(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, is attached, .A copy 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 os 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. (C) On his return to Washington Copaken spoke to FSM counsel Stovall. Stovallhad 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. (C) 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. =a Heel 1 | wey t