THE UNITED STATES

‘Freedom fighter’ allies facing a ‘Contragate’

MARCI MCDONALD June 23 1986
THE UNITED STATES

‘Freedom fighter’ allies facing a ‘Contragate’

MARCI MCDONALD June 23 1986

‘Freedom fighter’ allies facing a ‘Contragate’

THE UNITED STATES

During his televised White House press conference last week, President Ronald Reagan stopped to correct his terminology. He had referred to the Nicaraguan rebel forces fighting the Sandinista regime in Nicaragua as “Contras, ” the popular abbreviation for contrarevolucionarios. ‘I’ve got to stop using that word, that was the Sandinistas’ word for them,” the President declared. He went on to call the guerrillas “freedom fighters” as he repeated his appeal to Congress to vote $100 million in military and nonlethal aid to the rebels when the measure returns to the House of Representatives next week. But Reagan’s attempt to enhance the Contras’ name appeared to be part of an increasingly unsuccessful administration effort to improve their rapidly deteriorating image.

In fact only hours before Reagan’s press conference, congressional investigators had issued a damning indictment of the Contras. They testified that millions of dollars in U.S. government humanitarian aid voted to the

Contras last year have been diverted to top officers in the Honduran armed forces, untraceable companies and secret bank accounts in the Bahamas and Cayman Islands. Rep. Michael Barnes (D-Md.), chairman of the House subcommittee that heard the testimony from the General Accounting Office (GAO), Congress’s investigative arm, described the disclosures as “shocking” and “evidence of criminal activity.” Said Rep. Peter Kostmayer (D-Pa.): “The money was stolen. The question now is whether this becomes a Contragate.”

The GAO report pointing to misuse of some of the $27 million voted to the Contras is the firmest corroboration so far of mounting allegations that the rebels have been involved in profiteering, gunrunning, drug-smuggling and

murder plots. Those charges have become so widespread that one of the Contras’ strongest supporters in Congress, Rep. Charles Stenholm, a Democrat from Texas, has written Reagan expressing concern.

The GAO findings were released at a time when new developments have seriously undercut Reagan’s chances of winning Congressional approval of a package that would nearly quadruple Contra aid. Despite the failure of Nicaragua and its four Central American neighbors to sign a peace treaty by their self-imposed deadline of June 6, a new draft of the so-called Contadora agreement emerged from a meeting in Panama on June 7. Nicaraguan Foreign Minister Miguel d’Escoto said the pact could be signed as early as next month.

The administration has consistently opposed the Contadora treaty— which Canada supports—and some congressmen contend that it would eliminate the need for funding the Contras. Both critics and supporters of the aid package agree that the latest allegations of criminal activities among the Contras could influence undecided swing voters in Congress. Said retired Maj.Gen. John Singlaub, a former CIA station chief in Korea who has raised $25 million in private donations and weapons for the Contras since Congress cut off covert CIA funding two years ago: “The charges have done some damage. Now some congressmen can rationalize their lack of support by saying these guys are corrupt.”

In fact, one of the weakest points in Reagan’s argument for aid to the insurgents has been the Contras themselves, who recently have suffered from their worst-ever disarray.

They have been fighting internally and they have faced well-documented charges of human rights violations ever since they were first organized by the CIA in 1981 and given $100 million in covert funding over four years. Despite often fierce fighting they have never succeeded in holding any Nicaraguan territory.

The main rebel group, the Nicaraguan Democratic Force (fdn)—currently based in Honduras and with between 12,000 and 16,000 menis led by Adolfo Calero, a right-wing former manager of Nicaragua’s Coca-Cola bottling plant. But last month Calero’s two Contra leader partners, former Sandinista junta members Arturo Cruz and Alfonso Robelo, accused him of autocratic control of the rebel army.

Late last month, under strong pressure from Washington, the three Contra leaders held a tense, 2%-week summit in Miami, emerging to declare they had agreed on equal power-sharing. Privately Calero still opposes his codirectors’ insistence on limiting the number of former officers from Nicaragua’s pre-Sandinista National Guard—notorious for human rights abuses—in chief Contra command posts. Singlaub told Maclean’s that the rebels could achieve greater military success if Cruz and Robelo would allow them to use 100 more former National Guardsmen as trainers. Added Singlaub, whom former Contra collaborators last week accused of being the civilian link between the White House and the Contras: “It is a self-inflicted wound. Can you imagine re-forming the German [army] without using any former Wehrmacht officers? It’s just crazy.” Singlaub also confirmed that “practically all” the Contras’ weapons come from the Soviet Union or other Communist countries.

At their Miami summit, the Contra leaders attempted to deal with the mounting charges of corruption. But Robelo’s declaration—“We know we are clean”—was swiftly discredited when two freelance American journalists based in Costa Rica interrupted the news conference to announce that they were launching a $23.8-million lawsuit against the Contra leadership, Singlaub and other supporters. Among their charges: that the rebels smuggled cocaine through secret airfields in

northern Costa Rica to finance their military operations. And investigators working for Senator John Kerry (DMass.) for the past six months have assembled 119 witnesses—the majority of them former or current collaborators with the Contras—with evidence of wide-ranging corruption. Last week Kerry declared that he had persuaded Senator Richard Lugar, Republican

chairman of the Senate foreign relations committee, to hold hearings into the Contras’ activities.

But the GAO findings have so far proved the most difficult for the Con tras to refute. The agency checked 14 subpoenaed bank accounts into which $14.1 million in U.S. treasury depart ment payments had been deposited, os tensibly for Contra suppliers and bro kers based in Central America. The GAO found that only $785,674 had been paid into the Central American region

itself and only $185,434 of that to the identified suppliers. In one case, a payment of $422,000 has remained in a bank ac count drawing interest. In another, a U.S. gov ernment payment of $3.3 million, which receipts showed had gone to 22 companies that the GAO could not trace, went mainly to unrelated U.S. corpora tions or individuals and $380,000 was deposited in a bank account in the Caribbean. The GAO also found that three cheques totalling $986,689 were paid to the Honduran armed forces and another $450,000 to its former commander-in-chief.

d drugs At the same time, an investigation by the Mi ami Herald last month revealed that $3.8 million of official U.S. humanitar ian aid was paiwzd to a corner grocery store in Tegucigalpa, the Honduran capital. Called the Supermercado Her mano Pedro, the shop is owned by the wife of a Honduran politician Rodolfo Zelaya, with close ties to the military commanders who work with the Con tras. And the Herald quoted a top U.S. official as saying that Washington tol erated the payoffs "as a way of re warding key Honduran army officers for co-operation with the Nicaraguan rebels." Although he later retracted the statement, Singlaub told Mac lean's: "The Hondurans have been shaking us down. On some of the ship ments we sent down, the Hondurans would take a percentage of their share." The GAO still has to report on the rest of the Contra aid payments, and the Senate is now preparing to in vestigate other charges of wrongdoing. As a result, with the Contras fighting to clear their tarnished name, Reagan may find himself reluctant to repeat a claim he made in a speech in Washing ton last March: "I am a Contra too."

— MARCI MCDONALD in Washington