JUSTICE DEPARTMENT SUIT AGAINST WORLD DIAMOND CARTEL/OTHER OSS CORRESPONDENCE WITH JUSTICE DEPARTMENT

• Document Type: CREST
• Collection: OSS Collection
• Document Number (FOIA) /ESDN (CREST): CIA-RDP13X00001R000100300002-9
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 96
• Document Creation Date: November 3, 2016
• Document Release Date: July 31, 2013
• Sequence Number: 2
• Publication Date: February 8, 1945
• Content Type: MISC

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ADDRESS IMPLY TO
ME ATTORNEY 6104ERAL"
AND ntrem TO
INITIAL/0 AND NINANUE
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DEPARTMENT OF JUSTICE
WASHINGTON 25, D. C.
G. Edward Buxton, Aoting Director
Office of Strategic Service*
Washington, D. 0.
Dear Mr. Buxton:
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February 5, 1945
Thank you for your letter of January 30 in connection with
U. S. v. De Boers Consolidated Mines Limited, et al.
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I would be glad indeed for my staff to have the benefit of
a oonforence with your representatives who have worked in the field
of the world diamond cartel, and would appreciate yourhaving them
telephone Mr. Berman of ley staff.
)
Very tru y yours,
ebK
WENDELL BERGS
Assistant Attorney General
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30 January 1945
Mr. Wendell Berge
Assistant Attorney General
Department of Justice
Wrshington, D. C.
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my dear Mr. Borges
It has come to our attention that the Department of' Justice
has filed a civil injunction euit in the Federal Court of New York on
29 January 1945 against the world diamond cartel.
You are already in receipt of the study "Summary and
Analysis of Industrial Diamond Intelligence" prepared by this office.
We with to advise that two of our representatives who worked on this
investigation in the field are now available in Washington, D. C. If
you fool that they could be of any assistance to you in this case, we
would be happy to have them call upon you at your convenience.
Yours vory truly,
G. Edward 9uxton
Acting, Director
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Mr. Wendell Berge
Assistant Attorney General
Department of IustLce
Wasnington, D* C.
(25)
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8 November 1944
Dear Mr. Berge:
In accor,IAnce with your rogue:A, there is
enclosed our most recent study entitled 11Summ,ry and
Analysis of Industrial Diamond Intelligence".
The attached report includes not only the
results of an OSS investigation of Africa diamond
smugglinG, bat in connection with the discussim of
the Diamond Syndicate it relies to a great extent on
material obtained from Justice Depd4rtment, state De-
partment and PEA reports. Thus, the report represents
an attempt to consolid.ite and integrate tIle work of
OW and other agencies on the subject of inaustrial
diamontls.
Other than the reviev of the smuguling in-
vestitiution, you will �'id th.t tht, section devoted
to the Belgian Congo corporate situation is somewhat
more detdiled than the Daly (Dep.rtment of Zustice)
report on the Diamond Syndicate.
Since the investigation of this agency of
leakage to the enemy was carVed out in closest cooper-
ation with our British opposites, we request that pre-
caution be taken to prevent any of the material in this
section of the report from reaching non-imerican agencies.
While portions of the attached report will
duplicate what is either available to you from other
agencies or hi as been reported to you by your own divi-
sion, it is our hope that the additional infornation
and the general attempt at integration wil; prove
helpful
Enc.
eg
rhirgor
Nor Eli
Very truly yours,
Charles S. CAeston
Assistant Director
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CONFIDENTIAL
OFFICE OF STRATEGIC SERVICES
WASHINGTON, b. C.
SECRETARIAT
MEMORANDUM.
TO
.2o Octobor 1944
1944 OCT 21 RI 3 a
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: Lt. Auchinclo!is
: William L. Lam-cr
Peferonce I s made to ) renuest of
10 October 144 tl-iat ;Pe flirn I si 1,101/it nfo-ria
iight have recard Inc- the :na,tg trl !nclus
to the Department of .ru:;ti cc ( Ir letter 1.3 Octl-
ber 1944 a ttached
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rrt:EI torial. o Eau� on this 3...11),ject T 1,011pvt-, 1-ower,
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Attached is a request from the
Department of justice for inform-
ation concerning the industrial
diamond industry.
Dz. Langer and Mr. O'Gara have
been asked to forward any informa-
tion on this subject to you through
General agruder.
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:vvq.' At J. W. Auchincloss ;7 at..
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OkficeO&the Secretariat
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ENDELLBERGE
ASSIVTAM Arropmerv GaNLIAL
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Brigadier General William C. Donovan
Office a Strategic Services-
Room 121 Administration Building
25th and E streets, N. Wo
Washington 25, D. C.
Dear General Donovan:
Por smile time we have been making an analysis of the
industrial diamond industry. We have received several reports
frum the State Department and the Foreign Economic Adminis-
tration. Our analysts, however, believe that there are
certain recent reports which have been made by the Office of
Strategic Services which would be highly useful. IS at all
possible, we should very much like to have access to such
studies.
Any assistanoe which you might find it possible to
render would be deeply appreciated.
Si oorely yours
Assistant Attorney General
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Brigadier General Willi= C. Donovan
Offioe of Strategic Services
Room 121 Administration Building
25th and E Streets, N. W.
Washington 25, D. C.
Dear General Donovan*
Octobpir 13, 1914
For some time we have been making an analysis of the
industrial diamond industry. We hare received several reports
from the State Department and the Foreign Economic Adminis-
tration. Our analysts, however, believe that there are
certain reoent reports which have been made by the Office of
Strategic Services which would be highly useful. If at all
possible, we should vory muoh like to have access to such
atudies.
Any assistanos which you might find it possible to
render mould be deeply appreciated.
Sincerely yours
PENDELL BERGE
Aseistart Attorney General
MUMMEMOialfilli
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OCT 21 1944
General Donovan:
I agree with Mr.
O'Gara's suggestions that
you di3cuss this with
Colonel Schmidt before
forwarding.
,
ki
Lyr,
John r�tigrucier, .
OPrtity Di rector, Into I I ; rv'co
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O'Gara
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Each comment should be numbered to corz,.;ront with nAmber in Te -olAmr.
A line should be drawn across she. uni.r e tt mre.A.
Officer Designations should be u.Ae,1 An
Each Officer should inatial (cheek mark i!s !:. sent' before fLrther ro.�:t1np:.
Action desired or action taken shoa1i b :n. : 1: :omments column.
Routing sheet should always be reiturn-d t
For Officer Designations see separac.
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Attached a copy Of,. a:lettei
from the Departwont of. Zrusttc*,
requesting any informationit '
OSS may have regar4ing,
(*stria diamond industry.
tould TOU semi to the Director,
through 6anera1 Magruderj, any in-
formation on this subject which
your Bran oh may have.
JANAltaveNcRA4
3, W. Auchinoloss
1st Lt., JAW
Off ice pi 'the Secretariat
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LINIMENT OF flSTICE
bASHINGTOF
WENDELL BERGE
Assistant Attorney General
Brigadier General Vilhiam C. Donovan
Office of Strategic Services
Room 121 Administratioz Build:I/1E
25th and E Streets, N. W.
Washington 25, D. C.
Dear General Donovaa:
October 13, 1944
For some time we Lave been making an analysis
of the industrial dismord ildustry. We have received
several reports froll the tb.te Department and the Foreign
Economic Administration. Our analysts, however, believe
that there are cerLir re:eLt reports which have been
made by the Office of E:tr.ltgic Fervices which would be
highly useful. If tat 1L cwbLe, we !thould very much
like to have access to sl.h studie:�
kay assistari:e NhIct... you night find it possi5le
to render Nou.ld be 0,,ieA Eli,r.JcLhted.
Lncerely your..9
WENDELL BERGE
;:.Ls.:,r..nt Attorney General
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OFFICE OF sTRATEGic SERVICES
WASHINGTON, D. C.
l October 1944
TO: 7irector, :SS
Iia General n.rudcr
Acting Chief,
SUI3JCT: Africa Divisirm, SI teport on
Industrial Diamond Tn.;Dllif;once
1. In accordance vit;1 the request contained in the
letter of r. endell Alsistant Attorney General to 3-enera1
Donovan dated 30 October 1944, there is attached the most recent
report prepared by trio Africa 1)Hrision, td entitled "Summary are
Analysis of IaJostrial DiRmond ntellir,ence".
2. There is elso attached a sw-p;ested letter of trans-
mittal to be sLcnad by General ,Dquvan to r. iere.
Z. 1
tft(4r stucyini.: report, I s',;--r'st tnat you dis-
cuss the cisseriinatian of this naterial briefly with Lt. Ccloael
;Jchmidt before forwrdiag.
Lohn pra
jT
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Mr. Wendell Berge,
Assistant Attorney General,
Departmant of ;Mettle�,
Washington, D. C.
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My dear Mr. Berge:
Thank you for your letter of 15 Juno 1944
addressed to General Donovan, who at present is
absent Xrom Washirgton.
The excellent cooperation with this agency
which the Antitrust Division of the Department of
thistie� has always exhibited has been a source of
&ratification to General Donovan and myself. I am
very happy to name Sortmant Monroe Karaulk as liaison
with your department for cartel matters. To that end,
have asked br. ii11inm L. Langer, Chief of the
branch in which Sergeant tarssik works, to notify
the sergeant of tlis ap:pointment.
Sincerely yvars,
G. Edward Emxt�Jn,
Acting Director.
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NEWLIN= TOt DTpWX1UaIt L. Langer '
1Lieft Research & lysis
FROU: ;Iporetariat
SUBIECT*
The attaoltlea letter is forwarded to you
site SergemU Eardsik is in your Branch. Would
you kindly 1.repalm a reply to Mr, BE for Col.
Buxton's signature.
JI,ttaolainent
JJM: LC
J. Lonigant Jr.
Viajor, CAC
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WE ,DLL BURGE
Ailft ATTORMY 01111114AL
Mao olvigotato
.1,3eparctanntil:nfajustite
Brigadier General William J. Donovan
Office of Strategic Services
Washington, D. C.
Dear General Donovan:
June 15: 1944
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E know you are aware that members of your staff
have eonferred from ti e to time with members of the Antitrust De.
partment with reopect -t,o the application of various cartel mattere
on the problems of reo,lcupation and related problems where the
economic and industrial. connections of the important German cartel
firms become of vital Laportance. From time t. time, members of
your staff have request.cd access to confidential Department of 4Pas-
tice materials, JecludLne grand jury records. So far as I know,
the cooperation bebweea ti.e two staffs has been excellent.
It occurred to me that the access of the members
of your staff to variow confidential Department of Justice materials
(which I know you will Lgre,9 has to be under appropriate safeguarda)
would be greatly furthered and tile cooperative work of the two stairs
strengthened if wen, possible to have a member of your agency
familiar with the Department of justice files and set-up appointed
to act as liaison botwien the two groups working on cartel matters.
You have assigned to y,ur agency Sergeant Monroe Karasik3 who was
\)&I for a number of yours .L limber of the Antitrust Division staff and
r' was particularly active: Ls tho one pharmaceutical camel
cases. I do not luau ihither this is possible or not, but I think
his aeeignment. as a liti)on man to worx with us on problems of
mutual interest wuld te a uneful step so far as the joint work is
concerned. I would approclate hearing from you 4e1 to whetber such
a step would be possible,
1CTORY
BUY
UNSTRO
RTAt7,111
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With aJI personal regards.
Sii.cero yours,
/7 /7
"(A
A ELL BERG] I
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Assistant Attorney General
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Document Letter fm Justice, :.. Berge, re equipment to repair
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ADDIVICII AMY TO
� �TIOC ATTORPICY ORPWRAL"
AIM REFER TO
INITIAL" AND MUNICH
996
DEPARTMENT OF JUSTICE
WASHINGTON, D, C.
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A Ce,r) fe I r
November 26, 1910 ,� at 6a
Brigadier General William Donovan
Director, Orfiae of Strategie Services
25th and E Streets, N. W.
Washington, D. C.
Dear General Donovan:
The fighting in Italy has or probably will destroy a largo
part of the Italian oommunioations facilities. Since adequate oom-
munioatiens service ie highly important for both military and civil
government, the Allied Military 0overn3nent will require unusually
large amounts of oonwminioations equipment to repair or reestablish
exieting facilitieso
BUY
UNITED
STATES
&MGR
08
AM/MAIM
There are hiEhly developed communications equipment
industries in both tho United States and Britain which could supply
these requirements. There aro also conuaunicsations equipment
factorieu in Italy end when these Italian factories fan under
United Nation's (=tea, Allied Military Government may wish to
procure eommunicatione equipment from these Italian factories.
So long as elle Military (overnment itself purchases either
the output of the Ita-ian feetories or Italian requirements from
American or British faotories, it is improbable that any serious
production or procurement problems will arise. However, if Military
Government merely determines an overall policy and permits Italian
communications companLes aAd oommunications equipment manufacturers
to remain under price.;e eoutroll both production and procurement by
such private onterprives well present difficulties.
&grecments in Ufte possesaion of the Antitrust Division
show that the manufacture and sale of communications equipment is
completely cartelized. These cartel arrangements restrict exports
to Italy, exports from Italy and allocate fields between Italian
manufaeturers.
These cartel relationships and commitments are indicated
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in two groups of agreemontnp one involving Societe Italiana Reti
Telefeniche Interurban* (Sirti) amd the other involving Fabbrioa
Appareochiatmre Per Comunicasioni Elettrioho (Ftee). Sirti is owned
20 pereent by International Standard Electric Corporation (I.S.E.C.),
$40) peroant by Sociota itelians Pirelli (Pirelli)* 20 percent by S.A.A.V.
TOdeschi (Tedesohi)� 10 porcest by Condittori Elettriehe Affinix
lyfinix) and 10 percent by Siemens (Id Halske A.G. (S. 82 HO of Germany*
race is owned 51 percent by Sirti and 49 percent by a wholly owned
subsidiary of I.S.E.00
The Sirti and Poe al! remnants divide oonuounioations equipment
into three ottegories� oommunications cable, cable acoeesories (loading
coils, repeaters and carrier II ga ment ) and telephone and telegraph
equipment*
The manufaeture of oommunioatione cable is allocated to Sirti
and its aesociated companies. Pirelli, Tedesehi and efinix. Sirti is
the exclusive selling tgint for the associated oompanies and neither
Sirti nor the aseooiated oompanieu can cell such cable outside or for
use outside Italy.
The manufacture of cable aoceeeories is divided between Face
and �Mani Lombardo Apporeohi di Preoisione (Olap) a subsidiary
Of S.A. Hi. Definite quotme aro tiyed tor both Olap and Face for each
type of equipment* All cable scoosoorieu manufaotured by Clap and
Face muaa. be cold exclusively throagh Sirti.
Some cable accesisorios could not be coonomioally manufaotured
by Face or Clap, and I*S.E.C. and S�ez II. are permitted to export cu oh
equipment tc Italy under the IMMO quotn allocations as Face and Olap
rcepeotively. Both I.S.F.C. and S.& B. are also required to veil puoh
cable aocesecries exolusAvely through Sirti.
In addition to cable accoaeoriee, Face is licenued by 10.E.C411
to mace telephone and talograo equipment* While the license is non.
exclusive, IsS�134. agrees not to export to Italy any telephone and
telegraph equipment unless Faco does not make such equipment. IeS.P.0O3
also agroeu not to grant any additional licenses to make telephone and
telegraph equipment in Italy unless such additional licenses are
necessary to carry out quota allocations*
The quota alloonti.one referred to, divide the telephone and
telegraph equipment busineus in. Italy between I.S.E.C. and S.& H.
Face is obligated to c*'lt all telephone and telegrap:d ecild 'neat
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EllinittirianiefigtM6oc.tikimersammiwk,ftwe4Co-15~0.14e1;maiaraw
exolusively throurh Standard Elettriohe Italiana, a wholly awned
subsidiary of I.S.E.C.
There are two agreements between I.S.E.C. and Face, one dated
May 31, 1935 and the other deted Nay 31, 1936. In the 3.935 agreement
Face is required to make only I.S.E.C. types of equipment but in the
1936 agreement, Face is also allowed to make equipment of the typo
made by Nix & Genest A.G., a German subsidiary of I.S.E.C.
In April 1941, I.asEme. entrusted to Pirelli control of the
I.S.E.C. subsidiery, Sooieta Finanziaria Elettrotefonioa, which holds
I.S.E.C.fs interest in Feces
The cartel commitments and arrangements not only prevent
the Italian companies from exporting from Italy but also prevent the
world's leading nomufacturere of comanualcations equipment from exporting
to Italy.
I.S.E.C. is exolusive selling agent for Western Electric
Company, all I.S.E.C. and International Telephone and Telegraph
Corporation manufacturing subsidiaries and several other manufaoturers
of oommunicetions equipment lnoluding Nippon Electric Company. I.S.E.C.Is
covenant not to export to Italy automatically prevents exports by the
companiee for which I.S.E.C. is exclusive agent.
Agroementa between E.S.F.C. and companies in allied and
neutra3 countries restrict the right of such companies to export to
Italy. Telefonaktiebolor;et L. M. Ericsson or Sweden can sell loading
coils and repeaters) in ItaLy only to its associated telephone companies
and can manufacture and 8011 open wire carrier equipment in Italy.
subject to world quota conditions. Orders from Eriosson operating
telephone companies in Italy are reserved exclusively for Ericssen.
Automatic Electric Co. Ltd. of England can purchase loading cone
and repeaters from 1.S.E.C. or S.& H. for resale in Italy but only
to telephone operatiag companies associated with Associated and only
when those aocessorJLes forlepart of end are not more than half the
value of the telephone exobange equipment to be furnished. Siemens
Brothere & Co. Ltd. )f England is subject to the same restrictions
au Associated.
The Face wed Sieti agreements indicate the existence of
other agreemente relating to the manufaoture, use and sale of
communications equipment in Italy. Apparently, these other agreements
3
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complete and extend the cartelizstion of communications equipment in
Italy and mould undoubtedly permit a more detailed analysis of the
industry.
If the Allied Military Government feela that a more detailed
analysis is necessary or dedirablej it is believed that copies of
these additional agreements could be obtained.
Very trizly yours
,/
WENDELL BERGE
Assistant Attorney Geneva
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OFFICE OF STRATEGIC SERVICE4
WASHINGTON, D. C. X .619$ 19t4),
Mittlorilmentrntimllant�vs,,,,,
30 November 1943
YEYORit.rDUr. IOR The ActJnL,. DIrector, OSS
(Throu,:h t: E' becretariat, Att. Ensign
P.,t7e11)
Letter' FroT assistant Attorney Genera]
vdith iieference to Czech IntelliL-ence
Activities.
1. Ln acyodarce with the 1.erbal instructions
cf the Acting Director, 1.r. 6hepardson and b.r. Poole
called on rr. hugh Gcx in :tonnection with his letter to
General Donovan, a cony of ich Is abtached.
2. Attacttld re i' :vd.:,11 are tne memoranda from
S-eneruson and N. Pc Le ich v;oul irp:icate trat
the :ratter was close.1, at least fer tne tine ter..
joS el
1)Iri'ctor, (
n,
oervLce
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and Approved For Release 2013/07/31 : CIA-RDP13X00001R000100300001-0
MEM= EIMME
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TO:
FROM:
SUBJECT:
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OFFICE OF ,STRATEGIC SERVICES
Col. Russell Forgan
Whitney H. Shepardson
.IMMINMIWIEM�111.1
INTEROFFICE MEMO
DATE;27 November l943
OFFICE OF STRATEGIC SERVICES
On 24 November 1.946 in accordance with your request
Mr. Poole And I called on V. Hugh Cox, Assistant Attorney
aeneral with referenoe to his letter of 9 November 1945
addressed to General Donovan*
At. Mr. Cox' s Tequest I described to him the relation
of this Branch to the Czech Intelligence Service both in the
United States and in London.
I told him that we had a firm relation with the
London officials of that service and that they gave out
people there intelligence replarly. Furthermore as I reported,
Colonel Rroe made it,acetioe of giving :very much the same
information to our-;6exp . office, from which in turn it was
transmitted to WasUngton.
I made it clear, however, that neither. in the London
office nor here did we receive any intelligence concerning
affairs within the Western Hemisphere and that this Branch
was and is solely concerned velth acquiring intelligence con-
cerning the enemy.
. Mr. Cox said that he understood our position completely
and was particularly xtons not to take any step here which
would svbetantially affect our valuable relationship with
the Czech Secret Intelligence*
I replied that I did not think this specialized
relationship would be substantially injured if the Czech
authorities were requested to cease their so-called intelli-
gence activities in the United States, We both agreed,
hawaster, that it would be ef great importance for the
Department of Justi (xi to discuss their problem in a most
friendly. way with the Czech authorities and explain to them
that the Departmentle atti Pude was general in character
toward an such intillligenee agencies in the United States,
and that in fact such American agencies of other foreign
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governments had already leen asked to cease their activity.
The entire interview van friendly and cooperative and
evidenced desire not to handicap WS in its work.
ef1/17.)
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CONFIDENTIAL
OFFICE OF STRATEGIC SERVICES
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OFFICE OF STRATEGIC SERVICFS
01*-