White House Chief Reportedly Knew of Iran-Contra Tie : Regan Denies Being Informed, Along With Poindexter, on Secret Arms Deal

Marine Lt. Col. Oliver L. North, accused of funding Nicaraguan rebels with the profits from secret arms sales to Iran, has told several people that he had personally briefed White House Chief of Staff Donald T. Regan on the program at its conception or early in its history, a source familiar with those discussions said Thursday.

The source, an official with consistent and accurate knowledge of the unfolding Iran scandal, said North claimed that the diversion of $10 million to $30 million in Iranian funds to the contras was done with the “knowledge and encouragement” of his superiors, including Regan and North’s boss, national security adviser John M. Poindexter, who resigned Tuesday.

North was reported to have won approval for the politically disastrous operation by pledging to take the blame should the scheme become public.

He was reported to have said that he kept both Regan and the President’s national security adviser fully informed of all efforts to finance the struggling contras’ army in Nicaragua since Regan became White House chief of staff in January, 1985. Poindexter took over last December from Robert C. McFarlane in the national security job.

Regan, traveling with President Reagan in Santa Barbara, was asked about the report and responded:

“No, That’s ridiculous. I was not briefed thoroughly on all this. Never heard of it before until the news came out Monday about what was happening with the Iranian money and the contras. I have no idea, no idea whatsoever.”

Asked if he had been briefed, Regan insisted: “No. Did you all enjoy your Thanksgiving? Sounds to me like I’m the turkey.”

Reagan Administration spokesman Dan Howard, when first informed Wednesday of reports that North had regularly briefed Regan, vigorously denied that Regan knew of the Iran-contras link.

“Don Regan says, ‘Not true, and if you’ve got anything, take it to Justice,’ ” Howard said, referring to the Justice Department probe of the Iran dealings.

The source with knowledge of North’s allegations, as well as several Administration officials close to the Iran affair, noted that North’s own credibility has been shattered by the secret Iran dealings and that North’s allegations may be in doubt.

Spokesman Howard repeated his denial Thursday to United Press International, which cited an anonymous White House official as saying that Regan approved details of the transfer of Iranian arms monies to the contras.

The official said that Regan was “briefed about the whole thing from the start, and he was informed every time there was a development” in the Iranian shipments, UPI said. The report said that Regan was briefed by North or Poindexter between once a week and once a month.

‘Some Knowledge’

A spokesman for Atty. Gen. Edwin Meese III said Wednesday that Meese already has said that Poindexter had “some knowledge” of the transfer of Iran arms sales profits to the contras.

The spokesman said that Meese stood by earlier statements, made on national television, that it was “pretty clearly established” that Regan and other top officials knew nothing of the scheme. He added, however, that Meese’s statement was based on interviews conducted up to that time and that a more rigorous criminal investigation of the affair is not yet fully under way.

Administration officials said that those remarks appeared less conclusive than Meese’s earlier statements, in which he said that both Poindexter and McFarlane learned only belatedly of the Iran-contras link, well after the diversions of cash are alleged to have begun early this year.

Insisted on Full Briefings

Officials repeatedly noted that Regan insisted on complete briefings on all national security matters and that he conducted regular closed meetings with Poindexter and North.

“It’s conceivable that he was not told,” one ranking official said of Regan. “But I can’t conceive of it.”

High-ranking Administration officials have said that Regan was Poindexter’s prime backer when Poindexter, who had been McFarlane’s deputy at the National Security Council, was appointed last December to replace the departing McFarlane.

Those officials, insisting on anonymity, have said that one condition of Poindexter’s appointment was that Regan would have intimate involvement in national security policy. Regan, reversing past practice, accompanied Poindexter at the President’s daily national security briefing.

“When Regan took over, the NSC’s access to the President was shut off,” said an Administration official who asked not to be named.

Long-Discussed Plan

The account of North’s conversations indicated that the diversion of Iranian weapons profits to the contras was an outgrowth of a long-discussed White House plan to send arms to Iran in an effort to establish ties with moderates within the government of the Ayatollah Ruhollah Khomeini and to secure the release of American hostages held in Lebanon by terrorists with ties to Iran.

The arms-for-hostages swap, first conceived in early 1985, was not under way until nearly a year after North had begun managing a secret White House program to direct private donations to the contras. Congress had banned military aid for the contras from the U.S. government as of Oct. 1, 1984.

The concept of financing the contras with Khomeini-regime money--a “brilliant” scheme, said the source with knowledge of North’s conversations--”was Ollie’s idea. He tried to do the driving. He went to Don (Regan) and said: ‘I have this opportunity. If it goes bad, I’ll protect you.’ ”

Kept Poindexter Apprised

North was reported by one source to have kept Poindexter apprised of the operation directly from his mid-level office within the political-military affairs division of the National Security Council.

The direct link avoided standard approval and filing procedures for official NSC papers, making it unlikely that copies of documents relating to North’s Iran scheme will be easily found, that source said.

The Times reported on Thursday that North had destroyed a series of NSC documents in his office last weekend that might have shed light on the scope of knowledge within the Administration of the Iranian dealings.

Word of the charge against Regan reportedly reached Reagan’s team of longtime California advisers, who have been agitating for changes within the White House, early this week.

New Impetus to Shake-up

It gave further impetus to calls by some of those advisers, who are consulting with the President over the holiday weekend, for a “clean sweep” from office of Reagan’s foreign policy and national security aides, including Regan and Secretary of State George P. Shultz.

The allegations of Regan’s involvement in the Iran-contras link came as another bombshell to a White House repeatedly rocked this month by reports of covert and controversial foreign policy initiatives.

First came disclosures that the United States had secretly been selling arms to Iran, which had held 52 Americans hostage for 444 days before releasing them on Reagan’s Inauguration Day in 1981. Government sources said that the first sales proceeded even though Reagan had explicitly rejected such a course before deciding on Jan. 17 of this year to approve further sales.

Although Reagan insisted that the arms sales were aimed at establishing closer relations with moderates in the Iranian government, polls showed that most Americans believed the sales represented ransom for hostages held in Beirut. Three hostages have been released since the arms sales were begun in late summer of 1985, but another three Americans have been kidnaped.

Then on Tuesday came the announcement by Meese that up to $30 million in profits from those arms sales had been diverted to Swiss bank accounts for use by the contras. Three or four arms shipments were made between January and September of this year by way of Israel, Meese said, and as many as three of them yielded profits that were transferred to the contras.

Times staff writers Doyle McManus and Robert C. Toth in Washington and James Gerstenzang in Santa Barbara contributed to this story.

Father Lawrence Martin Jenco spent Thanksgiving, 1985, as a hostage. Thanksgiving, 1986, in the warmth of his Orange County flock. Part II, Page 5.

Related stories, Pages 14-20.