SPRINGFJORD CASE (W/ATTACHMENT)

Created: 5/28/1956

OCR scan of the original document, errors are possible

ZB6

MEMORANDUM FOR THE KLCORD SUBJECT: Springfjord Caae

1. The above subject was discussedeeting withof State held in Assistant Secretary Holland's Present at the meeting were: Mr. Holland,r. L. Randolph Hlggs, Mr. Spencer M. King,C. King

i. recent history of the Department's

decision to matte,esult of British pressure, athe Embassy to Castillo with the objective ofhtm that the insurance companies' claims, particularly thebethat CIA had requested thisbe held up until it could examine the matter and hadunder the circumstances and since the Ambassadorto make the representation, there would be no strongto the proposed procedure, and had proceeded lo attempt tosome way of getting to Castillo whatever funds might be omewhat different position had apparently been takenAmbasaador, whoac recent view C

Jis that the proposed approach would be normal only afterunderwriters have requested the Department's assistanceof the claim. It Is inferred, therefore, that he feelsDepartment should not act under British pressure alone. Attime, it is his opinion that. Government shouldplaced in the position of "unwillingness" to act and.that the Department should, in view of the Britishaction, contact. underwriters to determinewould agree toower sum and. thereupon, tbatshould formally request the Department'sAmbassador had pointed out that by such an ex gratiasettlement of thia matter could be explained by Castillo into redound to his personal

tootecure means to ac-

complish the funding becauac of the strict regulations controlling government funds as imponed by the new constitution. C

hudethod ' nd

whichtedentatively docs nottadded bis agreement to this

also stated that it was CIA's tentative vie* thatroaeh the American underwriters, who as far ashave not raised the matter with the Department. lconcurred in this and asked what might be learned inthe attitude oi the American underwriters since he did notthe Department should yield to pressure from thethis wouldrecedent in regardumber oiBritish claims.that CIA willto learn more of the U. S. underwriters'the American attorneys whom Castillo retained inwith the Springfjord case. It was agreed that furtherof this matter be deferred pending receipt of thisat whichetermination rhould be made of. interests to effect settlement of the whole iv.atterwhether action should be delayed. Colonel King expressedas to how the funding could be achieved and observedhad not himself raised the question.CIA had given considerable thought to this matter ana tnewhich had not been eliminated as being completelyis considered far from satisfactory. Tbat procedurefor Castillo toarge sum of negotiableby Arbena had been discovered and to state before^involve itself in the matter that the proper use of thesebe for the settlement on an ex gratia basis of the The obvious drawbacks to this concept were discussed.

noted that as regards the British claims, the

^matter conceivably Could be settled through

however, the delicate question would first have to be resolved as to whether CIA would be willing to reveal to the British its interest in this matter.

c J

DC/WH

0 stribution:H

Original document.

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