TIME OF TRIAL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000605040002-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: May 4, 2012
• Sequence Number: 2
• Publication Date: May 5, 1987
• Content Type: OPEN SOURCE

STAT_ _`
Declassified in Part - Sanitized Copy Approved for Release 2012/05/04: CIA-RDP90-00965R000605040002-8
V" 1711M
NEWSWEEK
5 May 19 8 7
Time of Trial
A Watergate echo: 'What did the president know, and when did he know it?'
The ghosts of history were rustling
again among the marble columns
and crystal chandeliers of the old
Senate Caucus Room. The TV.
lights were positioned for another
summer of congressional hearings; once
again the insistent question would echo:
what did the president know, and when did
he know it? As in the national trauma called
Watergate 14 years ago, the na-
tion has little appetite at this
point to learn whether crimes
were committed in the Oval Of-
fice. But the presidency is again
on trial; and after this week's
opening, the hearings them-
selves may well quicken that
appetite. And in time for the
hearings, special prosecutor
Lawrence Walsh quietly estab-
lished last week that an aspect
of the Iran-contra affair had in-
deed been a criminal conspira-
cy. With that, the odds rose that
Ronald Reagan himself might
be seen as part of it.
The key move came when a
bit player in the scandal, con-
servative fund raiser Carl
(Spitz) Channell, pleaded guilty
to one count of conspiracy and
agreed to cooperate with
Walsh's investigators in trac-
ing the web of wrongdoing. For
openers, Channell admitted
that he had solicited private
contributions for his tax-de-
ductible National Endowment
for the Preservation of Liberty
and sent them to the Nicara-
guan contras. That had long
been suspected, but the confes-
sion was a new hazard for the
president. Until then, it was
widely speculated that if he
were guilty of any wrongdoing,
it would be that he knew that
profits from the sale of arms to
Iran were being illegally divert-
ed to the contras. But now
Walsh had established that the
misuse of Channell's tax-de-
ductible status was a fraud
against the government. There
were potentially several witnesses who
might establish that Reagan knew what
was being done with the money and thus
had tacitly condoned a crime-and the first
of them, retired Air Force Maj. Gen. Rich-
ard V. Secord, was to be the surprise leadoff
witness in this week's hearings.
Channell's plea bargain "opened a new
front, plain and simple," fretted one White
House aide. Presidential spokesman Mar-
lin Fitzwater issued a somewhat lame he-is-
not-a-crook manifesto: "It is the legal view
of the White House that the president is not
part of this conspiracy." Oliver North, the
National Security Council swashbuckler
who oversaw the( Iran-contra operation
from the start, once wrote that Reagan "ob-
viously knows" why he was meeting con-
tributors to thank them for their help. But
as Reagan and his people continued to in-
sist, the defense was ignorance: he was un-
der the impression that Channell's donors
had merely given money for television ads
asking Congress to back contra aid. It was
not a strong alibi, and White House aides
were showing the strain. "We'd be fools not
to be worried about this," said one.
It was North's onetime boss, former na-
tional-security adviser John Poindexter,
who might do Reagan the most damage
when he testifies, and Poindexter gave a
preview for committee lawyers behind
closed doors last weekend. Poindexter's
friends have been saying he will testify that
the president was informed about the diver-
sion of funds, and White House aides pri-
vately concede that this is their working
assumption. So they coached Reagan to give
him a public stroking: Poindexter, said the
president, is "an honorable man" who "was
being in some way protective of
me" in not telling about the
fund diversion. But the real
message was that if it came to
Reagan's word against Poin-
dexter's, the president wasn't
about to back down.
As the congressional select
committees on the scandal set-
tled in for their summer's work,
it was an open question whether
the hearings would turn out to
be a Watergate-style barrage of
political bombshells or merely a
rattling bore. Going in, the pub-
lic had little interest in the
whole affair. A new NEWSWEEK
Poll showed that although 62
percent of a national sampling
think Reagan knew more than
he has let on about the scandal,
a plurality of 49 percent be-
lieves the hearings will only
prolong the Iran-contra scan-
dal. Moreover, 52 percent said it
is more important to make solid
cases against wrongdoers than
to get all the facts out. That
will take some time in any
case: it will be a month or more
before the procession of 30 to
50 witnesses comes to a climax
with the testimony of North
and Poindexter, and chances
are the hearings will go on un-
til the August recess. Members
and staff alike have been un-
usually discreet about leaking
evidence, but some of them
said privately that at a mini-
mum, they expect to prove
that top presidential aides vio-
lated the Boland amendment
ban on federal aid to the con-
tras. Beyond that, said Maine's
Democratic Sen. George J. Mitchell, "this
was an executive branch totally commit-
ted to circumventing the law because it
believed it had a higher moral duty." And
that attitude, argued Hawaii's Daniel In-
ouye, chairman of the panel, made the
Iran-contra scandal worse than Water-
gate itself: it was no less than "the privati-
zation of American foreign policy," by-
passing any accountability to Congress
and the voters alike.
'Nothing to hide': As the lead witness, Se-
cord brings both drama and suspense to the
hearings. A longtime friend of North's and
something of a James Bond operator who
has run undercover work on threeconti-
nents (page 20), he had previously refused to
appear before the Tower commission, ap-
pointed by Reagan to investigate the scan-
dal, and had invoked his Fifth Amendment
rights against self-incrimination when
asked to testify to congressional commit-
tees. But last week he suddenly decided, as
Inouye told it, "that he has nothing to hide
and that he doesn't believe he has done-
anything wrong"-and so, without even an
offer of limited immunity from prosecution
in return for his testimony, he agreed to tell
his story. As a pivotal figure in both the
Continued
Declassified in Part - Sanitized Copy Approved for Release 2012/05/04: CIA-RDP90-00965R000605040002-8
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/04: CIA-RDP90-00965R000605040002-8 1Z
Iranian-and Central American operations, less than $1 million actually made it from sional investigators who said they had
he is uniquely qualified to give what com- the Iran account to the contras' control. found "talking points" prepared for Reagan
mittee staffers said would be an "operation- Getting old: But the key questions will con- for two of the meetings. Pointedly, the pa-
al overview" of the arms deal and the contra tinue to revolve around Ronald Reagan's
supply effort, telling what happened and role in both the Iran initiative and the long pers told him to thank Channell's contribu-
how. When Secord is done, former national- effort to support the contras. The Tower tors for helping with television commer-
security adviser Robert McFarlane, who commission, says one source, "told us how cials-and not to mention weapons at all.
oversaw the Iran initiative and carried out disengaged the president was. That is less It also remains to be detailed just how
the climactic mission to Teheran last Au- and less the conclusion of people who have closely North worked with William Casey,
gust, will explain the policy rationale. Pri- spent time on this investigation." And inan the former director of central intelligence
vately, committee investigators predict interview with CBS, Inouye said Reagan who is now said to be near death following
that Secord will be both impressive and was "very much knowledgeable" about surgery for a brain tumor, and with North's
telegenic; they worry that McFarlane's dry Channell's operations. "He was not just a contacts in the FBI. At Senate hearings last
monotone maynotdojusticetohismaterial. peripheral player," Inouye said. "He was week on the confirmation of FBI Director
Like the Watergate hearings, the Iran- involved very deeply. People have suggest- William_ Webster to succeed Casey at the
contra probe seems likely to develop a char- ed that he wasgettingold and hedidn't know CIA, Webster confirmed that North had
acter and cast of its own (page 23). On the what was happening.... From what we requested FBI help from his friend and liai-
first day the 26 senators and congressmen have seen, for example in some of the son, Oliver (Buck) Revell, to get a delay for
were each to get two minutes for what notes [in his diary], he knew what was Richard Miller's testimony in a grand-jury
threatened to bean endlessdroneofopening happening." investigation. Websterlsoeffectively on-
statements.Theroom itself,sceneofnation- Just how damning that appraisal might firmed a NEWSWEEK report that North had
al dramas from the Army-McCarthy hear- be will depend on how closely the testimony been sent copies of FBI reports about inves-
ings of 1954 to the Watergate drama, has linksthepresidenttoChannellandhisoper- tigations of the contra operation, acknowl-
been prepped forthe newrun withatwo-tier ation. Under the law, a foundation like edging that North had received three docu-
dais for the lawmakers, reserved seats for NEPL must use donations only for "reli- ments about a case he was interested in. In
140 reporters and carefully planned TV gious, charitable, scientific, testing for pub- the end, the Senate Intelligence Committee
lighting and camera angles. To guarantee lic safety, literary or educational purposes" unanimously voted to recommend Webster
whatlnouyecalls"equalopportunityunder if it wants to keep its tax deductibility. With for the CIA job.
theklieglights,"hehasdividedthecommit- Lerkieg boubsMNs: No one can predict for
at least some of his contributors, Channell sure where the trail will lead, or what bomb-
tees into questioning teams (each to consist made no secret of the true purpose of the shells lurk in the volumes of material p1-
of two senators, two congressmen and three funds: E. Thomas Clagett, a retired coal- ready assembled by the investigators. For
staff lawyers). The teams will take turns mining executive, has boasted that he gave one thing, there are strong hints that
grilling witnesses. Channell $20,000 to buy arms for the rebels orts un ogged after-hours meetings
The first weeks of the hearings will focus against the "Sandinista commies." In all, and phone calls with Reagan were more
on the contra supply operation. Next the staffers for the special prosecutor said extensive than Previously acknowledged.
committeeswilltakeupthelranarmssales, Channell had collected more than $2 mil- Walsh's staff has conducted more than 800
and the concluding weeks will be spent ex- lion to provide military and other nonhu- inter ie s and pored through 200 000
ploring how the administration let things manitarian aid for the contras. Arguably, pages of CIA documents and hundreds of
get so far out of hand. An early standout will funds to buy clothing and medicine might boxes of papers from the White House and
be North's glamoroussecretary, Fawn Hall, qualify as charitable contributions-and the NSC offices; more indictments will sure-
who has been immunized (with 14 other for his cover story, Channell pretended that ly come, and under their pressure new wit-
witnesses) to tell, among other things, how some of the funds went to buy Christmas nesses wt1l emerge. Ina report on his
she shredded documents for North when toys for the contras' children. But the real investigation so far, Walsh said last week
the scheme was unraveling. The commit- use was "clearly a non-tax-exempt pur- that thework was "accelerating" and add-
tees have yet to decide whether to grant pose," the prosecutor said, and thus a con- ed,"ExceptpeerhapsforWatergate.thesitu
-
immunity toNorth; Walsh has argued that spiracytodefraudtheTreasuryoftaxes. ationisvirtually unprecedented."
it isn't necessary and may hamper prosecu- Stroking sessions: Who was in on the plot? In Almost surely the Watergate parallel
tion, but the betting is that North will be court, Channell named North and Richard stops there: even if Ronald Reagan were
immunized early next month and take the Miller, president of a Washington public- firmly linked to the plot, the idea of im-
standJune 23, a week afterPoindexter(who relations firm said to have been used to peachment in his last year in office is all but
already has immunity). Committee mem- transfer funds to a gwiss bank account unthinkable. A House Judiciary subcom-
bers and staffers alike were amazed at the (Miller has denied wrongdoing).Channellis mittee is said to be looking into six laws that
trail of computer messages North left be- known to have contacted the offices of Vice the president might have tripped over, but
hind him, believing all the time that they President George Bush, Attorney General in practice, legal proof would probably
were being erased. "He's easily the fastest Edwin Meese III, former White House chief hinge on the crucial and blurry question of
gun in the East on his computer terminal," of staff Donald Regan, Senate GOP leader whether he intended any crime. Still, the
said Maine's Republican Sen. William Co- Robert Dole and Richard Perle, a former president is a long way from home free. As
hen. He must have been chained to the assistant secretary of defense. In addition, his people see it, he must be telling the truth
thing." But Cohen predicts that the volatile he hired Lyn Nofziger, a former White about his role if only because he is so vehe-
Northwill bean unpredictable witness with
astubborn streak a mile wide. As North put ~ House official and close associate of the ment; the problem is that after months of
president, for $240,000 as a consultant, and trying to recover from the scandal's dam-
it to a TV interviewer at the weekend, "This paid David Fischer, who had been Reagan's age, the hearings and Walsh's continuing
Marine is never going to plead guilty to personal assistant until April 1985, to help drumfire can only revive perceptions of the
anything, ever." Says Cohen: "He emerges arrange Oval Office visits at which the pres- "sleaze factor" in his administration. And
as the only five-star lieutenant colonel in ident could personally thank big contribu- with them comes the worst blow of all for
the history of the military." tors. Sources close to Channell say Fischer Reagan's image and effectiveness: the idea
The money trail in the scandal will be I at first got $50,000 for each session; later the that he is just another politician after all,
clear by the end of this month, and Cohen fee became a $20,000 monthly retainer. The doing one thing and saying another.
predicts: "You'll find there was a lot ripped Washington Post said there were seven LARRY MARTZU,jth THOMAS M. DEFRANK.
off along the way." That may well be; Se- such meetings, for donors who gave sums ELEANOR C L I FT, ANN M c D A N I E Land
cord's friends say he will testify that all told, ranging from $100,000 to more than $1 mil- Ro R E R T PARRY in Washington
lion. The New York Times quoted congres-
Declassified in Part - Sanitized Copy Approved for Release 2012/05/04: CIA-RDP90-00965R000605040002-8