THE UNITED STATES

The Canada connection

MARCI McDONALD August 3 1987
THE UNITED STATES

The Canada connection

MARCI McDONALD August 3 1987

The Canada connection

THE UNITED STATES

Senator Daniel Inouye, the Hawaiian Democrat who is chairman of the joint congressional committee on the Iran-contra affair, was clearly in a wistful mood. He told reporters last week that the televised hearings might soon wind up still leaving many questions unanswered. Said Inouye: “The jigsaw puzzle is not going to be complete.” But new documents—released by the panel and obtained by Maclean's— have added missing pieces to two parts of the puzzle involving the scandal’s key Canadian connections. One document reveals that a shadowy Montreal arms dealer named Emmanuel (Manny) Weigensberg—whose Trans World Arms Inc. brokered the first secret arms shipments to the Nicaraguan contra rebels in late 1984 and early 1985—was more deeply engaged in the clandestine weapons transfers than previously disclosed. The other documents shed new light on how threats by disgruntled Canadian investors in the secret U.S. arms shipments to Iran contributed to the unravelling of the covert, international operation last fall.

Although the records answer many questions, they raise another, which some Canadian observers find even more troubling: the extent to which the operation’s planners saw Canada as a means of circumventing American legal restrictions on sending arms to the contras. Said New Democratic MP Ian Waddell: “External Affairs is strangely silent on this. I think the Canadian government would like to wash their hands of it and turn a blind eye.”

One of the documents, a ledger kept by the covert operations’ key financial figure, Albert Hakim, shows six previously secret payments to Weigensberg’s Montreal-based Trans World Arms between Dec. 28, 1984, and May 30, 1985. Their total: $1,579,801 (U.S.). Together with a previously reported down payment of $432,500 (U.S.), those entries indicate that Trans World earned more than $2 million (U.S.) on the deal— nearly a quarter of the total $8.5 million (U.S.) spent on secret arms shipments to the contras. The payments contradict a claim by Weigensberg—through his lawyer Barry Shapiro—that he had brokered only a “single” $200,000 (U.S.) weapons shipment. Weigensberg — whose company is currently the subject of an RCMP investigation—is one of the few figures who has so far declined to meet with congressional investigators. Weigensberg was unavailable for comment on the material contained in the ledger.

The ledger also contradicts another

Weigensberg claim. In February his lawyers issued a statement that Trans World Arms had “no knowledge whatsoever” of Energy Resources International, a Panamanian-registered company that brokered the later secret arms shipments to the contras. But Hakim’s accounts show that the $1.5 million (U.S.) in payments to Trans World all came from an account Hakim labelled “Energy Resources.”

Indeed, Weigensberg appears to have had a long-standing tie to one of the scandal’s most controversial figures, retired U.S. air force Maj.-Gen. Richard Secord, whom former National Security Council aide Oliver North recruited to set up the complex, covert arms operation in the spring of 1984. Secord, in turn, has a close connection to Energy Resources, which lists an address in Vienna, Va., a Washington suburb that the general also frequently used.

According to congressional investigators, Weigensberg and Secord met through their mutual lawyer, Thomas Green, 46, a noted Washington criminal attorney. In fact, investigators say that Energy Resources paid Green a $45,000 (U.S.) “finders fee”—also listed in Hakim’s ledger—for putting Secord in touch with Weigensberg. U.S. Customs files show that Green has represented

Weigensberg in customs disputes with American authorities during the past decade. In 1976 customs officials investigated Weigensberg for not obtaining export licences for munitions, but no charges were laid. Other cases involved Weigensberg’s large bonded arms warehouse and exporting firm, Century Arms Ltd., in St. Albans,

Vt., just across the Quebec border. Green has also acted as Secord’s lawyer since 1982. That year the general was under investigation for his ties to ex-Central Intelligence Agency (CIA) agent Edwin Wilson— currently serving a 32year sentence in a U.S. prison for illegally exporting arms to Libya.

As a result of the inquiry, Secord took early retirement in 1983 from his Pentagon job purchasing arms for the Middle East.

Green himself has become a contentious figure in the Iran-contra affair. When the operation became public last fall, he also represented North. And some committee members have charged that he took part in a cover-

up attempt during a secret meeting between his two clients last November. North’s secretary, Fawn Hall, told the panel that when she smuggled documents out of the White

House on Nov. 25, she left with both Green and North and got into Green’s car, where she handed North the documents. Green then drove both of them to their own cars. Green’s law-

yer, Earl Silbert, has stated that his client was unaware of the documents until he saw them in the car and that Green promptly dropped North as a client.

Secord testified that in July, 1984, just as Congress was preparing to cut off financial aid to the contras—and shortly after Saudi Arabia had made the first of a series of $1-million monthly deposits into the contras’ Cayman Islands bank account—North provided him with a shopping list of weapons for the rebels. Secord took the list directly to Weigensberg. Secord has testified that he chose a non-U.S. company in case the operation became public. But investigators say that Secord and Weigensberg had discussed doing business together earlier. And Canadian officials point out that Weigensberg—through at least six companies registered in Quebec or Vermont—is one of the largest of the country’s estimated 50 arms brokers. Said a U.S. Customs officer: “They buy and sell all over the world. They have always been on the fringe of things.”

From his well-secured, second-floor offices at 5340 Ferrier St. in Montreal’s west end, Weigensberg has supplied antique, sporting and used military weapons to gun dealers since 1971, originally under the name Century Arms Ltd. His longtime associates have been members of the Sucher family of Montreal. Michael Sucher has now succeeded Weigensberg as president of Century Arms—which shares an address with

Trans World, a company set up in 1980—but Weigensberg remains chairman. During Weigensberg’s 36 years in the arms trade, investigators say that he also developed a reputation in what they commonly call “the grey market”— brokering arms to world trouble spots. Said one committee investigator: “We do know he has travelled extensively in Iron Curtain countries where hard currency transactions of this type are very important.”

Contra leader Adolfo Calero has testified that his “main interest” in mid-1984 was to acquire Soviet-built SA-7 rockets and shoulder-mounted missile launchers available from China and east-bloc countries—to counter the Sandinistas’ Soviet-made HIND-D helicopters. A Chinese official in Ottawa says that Weigensberg began to make calls on the embassy about five years ago, seeking arms contacts. Two-and-a-half years later the embassy put him in touch with the government-owned North China Industries Corp. (Norinco), a defence consortium that helped make China the fifth-largest arms exporter in the world last year. Shortly after receiving Secord’s arms list, Weigensberg visited China.

But, according to a partially declassified Dec. 4, 1984, memo from North to his then-boss, former national security adviser Robert McFarlane, the Chinese government balked at sending the ship-

load of 10 SA-7 missilelaunchers, 30 missiles, 10 tracking units and a training unit to Guatemala—the destination listed on the end-user certificates that Weigensberg supplied. Their objection, Maclean's has learned: many of Guatemala’s military officers were trained in anticommunist Taiwan. A lawyer for Weigensberg, and Secord himself, say that Secord never gave a “full briefing” to Trans World on the weapons’ true destination. But after Weigensberg passed on Chinese objections,

North arranged a meeting with China’s military attaché at Washington’s exclusive Cosmos Club “to clarify questions that had been raised in Canada,” as North reported to McFarlane. North told the military attaché that the weapons were really going to the contras. And he also assured him that Calero promised diplomatic recognition of China—publicly a strong ally of the Sandinistas—“once the resistance forces had succeeded.”

The first Trans World sealift did not

arrive in contra camps until April, 1985—five months after the contras’ Cayman Islands bank, BAC International, had wired a $432,500 (U.S.) down payment to account number 4092763 in a Montreal branch of the Royal Bank, where Trans World transacts its business. That transfer of funds was the only one made directly from Calero’s account.

Calero testified that Trans World’s shipment was so delayed that the contras called it “the slow boat from China.” His complaints provoked Secord to ask Trans World for an emergency airlift of arms. Again with enduser certificates listing the destination as Guatemala, Trans World brokered a planeload of 90,000 lb. of mortar shells and 7.62-by-39 mm ammunition, suitable for the contras’ Soviet-made AK-47 assault rifles. The Arrow Air flight from Lisbon was arranged by Southern Air Transport Inc., a former CIA proprietary airline based in Miami—also used in other

contra resupply efforts. Secord testified that the arms prices included a 20-to 30-per-cent markup. He and Hakim received one-third of the profits, while Trans World received twothirds.

Secord claimed that the delay in Trans World’s shipment prompted him to shelve plans to use that company

exclusively. Instead, he cut Weigensberg out in favor of former CIA agent Thomas Clines, a longtime friend, whose arrangements for the remaining arms shipments gave Secord a larger share of the profits. But that did not end Secord’s relationship with Weigensberg. Investigators have discovered that as late as last summer—

when Secord and Hakim suddenly had on their hands a mysterious boatload of $2.8-million (U.S.) worth of Sovietbloc weapons—the general once more discussed a deal to supply them to the CIA with Weigensberg. But that time, after a Montreal meeting, the Canadian arms dealer lost out on the bid to another broker.

What has still not become clear to investigators is whether Clines’s or Trans World’s shipments contained cases of the deadly and highly controlled explosive Composition C-4, which North included in an April 9 list of arms to McFarlane. The chemical—favored by terrorists—is manufactured in only two places, a munitions plant in Tennessee and a commercial factory owned by Produits Chimiques Inc. in Valleyfield, Que. According to Peter Maas, author of Manhunt, the story of how Edwin Wilson smuggled c-4 to Libya, the substance is “the most explosive explosive in the world—short of a nuclear reaction.” Indeed, Maas points out the Wilson case “provided them an absolute blueprint for what they did in the Irancontra affair.” As for why Secord and company chose to work through Canada, said Maas: “I guess it seemed to be easier.”

DAN BURKE

MARCI McDONALD in Washington with DAN BURKE in Montreal