U.S. Weighing Cash Grants to Contras for Food

The Reagan Administration, frustrated by its inability to airdrop food to Contra soldiers in Nicaragua, has concluded that the only effective way of feeding the rebels is to give them a cash allowance of 50 cents to $1 a day, an Agency for International Development official said Monday.

The official, who asked not to be identified by name, said that AID has already shipped about 300 tons of food to Contras encamped in Honduras but that “we can’t reach those forces in Nicaragua, and that’s the vast majority.”

He said that AID Administrator Alan Woods will decide this week whether the U.S. government will go ahead with the cash-grant program. The official said that the agency would prefer to provide food instead of money but that the staff has not been able to devise an alternative to the cash system.

“I think we are very inclined to do this, but the final decision has not been taken,” he said.

AID has been unable to deliver the congressionally approved assistance because Nicaragua’s Sandinista government contends that the shipments would violate the truce now in effect.

The official said that many Contras in Nicaragua have bartered uniforms and other equipment for food, taken food at gunpoint or begun to move back to Honduras, where food is available. From the U.S. viewpoint, he said, all those options are bad.

No Precise Figure

The official said that the meal-money plan would cost $60,000 to $450,000 in the first month. He declined to be more precise because, he said, that would reveal Contra troop strength inside Nicaragua.

He said the plan calls for AID to transfer funds into an account controlled by Contra leaders who would be authorized to draw out money to make the food grants. He said the dollars would be converted into Nicaraguan cordobas or, possibly, into the currencies of other Central American countries where there are no prohibitions on the black-market sale of cordobas. A dollar fetches much more in cordobas on the black market than it does at the Nicaraguan government’s official rate.

The official said the system contains a built-in protection against embezzlement and corruption because “people would know they were entitled to something, and if they didn’t get it, you can bet your bottom dollar you would hear about it.”

He scoffed at suggestions that the meal money could be diverted to the purchase of military equipment. Under the legislation, the U.S. funds cannot be spent on weapons.

“They already have guns,” the official said. “What they need is food.”

The official also said the U.S. government will spend about $333,000 a month to pay “family assistance” to Contras. He said most payments will be between $50 and $100 a month, although some could be substantially higher. Allowances will be based on the rank and “special skills” of the individual Contra. He said Contra leaders stationed in Miami would be entitled to the allowance, with most of them at the high end of the scale.

Courier Deliveries

The official said the money for both the food and family allowance programs would be taken into Nicaragua by couriers.

He said some airdrops of food may still be required because some Contras might be in remote areas where no food is available for sale. But he said most rebels will be expected to find their own food, even if they have to move around to do so.

The official said no funds have been allocated yet under legislation allocating $10 million to support the activities of a truce verification commission because the Organization of American States has not provided a detailed proposal on how the money is to be spent.