(UNTITLED) REVIEW OF OSS OFFICER'S STAY IN SPAIN

Created: 9/25/1943

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TOi General atnn J. Donovan PROU, Frankyan

Ineview of ay stay In Spain, from tho middle of February imtil tba end oft has been suggestedndeavor to make my report aa detailed aa possible, in order that some light might ba shed on Ambassador Hayes and his antipathy toward the Spanish organisation of tho Office of Strategin Services. herefore ^wish to commence this report by quotingrote froa madrid to Mr. Meyer onfollows.

"There ia no doubt that thowhich were inflicted on the sensitiveness of the Ambassador and Beaulaon the first months. representation, have not entirely healed. It did not take me long after visiting with the Ambaasador sod with Beaulao, particularly the latter, totheir general attitude of disdainheir personnel, and their activities. Itoint of view which they have acquirederiod of months and It may require an additional period before it la entirely cverocoe. It is my general belief after having eontaoted thorn on various occasions since being In Madrid that our relations with the Embassy mast be conducted politely bat firmly.*

Again, onrote from madrid as follows:

m satisfied in my own mind that ths real root of our trouble here is represented in Beaulao, thewho seems toreat deal of influence ovor the Anhassador. unless and until he is removed we shall always have troubled maters to navigate through. Heorn mischief makerm sure he delights in tbe annoyances that he oan

Alao in this aaeo letter of Junorote i

merely indicates again the necessity that the Ambassador receive instructions worded In no uncertain

ttiM that. work being done in Spain must be continued without interference, without interruption and without cenaor-shlp.

epeat our maximum efficiency over here can only be obtained if we are free to carry on our activities under the dlrectlTee froa iiaahington wit bout the kind of superrlaion whioh tba fcobaesy wis hoc to exorcise over oar operations."

An Incident occurred approximately two weeka after ay arrival In Madrid,ish to relate in detail,onsiderypical exeaplo of the lack of frankness and forthrigbtnesa on the part of the Aabaasador and his Counselor, Mr. Besulac. This characteristic of the Ambassador's atill persists, and mention will be aade later of current examples that took place in the week ofh. Tbe incident in question le as follows 1

Ihe time of my first mooting and conversation with Mr.

/ Bsaulao, the day following my arrival in Spaine reviewed at aces length thend failures ef ths. head ln Spain, Francis dl Lucia. In great detail he went into various incidents and happenings, all of whioh were consideredoetlight by tbe Asanassador and himself, and whichledequest to tho State Department thatucia be recalled. Their request was in time actedl Lucia was transferred to Lisbon. After listening to the atrong lndietateata which Mr. Beaulao was asking against dlent on to say that since dl Loda'a arrival ln Lisbon, several months previous, be bad been doing good work, and thst the boma office was pleased with what he was able to aocoapllah in Lisbon. ointed out that lt waa not assy for. representative to go into new territory and obtain the results which dl Lucia aeested to be getting in Lisbon withinbort ties.

Aa an example of bow he "got around"entioned that about tea daysather prcodneot visiting American was passing through Lisbon en route to London. He called on tbe Minister (Mr. Fish) and inquired if the Minister might be able toeeting for bin with Dr. Salassr. The Minister declined the suggestion, pointing out that there were so many Americans passing through Lisbon, includingman,ho would like an opportunity of meeting Sslaxsx, that ba had fixed ltatter of policy to decline such requests. The vial ting American later that same day aet dl Lucia, and axplsinert to hla Ms keen interest in meeting

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IV. Sslasar. Dluluctoorwdsuggestion that ba sight ba able to arrangean appointment. Tbo upshot of tba effort was that tha rial ting lasrlnan waa in Dr.esidence at'clock that night. Di Lucia waa present as an interpreter. At this point in tbseeby Mr. Besulsc, who inquiredpproved of such action on di Lucia'o part. eplied without hesitation;

"Ofo aots norely citing it as anof how di Lucia gets around ln Lisbon. ealize that In soon asttera protocol oust be followed, Di Lucia, being attached to tbe Legation Staff, should have obtained permission froa the Minister. In feet, dl Lucia realised that be bad probably taken on himself undue responsibility, for he presented himself to the kinister the following morning,whet he had dons tbe evening before, and remarked to the sinister that 'he had bis bags packed' if the Minister wished to send him home because of tbs Incident."

The conversation with sr. Besulsc then continued on otherand was cordially concluded.

About two weeks later, approximatelyeturned to Lisbon, taking tbe Spanish airplane fron Madrid. It ao happened that the Aehassailor wasassenger on tbe same plane. Bo visited going over, and at tbs airport in Lisbon the Ambassador waa net by Mr. Fish, tee American Minister.

Three days later,asourtesy call on the Minister, he confronted meonghand aUteaant, reading to the effectad declared to Mr. Beaulsc the greatthat our representative Mr. dl Luc is was taring In Lisbon, that be bad reedy aecess to Sslasar, sod could arrange appoint sects af sill, that the Minister was not an important official, that dl Lucia was tbe one who was running affairs ln Lisbon. In otheraa "bossting" at tbs expense of the Minister ofreat representative ws bad in Lisbon. The Minister quits properly was net only upset but incensed that dl Lucia ahould be Isnosd inashion et hla expense.

I aes shocked at such deliberate and treacherous misstatements Of facts seSswg contained in Bosnian's nwaoraodua to theelated to the Minister tbe actual conversation with Mr. Besnlsc, as outlined above, lis was relieved at my reassurances, snd inferred that lt aas not the first time thst the Madrid Embassy had endeavored to Interfere with Legation matters and

"trouble". old bla tbat immediately upon my return toould ae* tba Ambassador and Mr. Beaulao. hanked bin sincerely Tor hia gsfrtlaannllnnaa In personally confronting ae with the statement,u moat appreciative of It, as It afforded aa an opportunity of emewsring directly tbe accusation being directed against aw, and to confront ay aocoaora with their erroneous atatasotnU.

Upon ay return to Madrid the followingelephoned tha Ambassador andaating with hia and Mr. Bsaulac, which nas promptly granted. ntered the Ambassador's offloe and informed hiaas ooalng in to do some very "plain talking". eat on to describe tbead with the Minister, phan be confronted aa with tba longhand atatamsnt given to him by the aacaaaador, and written by Mr. Beaulao. Bsaulac denied that he had misquoted ma, on the grounds tbat ha had bean trainediplomat forears to rwaawabar ccarrersatlona, and therefore it woold ba quite impossible for hia to forget one. eplied tbateriod ofears no one could be Infallible, and in thia particularistake in properlyonversation had baan made.

I suggested that. In order to safeguard hia personal reputation and Integrity with tbe Minister, he writeote explaining tbat perhaps ha had misinterpreted ay conversation on the Salaxar-di Laala Incident. Thia of coarse he refused to do, insisting that ba had tarn right to arita reports, smaoronde, letters,o ahoaaoefvor ba wished withoutmsmltation with aa. On thiagreed with bla eotirwly,as obliged to warn hia tbat if, in the future, be had occasion to write raporta or memwrsnda aboat am personally, that ba take great care not to miaqooU or misinterpret am, as,id not Ilka it. urther pointed oat tbat it appeared to mm toeliberate attempt to ondarsdne aa personally, and what waa more important, to undermine. aa an organisation.

Th* conversation concluded by ay stating that, while aaaa plain talking had bean imdal^ed in on ayxpected and desired that if at any tine he or tba Ambassador had anyto sake about ao or tha organisation, they speak with equal candidneas to am.

It so happened thatPratt (Silky) waa present in Mr. beaulac'e office at tbaaa having the conversation with him on tbol Lucia appoint went. Be confirms my expression ofon di Lucia's bavins arranged tba appointment with Dr. Salssar. The following day, while visiting with tho Aacaaaador on otherointed oat tha feet that Jack Prattitness to ay varaion of the conversation, and if ba was interested

in having Pratt confirm It te bin, be oould request him to do ao. Pratt mas never asked to confirm my statements.

This mas tbs begUnlngertain foaling of distrust on my part in Beaulec and tbo Ambassador. It seamed to mm that If the Ambassador smroof Maintaining friendly relatione with. organization and its neatly arrived representative, that be might have bad tba frankness to question ma on tbo subject of tba oalaiar-dl Lonla incident. For two whole boors on tbo plans an roots to Lisbon ha had In blaocument concerningat amentaadnd yet ba did not have the courtesy to confront ma with them, ontrast to tbe gentlemanly, frank procedure of the Minister in Lisbon.

As for Beaulac, hia treacherous sffort to discredit as ln ay very first conversation with hia was sufficient reason for as to lose confidence ln bin. This opinion mas especially strengthened, as time passed in Uadrid, when reports and incidents of his devious ways of causing troubls varato ma. He was genuinely disliked by members of the American embassy end by other American agendas operating under tha patronage of tbo habeesy. Uoreover, Spaniards are frank in their criticism of him, and fail towhy the State Department, with ao aany abls man In their organization,sn of Besmlac'a character to remain ln Madrid.

Another incident, which took place, Indicating the Ambassador'sto talk openly and frankly to me, occurred several days after so-asually mentioned to blaod brought over some nylon stockings which aero being held at the Spanish Customs House, and wouldetter from the Ambassador requesting their release ae diplomat,le aerohandlse. This he readily and graciously consented to do. entioned ln passingad brought them overresent to ara. Franco. Be made no eonasnt at the time. Some weeks later,earned that ha Includedriticism of me for giving silk atockinga to the wife of the Chiaf of State. Again, bad tba Ambassador taken tba trouble to question ae about the propriety cfould have Informed him that ay oontaota vith the Francodated backnd that It was not the first tinsad given are. Franco stockings and other presents. ould have informed hiaan bean tho only American ever to be in tbs private living quarters of Ganeral Franco and hia family at hia palace ln Prado, some sight miles froa Uadrid. My arrival in February sspty-bandsd, without some gift of remembrance for Mrs. Franco, might have occasioned more wonderment than continuing ay usual custom.

The difficulties with tbe Ambassador, culminating In his,ith tbe renranwnadst Irci. terminate iuin Spain, really ceemwmcederious say at tbe and of the African msnolgTi. Spain at tbat tins ass alive with rumors as to where snd when the Allies Intended striking next, many of these rumors bed Spain or acme of ita island possessions included aa being in tbo line of amrch. During that period tbe Ambassador, on one oocaalon specifically, recueeted of aa tbatilitary nature be gathered oa Spain. Re requested ne to concentrate our sfforts, during what he called this "tensionn penetrating France,

cc^er-espionage information, awrchandlso jDOVsaents, etc.

xt aboutthis SMS tine we encountered oar polios difficulties in BeroeW, -nieh yon will recall resulted In four or five arrests of one of tbo Spanish chains operated. This Incident resultedeaving tbe country, and ths suoeessful clandestine escape to Africa of theSpanish oontsct In thle chain. This Spanish agent was reportedto death by tbo military tribunal In Baroalona. As thle agent van en eoploytw of the Consulate in Barcelona, there followed police questioning of several employees of the Consulate. Those polioo oJ/ficulUea In Barcelona caused the Amoaassdor's apprehension to grow. About two mess later, one of Billot's aub-egenta In tbe Bilbao area waa arrested. The American Consul ot Bilbao,eport to tbs Ambsasador, expressed concern over this arrest, lost lt should lead to tha Ciwsulsto's bocoalnc involved, or at least eabarrassed.

These arrests coming at abort intervals only increased the Aabacaa-dor'a slam and anxiety, fibat sppeared to be epecial vlllgance by the poliae against Americans may be attributed to the general nervousnose which prevailed throughout Spain that the Allies had "designs" oa Spanishor even the openingeeond front via Spsln.

To explain the Ambassador's state of mind during this period, it must be maid that be felt that tbo spring aontha3articularly oritiesl tlaa in the relationship of the United States and Spain. Franco, se to speak, wasight ropo, and any incident, however small, that would be liable to couao Spsln to topple into the hands of the Axis ant at all oasts be avoided. Be therefore desired to control and regulateetailed way the policy- of the Various American agencies thst were operating In Spain under the Jurisdiction of tbo Eobaeay.

esult of tho Antjssflador's desire to prevent any untowardfrom happening that would disturb the diplomatic relationship between Spain and our Government, be asde certain requests of me In connection with our operations. Amongite tbe following examples, having already mentioned hla specific reouest not to gather informationilitary a* tare on Spain 1

Be must not hire or solicit tho cooperation of ex-Reds, dissident elements or exr-jsilblrda. Ho instructed Billot to dismiss one of his principalan by the rame of Louis Ibsra, The Ambssasdox objected to Ibara on the grounds that ha mas da Igulrre Basque and an ex-prisoner of war. Be said that all Basques are Insome way or another attached to that "dangerous character".

Pre aidant Agulrre. Shea that Ambassador mode thia request ofas obliged to tall bin quite frankly that If an moot rofrain fron recruiting dissidenthether they be Basques, Seda, Free Catalans or Mcnorohlata, that the only available group left for recruitment would be ambers of the Palsnglet party, which would bo one sure snd positive way of gettingInto troubls, -ndas Interested in seeing that our men recruited workers and not stool pidgeone.

tfshort wave radio sanding and receiving set installed in Madrid, ft* have daily eontaot with Algiers. He has requested that we should only use this radio on anbasis, in other words, it ia directed that we oust not send sny jaessagos ovor the radio, that es oust only teat it to aee that it la in good working order. In heaven'shat good is the radio if wa cannot nee If w*tssssge from Barcelona, for oxaaple, having to do with aone spot information cooing out of Franco that we know would be of vital Interest to th* Theatre Ccesaand in Algiers, we are not, according to hia directive, permitted to despatch it. This is anything but on adult viewpoint.

Again, he instructs us that io other parts of Spain, where we have radios installed, these auat bs used solely to relay nosaoges from tho occupied zones; that Is to soy, any Laxu-tant happenings or cnvelopaents within Spain itself, nust not be sent over thoss oomaanicatlon*.

fiver since th* inception of our activities in Spain, the Anbsssadorunder the lmproasloa that the information gathered. waa notor benefit to the various department* In Eashlngton utilising theto them. Thia opinion be adeomatoly expresses in hisend quite naturaUy, therefore, some of tbe difficultiesad with bim, from time to tine, may ba encouragement from official

Boahlngton to assist us. aha! ho has done on our behalf bo has ctono on his own inltUUve snd raspoasihUUy. This would notair reportid not take cognimonce of and acknowledge th* various faolUtisa tbat have bean provided by th* Ambassador for the conduct of our aotiTitle* in Spain.o-qnostetfao far back ash tbat svery effort should bo made on the part of the home office toroper kind of letter to be sent to thofrom tbs Joint Chiefa of staff, expressing their satisfaction with tb* Information being obtained by. organisation in Spain, and thanking him for tb* cooperation he had extended. Apparently, however, for adequate reason*m not aware of, my rscoaaondotiou wa* not acted upon. A* time want by, the Ambassador's natural hostility snd critical viewpoint. bsoama aor* and more pronounced.

request was containedetterddressed to or. Mayor.)

Despite docccoslva afforte on agr part, and alao on tba partory Thomeshastill fells to realise the aatore aad duties of ea Intelligence crsaalsatiocu Be clings to the opinion. la Spain la part of the Embassy. He does not understand. la merely using theof the Embassy, and that Its operatlone, type ef personnel, end the dutlaa of Ita representatives are entirely different free those engaged la by the State Department for Satoassy aad Ccoselsr wars. If he would ealy reaagnlxe tbe prlnalpls tost applies to intelllgenoo aerk be would undsratsod that those engaged la espionage are constantly sodviols ting the laws of tbe country In anion they operate. Thessons apply to every phase of late!enes work and Inolode the flnsnolal field as well. To finance an intelligence organisationeutral or eneay country, we aust bave access to "untraceable' fuada* It la for this reason that our organizationem obliged to bave eccess to what Is known aa black market pesetas. The present crisis with the AaBassador, as outlined in Ida cable aesssgeas been brought about by the arrest of tso of ear American repressntstlvseiolationpanish foreign exchange regulation. This arrest has further Implicated Jack Pratt snd aoself, aa well as Ufa. Finger who was acting es my secretary.

If tbs ambassadoreneral on tbe field of battle, and his forces sufferedm sura tost ba would realise, as any soldlar must, that battles and mars eon only be woo by sustaining casualties and tbs spilling of blood. So it la with the conduct of intelligence operations. Be expect, es does the general in battle, to bave casualties among our agents. Be viae arreats no dlfferectly than the spilling of bloodattle field, to be regretted but not to be avoided, tbe alarm therefore whioh the Ambassador expresses in bis latest oable message should receive theeneral would receive, who hoists the waits flag at tbe first sign of blood. It la unbecoming of sa American In the responsible and authoritative position which tbe American Jivwestdor la Spsln holds toixth-rats, wobbly, shout-to-be replaced Spanish Ooverrswant to scare him to tbs point where be requests. quit ita actiritles ia Spain, These ore ths days we are advancing on all fronts, not retreating. He falls to realise thst what we are in Is aa ell-cut war, thstast use every mesneour power to gather every available scrap of Information on our easadss, so matter what nook or corner of the world they are In, me aust st all times beabout them, Be must knew their battle order, ws mast know their troop compositions, we must knew in detail their fortifications, we must know tbalr bases, we auat knee their agents.

All of this is unimportant to the Ambassador, so long aa whet bato be his personal cordial relations with tba Spanish Foreign sinister are permitted to continue unmolested sad unembarrassed. Spainnown snd recognized Fascist country. It baa longartner of tbs Axis. It has oa its borderB seme tons of thou nods ef CWeon soldiers. The southern extremities of Spain lieales of our African supply lines. Za the esse ef Gibraltar,ew hundred yards. This flank should not

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be permitted to remain exposed without haying it covered by an adequateorganisation.

Tba aabaaaador baa taken it upon himself to veto instructions issued to tbe field organisation. Ha baa takan it upon himself to reaove (and keep)eport coning to uaatalan organisationslona, slapl* bsoauss as peraoanolly does not spproys of our contscts with die aidant groups.

1 maintain that tbe Ambassador, unlsss authorised to do ao by tbehaa no right to interfere with tba collection of information and the ooerationa of our organisation in Spain. Bo aro happy and more than willing to provide the interested officials of tbe Smbassy with tbe information anion la gathered by ua, be it political, economic or military. Shortly after ay arrival innvited Colonel Hohenthal, the military Attache, to pay no frequent visits to look over and offer suggestions on tbe military infccns-tlno as it was being received by ua. Thieeffort endauggoetioc on my part was embodiedable despatch sent by the Ambassador to the State Department, lo response aaa aver received. let one of thoIs that ha foals tbat hs has not bean adequately informed. VJhllo the information which was gathered by us sma not routed to hia, hsad access to it by merely requesting it. In fact, itemsolitical and military nature of apeeial interest were routed to bin for hia Information. Ha was also given the paraphrase of every cable message which we over sent froa kadrid. He has not, however, bean kept informed, and rightly ao, on tho details of our operations, lhat la tossy,ye and means by which wa gather our Information. This is an organisational natter, quite out of the province of tbe Labesay. His Interest should be limited to the information celiac tod and not how it is obtained.

In July, in an effort to meet some of tbe objections of tbe embassy in exjunction with the Oil Control program, certain cencessions ssrs made to the State Lspartment that would enable the Oil Control observers In Spain, who also devote part time towork, to spend even mors tims on their oil work. Ible agreement was welcomed by the Ambassador asonstructive stepIn eliminating acme of tbe objectionable features of too oil cbsarvsrs actingual capacity. Thia satisfaction waa expressedable which tba Ambassador despatched to tho State Department,,

the arrival of Gregory Thomas was also calculated to give to thea representative with shorn he could dealresh and understanding basis. Thomas, In meeting some of the objections of tbe Ambassador on the operationsgreed onh to eight specific points. In an effort to further please tho Ambassador.

Tbe visit of Colonel Hebm (our financial offloer) waa likewise expected toeassuring note oa the charge. expenditures In the conduct of their activities in Spain ware excessive.

4. mpori. from Tbocao, dated September Uth, referring to tbo attitude of tbo Ambassador, bo writes:

"ioon rorrornondlncto bo takan in tbo future, bouinated bin dee Ira to fortify our or^nltation. rather than deatroy It."

e* days of this comment to Thomas, th* Ambassador despatched bi* cable1 ln which he recommended the ossaation. acUritise ln Spain. Tboaas and Col.m sure are not aware that tbs Asbassaaor has recommended to the SUte DopartBent thatS. osase its aetivitlea In Spain, sod yet at tben* that hi* cable waa being sent fron Uadrid they wars in friendly oonvorsatians about tb* future. In Spain. Suoh tootle* have characterised theactions against us froa the very beginning of our reprosecution in Spain. Us certainly has been anything but direct with those of us who have bad to deal with hia.

It soeos rather obvious to ae that tb* Aabassador, because of tbs recent srreeta of Schoocxssior anda, has seised this crocrtualty of reccmnend-ing the withdrawal of roa Spain. Hi* scheming in thi* direction aay be illustrated by hi* coble6 of September Uth to thetaent, an excerpt froauote tb* following:

"Pratt and ayan ware both Interested ln tb* exchange transaction involving ^uesada and Scbooonaker ond In view of tha fact tha Spaniard who handled tbs aatUr at Pratt's requestold to haveompletelso wish to request that Pratt be recalled. Likewise the Department should not permit Kyan to return to Spain or Portugal."

thi* financial deal appears toensational development to tboss who ore unlnformod, it was In no sans* on irregular method In tbeof black-market pesetas.

1 eall particular attsntion to tbe fast tbat be does not wish ma toeven to Portugal. It seems to mo the reason for this night wsll be tbat

hs realise* that froaould be In position to continue to conduct

concernharrassm*nUa. Perhaps his attitude nay be explained by tbs fact that han extremely pious ond devout religious man, and Buffer* personal distress whan facing tb* Spanish Foreign Office, knowing tbat Illegal aotivltiss are being conducted by Americans attached to too Jfaabaaay.

Tb* time to endeavor to Bend.o Spain, more pleasing to tha Ambassador, haa passed. He has shown that he cannotplacated by proper choice of personnel. The peraonnel representing .ir, Spain, however, have demonstratad that they have obtained information which ha* received highly satisfactory evaluations by. as wsll as tbe 0JI.1.

Information on subjects other than military has -Uo been received with sat lofaction by other interested deportments here in Washington to *hoa it hu been aada available.

In addition to tho value of tbe ourrant Inforaation bo Log reported by OSS froa Spain, it is of prime Importancelid foundation be laid for tbe continuation of on Amorloan intelligence organisation in the months snd even years that Lie aheadurope that will seethe with intrigue.

This whole matter, therefore, reoolves itself into slopIs query. Is lt the wish of ths Joint Chiefs of Staff thst our Spanish Organisation be continued? If lt is, then lt would seem necessary that steps be taken to instruct the Anbeisidorirect forthright statement that theof our activities is of Importance and that he should land every poseible assistance to ita proper functioning.

Inish to stata that It Is distressing to know that every effort that has been aadeeriodearalf placate the Ambassador, -tbst he refuses to be placated. That Inwarahead, when Germany is far from subdued, *hen

France and other countries of burope still remain unliborated, tbe Ambassador still wiebes to obstruct our efforts in obtaining intelligence inforaation.

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FTRiem

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