Contras Amply Funded Despite Congress’ Ban : Reportedly Got $88 Million From 1984 to ‘86, Half Coming From Private, Foreign Sources

For two years, as Congress blocked U.S. military aid for Nicaraguan rebels, Reagan Administration officials portrayed the contras as virtually penniless--but pledged, nevertheless, that they were carefully obeying the congressional ban.

“We did not solicit funds or other support for military or paramilitary activities either from Americans or third parties,” then-National Security Adviser Robert C. McFarlane assured Congress in 1985.

More recently, however, a very different picture has emerged. Almost inadvertently, the discovery of President Reagan’s secret arms sales to Iran has revealed a wealth of new details of the secret White House effort to obtain military aid for the contras from 1984 through 1986, when the ban was in effect. And the evidence indicates that Reagan aides actively encouraged foreign contributions to the contras and helped organize arms shipments to their camps, contrary to the Administration’s assurances to Congress.

“We operated carefully within the law to encourage private and third-country assistance to the contras,” a National Security Council aide who was involved in the program now acknowledges. “They were perfectly legal actions. We didn’t talk about them in public, but there were good reasons for that: either the donors wanted it handled quietly or for the security of the contras’ operations.”

‘Congress Was Deceived’

Members of Congress are not convinced. “It is not at all clear that everything they did was legal,” said a Democratic member of the House Intelligence Committee. “It is perfectly clear, though, that the Congress was deceived.”

The contributions included about $30 million from Saudi Arabia, unknown amounts of weapons from Israel and smaller donations from South Korea, Taiwan, El Salvador, Honduras and Guatemala, U.S. and contra officials say.

And the results were impressive. Because of the secret aid program, Administration officials now say, the contras received at least $45 million worth of foreign or private aid during 1985 and 1986. Together with non-military U.S. aid that was provided with congressional approval through the State Department and CIA, the contras received at least $88 million in all during those two years--more than twice what the Reagan Administration had requested from Congress when the aid was cut off.

“What’s kept the resistance alive has been private help,” Assistant Secretary of State Elliott Abrams said last October after a cargo plane with three Americans and a load of machine guns aboard was shot down inside Nicaragua. “Some very, very brave people have been willing to actually bring this material into Nicaragua. . . . God bless them, because they were fighting for freedom in Central America.”

What Abrams and other officials did not mention at the time was that the aid they described as “private” had been largely solicited from foreign governments friendly to the United States and delivered with help from the CIA and the staff of the NSC.

The official in charge of the secret program was Lt. Col. Oliver L. North, the same NSC aide who managed the arms sales to Iran--and, according to testimony from Administration officials, helped divert profits from the Iranian deal into supplies for the contras.

No One-Man Operation

But the contra aid campaign was no one-man operation. Evidence gathered by the Senate Intelligence Committee, along with the accounts of Administration officials, indicates that Reagan was well aware of the effort--as were his national security advisers, McFarlane and John M. Poindexter, and the director of the CIA, William J. Casey.

A Senate Intelligence Committee report released last week revealed that Reagan was briefed several times last year on his aides’ efforts to stimulate foreign aid for the contras. On one occasion, according to the report, Reagan was told that Israel had offered to send “a significant quantity of captured Soviet Bloc arms” to the contras. As the President prepared for a meeting with Israeli Prime Minister Shimon Peres, aides told him that if the subject of the contra arms came up, he should “just say thanks.”

On another occasion, the report said, McFarlane telephoned Secretary of State George P. Shultz to inform him that Saudi Arabia had contributed a sizable amount to the contras--$30 million, according to McFarlane, $31 million according to Shultz. Contra officials say the Saudi money paid for their weapons airlift; Saudi Arabia has denied giving any aid.

Private Auxiliaries

Most of the aid was funneled by North through a network of private auxiliaries led by retired Air Force Maj. Gen. Richard V. Secord and an Iranian-born California businessman, Albert A. Hakim, according to the report and the accounts of sources who were involved.

Secord and his associates bought weapons from a variety of sources, including the communist governments of Poland and Romania, according to shipping documents and contra officials.

But CIA officials also helped at several points along the way, most notably by coordinating the delivery of the weapons with some of the contra groups, officials said. At the time, the CIA was prohibited from aiding contra military operations “directly or indirectly.” One CIA official has been recalled from his post in Costa Rica for improperly aiding the contras, but he told a presidential commission last week that he believed he had the approval of top agency officials for his actions.

The State Department also approached several countries for donations of non-military aid in 1986, after Congress amended the law, which did not address solicitations of third parties, to specifically make such solicitations legal.

A Pitch to Singapore

But a pitch to Singapore for a contribution of field communication equipment failed because the Asian city-state does not produce the right kind of equipment, congressional sources said. The sole donation that the State Department did collect, a $10-million gift from the Southeast Asian sultanate of Brunei, went astray when Abrams directed it into one of Secord’s secret bank accounts. Congressional investigators and State Department officials have said they have not been able to determine what happened to that money.

An accurate estimate of the sum collected through these various schemes is probably impossible to produce. But Abrams, in an interview, estimated that the contras needed roughly $25 million per year merely to stay alive, before buying any weaponry. “If I had to pick a number as a sort of educated guess, I’d say $25 million a year,” he said. Other officials provided varying estimates, but agreed that at least $45 million in private or foreign aid had been collected.

In addition, during 1986 the contras received $27 million from the State Department to pay for non-lethal supplies, as well as some $16 million from the CIA in secret non-military aid that Congress quietly permitted ($10 million in intelligence assistance, $3 million for communications and at least $3 million for political activities).

sh $88 Million in Two Years

The total resources available to the contras thus came to at least $88 million over two years. (By comparison, the Administration was asking Congress for only $21 million in annual aid when the program was cut off in 1984.)

In short, the secret aid effort produced a significant amount of support--enough to maintain the contras as a potential threat to the Sandinistas, but clearly not enough to enable them to overthrow the regime.

Was the foreign aid legal, as the Administration contends?

Democrats in Congress concede that there was no law expressly prohibiting the President from asking other governments or private citizens to donate money or guns to a favorite foreign project. Many, however, believe that such a ban was implicit in the laws they had passed. The Administration disagreed--but it kept its disagreement secret.

In 1985, for example, Rep. Lee H. Hamilton (D-Ind.), then chairman of the House Intelligence Committee, formally assured the House that under the law then being passed, “no other department or agency involved in intelligence activities (except for the State Department) may engage in any type of solicitation for the contras.”

Wording Not Explicit

But that wording was not explicit in the law itself and the Administration now says it did not agree with Hamilton’s interpretation. “Congress had the opportunity to pass a provision like that, and it didn’t,” the NSC official said.

The Administration never raised those arguments at the time of Congress’ debates in 1984 and 1985, however. Instead, congressional sources said, Administration officials maneuvered quietly to keep any prohibition on soliciting aid out of the law.

Abrams and other Administration officials say they consider the secret aid program a success, because it kept the contras in the field and fighting. And they say they do not believe the questions over its propriety will hamper their efforts to win $105 million in new military aid for the contras this year, on top of the $100 million passed last year.

“All these questions about private aid just aren’t relevant any more,” Abrams argued. “Now it’s the United States Congress which is funding the contras. The scandal will be irrelevant as long as you cannot demonstrate that bad behavior on the part of contra leaders compromises their ability to continue leading the resistance, and no one has been able to demonstrate that.”

“We’ll see about that,” remarked Rep. Sam Gejdenson (D-Conn.). The congressional committees investigating the Iranian arms sales, he said, may spend much of their time looking into the contras instead.