Israel Denies Reported Role in Contra Funding

Israel on Sunday flatly denied a U.S. Senate Intelligence Committee report claiming that it played a role in diverting Iranian arms sales funds to the contras of Nicaragua and that it offered as well to ship captured Soviet Bloc arms to the contras.

“Israel reaffirms that it had no knowledge and was not a party in any way in the alleged diversion of Iranian funds to the contras,” Avi Pazner, spokesman for Prime Minister Yitzhak Shamir, said after the weekly meeting of the Israeli Cabinet.

“Likewise, there is no foundation whatsoever to the allegation that Israel suggested to the United States that arms from Israel be delivered to the contras,” Pazner said.

The formal denial from the prime minister’s office followed an equally strong denial by the country’s Defense Ministry, which was angered by a claim in the Senate Intelligence Committee report that Defense Minister Yitzhak Rabin offered, during a Washington visit in September, 1986, to send “a significant quantity of captured Soviet Bloc arms” to the contras.

‘Rejected Outright’

The Defense Ministry denial said that “on the contrary, an American request by a member of the National Security Council to the defense minister that Israel help the contras directly was rejected outright at the time.”

Neither of the Israeli denials offered a detailed rebuttal of the Intelligence Committee report, which singled out Israel as playing a key role in promoting U.S. arms sales to Iran and diverting the profits to the contras.

Nor did they deal directly with a section of the report that quoted a CIA memorandum contending that an Israeli official took $2 million of the arms profits directly. The CIA memorandum said the money was taken by Amiram Nir, the top counterterrorism aide to then-Prime Minister Shimon Peres, to be used “for some unknown purpose by an Israeli official.”

Role Dismissed

But Pazner’s formal denial from the prime minister’s office Sunday dismissed any role in handling the Iran arms money.

“The payments from the Iranian transactions were made by an Iranian representative directly to an account designated by the Americans, and none of the money transferred by the Iranians went through or remained in the hands of Israel or its representatives,” Pazner said.

“I wish to emphasize again that throughout the Iranian affair Israel acted in full cooperation and coordination with the United States in the spirit of the close friendship between the two countries.”