Behind the Cuban Prisoner Ransom

...The Attorney General traced the history of the Bay of Pigs invasion in April 1961, emphasizing the U.S...

...the latter supplied the now well-known freighter, the African Pilot...

...The Castro regime got up a catalogue the size of a telephone book, which went into minute detail designating exact amounts of particular items wanted...

...Special telephones provided instant connections around the country...

...Government program...

...And these were both backed by assurances from the Red Cross, which in turn had a performance bond from the Continental Insurance Company in New York...

...As Donovan began negotiating with Castro, an advisory committee headed by General Lucius D. Clay was set up...

...These men spent the next three weeks full time on the job, often working around the clock, as the Government officials did...

...They are our responsibility...

...Then, that weekend, Castro began mentioning to Donovan and Nolan that he had never been paid the $2.9 million promised for the release of the 60 wounded prisoners last April...

...The credit was to be payable next July to any amount up to $53 million not covered by goods delivered...

...He said he approved it...

...The businessmen's initial question was whether the ransom was in the national interest...

...On November 30 Kennedy asked Deputy Attorney General Nicholas deB...

...But the story of the Cuban ransom has to be taken back at least to April of 1962, when Castro released 60 badly wounded prisoners...

...Many members of the press also agreed to withhold stories until the negotiations were concluded...

...All the necessary pledges were in hand, and hurry-up clearances had been given by a handful of Federal agencies—the Interstate Commerce Commission, for example, for free railroad carriage and the Narcotics Bureau for export of drugs...

...we are not promising any favors, and we will give none...

...At 11 P.M...

...Ten airlines, both passenger and freight carriers, joined in (the Air Transport Association estimated their costs at $141,000...

...Everyone I called pitched in to help...

...The IRS scrutinized the value of donations submitted by every company...

...To get the material from Florida to Cuba, Prettyman enlisted PanAmerican World Airways and the Farrell Lines...

...Further negotiations with Cuban officials were necessary to get agreement on many changes in the original list...

...One newspaper chain and one news magazine, however, published stories sharply critical of the Government's role in ransoming the prisoners...

...In exchange for their freedom, the prisoners promised to raise $2.9 million as their own ransom—or else to return to prison in Cuba...

...This is a humanitarian appeal, Katzenbach would say, we are not twisting anyone's arm...

...Each of the lawyers on the committee took on special duties...

...only one or two refused to take part in the ransom effort and complained to the press of "Government pressure...

...The Cuban Premier spoke repeatedly of "good faith...

...But when the crisis subsided, Donovan and the chairman of the Cuban Families Committee, Alvaro Sanchez Jr., reported that Castro was still prepared to make a deal...

...Official tax rulings were issued in a matter of hours, instead of the usual weeks...

...The committee then began approaching manufacturers for donations of their products...

...As business' willingness to contribute became evident, the next problem was to match the contributions to Castro's list of requirements...

...Another says the Attorney General concluded in the following vein: "These men fought well...

...Perhaps the most notable aspect of the entire affair was the collaboration between government and private citizens organized into an informal committee...

...On condition that he remain anonymous, the man offered a cash contribution of $1 million...

...The principal one was Castro's demand that he be assured of cash payment in the event any of the promised goods were withheld after the prisoners were freed...

...That Sunday afternoon Robert Kennedy called a man he knew and explained the situation...

...This was met by the issuance of a $53 million letter of credit to the Cuban Government by the Royal Bank of Canada in Montreal...

...By Friday, December 21, success seemed imminent...

...Nolan, for instance, concentrated on the pharmaceutical industry, and in general moved into the role of top adviser to Donovan...

...Company by company, trade by trade, businessmen and their lawyers came to the committee to discuss the possibility of gifts within their 5 per cent allowance...

...To head off such an interpretation, former President Dwight Eisenhower was telephoned and asked his views on the ransom effort...

...HOW CASTRO'S DEMANDS WERE MET Behind the Cuban Prisoner Ransom By Anthony Lewis Washington A remarkable money-raising effort climaxed a wholly extraordinary campaign to meet Fidel Castro's price for freeing the 1,113 prisoners taken at the Bay of Pigs...

...Arranged for free transportation of the goods by railroads, airlines and trucks from all over the country...

...In many instances, two companies would volunteer donations of the same product...

...Several of the contributing companies cooperated beyond the limits of tax benefits...

...By Christmas eve the $2.9 million, or something close to it had been pledged...

...This was solved on December 5 when the American Red Cross agreed to take on the assignment...

...Assembled in Florida 20 per cent of the goods which Castro had demanded as a down payment before release of the prisoners, and then shipped them to Cuba...

...Officials noted that tax rulings did not permit transportation firms to deduct any "fair market value" of their services...

...Kennedy told them to go ahead and do it—by Christmas...

...And the goods valued at $1,000 would actually cost the company considerably less to produce...

...Prettyman's job was to arrange free transportation for the materials...

...Douglas worked on foods...

...Worked out a complicated financial assurance to the Cuban Premier that he would be paid should the rest of the material fail to arrive...

...they were allowed to deduct only their costs...

...No list of the contributions has been put together, and it is not certain that any will ever be published...

...The volunteers from Washington included John E. Nolan Jr., E. Barrett Prettyman Jr., John W. Douglas and Raymond J. Rasenberger...

...The 1RS decided that contributions to the Red Cross for the purpose of the Cuban prisoners' release would be considered charitable gifts, and would thus be covered by a provision of the tax laws permitting any company to deduct such gifts up to 5 per cent of its annual income...

...At 5 a.m...

...In addition, they proposed to work out a plan for ransoming their fellow captives...

...Before the Cuban missile crisis broke in late October, the New York lawyer had reached a rough agreement with the Cuban Government on the ransom price— $53 million in food and drugs— for the remaining prisoners...

...One thing, however, was clear: No Government funds or supplies could be used as part of the ransom, for this had been ruled out by leading members of Congress...

...The check was issued by the Havana office of the Royal Bank of Canada...

...He suggested that they contact lames B. Donovan...

...Ten railroads agreed to carry 2.5 million pounds without charge...

...the disaster was no fault of theirs...

...Was the President for it...

...Anthony Lewis is a member of the Washington Bureau of the New York Times, which made this article available to The New Leader...

...nevertheless, it contributed $50,000 worth of supplies...

...Monday December 24, Nolan telephoned from Miami to say that he thought the $2.9 million would have to be turned over to Castro by 3 p.m...

...They also had reports that he would consider releasing 25 or more imprisoned Americans if "good faith" were shown now...

...Katzenbach and other Government officials pointedly told company representatives at each meeting that in return for their donations they could not expect any favored treatment on future tax, antitrust or other governmental problems...

...The New York branch of the committee, particularly Warfield and Knight, concentrated on the problems involving finance...

...A huge chart on the wall, marked with blue and red crayon, indicated the daily progress toward reaching the goals set for food and drugs...

...One firm, for example, showed a net profit of only $360 for the last year, and thus had nothing to offset by tax deductions...

...One participant at the conference recalls him saying: "My brother made a mistake...

...Private lawyers, all of whom agreed to serve without charge, were quickly recruited by Donovan, Katzenbach and Oberdorfer...

...In a three-week period the committee accomplished the following: • Obtained pledges for the ransom price of $53 million in food and drugs from American companies...

...The reason for this was the fear that Castro might raise his price if the prisoner ransom became known as a U.S...

...Trackers all over the country cooperated...

...From New York came Robert H. Knight, Henry Harfield, William C. Carroll and Bruce Thompson, all from the firm of Shearman and Sterling and Wright...

...Most were allowed in full, though a few were considered inflated and cut down...

...But through the trade associations the potential of each company was explored, and requirements were allotted among them...

...For their part, the businessmen were almost completely cooperative...

...The next day they informed the Attorney General that the job could and indeed should be done...

...They also said they knew their group could not raise anything like the volume of goods Castro demanded...

...The significance of the Canadian source was that it gave assurance to Castro that future U.S...

...The letters, too, were drafted in record time, and were limited to apply only to the Cuban situation and the three weeks of the ransom effort...

...Katzenbach and Assistant Attorney General Louis F. Oberdorfer to look into the situation and find out whether raising the money in goods was feasible and whether the Government could help...

...The trade associations requested letters immunizing them from any antitrust charges because of the cooperative effort they were organizing...

...With this news, General Clay began to contact his friends for contributions...

...Kennedy gave them one piece of advice: Get help from a lawyer not emotionally involved in the situation...

...Nicholas Katzenbach went home to trim his children's Christmas tree—and to get his first good night's sleep in weeks...

...In appealing for donations, the committee had a big assist from a new ruling of the Internal Revenue Service, which was issued December 10...

...A ruling made in 1947—in the case of a gift of wheat to the Freedom Train —allowed valuation not at cost but at the higher market (wholesale) value...

...One of the first problems the committee faced was to get an experienced organization to receive and handle the supplies once they were obtained...

...One man agreed to lend $1 million so that a check could reach Castro by 3 p.m...

...A command post was set up in Oberdorfer's office in the Justice Department...

...The committee foresaw the possibility that businessmen might feel this was a partisan effort of Democrats and should therefore be shunned by Republicans...

...Contributions of $50,000 and $100,000 were obtained, and by mid-day the target was in sight...

...This was an expected tax ruling, and strictly within past interpretations, though apparently few companies had been aware of the possibilities...

...While negotiations continued, the committee asked the companies to keep the Government's role in the ransom quiet...

...In the end, the pledges came to $23 million in drugs and pharmaceuticals, $7 million in surgical, dental and veterinary instruments, $9 million in powdered milk and $14 million in baby foods—for the required total of $53 million...

...On Sunday, December 23, when the prisoners began flying into Miami, the committee noted that Castro seemed to be holding back the men who had led the Bay of Pigs invasion...

...The Canadian bank was covered by two letters of credit, for $26.5 million each, from the Morgan Guaranty and the Bank of America...

...regulations could not in any way affect the payment...

...Government's role in sending the Cuban exiles to their unhappy fate...

...As it turned out, partisan politics was astonishingly absent from the affair...

...In most cases the contact was made through trade associations...

...Last August some of these 60 prisoners and representatives of the Cuban Families Committee came to see Attorney General Robert F Kennedy about their efforts, which had thus far been stymied...

...One question to which the donors wanted a precise answer was how the goods they gave would be valued for tax purposes...

...Meetings went on in Oberdorfer's office day and night...

...The Cuban quarantine, of course, stopped negotiations...

...The message seemed to be: Pay the $2.9 million in cash or else you will have to do without the leading Cuban prisoners, the Americans, or both...

...Robert Kennedy, speaking to five officials from the American Pharmaceutical Association who had been called to Washington, tried to supply the answer...

...Moreover, the law states that gifts exceeding the 5 per cent limit can be spread over two future years...

...The two Justice Department officials worked through the night with Mitchell Rogovin of the Internal Revenue Service and Robert A. Hurwitch of the State Department...

...Robert Knight, himself a Republican, a former general counsel of the Treasury, and a man with close friends in big business circles, said: "I called old Republicans, I called businessmen of all kinds—and I never got a turndown...

...Thus a company paying the maximum corporate tax rate of 52 per cent—as most of those asked to contribute did—would save $520 for each $1,000 in goods contributed...

...Furthermore, he offered that same assurance when telephoned by businessmen seeking his opinion...

...Late in November the two men visited the Attornsy General, informing him that the prisoners' physical condition was deteriorating...

...In New York, Knight and his friends sought additional cash donations...