Former Federal Reserve Board Chairman Arthur F. Burns has accused Henry Kissinger of blocking his attempt to convince both the Nixon and Ford administrations to break the OPEC price cartel.
Burns, in an interview in today's issue of Business Week, said the former Secretary of State also stopped his efforts immediately after the 1976 elections to get the Ford White House to work with the incoming Carter administration toward the start of "realistic economic and political conversations" with the oil producing nations.
In his first public attack on the government's handling of OPEC, Burns said the only thing the United States has done since the 1973 Arab oil embargo is to "get down on our knees and thank them for being so considerate" when they hold their price increases to 5 percent.
Kissinger, through a spokesman, yesterday denied any knowledge of efforts by Burns to try to break the OPEC price cartel. "He said he never heard of any proposal by Burns to break OPEC," a spokesman for Kissinger said.
Kissinger also denied any knowledge of an attempt by Burns to get the Ford administration to work with Carter on the start of talks with OPEC.
In the Business Week interview, Burns said he favored an effort to try to break the OPEC price."I was in favor of that in November of 1973 and urged that on Mr. Kissinger and later on Mr. Ford," Burns said.
Burns said, "I got a little group started working, but in the end nothing came to the effort, I'm sorry to say."
The retired central banker said his position was to first try to help the OPEC nations see that "it was against their own long-run interest to inflict damage on the rest of the world."
And if that didn't work, he said "we" could exert economic and political pressure on some of the countries. You can exert economic pressure by restricting certain exports that are essential to the economies of those countries. I felt at the end of 1973 that we ought to move rapidly in that direction and likewise exert politcal pressure."
Burns added that, "I felt then that by holding up certain exports of machinery, planes and military equipment, something significant could be achieved."
Burns, who was appointed to the Federal Reserve Post by President Nixon after serving more than a year as the President's chief economic adviser, never publicly expressed his disagreement with the Nixon-Ford policy until now.
The most recent attempt to break the OPEC price, according to Burns, occured shortly after the 1976 Presidential elections:
"I . . . recommended to President Ford right after the 1976 election that he send Vice-President Rockefeller and that he try to get Mr. Carter to permit (Vice-President elect) Mr. Mondale to join Rockefeller to carry on some realistic economic and political conversations with OPEC countries. I thought it was a good time. And President Ford took that seriously. But Kissinger talked him out of it."
The spokesman for Kissinger said the former Secretary of State "definitely" had no recollection of any effort to get Rockefeller involved in talks with the OPEC nations.
The spokesman also noted that the period Burns refers to in his Business Week interview was the same period when U.S. policy was to try to get Saudi Arabia and other moderate Arab nations to negotiate with the Israelis, not to spark additional confrontation.
Early in 1975, however, Kissinger, also in a Business Week interview, warned the OPEC nations that the U.S. might consider military retaliation if they tried to impose another oil embargo. The spokesman for the former cabinet official said that was an entirely different situation than attempting to break up OPEC.
Despite his criticism of the Nixon-Ford policy, Burns would not criticize the Carter administration for its policy toward OPEC.
"The Carter administrative may deserve criticism as well," Burns said, "but I'm not ready to offer it because I'm less well informed about political factors than I was during the Ford days.