White House Releases Iran Memo : Contends Document Backs Reagan’s Version of Arms Sales

The White House Friday released a memorandum prepared in connection with the Iran arms sales after accounts of its contents appeared in the press, but argued that the document supports President Reagan’s contention that the sales were intended to encourage “moderate” elements in Tehran.

However, the memo drew an unmistakable link between shipments of U.S. arms to Iran and the release of American hostages in Lebanon. It also asserted that arms transfers would stop unless all U.S. captives were freed after the first delivery.

Written by Lt. Col. Oliver L. North for then-National Security Adviser John M. Poindexter, the Jan. 17, 1986, memo said Israel suggested selling arms to moderate elements in Iran and it documented a feud among top Reagan Administration officials about the wisdom of the proposal.

The White House released the document in the wake of published and broadcast accounts of its details, based on a draft Senate Intelligence Committee staff report summing up that panel’s investigation of clandestine arms sales to Iran and diversions of sales proceeds to Nicaraguan rebels.

The contents of the memorandum were reported in Friday’s Los Angeles Times, on the basis of accounts provided by White House and congressional sources.

Reagan’s Argument

Reagan, who insisted from the beginning of his presidency that he would not make concessions to terrorists, has repeatedly denied that he swapped arms for hostages. Instead, he has argued that the weapon shipments were part of a larger initiative to establish contacts with “moderate” elements within the fundamentalist government led by the Ayatollah Ruhollah Khomeini.

However, the memo makes clear that the delivery of U.S. arms was the foundation of renewed American ties to Tehran.

“In that we have been unable to exercise any suasion over Hezbollah (a radical faction) during the course of nearly two years of kidnapings, this approach through the government of Iran may well be our only way to achieve the release of the Americans held in Beirut,” the memo said.

In fact, all of the U.S. hostages in Lebanon were not released after the first arms delivery, and there were at least four more transfers of arms after the Jan. 17 intelligence “finding” was signed by Reagan. The Administration has not explained why it persisted in selling arms to Tehran.

‘A Byproduct, a Fallout’

The memo said that the release of hostages was “in some respects a byproduct of a larger effort to develop ties to potentially moderate forces in Iran.”

Stressing that point, a senior Administration official, speaking on condition of anonymity, said Friday, “The hostage release is in some respects a byproduct. It is inadvertent, it is fallout from a larger effort to develop--a spinoff from--a larger effort to develop ties to potentially moderate forces in Iran. That is what this whole memo is about.”

CIA Statement

Meanwhile, in an unusual public statement, the Central Intelligence Agency took exception Friday to reports that the Senate panel’s draft document had found that the agency’s top officials had misled Congress about when they first knew of the diversion of Iranian arms money.

CIA spokesman George Lauder issued a statement contending that agency officials, including Director William J. Casey, had heard only “speculation” about the diversion of arms sale proceeds to Nicaragua’s contra rebels, before they were told officially of the diversion on Nov. 25.

“It is time for the agency to set the record straight publicly,” Lauder said, adding that Casey and Deputy Director Robert Gates had made “full disclosure” in their December congressional testimony “about speculation that had reached them in October about a possible diversion of funds and what they had done about that information.”

In another development, the United Nicaraguan Opposition, the leading U.S.-backed contra rebel group, has informed the Justice Department that it paid for its Washington operations last year with money from “unknown” foreign sources.

UNO’s statement deepens the mystery of where the contras obtained money to pay for their political activities in the United States and the possible role of fired White House aide North, who allegedly masterminded the diversion of Iranian arms sales profits to the contras.

‘From Foreign Source’

In a filing last week with the Justice Department’s foreign agent registration office, UNO said it paid its office expenses over a six-month period ending Nov. 14 with $91,608 provided through three deposits--May 9, Aug. 11 and Nov. 6--”from foreign source.”

The sworn UNO declaration, signed by its Washington representative, Ernesto Palazio, Jan. 5, added: “Sources of UNO support unknown to registrant,” which is listed as UNO, the political umbrella group for most Nicaraguan rebel forces.

The document released by the White House Friday also revealed that the Administration--at least as far back as February, 1985, and perhaps earlier--had researched the legality of selling arms to other countries and determined that such deals could be made outside the provisions of American laws and reporting requirements for foreign military sales, if the President signed a “finding” authorizing such sales.