CIA ARMS ACCOUNT WAS ALSO USED BY SAUDI ARABIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000504130017-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: February 27, 2012
• Sequence Number: 17
• Publication Date: December 4, 1986
• Content Type: OPEN SOURCE

a
Declassified and Approved For Release 2012/02/28 :CIA-RDP9O-009658000504130017-4
LOS AvGELES TIMES
4 December 1986
CIA Arms Account Was
Also Used by Saudi Arabia
By MICHAEL WINES and Dom( ~r~CI1S, Times Staff Writers
.~
WASHINGTON-Part of the
millions paid by Iran for U.S.-made
weapons was depatited in a $500-
million CIA-managed bank ac-
count secretly used by the United
States and Saudi Arabia to buy
arms for the anti-Soviet Afghan
resistance, government sources
said Wednesday.
The accounting arrangement,
which mixed the finances of the
congressionally approved Afghan
program with an Iranian operation
hidden. from Congress, was called
by one oHidal ~n "unforgivable
blunder" that was committed in
haste and never corrected.
However, the CIA and other
officials flatlar denied a news report
stating that the CIA-managed ac-
count included :10 million to $30
million in cash skimmed from the
Iran arms sales and later diverted
to support the contra rebels in
Nicaragua.
That report, in the Washington
Post, quoted congressional investi-
gators as saying that the CIA
allotted money from the account to
fund the contras in violation of a
congressional ban on U.S. military
aid to the rebel army.
"We didn't have anything to do
with it [the diversion] directly or
rr indirectly," CIA spokesman
f `'p ;~ said Wednesday. "I ust
ed with our controller. He's got
every nickel" accounted for.
A congressional source, speaking
on a pledge of anonymity, said that
CIA officials had been subjected
only to "incomplete interrogation"
on the matter by congressional
investigators and that allegations
of impropriety were "premature."
Proof that the CIA diverted any
of the Iranian arms money to the
contras would dramatically widen
the Iran scandal, which so far is
confined to allegations that a hand-
ful of White House National Secu-
rity Council officials, led by Marine
Lt. Col. Oliver L. North, knew of
and approved the cash-skimming
plans.
The Post article quoted a Reagan
Administration source as saying
that all receipts from Iranian pur-
chases of U.S.-made weapons were
placed in a CIA account in Switzer-
land from which "the various ac-
counts involving the Reagan doc-
trine are administered."
The account in question, govern-
ment sources said Wednesday, in-
cludes $250 million in deposits from
both the United States and Saudi
Arabia that are used to buy Soviet
Bloc weapons for distribution to
resistance forces battling the Sovi-
etoccupation of Afghanistan.
The Post report, quoting con-
gressional sources, said the account
also financed secret purchases of
weapons that were then sent to the
contras and "freedom fighters" in
pro-Soviet Angola.
CIA spokesman Lauder said
Wednesda that some recei is
from Iranian arms urc aces were
lac in a num v~nss ac-
count. ut a to epostts, e
said, cover o y e cost to e
erase a en o e wea -
ons themselves an tear transpor-
tatton to an, a figure pu is y
estimated at about $12 million.
e m e ect got ~ by the
Defense De tment for the cost of
U.S. wea ns sent to an, uder
said. " en t e mope was ai to
us, it mov in in c un s an we
passed it right on to the PentaROn."
He did not say where the esti-
mated S10 million to $30 million in
ro its enerat y t e arms sales
was de sited, but .Aft .Gen. Ed-
win eese said last week that
_ those funds were placed in bank
accounts under control of the con-
Tras.
-_ ~e informed source. sneaking
on a promise of anonymity, said
Wednesda that CIA finance offi-
cials apparently ow t e rani-
an monies to be placed in the
_ Afghan account in haste after be-
mg approac on an emergency
basis by the NSC's North.
In related matters, the CIA was
reported Wednesday to have given
congressional intelligence commit-
tees anew version of its role in a
secret arms shipment to Iran in
November, 1985, two months be-
fore President Reagan signed an
order approving such shipments.
Members of Congress have asked
questions about the 1985 shipment
because it marked the CIA's first
involvement in the Iranian arms
deal and because the agency acted
without formal authorization from
the White House.
According to a congressional
source, the CIA now says that
neither CIA director William J.
C~y,nor his deputy in Novem r,
1986. John"~~~~ approved
the agency s on to grant "lo-
gistilCalhelp" to that shipment.
The agency also said it helped
move the shipment from Lisbon to
Iran under the mistaken belief that
it included oil drilling parts, not
weapons. the source said.
Casey had told the House and
Senate intelligence panels on Nov.
21 that McMahon approved the
shipment while Casey was in Chi-
na. After McMahon objected vigor-
ously to that version, Casey told
the committees that he had "mis-
spoken," and several congressional
sources said he had personally
approved CIA aid for the shipment.
In the latest explanation, the CIA
told congressional officials that the
authorization for logistical aid for
the arms came from a third, low-
er-ranking CIA officer.
"We still don't know what really
happened," a congressional official
said. "Casey has not made anything
clear."
The White House has said that
President Reagan did not know of
the November shipment until three
months after it occurred. The
source of U.S. approval for the
arms-the first shipment directly
aided by the United States-has
not been established, at least pub-
licly.
Declassified and Approved For Release 2012/02/28 :CIA-RDP9O-009658000504130017-4