Panel Reportedly Ties Contra Aid to Bilked Middlemen

The Senate Intelligence Committee has concluded that most of $8.5 million apparently diverted from Iranian arms sales to Nicaraguan rebels last year came not from the coffers of the Ayatollah Ruhollah Khomeini but from financial middlemen who were cheated in the arms deal, congressional sources said Wednesday.

The committee’s unreleased report on the Iran- contras scandal states that the middlemen, led by Saudi Arabian arms merchant Adnan Khashoggi, lost much or all of $15.7 million that they had placed in a Swiss bank account as collateral for U.S. arms shipments to Tehran last May, according to sources familiar with the report.

Those middlemen sought to charge the Iranians $24 million for the weapons, according to sources--a figure that appears to include profits they had hoped to realize from the deal. But the Khomeini government balked at the high price and paid only $8 million.

Pentagon Reimbursed

About $6.5 million was sent to the Defense Department in payment for the weapons, leaving Khashoggi and others far short of being reimbursed for their $15.7 million.

Precisely how the millions were diverted from the Swiss bank account to the contras remains unknown. But officials have said that the account was controlled by Oliver L. North, a National Security Council aide later fired for his role in the Iranian arms deals.

A reliable Senate Intelligence Committee source added that the figures prove that “the real scam” was perpetrated on the originators of the arms deal with Iran, the middlemen.

He said that the report generally portrays President Reagan’s aides as well-intentioned policy-makers who became involved with the opportunistic private investors who came up with the arms sale scheme.

The disclosure helps to explain why White House officials and Senate Republicans have been eager for public release of the Intelligence Committee report. A Senate source indicated that the Republicans intend to make the argument that the transaction did not necessarily violate the law because the money that was diverted was technically not owed to the United States but, instead, to private investors.

“In my opinion, you can’t cheat these guys (the middlemen),” said a Republican source who refused to be identified. “Everything they get, they deserve.”

Copy of North Memo

It was learned also that the committee report includes a copy of the undated memo written by North in which he originally proposed the diversion of arms sale profits to the contras. Sources said that the committee has concluded that the memo was written in early April and directed to North’s supervisor, then-White House National Security Adviser John M. Poindexter.

Democrats have opposed release of the Senate Intelligence Committee report on grounds that the findings are incomplete, because the panel was unable to interview North and Poindexter, both of whom cited the Fifth Amendment right against self-incrimination and refused to testify.

On Wednesday, Senate Intelligence Committee Chairman David L. Boren (D-Okla.) disclosed that three White House officials--a member of the National Security Council staff and two attorneys--helped in redrafting the report, even though Democrats objected. He said that those officials were involved in deciding which parts of the report would be deleted to preserve national security secrets.

Boren said that the participation of White House officials was inappropriate, in part because the actions of White House officials were under investigation by the committee. “Propriety dictated that they shouldn’t have been there,” he said.

Officials of the Central Intelligence Agency and the State Department also were permitted to review the document, according to sources.

The report was revised with the intention of releasing it last Monday, but the committee members voted 7 to 6 against public disclosure.

Boren, who did not become chairman of the committee until Tuesday, when Democrats assumed control of the Senate, said he had telephoned the committee offices and warned the Republican-controlled staff that it was making “a mistake” when he learned that White House officials were being consulted.

He said that Sen. William S. Cohen (R-Me.), who became vice chairman of the committee on Tuesday, also objected to the involvement of White House officials in revising the report. He said Cohen left instructions that the White House officials should not be permitted to take notes on the material, but he did not know whether the instructions were followed.

The President frequently has said that the committee’s report should be released to the public, and the New York Times on Wednesday carried a story quoting White House officials who disclosed some aspects of the committee’s findings.

Section Deleted

Senate Majority Leader Robert C. Byrd (D-W.Va.), in a speech on the Senate floor on Tuesday, also questioned White House involvement in the revision of the report. He noted that one four-page section that had been deleted contained no classified information.

Sen. Dave Durenberger (R-Minn.), who headed the Senate Intelligence Committee until Tuesday, said that the section to which Byrd referred was deleted at his request and not on the advice of White House officials. He said the information was not the product of testimony before the committee and could have been embarrassing to another country.

Durenberger asserted also that the White House officials suggested no changes in the report, and he accused Boren of raising the issue to discredit the results of the committee’s work when it was under Republican control.

“We’ve put the pressure on them to release it, and they have to start discrediting us,” said Durenberger, who threatened to release the report himself if Democrats fail to do so.

Apparently as a result of pressure from the Republicans, Boren indicated that the committee under his leadership probably will release a different version of the report within the next week. He indicated that it probably will be shorter than the Republican version.

The Senate Intelligence Committee’s findings are also to be turned over to a special committee that has been created by the Senate to investigate the Iran-contra affair. On Wednesday, the House voted 416 to 2 to create a similar committee.

The House legislation set up a 15-member panel with broad investigative powers that would extend through Oct. 30. The Senate had voted 88 to 4 Tuesday to set up an 11-member committee, giving it until Aug. 1 to complete its work.

Rep. Lee H. Hamilton (D-Ind.), chairman of the new committee, told the House that, although it is not his intention to prolong the hearings, the committee must be free to follow “the trail of evidence,” wherever it may lead.