Created: 12/14/1967

OCR scan of the original document, errors are possible

MEMORANDUM FOR: Director oi Control

Director for Plana

catlog oa Radio

Free Europeadio Liberty (RL)

memorandum haa bean prepared for thonformationeelble ua* ateeting acheduled for IS December. Tbe mooting, we and* ra land, ha* beecby the Deipartmoot offorexamining thof the Budget (BOB) propoaal for eurg* funding of tho two radio*.

Th* followiog eibaarvatloa*aotmot or*ad to be. Th*lr parpoa* la aololy to highlightnombat ofmora *al Icnl factora boarlag upon th* eltiiatloa of thoaiitexiommitdeclaloo to lrnplatn*ot tb*dered by th* Bureau of th* Budget.

Tim bag i faadiog of th* two radloah* troaafarTo accompli ah thle la an

:laf th* various machaalcal proaUma. actloaecember at th*

4.. Scanarlo: Th*o aaggeatioo for publict. Th* aiinplea: way to go about It would probably be totm*at of Stat* praaaehortly aftaroadlio*. Whan aaked about th*of actloa pura ii.nt to th* Katoaobach etatameat of laat aprlog,tm*oi woald re*pond to the effect that allips with tha organization* reviewed_ Iflocal ry la mad* coacsrolag th*ha reply wouldCo th* original b* which Bale that iof th* organ!aatlOUould b*ublicly.

5. RFE and RL Reactions: There ha* been nodicm slon to date with official* of tho Radio*his subject. The Government'* decision may therefore beto tax* them by surprise. Ia the ab**DC*dv*bce aoundlng*,are laposition only to *paculat* about their po**ible reactions. At on* time aoni* weak* ago, w*troog inclination od th* part of th* principal* la favorot* of one kiad or aaothar. It la tha* poaalble that the/ mar vlaw th* Schulte* proposaliable interim eolation and ao regard itIf itaccompanied by th*aeuraocaonger term eolutiooeing aougbt and, li thl* prove*hat the Government will underwrite the termination coetsillion). It la equally possible that th* principals will Interpret surge fuodiog--coupled with ao aonouocement thatwill beurther covert financial support by. Government to tha organization* affected bynbachmeaning Inevitably UrmloatloQ after (if not before) In ourth* latter I* almost certain to b* th*of key officer* of both radio*. If the expectation of terminationthus to tax* root. It would probably*of th*taff* to begin sacking other and moraemployment.

Congre*slocal Reaction: The alternateor Interpretation of th* actualoffoodingaparagraph, would alao apply toof Congress. Tha latter having been briefedp*ctpecific course of action for handling th* problem of th* Radios, they might question th* Implication of this new andradical departure. In this connection it sbonld be noted that lb*rincipals might wellfit to undertake th'*lr own lobbyingongressmen aodmmediately upon being told of th*decision.

Continued Agency presence:ublic announcement of termlof Agency aupport to th* "Kataeobacb" organisation* woold presumably b*lso the end of Agency involvement In and with thos** currently^ ^Agencyinposition* within RFE, aad[ >rlthln RL. Of those Inur*agent* andf^jVre career agents. Of those3areer agent,contract employe*. If, In order to comply with asauxaacaa to th* public afterecember, It war*to removeh* effact would h* to reduc* drastically oar control over the operation. It might also crippl* the Radios aa such.


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a. Government Credibility: If th* Scholia* interpretationave* of continuing press interest In too CIA fending lean*orrect, wo cannot dlamla* too po*ibllity of contlnaad InvseUgatloa1 December, la the face of whatever publiela madahat time. Shoold the idea of ultimate termiaazioa of the Radio*oothold, either within the rank* of the project people th*m. eelvea or la congressional circlea, It la conceivable that additional rovelatlooe might ia time bethe continaed preseace of Agency personnel within the Radloa. The emooat eorge-faaded erUl have bees entered oo theook- and6 Incorn* onUed with both Internal Revenue Service and tha Attorney General of New York State. Both will be available for pabllc accounting. It la our Impreaelon oo balance that the "exception" route for handing the preaa entail* less fuiUiaed haaard to the Goverameat'a credibility than doe* the propo*al offered by the Bnraaa of the Budget.

Solicitation: Ituite possible that followingand public announcement, and assumingand RLtha situation, the principal* of RFE would decide to pathwith their fund-raising campaign. Radio Liberty, whichhaa not pnraued pabllc eqiiciutloa, might also feel that the time

had come to do The**ualtties woold

whatevar residual mediaexisted bearing en th* nature and makenp of the Radloa.

Policy Control: The pattern of future contact between the Agency and th* Radio* would, ofe governed by the dec!sloe ofommittee. Agency officer* woold be available to aeslst tbe Radio* In their policy problem* alongline*. Itowever, that tha Radio official* mighto take their guidance directly from the Department of Stat*.

Ancillary Actlvitl**: Th* Bureau of th* Budget propoeal caake* no provision for futur* haodllog of thencillaryook malllag, financial flopport to exiles/and th*_

1Z. Th*r*n element of speculation In the**and no* posalbl* until th* aohject ha* beenwith th* prlncipel* ofnd RL. Inheof weighingand now th* odd* effecting the Radios'

f scrvival beyond If tcreninaxlou haa to b* faced at thai time, it would be far preferable to have provided for it today.through Inclusion of the necessary funds fa the amnant sarge-fundod beforo This wealdh*rotection through thalr critical period, would loaore thatterminationat in aamanner, and woald entailpotential security complications of the typeto above.

cc: DDCI

Original document.

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