Lucas then got into a discussion with Spielberg and Kasdan over how The Nazis should be portrayed as the villains of the movie. They debate over whether the villain should be German, Oriental, Italian, or Arab. He also went into a brief point about how Hitler searched for the world greatest treasures and religious artifacts. Yet they settled on a Nazi sympathizer instead.
They also settled on the idea of the villain being charming and making donations to a museum, despite being a greedy con artist. This contrasts their concept of Indy as a cynical and reluctant, yet honest man of adventure. It can be gathered this early concept later inspired Rene Belloq in Raiders of The Lost Ark. Maybe Walter Donovan in The Last Crusade as well, or even Lao-Che in the opening scene for The Temple of Doom.
In addition, they also went over ideas for Indy’s love interest. Possibly a German singer in the vein of Marlena Dietrich. Also one he may have a past with, or even also be a Nazi sympathizer herself, in some way. This could point to inspiration for all three of Indy’s love interests, Marion Ravenwood, Willie Scott, or Dr. Ilsa Schneider.