Aid to Contras Being Diverted, Congress Told

Millions of dollars in U.S. non-lethal aid to Nicaraguan rebels have been funneled into offshore banks, paid to the military of a Central American nation or kept in the United States, congressional investigators said today.

The General Accounting Office, Congress’ investigative arm, found that one broker for the rebels, known as contras , received $3.3 million from the U.S. government but only sent $150,000 to Central America.

Most of that $3.3 million went instead to American companies and individuals, and $380,000 flowed into offshore accounts in Grand Cayman Island or the Bahamas, which have protective banking laws that offer tight secrecy, said Frank C. Conahan, GAO’s director for international affairs.

‘Enough Evidence’

“There is enough evidence to be concerned that humanitarian assistance may not be reaching the intended beneficiaries,” Conahan said in testimony before the House Foreign Affairs subcommittee on Latin America.

Conahan said two accounts handling non-lethal aid to the rebels paid $986,689 to the “armed forces of a country in the region” with another $450,000 payment on Jan. 10, 1986, “to the commander-in-chief of that country’s armed forces.”

Although GAO did not disclose the identity of the country, congressional sources, insisting on anonymity, said the payments were to the Honduran military.

The GAO assessment was based on its analysis of subpoenaed bank records of 14 accounts, mostly in Miami. The subcommittee, headed by Rep. Michael Barnes (D-Md.) issued the subpoenas May 8.