The Uadrid Agreement has been in operation since Its ratification was oxpoctod lomooth and efficient working arrangement under which our intollicence activities oould be continued in Spain inwith the wishes of Ambassador ifeyos. In the ensuing fifteen months wo hare had ample tiae to tost the results stcir-jn- from this'undorstanding. Those results clearly indicate that the Ifadrid Agreement must be abrogated if we are tb produce tho intelligence ejtpoetod of us in Spain.
The following provisions of the Agreement have proved tho ones undor which difficulties aroso and which ultimately led to the reduction of our SI mission in Spain toresent personnelotal of thirty-one persons operating under cover of the State Department to its present number of niae.
Under "Functions" inho following sentence
appearsi
o far as direct intelligence from Spain is concorned, SI operations will cover only such intelligence an may bo requested or agreed to by the Embassador and the Militaryval Attaches, or be required by the Joint Chiefs of Staff with the concurrence of the State."
It is to bo notedrovision of this sentencea concurrence by the State Department of any requost made of tho OSS by the-Joint Chiefs of Staff. Thiselieve.
xtent makes void the beslo prlnoiple of OSS as An intelligence organiiation. Its purpose is to serve the Joint Chiefs of Staff in securing intelligence fron other then existing sources.
nder "Functions" reads as followsi
ss in Spain will not become involved in any activities embarraesing to the Embassy. The decision as tu what is or is not eobarrass'ln^ rests with the Ambassador, who should be kept currently informed of the nature of the activities ln which OSS engages or plana to engage in Spain".
Ambassodor hayes has invoked his prenogativea under this provision to-re.uest the departure froa Spain of ourfearing that their activities might lead to embarrassment. In fact, after the liberation of Southern Franoe ho requested that all of our subst&tion personnel located in such important cities as Barcelona, San Sebastian, Vigo, La Coruna.'and Bilbao depart from Spain, leaving these important areas without intelligence coverage.
nder "Organization and Personnel" reads as follows!
"Bence in cases where the Ambassador has reason to believeertain individual is connected with OSS, and that his activities in Spain are likely to cause embarrassment to the Unbasey, the Giroctor of OSS in Spain will, upon the Ambassador's request, inform him whether or not the individual in question is ln fact connected with OSS."
This provision nullifies the effective use of having
persons under private cover. The security of the Embassy has
proved not to be as efficiont as the security of our OSS office.
It nay be correctly deduced that if the Embassy is aware of the
presence or*OSS under-eover operator, itatter of
a short time before the nan is uncovered.
nder "Coordination" roads as followsi
"The Ambassador hits been authorized by the State Department, with the concurrence of OSS, to examine all incoming and outgoing correspondencethrough the Embassy. He will exeroise this right to the extent he considers necessary."
This paragraph is linked to the objections raised to provisions contained innder "junctions". With authority to examine operational pouch material, the Ambassador plaoe himself in tho poaltion of knowing of the existence end par haps the identity of "private cover" OSS representatives^ and therefore the chances of hia becoming embarrassed are greatly inereasod. The Ambassador should ba in tha position to disavow those private cover Americans, and thia oan cost affectively te accomplished by his not knowing of their existence, whioh, ln turn, can only be attained if the operational material of both incoming endpouches is deprived him.
Tho extent to which the flow of intelligence information from Spain haa declined nay be Illustrated by saying Chat in the month ofotalpanish Intelligence reports were received compared to eight roports ln
The Ftobassy have, since the Madrid Agreement,an on our Uadrid office sending documents which (a) are not-ln aocord with facta available to the Chancery or (b) which dealituation that the Embassy describe as "miscellaneous political reporting". This, the Lnbassy states, is strictly reserved to the Chancery officers.
Reoent incidents have boon reported to us
letter, sent by Mr. David KcK. Key,
American Consul General, Barcelona to Ambassador hayes, submitted as an attachment for your consideration, is largely self-explanatory. The point to bo eophasised is that it was received January li by the Ambassador but did not reach our representative's hands until Paragraphs,f the letter ln question are considered most important subjects.
The relations between our SI office and the Naval Attache have beenery cooperative basis. However, whenbassy became aware of the close workingbetween the two offices, it forbade the further exchange of
At the time our SI Barcelona representotlve was withdrawn arrangements were made to continue comaunications between these two agents and our Madrid office throughrepresentative in Barcelona. However, when tho Embassy heard of this, it not only forbade the comwnicatlonbut even forbade contact withan, fearing, as
_.. the Embassy described it, "SI contamination.
If our maximum effort is to be achieved inew basis of understanding should be arrived at with Mr. Armour-in this connection,tho ideal solution being the working arrangement
that has proved so successful in Sweden and Switzerland* the pattern ofnderstand has been recommended toasis for future operations in all neutral countries.
Original document.
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