U.S. Denies That Salvador Aid Is Misused

The State Department on Monday denied charges by three congressmen that U.S. economic aid to El Salvador is secretly being used to fund the nation’s war against Communist rebels and that some of it is being stolen by corrupt Salvadoran government officials.

Department spokesman Charles Redman said that U.S. foreign aid officials “have consulted fully with Congress on all of our aid programs to El Salvador” and that repeated government audits have shown the assistance programs to be “well managed.”

The three lawmakers--Sen. Mark O. Hatfield (R-Ore.), Rep. Jim Leach (R-Iowa) and California Rep. George Miller (D-Martinez)--made the allegations of misspending in a 34-page report on U.S. aid to El Salvador sent Monday to a congressional caucus on foreign policy.

The report contended that the $500 million in annual assistance to El Salvador has failed to reverse either a long decline in the nation’s economy or increasing political instability caused by a seven-year war with the guerrillas.

Two-thirds of the $1.4 billion in U.S. aid allotted since 1985 has been spent on the guerrilla war, the report alleged, including some cash assistance and U.S.-backed loans that the State Department had certified as non-military.

Redman said that the charges are unfounded.

“U.S. economic assistance to El Salvador is directed to economic and social development of the types the caucus itself recommends,” he said. “In accordance with U.S. policy, none of it is under the control of the Salvadoran military,” although a “small portion” of U.S. aid is used to repair guerrilla damage to power stations, roads and other essential Salvadoran operations.