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Poindexter Out, Aide Fired : Iran Arms Cash Diverted to Contras Without Reagan OK : National Security Council Officials First to Depart

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Associated Press

President Reagan’s national security adviser resigned today and a key operative who handled secret arms sales to Iran was fired as the Administration disclosed that up to $30 million the Iranians paid for U.S. arms was diverted to U.S.-backed contra rebels in Nicaragua without the President’s approval.

Reagan continued to defend his Iranian policy while saying that he had not been “fully informed on the nature of one element” of that policy.

In a bizarre twist to the tale that already has enveloped Reagan in his most severe crisis as President, Reagan appeared in the White House briefing room on short notice to announce he was permitting his chief national security adviser, Vice Adm. John M. Poindexter, to resign to return to the Navy and that Marine Lt. Col. Oliver North, one of Poindexter’s deputies, had been “relieved of his duties on the National Security Council staff.”

They were the first Administration officials to depart in the wake of the controversy over Reagan’s secret arms sales to Iran.

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Panel to Probe NSC Staff

The President said he would name a commission to examine the role of his National Security Council staff, which directed the operation and has come under direct fire from the State Department for its operations. The President also said the Justice Department will launch a full-scale probe of how the money was handled to determine whether federal crimes were committed in funneling money to the contras at a time when Congress had banned direct U.S. military aid to them.

Atty. Gen. Edwin Meese III, following Reagan to the lecturn, told reporters that, with North’s knowledge, $10 million to $30 million collected from the Iranians for U.S.-shipped weapons was siphoned by Israeli middlemen and transferred to Swiss bank accounts set up by contra rebels fighting the Sandinista regime in Nicaragua.

Superiors Not Informed

Poindexter knew about the diversion but did not inform his superiors, either Reagan or White House chief of staff Donald T. Regan, Meese said. The attorney general said Poindexter’s predecessor, former national security adviser Robert C. McFarlane, learned of the secret payments last spring, about the time he went on a clandestine presidential mission to Iran aboard an arms-carrying cargo plane to meet with moderate Iranian leaders.

“To the best of our knowledge, it did not go any higher than that,” Meese said, as he reported on the results of a preliminary investigation he had conducted for Reagan over the weekend. Meese had told the President on Friday that there appeared to be gaps and discrepancies in the accounts of Administration officials scheduled to testify before Congress about the unfolding Iranian affair.

Only North Knew

“The only person who precisely knew about this was Col. North,” Meese said of the money matters. Sources say North, an expert on unconventional warfare in the Political-Military Affairs section of the NSC staff, secretly oversaw American efforts to help the contras in their war against Nicaragua, handled counterterrorism matters for the White House and was a key link in the secret arms shipments to Iran.

Poindexter, Meese said, knew something about the diversion of funds and “did not try to stop it.”

As the attorney general explained it, the money was not due the U.S. government because the Central Intelligence Agency collected and gave to the Defense Department the $12 million the United States was owed for the weapons Reagan agreed to sell Iran.

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Funds Collected by Israelis

The additional funds, Meese said, were collected from the Iranians by the Israeli middlemen who made the deal for the United States, and the Israelis slipped at least some of the excess into Swiss bank accounts controlled by the contras.

“No American person handled the money,” Meese said, and there is no indication any U.S. official profited from the deal or that the United States was defrauded of any of the funds due the government.

Meese confirmed that the first U.S.-sanctioned arms shipment to Iran took place in 1985 without Reagan’s knowledge and was approved by the President only after the fact. Reports of the unauthorized transaction first appeared in the Los Angeles Times. Administration sources, speaking on condition they not be identified, said that Col. North, who was fired in the shakeup, gave Israeli officials the go-ahead for that shipment on his own authority.

Meese said Alton G. Keel Jr., a veteran government official who joined the staff of the NSC four months ago, would take over Poindexter’s duties until the President names a successor.

No Further Shakeup Seen

Meese said he did not know of any further shakeup of the Administration over the Iranian arms deal and specifically said there had been no discussion of the resignation of Secretary of State George P. Shultz. The secretary and his deputies have made it clear they disagreed with the White House over the Iranian arms shipments.

A White House aide close to North described the NSC officer as being in good spirits despite his dismissal. “He’s going to take his hits and support the President,” said the aide, who insisted on anonymity.

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North, 43, went to the National Security Council’s staff in 1981 after working on policy at the Marine Corps headquarters for six years. He had a close relationship with McFarlane, who resigned from the NSC last December. McFarlane once described North--who disliked personal publicity--as “like a son of mine.”

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