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OFFICE OF THE LEGAL ATTACHE © Eupaeey OF THE Unirec BTaree SANTIAGO CHILE Ootober 9, 1944 g Direotor, FBI . . Oo Re: BASQUE INTELLI CHILE - ADMINISTRATIVE Dear Sir: Reference is made to Santiago radiogram of September 16, 1944 and Bureau radio~ gram of September 16, 1944 doth in connection with the above-captioned subject. de LASARTE, Basque representative, it was agreed that beginning with September 19 type This is to advise that as a result of prolonged disoussions with JOSE MARIA . 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 representatives and their desire to await the arrival of LASARTE, the past obligations of 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 wmable to show eny satisfactory reason why they should receive more during the past few months of their relative inactivity. The understanding was also reached whereby the sum of 8,500 pesos to be paid henceforward could be adjusted either up or down in keeping with the results obtained, This represente 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. 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 sctivity or lack of activity of the Basque organisation and also provide a means for giving th some apparently much needed instruction in the obtaining of intelligences intorantion. It was also agreed that the two full time Basque Intelligence Agents would , free to and would be expected to make such trips outside of Santiago as the leads giver them might require, and for thie they are to be reimbursed for actual expenses paid out They had previously desired a flat sim per month for road trip cxpentee. 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 locel representatives, and « order to better inform this office of the possibilities of the Basque orgenization fo: coverage of small towns in the south, Although LASARTE was, of course, somewhat diss~ 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, and he also seemed quite grateful for a speci luncheon given him and several of his local, exeguEsves by this pffios onthe Pey ** his stay in Santiago) " og ail = / A ty Y wut we 226 oe