‘Sting’ OK Reported as U.S. Sent Arms to Iran

Atty. Gen. Edwin Meese III and Treasury Secretary James A. Baker III approved a U.S. Customs Service “sting” operation against illegal arms sales to Iran at the same time that the White House was secretly shipping weapons there, a federal law enforcement source familiar with the case told The Times.

Baker oversees the Customs Service.

The source also said that Secretary of State George P. Shultz was briefed by either Meese or Baker “prior to the arrests” last April of 10 American, German and Israeli businessmen, one of whom was retired Israeli Brig. Gen. Avraham Bar-Am.

Case ‘Well Coordinated’

“That case was well coordinated with all those who needed to be involved,” said the official, who asked not to be identified.

“In the world of international arms investigations, it’s always real tough to sort out the good guys and the bad guys, so these things are always checked out to make sure one agency isn’t stepping on another agency,” the source said.

Although both Meese and Shultz reportedly were aware of White House involvement in arms shipments to Iran, “neither raised any flags,” he said.

Meese’s role in prosecuting the “sting” has taken on increased significance since disclosures that the President sought the attorney general’s advice about the legal implication of the White House involvement in arms shipments to Iran.

Order by Judge

On Monday, a federal judge here ordered the U.S. government not to destroy, conceal or alter any documents pertaining to weapons shipments to Iran.

The order by Judge Leonard B. Sand, which covers weapons sent directly from the United States or through any another country, came in the case of 17 defendants caught up in the “sting.” They are charged with plotting to smuggle more than $2 billion worth of arms to Iran, most of it via Israel. Ten have been arrested and await a trial tentatively set for Feb. 2.

The case figures to be the first clear test of what impact President Reagan’s secret arms shipments to Iran may have on prosecutions of arms smuggling.

Defense lawyers have asked Sand to subpoena Vice President George Bush; Marine Lt. Col. Oliver L. North, a former National Security Council aide fired by Reagan, and two former national security advisers, Vice Adm. John M. Poindexter and Robert C. McFarlane.

The defendants, both in court arguments and on surreptitiously recorded audio and video tapes made by customs agents, said they had believed that the Reagan Administration would secretly sanction the arms deal.

Missiles, Spare Parts

Among the weapons they proposed to sell to Iran were TOW anti-tank missiles and spare parts for F-4 fighter jets. This type of equipment was actually shipped to Iran with White House approval during the months that undercover customs agents were accumulating evidence against the accused businessmen in New York, London, Paris and Tel Aviv.

On Monday, Sand also granted a request by prosecutors for a 10-day adjournment while the Department of Justice tries to determine whether recent disclosures about White House approval of some arms sales to Iran will affect the case.

“There are decisions that have to be made by U.S. government agencies as to the suitability of this prosecution at this time,” Sand said, in granting the request.

Sensitive Issues

In a preview of sensitive and potentially embarrassing issues that could be raised if the defendants come to trial, Sand asked Assistant U.S. Attorney Lorna Schofield what kind of export documentation accompanied the Reagan Administration’s arms shipments and whether papers were falsified to show that any country other than Iran was the ultimate destination.

“That (answer) is not known to the United States Attorney’s office,” Schofield replied. Sand then asked her to find out. The prosecution has accused the indicted businessmen of conspiring to acquire false export documents to conceal the destination of arms intended for Iran.

Defense lawyers requested the document-protection order after reports last week that North may have destroyed some documents relating to White House-sanctioned arms shipments. North was fired after discovery that some funds from the Iranian arms deal was sent to U.S.-backed rebels, known as contras , fighting in Nicaragua. Poindexter also resigned as national security adviser.

In issuing his order, the judge overruled objections from Schofield.

“We have no idea whether these (the North) documents have anything to do with this case,” the prosecutor said. “We share the defendants’ concern. We do not think we need an order.”

William C. Rempel reported from Los Angeles, and John J. Goldman reported from New York.