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(C)
Copaken says that President Kabua and Foreign
Secretary deBrum, having previously been alerted to
the existence of the problem, had already gotten
themselves into a frame of mind where they regarded

the Compact as dead but that he succeeded in obtaining
their approval of this approach in fairly short order.
He secured a letter from President Kabua to me proposing
the Senate deal and presented it to me June 24,
A copy

is attached,

together with a supporting memorandum of

law which addresses the international law issues raised
by the proposal.
(C)
In Hawaii, on his way home from the Marshalls,
Copaken met with Palau counsel Sutcliffe, on the latter' s
return from the Guam meeting.
Sutcliffe is reported
to have indicated that Palau has no problem in principle
with the suggested approach but urged that the Marshallese
include in the Kabua letter a further demand for an
increase in the baSic grant amounts included in Section
211 of the Compact.
Copaken says that he refused because
he felt that Administration resistance on this point
would be so great as to jeopardize the whole package.
(Cc)

On his return to Washington Copaken spoke to FSM

counsel Stovall. Stovall had experienced difficulty contacting his

clients and was upset that the issue had arisen at a time
when the whole issue of the Compact may be in the balance
at the FSM leadership conference now in progress at Yap.

He says that this additional complication could affect

the results of the Yap meeting, if known to his clients.
Stovall himself seems sympathetic to the Copaken-Senate
deal.
(Cc) One further consideration arose at Copaken's
presentation of the Kabua letter to me Tuesday morning.

He stated that Marshallese objections to the inclusion
of the independence option on the plebiscite ballot

had focussed on the absence of a clearly defined set
of consequences in the event that the Marshallese voters
chose independence; i.e., how much money they would get
if they opted for independence rather than free asso-~
ciation.
With the removal of the Section 453(b) 50%
provision, that objection evaporated and the MIG would

therefore find itself in a position to support inclusion
of an independence option on the ballot.

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