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OPTIONAL FORM NO10 Moh UNITED STATES GOVEI MENT Bel Memorandum Callah DeL Mal McGurre Rosen OL Mr. DeLo DATE 7-8-60 Tamm Trotte W.C TeleRoo FROM no SUBJECT DR. JOHN C. LILLY DIRECTOR COMMUNICATIONS RESEARCH INSTITUTE BOX 456 ST. THOMAS, VIRGIN ISLANDS Remy memo dated 6-28-60 advising of Dr. Lilly's visit to FBI Headquarters on 6-21-60. Dr. Lilly presented a letter of introduction from Julian B. Baird, Under Secretary of the Treasury. Dr. Lilly claimed the FBI had made an error in information I given to the Defense Department for a security clearance for Dr. Lilly. An immediate check reflected that Dr. Lilly was in error and that possibly someone in the Defense. Department put the blame on the FBI in order to cover a mistake on their part.. Defense of our displeasure at being blamed for what coulhave been an oversight or mistake on their part. Attached L'Allier to Belmont memo dated 7-6-60 reflects results of interviews conducted at Defense Department by SA pf the Liaison Section. The entireb6 matter was discussed with Mr. George Gouid, Security Services Branch, Office of the b7C Secretary of Defense (OsD) and our position was explained and Gould was informed of our unequivical refusal to accept blame for any error in the granting of a clearance for Dr. Lilly, if an error was made. Interview with Colonel Philig. XMitchell, Office of Science, OSD, reflects that Colonel Mitchell may have been the person who furnished false informa- tion to Lilly. While Colonel Mitchell did not admit any misconduct on his own part, his demeanor indicated that he may have been the source of the allegations and a vigorus protest was lodged with him. Mitchell was also told that Dr. Lilly was being given the true facts. and that these were also known to the Defense officials involved in granting clearances. The Director has noted: "1. Did we do this? 2. I think we should again demand of Lilly the identity of his source which falsely accused the Bureau & if he refuses that he be told that it would appear his complaint is a complete fabrication & our files will reflect his refusal & lack of cooperation. H* 6 1061/x REC- 64 1 - Mr. Ingram 5 JUL 14 1960 1 - Mr. Belmont (Attention Name Check Section) 1 - Liaison Section. RwK:c51 JUL 20 1960 (6) IME