans,              and will         cover       the period       of March 1,

 1971, to February               28, 1972.         It     has been revised                   somewhat by consolidating

 the eight         objectives        in the 1970 Plan into                       three       broad objectives:

Self    Defense,          Self    Government,            and Self             Development.
CORDS Organization                  and Personnel

           The Commander; U.S.                    Military           Assistance          C-and,               has overall

responsibility               for    U.S.         Pacification               and Development                  assistance         and

administers            the programs               through           his     Deputy      for     CORDS, Chief              of Staff,

and the Assistant                  Chief         of Staff           for     CORDS.

           At the Saigon            level,          CORDS has 11 directorates                           which         advise         the

Government          of Vietnam’s                 Ministries               and perform          the staff             and adminis-

trative         functions.           These directorates                        are under          the control             of the

,Assistant         Chief      of Staff            for     CCXZDSand are manned by both military

personnel          and civilians.                   CORDS field              personnel          are under             the direct

control         of the Deputy              for      CORDS. The organization                            in the field             is

similar         to CORDS Saigon                  in that       each of the four                  military             regions        has

staff       advisors         organized            along       the same functional                      lines         as the Saigon


           CORDS had about            ,13,300 personnel                      at July          1, 1970.          The staffs             were

composed of U.S. military                          and civilian                personnel;             local     national         empl.oyees

of Vietnam;          and third             country         nationals            from such countries                     as the
Philippines,           Korea,        etc.          Over 80 percent                  of the assigned                  personnel             as

of July         1,. 1970, were assigned                       to field          activities             outside         of Saigon.

CCRDS Financial               Programs.

          When CORDS was established                           it     was decided              that     it     for     the most

part      would     receive         services,             supplies           and needed materiel                     directly

from its          supporting         organizations.                       Accordingly,           it     dSd not establish

any central          accounting             or budget               or funds        control           mechanisms          of its

OWn.       It    drew directly              as needed upon its                      supporting               organizations,

principally          the military                 services          , and used their                  employees         including

military         personnel          to carry            out its           activities.

          In late         1970,    the Saigon Headquarters                         of the Agency for                    International

Development            and the Joint               U.S.      Public     Affairs        Office          still          operated

,independently             of CORDS for             programs          not related         to pacification,                     but

their      field,staffs            fall      under         CaDS for         all     assistance               programs.           Since

the bulk        of the resources                   for     pacification            support       were and continue                     to

be provided            by the military,                   the Commander, United                  States          Military

Assistance            Command, Vietnam,                   was charged        with      the leadership                   of the pro-

gram under            the overall           authority          of the Ambassador.

          The combined            financing              of the CORDS programs                  for     the three           years

1968 through            1970 totaled               about      $4 bfllion.            The United                States     budgeted

approximately              $2.1 billion,                 and the Government             of Vietnam               budgeted         the

equivalent            of about        $1.6 billion.               Also,      the equivalent                    of about        $300

million       was made available                    from U.S.-owned                or controlled                local     currency

‘(plasters      1 accounts.               This       local     currency           was generated                under     other       U.S.

dollar       financed        assistance             programs.

          Approximately            $3.2 billion               or 80 percent            of these              funds      were

budgeted        for     Territorial               Security       or related          military           programs.              Other

uses for       which        the funds             were budgeted           were:        Establishment                   of local

government , $3 28 million                        or 8 percent;           Brighter        life         for      war victims            or

refugee       programs,           $141 million               or 4 percent;            General          support,          $202

million       or 5 percent                (General         support      involves         such things                  as CORDS

technical        support          - personnel              support      and Air        America);               Funds in lesser

amounts amounting                 in each case to 1 percent                         or less           of the total             were

budgeted        for     People’s           self      defense      force;          Prosperity           for      all     or civic

action;       Greater        national             unity      or Chieu Hoi;            Protection               from terrorism

or Phoenix;            and People’s               Information          Program.

                                                                                                                                     -7     -
        Under the present                      CORDS organization                       the eleven           individual           direc-

torates,        to the extent                  that      they       desire        it,     must obtain            their        financial

information             from      the agencies               (Military            servicep,           AID,     and CIA) which

support        their       programs.              This       is a time-consuming                      task     for      them and in

scme cases is avoided.                          During          our survey,              we received           incorrect             and

conflicting             figures         from      the CORDS directorates.                             We also         found         that

some of the responsible                          officials            in the directorates                     were unaware                 of

the amounts             obligated          under         their        programs,           and in some instances                        did

not know ‘the amounts                    in’ their           budgets.             In discussing               these       matters           in

Saigon        our staff           suggested           to officials                there        that     procedures            for

central        management and control                           of budgets              and obligation               data were

needed,        as we,11 as procedures                        for      obtaining           obligation            data      input        on a

regular        basis       from the contributing                          agencies.             At the sonslusion                    of our

survey,        C(;RDS informed                 us that           steps     were in process                   to receive             and

record        financial           data         on a regular              basis.

          We believe             that     it     is now time              for       a fuller          reassessment             of the

milit’ary        and AID financing                    arrangements,                  not only          in Saigon but also

at the Unified                  Command and Department                          levels.         We believe             this     is needed

to clarify             fiscal       responsibility,                   an d to overcome                 the     lack      of adequate

central        financial            records           in CORDS. What may have been most expedient

under       the earlier             circumstances                   should,         in our view,             be fully          reconsidered

now in the             light      of the changing                    conditions             and the prospective                     shift

toward        economic           and rehabilitation                      efforts.

           In this        regard         we would            like     to express             caution         about       the degree              of

reliability             of any presently                   available              overall         documents           or reports

purporting             to contain              completely            reliable           figures        on program             costs

                                                                                                                                                 - 8 -
 associated           With     these         operations.         We have seen several                    differing         sets

 of figures           as indicated              on page 142 of our document.                          This     further

 supports          a conclusion              that     the system         of financial            accountability            and

 financial          reports          on CORDS oberations             needs to be reassessed                       and


 Sourcesof            U.S.     Contributions

           U.S.     resources          are contributed             through       the appropriations                    of the

 Department           of Defense9             the Agency for             International            Developmen.t,           and

 the Central           Intelligence                 Agency,    CORDS rciiceives            rescmxes            in the fom

 of funds,          personnel          and materiel           directly        from       these      organizations              or

 from the individual                   budgets          of subordinate          U.S.      organizations               in South

 Vietnam          and the United              States.

           The U.S.          funds     used to suppart             the C         S organization                are not

 appropriated              for, CCRDS as such but instead                       are appropriated.               for      the

 function          being      performed.              For example,         Department            of Defense           appro-

‘priations          which      account         for      some 86 percent          of U.S.          C      S funding         ara

 from appropriations                   for      operations       and maintenance,                 mil,it,ary      personnel

 and major          equipment          items.

 Program          abfectfves          and Results

           The 1970 pacification                      and ~eve~~pme~t           pragr            objecctives,          and:the.

 results          thereof,      according             to CCRl3S @an be:, s

           1.      The first     objective    is to provide effective     territorial
                   security    for 100 percent of the population.           By June 30,
                   1970, some degree of security          had been provided for 91.1
                   percent of the Vietnamese population.            The Government’s
                   Regional and Popular Forces assisted          by Free World Forces,
                   and Vietnamese regular        forces,   the National   Police,     and
                   other civilian~forces        have principal   responsibility       for
                   territorial      security.    The Regional and Popular Forces
                   were expanded by over 115,000 during the 18 months ended

                                                                                                                                    - 9 -
     Jurk 30, 1970, and have been provided modern weapons and
     equipment.     The National   Police are also being prepared to
     assume a greater     role in territoriaL   security, and CORDS
     has attempted    with limited    success to increase both the
     quality    and number of pokice.

2.   As a supplement to the territorial    security program the
     Government is attempting   to improve the organization,
     training,   and equipment of the Peoples Self Defense Force.
     The Peoples Self Defense Force is a civilian    militia  whose
     missi.on is to defend the hamlets.   The goal of organizing
     2.7 million   members by June 30, 1970, was exceeded by

3.   The Government of Vietnam is also decentralizing               government
     administration   and permitting     village     and provincial      govern-
     ments more authority     in local matters.        As of.May 31, 1970,
     1,953 of about 2,000 villages       had elected officials.           CORDS
     is assisting   in developing     the capabilities      of local officials
     by providing   extensive   training     programs and deploying        Rural
     Development Cadre to organize and assist village               governments.

4.   Closely related    to the development     of local government is
     the program to involve     the people and local governments in
     economic development projects.       During the first    seven
     months .of 1970, 8,500 Village     Self Development projects
     were started    and during the first    nine months of 1970, 511
     province   level projects   were started.

5.   Under the Chieu Hoi program the Government attempted    to
     induce 40,000 of,the enemy to rally to the Covernment”.s
     cause during 1970. Only 65 percent  of the goal for the
     first half of 1970 was achieved.

6.   The Government’s       Phung Hoang- _.
                                          program is directed         toward
     neutralizing    members of the Viet-Cong        Infrastructure,         the
     leadership    of the Communist insurgency.           As of. August 31,
     1970, 13,708 members had been neutralized              during the year.
     Attempts to improve neutralization          results     have included
     formal training      programs ) targeting     specific     individuals
     in the Infrastructure,       preparation    of dossiers       on known
     members of the Infrastructure,          and emphasis on the timely
     processing    and trial    of detainees.

7.   The Government has also attempted        to establish      an effec-
     tive people’s    information    system to explain the Covern-
     merit’s programs and elicit       public participation.       This
     goal was being pursued through face-to-face             communications,
     indoctrination     courses,  television   and radio programs,films
     and distribution      of pamphlets and magazines.
          8.   Finally the Government is attempting to improve the life
               of war victims by assisting them to resettle in new areas
               Or return to their original villages.      The June 30, 1970,
               goal was to pay full resettlement allowances to 101,825
               refugees and to pay full return-to-village     a%l,owances to
               another 273,514 refugees.    As of June 20, 1970, only
               44,591 war victims had received their full resettlement
               allowances and only 105,448 had recellved their full return-
               to-village   allowances.  The primary reason for the shortfall
               was that large numbers of new refugees were generated in
               1978 and the Government's resources were diverted from the
               normal'programs to provide emergency relief.
          As a result   of CORDSassistance,    the Government of Vietnam has

     achieved a degree of success in its pacification       aad development efforts.
     However, we observed a number of Froblems common to many of the Govern-
     ment's programs, which have hindered the full.      achievement of objectives.

     We noted that:
          --There is a shortage of qualified     leaders in the Regional
x            and Poptil-ag,Forces and the National Police.
          --Military  priorities   have also adversely affected the
            retention and recruiting    of qualified  personnel by civil
          --The Regional Forces and the Rural Development Cadre were
             not deployed in accordance with the instructions    contained
             in the Pacification   and Development Plans. The Special
             Pacification   and Development: Plan emphasized the deployment
             of Regional Forces in mobile offense missions.     We observed,
             however, that little   success has been realized in redeploying
             the units.
          --Pay and allowances of the Government's military         and civilian
             personnel are considered by C S to be bow cl believe this
            ,has contributed      to desertions in the rn~~~~~~ycorruption by
             civilfan   officials    and the inability   of civil agencies to
             recruit and retain qualified       personnel.
          --The Government, in some instances,      has not provided    adequate

                                                                                   - 11 -
       --There has been poor cooperstion between Government of
          Vietnam officials   in implementing Government policies.
          This has been particularly   true in the Phoenix program
          in which the lack of inter-agency cooperation has been
          one of the more significant    factors hindering program

       These problems have been recognized by CORDSand in some instances
remedial measures have been developed.
       Recent articles         appearing in the press since July 10, 1971, conveyed

an implication       that our survey of the Pacification          'Program had disclosed
that $1.7 billion        of the funds available       for that program were lost.
This was a misinterpretation           of statements contained      in our survey document.       i
cln page 137 'of that document we said:
              "We were unable to obtafn obligations    for $1.7 billion   of
       the $2.1 billion    budget shown above. The largest part of.this,
       about $1.3 billion,    was budgeted to provide military    hardware
       and other commodities to the Regional and Popular Forces under
       the Military   Assistance Service Funded program. Because this
       program also provides commodities to other Vietnamese military
       organizations    and records segregating deliveries   to the Regional
       and Popular Forces are not maintained, we were unable to obtain

The point we were developing           in our survey was the fact that the overall
operational      costs for the various      programs administered      by CQRDSare not

available      at CORDSnor to the best of our knowledge anywhere else.               In
other words, we are concerned that the absence of adequate fiscal                  control
over the operating           programs of CORDSis a serious weakness which could
permit the misappropriation           of equipment , materials,     and supplies   without

a,lerting   management in a timely manner.
      We did not intend for our statements to infer               in any way that we

believed      $1.7 billion      of funds were lost.     It is our belief,    however,

that in the absence of adequate financial              controls   at CORDSit would be

                                                                                           -12-   I

    , *

          very    difficult        if   not impossible               to accurately      reconstruct          the value

          of and disposition                of equipment , supplies             and services          that    have been

          furnished           by the U.S.      for      the operating        programs      of CORDS.


                  To summarize--we             believe        that     the main elements          and related         ques-

          tions    pointed        up by our survey             are:

                  1.     CORDS, as the organization         responsible     for administering
                         the U.S. pacification        program in Vietnam, has not been
                         given responsibility       for financial      stewardship   and
                         accountability      for the costs of the programs it administers.

                         We believe   that CORDS or any other U.S. organization         respon-
                         sible for managing a foreign    assistance    program, should not
                         be exempted from the integral     and very important      part of
                         that responsibility  that relates     to financial    stewardship
                         and accountability.

                         The military’financial    budgeting and accounting   system does
                         not provide information    as to the portion  of the materiel
                         supplied    from the U.S. military  pipelines into the CORDS

                         We believe          the system         should     be modified         to provide      such

                  3. ‘.The present system results        in a blurred    distinction of
                       accountability      between the respective     U.S. military  services,
                       Free World,military       forces,   the Vietnamese armed forces,     and

                         We believe    that consideration       should b,e given to the more
                         fundamental     question     of whether an operation    such as’a U.S.
                         foreign   assistance     program or CORDS should have adequate
                         financial   control     relatable    to that foreign   assistance

                  We expect        to look          further     into     the system      for    financing      and controlling

          the CORDS operatkon                and plan         to make reports        to the Congress           on the results

          of our work.
       This              our statement,
              CCYIIC~U~~~S                         Mr. Chairman.    As I indicated       earlier,

it   is based on the initial            survey    work pergormed   by our staff      in Vietnam.

Much of the supporting         detail      is    classified,   but to the extent      that   we

can we will     be glad   to answer questions.

                                                                                                    - 14 -