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EMBASEY OF THE UnTaD OTATRS ‘ cacy SANTIAGO CHILE : OFFICE OF THE LEGAL ATTACHE | secs October 9, 1944 PLL nednteatis CORTAMED J a . . Wadi’ ShCwH ¢ Director, FBI attics wil vay qu he b CHILE - ADMINISTRATIVE | CLASSIF Dear Sir: bed ae Reference is made to Santiago radiogram of September 16, 1944 and Bureau radio- gram of September 18, 1944 both in connection with the above-captioned subject. j Ley This ise to advise that as a result of prolonged discussions with JOSE MARIA 7 4G WASARTE, Basque representative, it was agreed that beginning with September 1944° that | ofgarization would receive from this office 8,500 pesos per month, this being a reduction ; from the approximately 12,000 pesos per month which had been paid until recently. Since no payments had been made for four months due to the disorganization of the local Basque ad representatives and their desire to await the arrival of LASARTE, the past obligations of as thia office to the Basque Organization were settled for 15,000 pesos or a little bit more than one month's payment under the prior system, This reduced settlement figure was reach- ed when the Basques were unable to show any satisfactory reason why thoy should receive more during the past few months of their relative inactivity. (2 The understanding was also reached whereby the sum of 8,500 pesos to he paid henceforward could be adjusted either up or down in keeping with the resulte obtained. This represents money for salaries of two men fulltime, for all entertainment done in Sen tiago, and also for certain operational expenses of the Basque Legation which LASARTE con- sidered as the “cover” for operations. WK) It was also arranged that one of the two Basque Intelligence operators who is 2 supposed to be working full time for this office should contact a Special Agent of this . office on a daily basis, thus providing this office with a better idea of the activity or lack of activity of the Basque organization and also provide a means for giving th some apparently much needed instruction in the obtaining of intelligence internation. a hee. a. It was also agreed that the two full time Basque Intelligence Agents would £e free to and would be expected to make such trips outside of Sentiago as the leads giver them might require, and for thie they are to be reimbursed for actual expenses paid out co fs They had previously desired a flat sim per month for road trip expenses. WY L An Agent of this office will shortly make a trip to the south of Chile with t Basque operators in order to become acquainted with their local representatives, and - order to better inform this office of the possibilities of the Baaque orgenization fo coverage of small towns in the south, Although LASARTE was, of course, somewhat dise~ pointed at the financial arrangements made, since he had hoped to considerably inores the prior payment of $400 per month, he nevertheless appeared to understand that this fice was being entirely fair with him, snd he also seemed quite grateful for a speci luncheon given him and several of his local exsgutsves by this office on the Jas} & ae his stay in Santiago) 7 “abel C= “ihe * — GA es