Bank Accounts Linked to Arms Sales : Cayman Officials Would Cooperate if U.S. Asked

Two senior officials of the Cayman Islands government said Tuesday that they will offer full cooperation if U.S. authorities ask for their help in verifying charges that millions of dollars in Iranian arms profits were channeled through secret Cayman Islands bank accounts on their way to the Nicaraguan rebels.

But the officials--Atty. Gen. Michael J. Bradley and Financial Secretary Thomas C. Jefferson--said they have not received a formal request from the U.S. Justice Department for law enforcement assistance.

U.S. authorities have said that some of the profits from the Iranian arms sales were shifted from Swiss banks to still-unidentified bank accounts in the Cayman Islands and Panama, where the funds presumably were used to support the war against the leftist Nicaraguan government.

The Caymans provide a base of operations for several firms linked to the flow of funds from the Iranian arms deals, including a branch of the Swiss-based Compagnie de Services Fiduciaires. The Times of London, quoting sources with knowledge of the transactions, has said that $18 million from the Iranian arms sales was paid into CSF’s account in the Cayman Islands.

‘No Evidence of a Crime’

Bradley, when asked if he believes that any Cayman Islands bank accounts were used to funnel money to Nicaragua’s contras , replied: “How would I know? We have no request from the United States and no evidence of a crime to investigate ourselves.”

Jefferson said he has made some informal inquiries among bankers here but has turned up nothing. Neither official would answer questions about specific individuals or specific banks.

In separate interviews in this British crown colony in the Caribbean, Bradley and Jefferson said that new treaty provisions between the United States and the Cayman Islands have poked some holes in the strict corporate and bank secrecy that has long characterized this offshore tax haven.

Those provisions, they said, take effect when the United States certifies that it has reason to believe criminal acts have occurred that involve both countries. But even if the United States, short of alleging any criminality, were to ask for assistance in the Iran arms probe, “I think our response would be positive if the U.S. put up specific information,” Jefferson said.

Besides the Swiss-based CSF, companies with offices in the Cayman Islands include Vertex Finances S.A., whose directors include two Canadian businessmen linked to the Iran arms sales, accountant Donald Fraser and real estate dealer Walter E. Miller. Vertex is reported to have provided financing for some of the Iran arms purchases.

Declines Comment

Ivan Burges, a registered agent for Vertex, declined comment on all questions about the company and Fraser. Attempts to reach Fraser at his palatial Cayman Islands home for comment Tuesday were unsuccessful.

A third Cayman Islands firm, Euro Commercial Finances B.V., is shown in Utah lawsuit records to have made loans to Saudi Arabian arms dealer Adnan Khashoggi and includes Miller among its directors. Khashoggi advanced some of the money with which Iran purchased U.S. arms.

Separately, Senate investigators say that Adolfo Calero, a leader of the contras, maintains at least one bank account in the Caymans.

Staff writer Michael Wines in Washington contributed to this story.