XOR-0-0271

29 May 1959

SUBJECT: DRAGANOVIC, Krunoslav     REFER:

1. Circumstances of Contact:

   a. Reason for meeting: To be introduced to DRAGANOVIC and attempt to establish a controlled operation into Yugoslavia with use of SUBJECT's organization.

   b. Date, time and place of meeting: 28 May 59, 1330 hours-1500 hours, Via Risorgimento 2, Verona, Italy

   c. Transportation utilized: Private Vehicle

   d. Language(s) spoken: Serbo-Croation [sic]

   e. Unusual occurrences: None

   f. Additional security precautions: None

 

2. Finance:

   [.....]

   Other (specify): Development of Source - 10,000 Lire

3. Logistics:

 

4. Operational Data:

   a. FRANKO, who established initial contact with DRAGANOVIC, had made arrangements for DRAGANOVIC to travel to Verona from Rome for the purpose of meeting SARDI. On the basis of a letter sent FRANKO by DRAGANOVIC that he would be in Verona on 28 May 59, arrangements were made for SARDI to meet SUBJECT at FRANKO's home upon DRAGANOVIC's arrival. At approximately 1315 hours, FRANKO's wife phoned and stated that DRAGANOVIC had phoned and was on his way over to FRANKO's residence. FRANKO and SARDI departed their offices and arrived at approximately 1330 hours. FRANKO introduced SARDI as Marko SOPAR. After initial exchange of pleasantries, FRANKO departed the room and SARDI decided to get to the business at hand.

   b. SARDI informed DRAGANOVIC that he was informed by FRANKO that DRAGANOVIC through his organization may be able to help SARDI in obtaining information from within Yugoslavia. SARDI explained to DRAGANOVIC what he wanted was a controlled operation into target area, utilizing DRAGANOVIC and individuals who he has in place within the country. DRAGANOVIC stated that he personally does not have or control the men, but that they are members and followers of his organization. He stated that that is the method in which information was to be obtained. He asked SARDI exactly as to what type information was desired.

   c. SARDI explained that he was interested primarily in OB information, then secondary economic and political. DRAGANOVIC informed SARDI that his organization and his contacts were not trained in the gathering of OB information, but that it could be done with training. SARDI agreed with him that training would have to be conducted. SARDI began to explain in detail as to what was desired in line of OB information. He informed DRAGANOVIC that he wanted a operation set-up as such that SARDI would be able to request specific information in specific locals and that DRAGANOVIC's net or sources would be able to supply the answers to questions as given by SARDI. DRAGANOVIC interrupted and informed SARDI that he has the ways and means available in doing exactly that as SARDI outlined.

   d. DRAGANOVIC continued to expound on the beliefs and ideals of he and his organization. They were anti-TITO and pro-Croatia. He continued to elaborate to SARDI that the organization was such that it was large, had contacts all through-out Yugoslavia, could cover any portion of Yugoslavia and in any field. He rambled on along this line for approximately 20 minutes and then informed SARDI that before he or the organization would be become [sic] involved in this type of work he had to have some agreements drawn up between his organization and the United States Government. SARDI inquired as to what these agreements were.

   e. DRAGANOVIC then proceeded to inform SARDI that his organization has three objectives. He stated that these objectives may not come into reality next day, next year or perhaps ten years from now, however, the objectives were given as follows:

   (1) A free Yugoslavia from the Communist regime.
   (2) The needs of the people looked after first before anything else.
   (3) The people themselves select and determine the ruling power, party or faction when liberated or freed from Communism. His organization itself desires a plebiscite, made of the six Yugoslav Republics.

     f. SARDI inquired as to how did the objectives of the organization or those of DRAGANOVIC enter into the picture in connection with the matter at hand, that is utilizing the services of DRAGANOVIC or his organization in obtaining information from within Yugoslavia. DRAGANOVIC replied that on the basis of the objectives he would have to have a agreement drawn up by the US guaranteeing that when and if the Communists are overthrown be it now or ten years from now, that America, it's political groups or other Western powers would not force upon Yugoslavia or it's people a individual selected by the aforementioned powers or forces as the governing head of the country. He continued to elaborate or rather spell out that his organization or he himself did not want at a future date to have America tell the Yugoslavs that King PETER is the selected leader, or select someother [sic] individual who America desires to lead the country. DRAGANOVIC stated that this agreement would not have to be a so-called pact or treaty, but if would have to be written up and signed by some high responsible American Government official in Washington.

   g. SARDI explained to DRAGANOVIC that he was not a representative of the US Government for matters such as this, he merely had a job to do and that was obtaining information on a country of interest to us. DRAGANOVIC stated that he was fully aware of this, however, if he and/or his organization were to work with SARDI the agreement would have to be drawn. He stated that he had to return to Rome, contact other responsible heads of the organization, they would write a memorandum, which would contain all information as to what his organization stands for, what it can assist us in and what it demands for it's services. He stated that when it was completed he would submit it to SARDI for transmittal to higher offices. In addition to this so-called pact or agreement, DRAGANOVIC brought up other stipulations which his organization would want. He stated that of course that once the agreement is signed his organization would begin to work in obtaining information as requested and that these latter stipulations would come later as work progressed. He outlined the other demands as follows:

   (1) DRAGANOVIC stated that he knows we have Agents operating in Yugoslavia, travelling from and into Yugoslavia. He wants these travellers, whether legal or illegal to take mail into the country and mail it from within the country. He described an example that we may have a individual [sic] going to Belgrade, SARDI would inform DRAGANOVIC that we do have a man going, thereupon, DRAGANOVIC would give SARDI several letters to be given to this traveller to be mailed upon his arrival in Yugoslavia. SARDI questioned as to why that. DRAGANOVIC stated that he or his organization does not desire to mail anything from outside the county, explaining that although there is no censorship, spot checks are made occasionally and some receivers may be on a watch list.

   (2) Another stipulation was that SARDI or his superiors would put DRAGANOVIC in contact with various American Consulates in Eurpoe. [sic] SARDI when asking why, was informed by DRAGANOVIC that numerous Yugoslavs permitted to emigrate to the US are no good and that all the good ones have been left behind. He added that if he was in contact with all Consulates, the Consulate when having an individual (Yugoslav) reading for emmigration they would contact DRAGANOVIC and then he would inform the Consultae [sic] whether the individual was qualified to emmigrate or not. In other words he would be the one to pass judgement as to which or what Yugoslav refugee would emmigrate to the United States.

   (3) Numerous contacts and/or followers of DRAGANOVIC or his organization are known or suspected as such within Yugoslavia and are not permitted to travel from outside their immediate area of residence or employment. DRAGANOVIC wants that we obtain blank Yugoslav identity and travel documents to be given him for the purpose of falsely documenting his contacts or sub-sources for travel within the country. He even outlined the fact that some of the documents would be student documents, military documents and others utilized. He stated that he knows our intelligence facilities could obtain such documents and send them out of Yugoslavia through the use of the US diplomatic pouch.

   h. Remaining portion of the meeting was spent in going over in detail of what was wanted from SUBJECT and/or his organization in line of OB information, political and economical. During the course of the meeting SARDI also brought up the fact that if we could not meet DRAGANOVIC's requests for the written agreement, and other 3 secondary requests could SARDI work just with DRAGANOVIC on a personal basis. DRAGANOVIC stated that he is only familiar with cultural and social work and would not be able to devote time and effort to the gathering of information as outlined by SARDI. He also brought up the fact that or rather hinted and gave SARDI the feeling that he would not do anything except through his organization. Likewise, SARDI felt him out as to whether he knew of individuals who he could put in contact with SARDI, these said individuals having communications with residents in Yugoslavia so that something of an operation could be initiated through these individuals. DRAGANOVIC stated that he has a few colleagues but that they are within the organization and would not work on an individual basis but rather through the organization. Now these aforementioned, DRAGANOVIC or his freinds, [sic] were not flat refusals, but sort of hinted at that if a agreement [sic] as outlined by SUBJECT was not acceptable and the services of the entire organization were not utilized, that neither he nor the friend would not want to work. His position in replying was to wait and see until he had the so-called memorandum drawn up and forwarded to Washington, then on the basis of the results on it then maybe or perhaps we could talk business. SARDI brought up the fact that DRAGANOVIC in his position in life has numerous acquaintances that have no ties with the organization, and that these individuals may have channels of communication into Yugoslavia and would be willing to work with SARDI for either idealistic reasons or financial gains. DRAGANOVIC admitted that he did know some individuals such as, however, bringing to SARDI's attention that if they were not members of his organization they were not idealists and others who could be tapped because of want for financial gain were not to be trusted, being liars, cheats etc. He left the impression that if he or his organization were not accepted on their basis then he wouldn't even bother placing SARDI into contact with the so-called liars and cheats.

   j. SARDI spent some time in trying to obtain the name or official designation of the so-called organization with which DRAGANOVIC is connected. This he would not disclose, merely stating when asked as to the location of it's headquarters that it was not in Italy. He also brought out the fact that he himself was not the head of it. Informing SARDI that the so-called memorandum would have to be agreed upon by other members or parallel heads in addition to DRAGANOVIC that is in the organization.

 

5. Leads: NTR

 

6. Instructions to Agent:

   a. Next contact to be made by SARDI with DRAGANOVIC will be done through FRANKO.

   b. When the so-called memorandum is drawn up and prepared DRAGANOVIC will notify FRANKO andthen [sic] arrangements will be made for it's pick up by SARDI or delivery to SARDI.

 

7. Comments and recommendations of Agent Handler:

   a. Initial contact with SUBJECT, disclosed that he is a very intelligent if not shrewd politician. He and his organization have a goal and they want to attain that goal by any means.

   b. He would not disclose the name of his organization or other names of leading heads, however, he did disclose that he was recently on a trip to South America. This leads SARDI to believe that the organization with which DRAGANOVIC is connected is the Anton PAVELIC Croation [sic, here and below] Liberation Movement. PAVELIC is the ex-Ustashi quissling leader of Yugoslavia. He is wanted as a war criminal by the Yugoslav government. PAVELIC currently resides in Buenos Aires, South America and likewise the headquarters for the Croation Liberation Movement is located there.

   c. Of course nothing further can be done until the memorandum reaches us and we can see what the demands are, however, the demands made verbally gives SARDI the personal belief that we would be working for DRAGANOVIC and his organization rather than they working for us. First is the guarantee they demand. Matters such as that are taken up on the State Department level. No commitments were made by SARDI, merely agreeing that he will accept it when furnished by DRAGANOVIC and turn it over to SARDI's superiors. Now the next three stipulations do not ring true for an organization claiming that they have channels of communication into the target country. First wanting us to mail letters from within the country to addressees. In other words we are to be couriers and letter drops for the organization. Probably want us to deliver propaganda material for the organization to loyal followeres [sic] inside Yugoslavia. This way if our people would do it and they were caught then of course his organization would not lose anybody. Next is the request for documents to document his people. This is in reverse. We have standing requirements to attempt to obtain any type of identity documents from target countries for the purpose of documenting any potential IBC's we may have. Here an organization that claims that they have many individuals in the target area requesting documents. Of course known followers of the organization are probably on a watch list and only permitted to travel in a small area, therefore for it's own purposes the organization would want documents to permit the restricted members to travel around Yugoslavia.

   d. Another factor which leaves SARDI to believe that the organization does not have the so-called connections and channels of communication into Yugoslavia as claimed by DRAGANOVIC was the fact that during the course of the conversation DRAGANOVIC brought up the fact as to whether SARDI had heard about the riots in Zagreb. When SARDI replied that he had, he asked DRAGANOVIC how did he obtain the information, through the organization and how fast was it in comparison through the normal news releases. DRAGANOVIC stated that he had the news three days prior to anything being written in the local presses. SARDI attempted to draw out the fact out [sic] as to how it was delivered to the organization, courier, or what means to have it so rapid. DRAGANOVIC stated that through the Croation [sic] Radio Station in Madrid, Spain. Now on this point SARDI could not determine whether it is a radio operated by the organization or some other broadcast from within Yugoslavia picked up by the organization in Spain.

   e. Of course if nothing can be worked out with the organization then we may be able to do something with DRAGANOVIC on a personal basis. Either he directly or he could place us contact [sic] with prospective sources, however, from the line of replys [sic] to these specific questions given him, it appears that if we can't do business with the organization that we may not do business at all. Perhaps if he does come across with something, it may be members of his organizations and they will be controlled by the organization or SUBJECT. Anything we levy on the sources will be reports to the organization or DRAGANOVIC and anything readied for transmittal to us will first reach him or them and they will OK it or tell the source not to give it to us.

   f. Of course all of the aforementioned are personal opinions of SARDI and only time will tell. It is recommended that SARDI continue on with DRAGANOVIC until we see the memorandum and their demands. Then on the basis of that we will see if we can work. As DRAGANOVIC stated it will be either yes or no, if yes we cooperate if no we shake hands and depart friends.

[signed]
SARDI

 

8. Operational Comments: We will wait for the memorandum promised us by DRAGANOVIC and take it up from there. A/H has given considerable thought in preparation of this XOR and has definitely pointed out the various ramifications of a possible operation involving DRAGANOVIC. Agree that on certain points DRAGANOVIC contradicted himself, however, this could be done by any of us in a lengthy discussion on some new exploitation. Also agree with A/H that we may be able to use DRAGANOVIC on an individual basis separate from his organization - if we cannot use the organization.

Concur with recommendations