Wright Says North Aid May Compromise Contra Leader

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From a Times Staff Writer

The discovery that former White House aide Lt. Col. Oliver L. North used secret funds to pay the salary of a Nicaraguan rebel leader further damages the Reagan Administration’s chances of obtaining aid for the contras from Congress, officials said Friday.

House Speaker Jim Wright (D-Tex.) said he was dismayed to learn that Arturo Cruz, the most moderate of the three top contra leaders, had been receiving about $7,000 a month from North for most of 1986.

“I am saddened upon learning of this and regret that it may tend to compromise the public credibility of Mr. Cruz, whom I’ve always regarded as a man of considerable personal integrity,” Wright said in a statement released by his office.

Focus on Source

“The Congress will want to know what other things Col. North may have done with funds available to him and identify the specific source or sources,” Wright said.


“Before it approves any additional funding for the contras, Congress has the obligation to discover just what has happened to the public’s money,” he said. The payments were disclosed in a Los Angeles Times story published Friday.

A ranking congressional aide said that the arrangement, under which North transferred money from an overseas bank account to an account Cruz opened in Costa Rica, was “unbelievably stupid.”

“Cruz was the closest thing they had in the contras to an honest guy, and now they’ve blown it,” he said. “If he needed the money, is there no rich Central American who could have paid his bills?”

State Dept. Sees Problems

State Department officials acknowledged that the payments raised the question of whether Cruz had any significant backing among Nicaraguans and would probably complicate their efforts to obtain the requested $105 million in new aid for the rebels this fall.

“It doesn’t look real good to have a guy we’ve been putting forward as a key Nicaraguan leader drawing a salary from Ollie North,” one conceded. “One of our vulnerabilities all along has been the charge that these leaders were chosen by the United States and not by Nicaraguans. Unfortunately, the charge is true.”

Cruz, through a spokesman, acknowledged receiving the payments and said he needed the money because he had no other source of income. He said the payments had stopped in November, when North was fired for allegedly diverting Iranian arms deal profits to the contras.