A 'sad and sordid’ story

IAN AUSTEN May 18 1987

A 'sad and sordid’ story

IAN AUSTEN May 18 1987

A 'sad and sordid’ story


All the theatrical elements were in place. The television lights were so bright that some participants wore dark sunglasses. Outside the marble-columned meeting hall a long line of people awaited the opening performance. And leading off was a star witness who had broken his lengthy silence to relate incredible tales of code names, disguises, encryption machines and of bungling and betrayal. But as the televised joint hearings of the U.S. Senate and House of Representatives select committees on the Iran-contra affair opened last week, the mood in the Senate caucus room was more sombre than entertaining. Even before the first of about 50 witnesses began testifying, Democrat Daniel Inouye of Hawaii, who heads the Senate committee, set the tone. “The story is both sad and sordid,” he said. “People of great character and ability, holding positions of trust and authority in our government, were drawn into

a web of deception and despair.”

Modelled after the 1973 Watergate hearings, the 26-member joint congressional committee had offered limited immunity from criminal charges to about a dozen witnesses in exchange for their testimony. But Richard Secord, who had earlier invoked the Fifth Amendment to avoid testifying, broke his silence without legal protection. And he told a serpentine tale of White House dealings and international intrigue involving multimillion-dollar transfers—and a Canadian arms company that failed to deliver on time.

The two committee counsels employed the “good cop, bad cop” routine of television police dramas to question Secord. Sandy-haired House chief counsel John Nields played the good cop as he deferentially led Secord —a retired air force general turned arms trader—through a chronology of the affair. In the composed manner of a star witness, Secord told how he was approched by former National Security Council aide Lt.-Col. Oliver North in

1984 to run a private network to airlift arms to the contra rebels who are trying to overthrow the leftist government of Nicaragua. Although U.S. military aid to the contras was banned by Congress in 1984 and again in 1985, Secord defended the operation. He said that it was not a means of circumventing U.S. law but rather a patriotic mission that was known to, and approved by, many in the administration —including former CIA director William Casey, who died on May 5, and VicePresident George Bush.

Secord also testified that the idea of using profits from U.S. arms sales to Iran to fund the contras emerged at the outset of the Iran program in 1985 rather than as an afterthought. In great detail he outlined how the deal with Iran degenerated into an attempted arms swap for U.S. hostages held by pro-Iranian groups in Beirut. Secord also suggested that Ronald Reagan may have known about the diversion of funds. He claimed that both North and his boss, Rear Admiral

John Poindexter, then national security adviser, had hinted that the President had been briefed on the plan and had given it his blessings. Said Secord: “We believed very much in the significance of what we were doing and that our conduct was in furtherance of the President’s policies.” For the first two arms shipments to the contras, Secord testified, he turned to Montreal-based Trans World Arms Inc. Secord said that the Canadian firm—which lists only a Montreal law office as its address—did not know the

ultimate destination of the arms it supplied. However, he said, Trans World was so slow in its shipments that he turned to other suppliers. A lawyer for Trans World said in Montreal last week that company officials believed the purchase travelled to Guatemala, and a company spokesman said that the firm had violated no Canadian laws.

Secord went on to describe the dealings with Iran. In what sounded like a mixture of James Bond spy drama and low farce, the participants used code names and code words, jetted between continents and talked through sophisticated and secret National Security Agency communication networks. North was “Mr. Good” and hostages were referred to as “boxes.” When the U.S. government could only

provide a woman translator for a meeting between North, a CIA official and Islamic fundamentalist Iranians about arms purchases and the Iranians insisted on a male, Secord’s business partner, Iranian-born Albert Hakim, was pressed into action. Because Hakim, now a U.S. citizen, is an opponent of the Iranian regime, he donned a wig and other disguises and used a phoney Arab name. But according to Secord, the arms sales diversions never generated a sum approaching the $13 million to $39 million that U.S. Attorney General Edwin Meese said was diverted to the contras when he disclosed the affair at a press conference last fall. Rather, Secord said, the contras re-

ceived only $4.5 million of the $39 million paid by Iran for the arms drawn from Israeli and U.S. stocks. The cost of the weapons, expenses and other projects consumed $21 million. About $10 million sits in Swiss bank accounts still controlled by Hakim, and $2.6 million is missing. Secord claimed that the remaining bank balance was intended for future contra activities and complained bitterly about Meese’s decision to make the program public, despite his plea to Meese to keep the affair quiet. Said Secord: “We were instead betrayed, aban-

doned and left to defend ourselves.” But Secord’s image as a man who acted out of patriotism alone was soon shaken by the bad cop of the team, Arthur Liman, a rumpled Wall Street lawyer who quickly went on the offensive. Under relentless questioning, Secord acknowledged that no interest or principle had been paid on about

$676,000 in loans that were transferred during 1985 and 1986 from contra fund accounts to a Virginia-based company in which he had a major interest. He also reversed earlier testimony about the surplus money from the affair. Although most of it was generated by the sale of U.S. government arms, using U.S. government facilities, Secord had insisted that the funds were the pri-

vate property of the contra arms “enterprise,” not the U.S. government. But after a three-hour grilling by Liman, in which Secord often lost his temper, the retired general promised to help the U.S. Treasury recover the Swiss funds. The reversal in his testimony was so dramatic that Senate committee member Howell Heflin said afterward that it could lead to a criminal indictment.

Special prosecutor Lawrence Walsh has already taken criminal action against others whom North recruited to help the contras. Just before the Capitol Hill hearings opened on May 5, Walsh laid charges against Carl Channell, a fund raiser for anti-Communist groups. Within hours, Channell pleaded guilty to conspiring to defraud the U.S. government by diverting $2.6 million in tax-free donations to the contra arms slush fund. In court, he named North and Richard Miller, a Washington-based public relations executive, as co-conspirators. The next day Miller pleaded guilty to similar charges in a Washington court.

During last week’s sessions the committees learned that the fundraising network had as many mishaps as Secord’s arms delivery system. Secord testified that the Sultan of Brunei donated $13 million to the contra slush fund but the money vanished. U.S. government officials said that two digits were accidentally reversed on a Swiss bank account number, sending the money to a stranger’s account rather than to one established for the contras. According to U.S. government officials, there is no way to recover the money unless the recipient returns it.

While Secord’s testimony revealed that the CIA was heavily involved in the operation, the full extent of the agency’s role may never be known because of Casey’s death from pneumonia. Casey, who had regular access to Reagan, entered the hospital for removal of a brain tumor shortly after the news of the scandal broke last fall. He never fully recovered.

That now leaves North and Poindexter as the key links to Reagan. Both have been granted limited immunity from prosecution—although North appeared briefly in Federal Court last Friday to face what sources said were contempt-of-court proceedings. Last week hundreds of curious spectators lined up for the first day of hearings but drifted away as the week went on. But they are almost certain to be lured back in June when North and Poindexter are asked the crucial question of what they told the President.

— IAN AUSTEN in Washington