HEARING MAY FOCUS ON ROLE REAGAN HAD IN IRAN-CONTRA AFFAIR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000605180001-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 27, 2016
• Document Release Date: April 16, 2013
• Sequence Number: 1
• Publication Date: May 1, 1987
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2013/04/16 : CIA-RDP90-00965R000605180001-4
WALL STREET JOURNAL
1 May 1987
ARTICLE APPEARED
ON
Shedding. Light
Hearings May Focus
On Role Reagan Had
In Iran-Contra Affair
House-Senate Investigation,
Which Begins on Tuesday,
Will Examine New Data
Poindexter's Twice-Told Tale
By "EDWARD T. POUND
sJ And JOHN WALCOTT
Staff Reporters of THE WALL STREET JOURNAL
WASHINGTON?When the Senate and
House committees investigating the Iran-
Contra affair begin two months of long-
awaited televised hearings next Tuesday,
the main character won't be there.
Ronald Reagan isn't scheduled to take
the witness chair, and he hasn't given a
deposition. The president insists that he
didn't trade arms for Americans held hos-
tage in Lebanon and that he didn't know
that money from his administration's se-
cret arms sales to Iran was diverted to
help Nicaraguan rebels. But leaders of the
congressional investigation predict that by
the time their combined House-Senate.
hearings end this summer, the president
will emerge as a commander in chief who
inspired and applauded his aides' activ-
ities.
"Reagan deeply believed that the Con-
tras were an important element in the se-
curity of America," says Sen. Warren Rud-
man, the New Hampshire Republican and
vice chairman of the Senate investigating
committee. Adds a senior congressional in-
vestigator: "He made the decisions, and
he wasn't manipulated. He made the fun-
damental decision that the Contras
shouldn't perish."
What Isn't Clear
Congressional investigators say Mr.
Reagan's personal diary, his appointment
calendar and his public statements all
show he was actively involved in raising
funds for the Contras and in encouraging
his aides to do likewise. But, they say, it
isn't clear that the president's advisers
told him about everything they were doing.
And investigators say they don't yet have
any evidence that Mr. Reagan knew profits
from the sale of arms to Iran were di-
verted to help the Contras, or that he ap-
proved any lawbreaking by his aides or
others.
But the hearings won't be confined to
the diversion issue or to narrow Questions
of whether White House aides broke the
law Rather. say congressional investiga-
tors. the Panels want to know whether the
president entrusted two of his most impor-
tant foreign-policy priorities?Iran and the
Contras?to a handful of privateers in a
deliberate effort to flout congressional and
Legal restraints on Covert action and aid to
the Nicaraguan insurgents.
The hearings could be much more
damaging to the president than were ear-
lier investigations by the Senate Intelli-
gence Committee and a special presiden-
tial review board headed by former Repub-
lican Sen. John Tower of Texas. The Tower
board concluded that the president's de-
tached management style allowed over-
zealous aides to draw the U.S. into ill-ad-
vised and embarrassing secret dealings
with Iran and the Contras. The new hear-
ings, however, will show that the president
was actively involved in the policies, and
not a "befuddled" bystander, predicts Sen.
Daniel Inouye, the Hawaii Democrat who
heads the Senate panel.
New Information
One major difference is that new hear-
ings will be based on disclosures from
principal participants and records that
weren't available to earlier investigators.
The hearings should provide a much more
complete account of administration in-
volvement, specifically the president's in-
volvement, in private efforts to raise
money for the Contras after Congress cut
off U.S. military support.
The most important unanswered ques-
tion, says Sen. David Boren, an Oklahoma
Democrat, is: "Did the president faithfully
carry out the spirit of the law, or was he
ignoring it? . . . Did he subvert the process
himself by trying to raise funds to get
money to the Contras?"
The White House is bracing itself for
the worst. There are widespread?but un-
confirmed?rumors that Rear Adm. John
Poindexter, the former national security
adviser who has remained silent, will tes-
tify that he twice told Mr. Reagan that
profits from the arms sales to Iran were
diverted to the Contras. Senior White
House officials concede that it may be dif-
ficult to prove the president didn't know
about and didn't aUthorize a diversion.
Privatized Policy
What upsets Congress more than the di-
version of funds is the administration's de-
cision to use private citizens, including for-
eign agents and arms merchants, to carry
out secret foreign initiatives without con-
sulting Congress. This privatization of
American foreign policy "is far more im-
portant than Watergate," charges Sen. In-
ouye, who served on the Senate Watergate
STAT
ee year
rentiv expects these hearings to orce
President Reagan's resignation, the inves-
tigation will show that administration offi-
cials conducted covert foreign-policy oper-
ations that, well-intentioned though they
may have been. turned out to be confused,
duplicitous failures. "Very few people are
going to look good here," says a senior
congressional investigator.
Some of the president's former aides.
including two of his past national security
advisers, are expected to testify that they
briefed Mr. Reagan frequently about osten-
sibly private support for the Contras. '
Other principals in the affair will claim
they were told that Mr. Reagan applauded
their activities in behalf of the Nicaraguan
insurgents.
The panels will begin next week by
questioning retired Air Force Maj. Gen.
Richard Secord, who was recruited in 1984
by fired White House aide Lt. Col. Oliver
North to help create the private arms net-
work. Later, Col. North also asked Gee.
Secord. an experienced covert operator. to
help arrange the delivery of arms to
Iran. ,
Shedding Light
Gen. Secord, who will testify without
immunity from prosecution, can provide
detailed information on the inner workings
of both the Contra support operation and
the secret arms sales to Iran. Investigators
hope he will shed light on whether the
President directed his aides to establish
the private Contra network, on who made
the decision to divert funds from the Iran
arms sales and on who profited from the
operations.
Friends expect that, in his defense,
Gen. Secord will testify that his actions
were entirely legal and authorized by se-
nior Reagan administration aides. n_ley
say that he can be expected to describe his
relationship and meetings with former
Central Intelligence Agency Director Wil-
liam Casey, who, intelligence officials say,
was a driving force behind both the Iran
and the Contra policies. .
According ,to someone familiar with the
congressional investigation, retired Air
Force Col. Robert Dutton, who ran the ae-
rial resupply operation for Gen. Secord
last year, provided photographs for Col.
North to use in briefing the president on
the operation. It isn't known whether Mr.
Reagan saw the photographs, however.
The source says that Mr. Dutton, who has
a grant of immunity from the panels, is ex- ?
pected to testify "that he believed he was ?
working for the big man."
S TA:
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Former national security adviser Rob-
ert McFarlane, who has told investigators
he briefed the president on secret Saudi
Arabian donations and other aid to the Nic-
araguan insurgents, will be another early
witness.
Star Witness
Mr. McFarlane's successor, Adm. Poin-
dexter, is expected to be one of the star
witnesses when he testifies under limited
immunity in June. Administration officials
say that Adm. Poindexter kept detailed
notes of his meetings with President Rea-
gan and, like Mr. McFarlane, briefed the
president regularly on aid to the Con-
tras.
Congressional investigators have inter-
viewed more than 300 witnesses, subpoe-
naed more than 150 people and reviewed
more than 100,000 documents. Those docu-
ments include bank records and other evi-
dence enabling the committee to unravel
much of the complicated financial network
supporting the Contras.
The panels will explore the domestic
fund-raising activities of Carl "Spitz"
Channell and other conservative Contra
supporters. This week, Mr. Channell
pleaded guilty to conspiring to use tax-ex-
empt contributions to purchase military
equipment for the Contras and named Col.
North as a co-conspirator. Independent
counsel Lawrence Walsh also could prose-
cute Messrs. North, Secord and others.
The evidence gathered by the commit-
tees indicates that administration officials
began to organize the ostensibly private
effort to finance the Contras in 1984, as
Congress was moving to cut off U.S. gov-
ernment aid to the rebels.
Keeping Contras Afloat
During 1984, a number of private organ-
izations and individuals, including retired
Army Maj. Gen. John Singlaub and Gen.
Secord, already were involved in aiding
the Contras. But private efforts were hap-
hazard and uncoordinated, and administra-
tion officials began discussing ways to
keep the Contras afloat until the president
could persuade Congress to resume aid.
Administration officials say that during
meetings of the Restricted Interagency
or ? ftplor CIA Latin
American operations chief Duane
"Dewey" Clarridge and other officials de-
bated whether to seek aid to the Contras
from Israel, Saudi Arabia or other coun-
tries.
Late in 1984, Col. North wrote a memo
to Mr. McFarlane proposing that the ad-
ministration determine whether Saudi Ara-
bia, which was helping finance anti-Com-
munist rebels in Afghanistan, also might
be willing to provide financial support to
the Contras.
Mr. McFarlane, however, has told in-
vestigators that beginning in July 1984,
Saudi Arabia began making contributions
to the insurgents that ultimately totaled
about $30 million. Investigators say it isn't
clear whether Col. North knew of the Saudi
contributions or whether his memo was de-
signed to conceal the existing Saudi aid.
Turning to Secord
Even with the Saudi money, the Contra
aid effort remained disorganized and inef-
fective, administration officials say. At the
same time, Col. North and other White
House aides realized that Congress was un-
likely to reverse itself quickly on the Con-
tra-aid issue. In an effort to guarantee the
Contras' survival, Reagan officials and
people familiar with the congressional in-
vestigation say, Col. North turned to Gen.
Secord to help organize a more effective
private aid network.
"Getting aid to the Contras was a Pre-
occupation of Reagan, Regan and Casey."
says one senior intelligence source. "Rea-
gan certainly knew that 011ie North! was
in charge of efforts to get help for the Con-
tras."
While Gen. Secord and associates as-
sembled a complex network of companies,
bank accounts, and individuals to funnel
weapons and supplies to the rebels, gr.
Casey personally recruited the CIA station
chief in Costa Rica to assist them, intelli-
gence sources say. Mr. Casey directed the
CIA officer to report to km through air
George, the CIA's operations director, the
sources say.
Mr. Casey, now hospitalized with pneu-
nioniaAttgLAggeaggrierAILLyggs_litr
the removal of a malignant brain tumor,
isn't likely to testify. but other CIA officers
are expected to appear.
Disguising Money Movements
Gen Secord's lnianiess partner, Albett
Hakim, an Iranian-American with past ties
to the CIA, served-a one of the network's
principal financial managers, Mr. Hakim,
who became a U.S. citizen in 1984 and
whose immigration file is partly classified,
is identified by investigators as an expert
on disgdising money movements through
secret overseas bank accounts.
? Congressional investigators say that
funds diverted from the Iranian arms sales
and other moneys were routed through
Swiss bank accounts and a network of
companies in the U.S., Europe and Central
America. Last week, Mr. Hakim turned
over his Swiss bank records and other doc-
uments to the congressional committees
under a limited grant of immunity.
Investigators still are trying to learn
how much money was diverted from the
Iranian arms sales to help the Contras.
Investigators will focus on whether Mr.
Hakim, Gen. Secord and their associates
pocketed any profits from the arms sales,
as well as whether kickbacks were paid to
Iranian officials. Gen. Secord has told
friends that he didn't profit from his in-
volvement in the affair. Mr. Hakim and
his attorney haven't been available for
comment.
"Big money becomes very tempting,"
Sen. Inouye says. "I think we can safely
say persons and organizations did make
more than the usual profits."
DAVID ROGERS AND ANDY PASZTOR
CONTRIBUTED TO THIS ARTICLE
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