PAYMENT OF FUNDS PROMISED TO SOVIET DEFECTOR NOSENKO
Originator: CIA
From: STEMBRIDGE, SIDNEY D, OS
To: DCI
Document date: 03/01/1976
Document type: PAPER - TEXTUAL DOCUMENT

## Page 1

104-10106-10071]

2023 RELEASE UNDER THE PRESIDENT JOHN F. KENNEDY ASSASSINATION RECORDS ACT OF 1992

ASSIFIEES

SUBjECT:

(Optional)

SERNEYES ONLYO

ROUTING AND RECORD

. SHEET

Yuriy Ivanovich Nosenko

(Payment of Certain Funds

Previously Promised)

DENTIAL

...

SECRET

FROM:

EXTENSION

NO.

Sidney D. Stembridge

Acting Director of Security

TO: (Officor designation, room number, and

DATE

building)

DATE

6777

1

MAR 1976

OFFICER'S

INITIALS

RECEIVED

FORWARDED

COMMENTS (Number each comment to show from whom

to whom.

Draw a line across column after each commeni.)

Chief,

CI/R & A

2 B 1405

2.

4 MA

1978

3.

MAR. 1975

DDO

7

E 26

4.

5.

DDA

7 D

26

12 MAR 1976

' DDCI

7 D 5607

8.

/ Security

11.

SO/ASI

MAI

231976

12.

13.

14.

15.

From General Counsel to General

Walters:

We have reviewed this case in

considerable detail. Technically,

the release signed by Nosenko

could be asserted. In fact, however,

on the basis of the record, it appears

he is due this final payment and we

see no problem in your approving

it.

John S. Warner

General Counsel

Ruty-C/FINANCE. OS

has copy st

FORM

3-62

610 USEOIRENOUS

EDITIONS

SECRET

CONFIDENTIAL

INTERNAL

USE ONLY

UNCLASSIFIED

---

## Page 2

14-00000

SECRET

EYES ONLY

Piroutivo Pingistru

ĐD/0/6-1287

DD/A 76-1287-

1 MAR 1976

MEMORANDUM FOR: Director

FROM

VIA

SUBJECT

: Sidney D. Stembridge

Acting Director of Security

: Deputy Director for Operations

Deputy Director for Administration

: Yuriy Ivanovich Nosenko

(Payment of Certain Funds

Previously Promised)

1. This memorandum submits a proposal for your approval.

The proposal is to immediately pay Yuriy Ivanovich Nosenko

$28,500 in back salary in settlement of an Agency commitment

to him and to authorize a subsequent one-time payment of $10,000

to him directly or as a contribution to his retirement for

identifying a ranking British official, William Vassall, as a

recruited Soviet agent.

2. Yuriy Ivanovich Nosenko is a 48-year-old former

Soviet intelligence officer who is currently employed as an

independent contractor by this Agency. Mr. Nosenko has for

some time been of the opinion that he is entitled to $28,500

in back pay.

This amount represents the difference between

actually paid to him during the 1 March 1969 to

I March 1975 period and the $25,000 per year which was promised

to him at the time of his defection in February 1964.

At the

time of his defection, Mr. Nosenko was also promised

the addi-

tional $10,000 for identifying William Vassall, a British

Admiralty employee recruited by the KGB.

While serving as

a KGB security officer with the

soviet Disarmament Commission in Switzerland, Mr. Nosenko

contacted an American diplomat in Geneva on 5 June 1962 and

requested a small loan to repay official Soviet funds which

he had squandered.

Based on this contact Mr. Nosenko was

recruited shortly thereafter by the Agency and he agreed to

E2 IMPDET

CL BY 010249

SEGRET

EYES ONLY

US 60909

---

## Page 3

14-00000

EGRET

EYES ONLY

work as an agent in place:

On 15 June 1962 Mr. Nosenko

returned to the Soviet Union where he resumed

his duties as

an intelligence officer with the Second Chief Directorate of

the KGB in Moscow.

Mr. Nosenko worked in place in the Soviet

Union until January 1964 when he returned to Switzerland.

that time Mr. Nosenko decided to defect and requested political

asylum in the United States.

4.

Mr. Nosenko defected in Switzerland on 4 February

1964 and was brought to the United States under Public Law 110

on 11 February 1964.

At the time of his defection, certain

financial commitments were made to Mr. Nosenko.

These commit-

ments were substantiated in a conversation with him on

7 February 1964 and were documented in a 10 February 1964

memorandum to the Acting Deputy Director for Plans from

Mr. David E. Murphy, Chief, Soviet Russia Division (SR Division).

This memorandum stated as

Actahlof foLlows:

"First,

I assured Subject [Mr. Nosenko] that I

was satisfied that he was genuine. Based on

this and assuming his continued 'cooperation'

I said we would proceed to make arrangements

to bring him to the States.

Second, I con-

firmed our agreement to pay him $25,000 for

each year in place ($50,000) plus $10,000 for

his part in the Vassall case and our readiness

to contract for his services at $25,000 per

year.

Third, I explained the polygraph he

would be expected to take as final proof of

his bona fides."

5.

Shortly after his

arrival in the United States, the

SR Division encountered serious difficulties in attempting to

establish the bona fides of Mr. Nosenko.

The SR Division con-

cluded that Mr. Nosenko was not what he

claimed to be and thus

was not a bona fide defector.

As noted in paragraph four of

Attachment A, Mr. Nosenko was held under highly

secure conditions

at an Agency installation from April 1964 until October 1967.

In October 1967 the primary responsibility for Mr. Nosenko was

transferred from

SR Division to the Office of Security, which

conducted a thorough review of the developments in this case.

The conditions of confinement of Mr. Nosenko were progressively

relaxed and in October 1968 the bona fides of Mr. Nosenko were

established by the Office of Security.

At this point it should

be noted that the confinement of Mr. Nosenko was cited by the

2

EYES ONLY

---

## Page 4

4-00000

SEGRET

EYES ONLY

ALTURN TO CIA

Background Use Only

Do Nol Reproduce

Rockefeller Commission Report in June 1975 and that Mr. Nosenko

is aware of this citation.

Mr. Nosenko has, however,

made no

threats concerning possible damages as a result of this con-

finement.

AlSO,

despite the difficult period through which

Mr. Nosenko passed,

he has been and continues to be a coop-

erative and productive source.

6.

Mr. Nosenko has been of significant value to this

Agency as a source of information on KGB Second Chief

Directorate activities

against U.S. Embassy personnel in

MoscoW.

Mr. Nosenko named six members of

the Embassy staff

who rejected KGB recruitment overtures during the 1953-1964

period, and all have confirmed his assertion.

A physical

search

of the Embassy in Moscow also fully substantiated

information Mr. Nosenko provided regarding KGB audio surveil-

lance devices in the Embassy.

Mr. Nosenko also provided

information leading to the identification of fifty-one American

KGB targets and sixty-one non-American KGB agents.

The most

prominent of these Soviet agents were a Exench and a Canadian|

ambassador to Moscow, a director and a deputy secretary of the

Walian VassalMs. Nosenko is the most significant detector-

we have had from the Second Chief Directorate of the KGB, and

as a result of this his contributions have been of unique

importance.

7. Prior to 1 March 1969 Mr. Nosenko received no salary

for his cooperation

I with this Agency.

Effective 1 March 1969

Mr. Nosenko was employed as an independent contractor at the

rate of $10,500 per year.

Because of the previous difficulties

and uncertainties involved in establishing the bona tides ot

Mr. Nosenko, the extent of our commitments and obligations to

him were not clear at that time. Mr. Nosenko, therefore, was

not initially employed at the rate of $25,000

had been promised.

Mr. Nosenko's salary was increased annually,

nowever, until 1 March 1975 when he began to receive the stipu-

lated $25,000 per year.

firmly established and the earlier difficulties regarding his

status were resolved, the initial commitments took effect and

the payment of $125,000 (less federal income tax) was completed

on 16 November 1972

in settlement of salary arrears for the

period April 1964 to March 1969 (see Attachment B).

On 12 July

1973 a final payment was made on the obligation of $50,000 due

Mr. Nosenko for the period 1962-1964.

3

EYES ONLI

ZIBR

---

## Page 5

4-00000

95 5313

EYES ONLY

8. There remains to be paid $28,500 (less federal income

tax) in salary arrears for the period 1 March 1969 to 1 March

1975

(see Attachment C) and $10,000 outstanding for the Vassall

case.

(He has never requested the latter amount but the

obligation still exists.) Although Mr. Nosenko signed a

quitclaim for the period prior to 12 July 1973 (see Attachment. D)

and may have legally waived his right to back salary prior to

that date, the earlier payment of $125,000 tor the period 1904-

1969 recognized our commitment to Mr. Nosenko to honor all

agreements and established a precedent for paying him the total

salary difference.

We also believe that we have a moral obli-

gation and that this obligation should be met.

9. This matter is being brought to your attention since

Mr. Nosenko believes he has a valid claim to cited back salary

for the 1969-1975 period and in connection with the current

transfer of full responsibility for Mr. Nosenko to the Counter-

intelligence Staff, Directorate of Operations.

recommended that you approve the expenditure of $28,500 in full

payment of back salary for Mr. Nosenko for the period 1969-1975:

Of the $28,500, $27,667 can be paid for out of the FY1974 unobli-

gated balance allotted to the Office of Security, with the

remainder of $833 being charged to the Office of

Security FY1975

allocation.

10.

It is further requested that approval be granted for

the $10,000 Vassall obligation, which could be paid directly to

Mr. Nosenko at a later date or

preferably could be incorporated

into a retirement program for him, which is being given consid-

eration by the Counterintelligence Statt. It approved, these

cransactions would represent a fulfillment of all commitments to

Mr. Nosenko as of this date and would serve to fulfill outstanding

Agency commitments to Mr. Nosenko prior to his transfer to the

Counterintelligence Staff.

Attachments

SECRET

4

EYES ONLY

---

## Page 6

14-00000

SECRET

EYES ONLY

SUBJECT:

Yuriy Ivanovich Nosenko

(Payment of Certain Funds

Previously Promised)

CONCURRENCE:

William

&. Nelson

Deputy Director for Operations

5 hack 1978

Date

19 tent 74

Date

John F. Blake

Deputy Director

for

Administration

APPROVED

Kaun A Welles Deputy eter. 200641974

DISAPPROVED:

Distribution:

Orig - Return to OS via DDA

2 - DCI

1-

ER

1

DDCI

2

- DDA

-

DDO

1 - CI/R & A

5

EYES ONLY

---

## Page 7

14-00000

ATTACHMENT A

—---

---

## Page 8

14-00000

EYES ONLY

Executive Registry

22-5455

5 OCT 1972

MEMORANDUM FOR: Director of Central Intelligence

THROUGH

SUBJECT

: Executive Director-Comptroller

: Retroactive Reimbursement of

Yuriy Ivanovich Nosenko

1. This memorandum suggests action on the part of the

Director of Central Intelligence; this action is contained in

paragraph 9.

2. MI. Yuriy Ivanovich Nosenko, a 45-year-old, former

Staff Officer of the Committee for State Security (KGB) of the

USSR, attended the Institute of International Relations, Moscow,

from 1945 to 1950; was affiliated with Russian Naval Intelligence

during the 1951-1953 period; and was an officer with the KGB

from March 1953 until his defection to the Agency in Geneva,

Switzerland, on 4 February 1964, after having worked for CIA

for approximately two years.

3. A review of Mi. Nosenko's case reflects that, at the

time of his defection, various official commitments were made

to him, including a lump sum payment of $50, 000. 00 based upon

his nearly two years' work inside the KGB; a $10, 000. 00 bonus

for his work on the Vassal case; and a contract as a consultant

at a salary of $25, 000. 00 per annum. Mr. Nosenko was advised

by his Agency Case Officer that Mr. Nosenko was working for

the Central Iptelligence Agency as of 5 February 1964, and that

his salary began from that date. This was a verbal agreement

with the Agency Case Officer, and is fully documented in our

files.

CLASSIFIED 8T

000988

EXERIPI FREE GENERAL DECLASSIFICATION

SCHEDULEUTG & HIS! LYRIFTION CATEGORY:

WARNING NOTICE

SENSITIVE INTELLIGENCE SOURCES

AND METHODS INVOLVED

EYES ONLY

SECRET

ALIGATE:L& LLELASSIFIED ON

Date Impossible to Determine

(unless imposseble, insert doss as ereat)

---

## Page 9

14-00000

• EYES CHLY

4. In the early debriefing of Mr. Nosenko, it became

apparent that he was a particularly complex individual. To permit

extensive and prolonged debriefing, arrangements were made to

accommodate MI. Nosenko under highly secure conditions at

ISOLATION, where he remained from 1964 to 1967. These tight

security arrangements were dictated,, during the initial phases at

least, by the additional need to provide Mr. Nosenko with

continuing personal protection, since there was the distinct

possibility that he would be targeted for execution if the Soviets

should discover his whereabouts.

5. Since October 1967, the primary responsibility for Mi.

Nosenko has been in the Office of Security, which conducted a

thorough review of prior developments in the case. Mr. Nosenko

was moved to the Washington, D. C. area in late 1967, and the

case passed through various stages of phased normalization, as

he was given an increased degree of freedom and independence.

Mr. Nosenko was actually resettled on the economy in April 1969;

he obtained a divorce from his former Soviet spouse in September

1969; and he later married an American girl in October 1969.

During the period from October 1967 to April 1969, Mr. Nosenko

did not receive a salary, but he was provided with a moderate

amount of spending money.

6. As of April 1969, Mr. Nosenko signed a one-year

contractual agreement for $16,500. 00, including a clause giving

assistance to him in resettlement expenses in the amount.of

$8, 000.00. In March 1970, Mr. Nosenko signed a new contract

•for two years at $18, 500. 00 per annum. At about this same time

he was provided with certain financial assistance, $20, 000.00

being for the down payment on a new house, and $5, 000.00 for

other related household expenses. Mr. Nosenko's contract was

renewed at the new rate of $19, 500. 00 per annum on 1 March 1971,

and the contract was again renewed in February 1972, at the salary

of $21, 000. 00 per annum.

7. An analysis of this case clearly indicates that Mr.

Nosenko has been an extremely valuable source, one who has

identified many hundreds of Soviet Intelligence Officers, and he

has otherwise provided a considerable quantity of useful information

on the organization of the KGB, its operational doctrine, and

methods. At least a thousand formal memoranda have been

EVES ONLY

2

SEGRET

]

---

## Page 10

4-00000

....

• EYES ONLY

forwarded to the Federal Bureau of Investigation based on data

from Mr. Nosenko. He has conducted numerous special security

reviews on Soviet subjects of specific intelligence interest, and

he has proven himself to be invaluable in exploring counterintelli-

gence leads. He recently authored a book which is of interest to

the Agency. In effect, Mr. Nosenko has shown himself to be a

productive and hard working defector; who is "rehabilitated" and

favorably disposed towards the Agency.

8. In the course of a recent meeting with Mr. Nosenko,

he brought up the subject of his missing salary, covering the

period from April 1964 to March 1969. MI. Nosenko readily

admitted that he is living very well at the present time, but he

is not in a position to save any money for the future. He also

expressed deep appreciation to the Agency for the financial

assistance which was provided him through the years, and he

considers this to have cancelled out the original Agency

obligation of a lump sum payment in the amount of $50, 000.00.

Mi. Nosenko, however, still feels quite strongly that he is

entitled to be reimbursed for the salary which the Agency did

not provide him over a five-year period. He understands, of

course, that income tax would have to be deducted from this

back salary of $25, 000. 00 per annum.

9. In summary, the original oral agreement with Mr.

Nosenko is fully documented and supports his claim; his resettle-

ment since 1967 has been relatively smooth, with no significant

security problems having developed; and he continues to function

at the present time as a highly productive and useful source of

information on the KGB. In view of these various considerations,

it is requested that this payment of $125, 000.00 to Mr. Nosenko

be approved. These funds would be paid out of unliquidated

obligations applicable to lapsed appropriations (Fiscal Year 1970

and prior years--"M" Account).

Director of Security

EYES ONLY

SECRET

3

---

## Page 11

4-00000

SYES ONLY

(

SUBJECT: Retroactive Reimbursement of

Yuriy Ivanovich Nosenko

CONCURRENCE:

John W. Coffer

Deputy Director

60₫1912

(Date)

Thomas H. Karamessines

Deputy Director

for Plans

:12odh.22

(Date)

доєс, не

olitaried:

WECh

William E. Colby

Executive Director-Comptroller

180x72

(Date)

The recommendation in paragraph 9 is approvedwithaut DDP limitation

Michardthem

Richard Helms

Director

18 ОСТ 1972

(Date)

EYES ONLY

SECRET

---

## Page 12

4-00000

(

EYES ONLY

SUBJECT: Retroactive Reimbursement of

Yuriy Ivanovich Nosenko

Distribution:

Original - Return to Director of Security

1 - Deputy Director of Central Intelligence

1 - Executive Registry

1 - Deputy Director for Plans

2 - Deputy Director for Support

EYES ONLY

SECRET

5

---

## Page 13

14.00001

LATTACHMENT B

---

## Page 14

ROUTING AND RECORD SHE

•SUBUEET: (Optiona:)

Retroactive rayment to

Yuriy Ivanovich Nosenko

FROM:

Director of Security

Room 4-E-60

No.

Headquarters

TO: (Officor designation, room number, and

DATE

building)

EXTENSION

OFFICER'S

INITIALS

RECEIVED

1.

DD/MES

Room 7-D-26

FORWARDED

JUM 1972

2.

DD/O

Room

1E26

4 26DB

3.

NO.

DATE

COMMENTS (Number asch commont to shom from whom

to whom.

Dram a line across column after each comment.)

BY HAND

1. For Concurrence

Executive Secretary

CIA Management Cte

Room 7-D-59

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

FORM

3-12

Director of Security

Room. 4-E-60

2. For Concurrence

call.

656001157

Jerry Brown

-4. For Your Approval

Can this be in

correction with

Ex Sec

to dete

D/ Security.

61D USE PRONOUS

EDITIONS

SECRET

• CONFIDENTIAL

INTERNAL

USE ONLY

UNCLASSIFIED

---

## Page 15

4-00000

SLUMLA.

EYES ONLY

DD/M&S 73-2549

Execulito Registy

7.3:35 49

25 JUN 1973

MENDRANDUM FOR: Executive Secretary

CIA Management Committee

VIA

: Deputy Director for Management and Support

Deputy Director for Operations

SUBJECT

: Retroactive Payment to

Yuriy Ivanovich Nosenko

1. Action Requested: This memorandum contains a recommendation

for your approval.

2. Basic Data: For your assistance, reference is made to the

attached memorandum of the sane subject dated 5 October 1972.

visions o the reference were concluded with Mr. Nosenko, covering back

salary from April 1964 to March 1969, in October and November 1972 when

he was given the sum of $87,052.00 covering total salary for this period

less Federal income tax.

It is estimated that Mr. Nosenko has invested

all but approximately $15,000.00 of this sun in the purchase of property

and construction of a new residence in North Carolina.

Instant memorandum is addressed to the lump sum payment of

$50,000.00 promised to Mr. Nosenko by an Agency representative prior to

his

defection from the KGB in February 1964. Against this sun in April-

May 1969, Mr. Nosenko was given $8,000.00 as financial assistance for

resettlement on the private economy and $25,000.00 in mid-1970 towards.

the purchase of a new house and other related expenses. Mr. Nosenko

also agrees that he was given approximately $2,000.00 in March 1964

which should be included as a part of the above $50,000.00.

In essence,

• $15,000.00 remains outstanding against the above $50,000.00.

Recently Mr. Nosenko has rather specifically mentioned the

natter of the promises to Mr. Nosenko in 1964 and the remainder of the

financial promise which he did not receive. Mr. Nosenko considers the

WARNING NOTICE

SENSITIVE INTELLIGENCE SOURCES

AID METHODS INVOLVED

EYES ONLY

SECRET

2 iMPEET củ 8:Q07472

---

## Page 16

4-00000

SECRET

EYES ONLY

amount to be $13,000.00 but this is based on his recollection that he

received $10,000.00 in April-May 1969 xather than the $8,000.00 which

he actually received. As noted in the reference, as of October 1972

NI. Nosenko had indicated that the funds previously paid to him would

cancel out the 1964 lump sun promise. However, since October 1972,

several incidents have occurred which have had a strong effect on his

outlook on lite and his personal situation. In late 1972, the wife of

Nr. Nosenko suffered a heart attack requiring hospitalization and con-

tinuing treatment which was not fully covered by the health insurance

provided by the Agency. Due to the particular circumstances involved

in the Nosenko case, it was not possible to obtain coverage for

Mr. Nosenko and wife under a group type health insurance policy.

On 18 May 1973, Mr. Nosenko suffered the loss of two toes

in a lawn mower accident and the prognosis for full utilization of the

other three toes, particularly the large toe which is required for

balance, is still in doubt.. Mr. Nosenko is currently faced with the

obvious fact that he will be somewhat physically handicapped, the extent

of the handicap not known at this time but in the mind of Mr. Nosenko

it could very well lessen his usefulness to the Agency and perhaps

duration of full employment.

Mr. Nosenko has requested the previously mentioned $13,000.00

which will be used for investment purposes in connection with his new

property and residence construction and payment of medical bills. He

nas voluntarily stated that he will sign a document agreeing that the

$13,000.00 is in full and final settlement of the 1964 lump sun pay-

ment promise.

As you will note in the reference, another promise made to

Mr. Nosenko prior to his defection in February 1964 concerned a $10.000.00

bonus for his contribution to the exposure and arrest of a British

citizen, WIlliam J. C. Vassall.

Mr. Nosenko has never mentioned the

above promise while the responsibility of the Office of Security since

October 1967. It is noted that the promise of the above $10,000.00

was apparently not a matter of discussion with Mr. Nosenko prior to

his defection but was in the way of a gratuitous addition by the Agency

representative when Mr. Nosenko was advised that following previous dis-

cussion he would be given a $50,000.00 lump sun for resettlement and

employment at $25,000.00 per year.

Since none of the above remarks

were ever formalized in a document to Mr. Nosenko, it is very possible

that Mr. Nosenko does not recall the additional remark concerning pay-

ment in connection with the Vassall case.

2

EYES ONLY

jECRET

---

## Page 17

4-00000

EYES ONLY,

Recamendation: In view of the above, it is requested that

a payment of $15,000.00 to Mr. Nosenko be approved, thus settling the

specific $50,000.00 lump sun promise made to Mr. Nosenko in February

1964. If approved, Mr. Nosenko will be advised that the $15,000.00

figure is based on an accounting of Agency financial records and a

signed settlement statement obtained from Mir. Nosenko.

It is believed

that the additional $2,000.00 would be very well received by Mr. Nosenko

and will partially oftset his recent medical expenses not reimbursed

from his current health insurance.

Here! Notars

Director of Securit

Attachment

3

EYES ONLY,

SECRET

---

## Page 18

4-00000

EYES ONLY

SUBJECT: Retroactive Payment to Yuriy Ivanovich Nosenko

CONCURRENCE:

26 V0273

(Date)

Harold L. Brownman

Deputy: Director

for

Management and Services

Lavit I Blee

Willian E. Nelson

fir A/Deputy. Director

Operations

26 Jurc/973

(Date)

5 JUL 1973

APPROVED:

DISAPPROVED:

Distribution:

Original - Return to Director of Security

1 - Executive Registry

2 - DD/MES

2 - DD/O

4

EYES ONLY

SECRET

---

## Page 19

ATTACHMENT C

---

## Page 20

4-00000

MEMORANDUM FOR THE RECORD

SUBJECT: Yuriy Ivanovich Nosenko

Year

1 Mar 69-30 Nov 69

Dec

69- 30 Nov

70

Dec

70-30 Nov

71

1

Dec

71-30 Nov

72

1. Dec

72-30 Nov

73

1 Dec

73-30 Nov

74

*1 Dec 74-30 Nov

75

Was Paid

$

12,375.00

17,999.94

19,249.98

20,625.00

21,937.53

23,374.94

24,875.04

$140,437.43

Should Have

Been Paid

$

18,750.00

25, ,000.00

25, ,000.00

25,000.00

25,000.00

25,000.00

25,000.00

$168,937.43

Difference

$ 6,375.00

7,000.06

5,750.02

4,375.00

3,062.47

1,625.06

312.39

$.28,500.00

Less Estimated Tax Liability

NET PAYMENT

= 8,084.00

$20,416.00

*Rate of

$25,000.00 for period 1 Dec 74 - 28 Feb 1975

Rate of

$25,250.00

for period 1 Mar 75 - 30 Nov 1975

E2 IMPDET

CL BY 010249

---

## Page 21

ALLALEMENS L

---

## Page 22

4-00000

(SECRET

13 September 1978

MEMORANDUM FOR: Chief, Counterintelligence Staff

VIA

: Mr. John Hart

SUBJECT

: Outstanding Commitments to PDDONOR/1

1. Within the last week I have made a comprehensive

search of available Agency records to determine if we have

met all of the commitments made to PDDONOR/l. This has

not been an easy task because responsibility for this un-

usual case was

being transferred from the Office of security

to the Counterintelligence Staff at the very time when an

attempt was made to clear up all outstanding commitments,

because of other special and unusual payments made to him

over the years,

and because past financial records have

either been retired or unavailable to me because of the

Privacy Act.

Act re Neverthe esca

Nevertheless, I now feel confident that I am

totally conversant and accurate on the details concerning

his past salary and special payments made to meet the Agency's

early commitments.

In order to determine if any commitments are still

outstanding, we are forced to answer this question from

PDDONOR/l's point of view

separate from that of the Agency…

These differing positions

are:

a .

PDDONOR/1 insists, as he has in the past

(please see Attachment A), that he was promised the

following:

1)

A salary of $25,000 per year. This

commitment was fully met through

retroactive

salary payments of $87,052 ($125,000 lesS Federal

taxes)

made on 16 November 1972 and $20,416

($28,500 less Federal taxes) made on 7 April 1976.

2) $10,000 bonus for his work on the

Vassal case.

(Please see attachment B). This

payment,

although approved by DDCI General Walters

EZ IMPDET

CL BY 012208

SECRET

---

## Page 23

4-00000

SECRET

(

on 20 March 1976, has never been

made. There

is no record of this payment having been made

and former OS and CI B&F officers as well as

OS and CI case officers responsible for PDDONOR/1

during that time frame all remember the approval -

but have no recollection of its implementation.

The best explanation is that this payment fell

between stools when on 1 July 1976 responsibility

for PDDONOR/1 was transferred from OS to CI Staff.

3), $50,000 for resettlement purposes:

The

Agency believes that this commitment has also

on the other hand,

resettlement, but against the more specific

commitment 4) below.

Therefore,

he feels we still

owe him an

additional $20,000 under this commitment.

4) Financial assistance with buying a home,

or apartment:

b. Although earlier records refer to the above.

commitments (Attachment A), later memoranda without any.

explanation or attempt to reconcile these two differing

positions, state that the Agency's commitments to

PDDONOR/1

were the following:

1) A salary of $25,000 per year. Met

2) $50,000 for resettlement purposes.

we are to

ignore commitment 2 a. 4) above and apply

the $20,000 paid in mid-1970 against this commitment,

then it has been met.

Otherwise an additional

$20,000 Is due PDDONOR/I under this commitment.

3)

$10,000 bonus for his work on the Vassal

case:

Outstanding.

3.

In conclusion, then, it would seem that in either

event the Agency's early commitments to PDDONOR/1 have not yet

2

SECRET

---

## Page 24

14.00000

SECRET

been fully met.

If we are to ignore commitment 2 a. 4),

then

we still owe him $10,000 for the Vassal lead.

we are to honor all commitments, and fully satisfy him,

then

he is still due an

additional $20,000 under commitment

2 a. 3), for a

total of $30,000.

Vasia

CI/RA/O

Attachments:

As Stated

-CC:

Mr. John Hart w/att

3

SECRET

---