CIA REPORTEDLY TURNED A BLIND EYE TO CONTRA SUPPLY LINE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000807490019-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: March 9, 2012
• Sequence Number: 19
• Publication Date: November 28, 1986
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/03/12 : CIA-RDP90-00965R000807490019-7
~? h w "~ ~?~~ ' PHILADELPHIA INQUIRER
"' k=t 28 November 1986
SHAKE-UP AT THE WHITE HOUSE
CIA reportedly turned a blind eye to
contra supply line
oY Doyle McManus
mnd Michael Wines
Iw Au/eles n w ,
WASHINGTON - The CIA detected
evidence of the secret network that
funneled profits from Iranian arms
?ales as supplies to Nicaraguan con-
tra rebels, but it did not fully investi-
gate the pipeline, administration of-
ficials have said.
The CIA was restrained from pur?
luing the issue because to do so
would have violated federal restric-
tions against probing the activities
of U.S. citizens and because there
was little enthusiasm within the
agency for investigating a private
aid effort that President Reagan had
openly encouraged, the officials said.
"Everybody knew something was
going on at Ilopango," the Salvador.
an air base from which the contras'
supply system operated, one knowl-
edgeable official said. "But nobody
wanted to find out what it was."
That account did not square with a
statement Tuesday by Attorney Gen-
eral Edwin Meese 3d, who indicated
that the CIA was unaware that
rnbney skimmed from the arms sales
to Iran was being used to buy sup-
plies for the contras. "To the best of
our knowledge .. no one in the CIA
knew about it," Meese said.
The CIA did act as an agent in
tOnsferring U.S. weapons to Iran
and in receiving payment for the
aims shipments this year, Meese said
Tuesday. Other officials have said
the CIA helped arrange transporta.
tion for some of the shipments from
the United States through Israel to
Iran.
The CIA also participated in a se-
cret shipment of U.S. arms to Iran in
November 1985, two months before
Reagan formally approved any weap-
ons sales to the Tehran regime, the
officials said.
But the agency apparently did not
have any role in the first U.S.-spon.
sored shipment of weapons to Teh-
ran in August 1985, they said. That
shipment has become a focus of in-
quiries because Meese has been un-
able to find who authorized it, while
Israel's government insists that the
administration approved it.
CIA officials have told the Senate
lotelligence Committee that the
agency shipped Hawk antiaircraft
is=iles and TOW antitank missiles
from Israel to Iran in November 1985,
but they have contended that the
agency did not know at the time that
the shipment included weapons, sev-
eral sources said.
"They were under the understand.
ing at the time that it was not arms
being shipped, it was oil-drilling
parts," said_"e David Durenberger
(R., Minn.), chairman of the intelli?
gence committee.
Iran's petroleum production is crit-
ical to its economy, and the CIA
thought oil-drilling equipment was a
permissible form of indirect aid, ac-
cording to the officials' account.
Officials said that part of the ship-
ment was pulled back by the CIA and
that the weapons were later re-
turned to Israel instead of being for-
warded to Iran. On Tuesday, Meese
indicated that the shipment was au-
thorized by someone on the White
House staff, but added that the Presi-
dent did not know about the action
until about three months later.
In Central America, the CIA
learned about the contras' new weap-
ons and airplanes by monitoring the
rebels' operations in El Salvador and
Honduras, the officials said. The new
supply operation, which officials
said was organized by retired Air
Force Lt. Gen. Richard V. Secord,
began supplying the contras with
cargo planes and crews in 1985 and
expanded quickly in 1986.
The CIA did order its operatives in
Central America to keep an eye on
the contras' new supply line, knowl-
edgeable .sources said, but warned
them to observe the legal prohibi.
tion against agency surveillance of
Americans abroad.
"They have been very careful, not
only not to get involved, but also not
to go out monitoring the activities of
U.S. citizens," one senior administra.
tion official said. "They're not sup-
posed to track U.S. citizens."
"The CIA was not specifically or-
dered to stay away" from examining
the supply operation, another offi-
cial said.
But the agency's inquiries appar-
ently failed to lead to the source of
the funds, the Iranian arms deals in
which another branch of the CIA
was involved, the officials said.
Contra leaders and U.S. officials
also said that, contrary to Meese's
account, the rebels received only
supplies from the secret operation,
not cash.
On Tuesday, Meese said the money
skimmed from the arms sales - esti.
mated at $10 million to $30 million -
had gone into Swiss bank accounts
"under the control of Icontral repre-
sentatives."
But a senior administration offi-
cial involved in the contra program
said Wednesday: "As far as we know,
they certainly weren't getting the
money. They were receiving sup-
plies."
The three top contra leaders, at a
news conference in Miami, yesterday
hotly denied Meese's version.
"It's wrong," said Adolfo Calero,
leader of the Nicaraguan Democratic
Force, the largest contra faction.
"We have never had access to a
Swiss bank account," said Alfonso
Robelo. another rebel leader.
But Calero did acknowledge that
funds from an unknown source paid
for air supply drops made to the
contras during the last several
months.
"I do not know, however, where
the money came from to pay for
those services," he said. "I refer espe-
cially to the air drops."
Asked if money from the Iran arms
deal could have paid for the supply
flights, he said: "Well, I do not specu.
late."
But other contra sources have said
their supply operation was funded by
the Swiss bank accounts that they
helped set up as part of the arms
deal. The contra sources said Calero
did know that the operation was run
by Secord using funds from donors
in the Middle East, including Saudi
Arabia.
Sources in Israel and the United
States have said that some of the
money in the Iran arms-deal came
from .Adnan Khashoggi. a Saudi bil-
lionaire. Saudi Arabia yesterday de-
nied the allegation.
Asked if the supply operation could
have cost as much as 310 million,
Calero said, "I don't think so. I doubt
it." He said he believed that the sup-
ply flights occurred in 1986.
He said the supply operation ended
in October, when Nicaraguan troops
shot down a C-123 cargo plane ferry-
ing materiel to the contras. Three
crewmen were killed and a fourth.
American Eugene Hasenfus, was cap-
tured.
Declassified and Approved For Release 2012/03/12 : CIA-RDP90-00965R000807490019-7