CIA File on Ray, Manuel

aligned by the Costa Flores was not to be found in the company files.

It was presented (by KUWAN) that Erquia had gone off with the original order and was waiting for the right moment to use it.

7. When translations of the press items that had appeared in California were given considerable replay in Costa Rican press and provoked much comment, that Government feared a scandal and urged CDACID and/or KURAKE to help keep secret the existence of the original Costa Rican letter ordering the arms. In their official statements, the Costa Ricans denied any and all involvement in this arms purchase. CDICKE replied that while in sympathy with their situation, there was little to be done to quash the matter since it was completely in the jurisdiction of state authorities.

8. In brief the situation as it now stands is that the principals of the company have been accused of operating without a state license, and although Erquia has skipped out, Knudson will stand trial. The State case incidentally is not secure (ivon a) possibly a Federal license may preempt the need for a state license, as Knudson has claimed and b) the seizure was made without a proper warrant. Also the California political climate is such that public officials must eager to make a move

for this missign