Reagan Seen as Aiding North in Funding Rebels

President Reagan actively aided Oliver L. North’s efforts to raise money for the Nicaraguan rebels during the period when U.S. military aid to the contras was banned, although Reagan denies any knowledge of the secret funding effort, a presidential commission’s report disclosed Thursday.

The report quotes North, then a White House aide, as telling then-National Security Adviser John M. Poindexter in a 1986 message: “I have no idea what (White House Chief of Staff) Don Regan does or does not know re my private U.S. operation, but the President obviously knows why he has been meeting with several select people to thank them for their ‘support for democracy’ in (Central America).”

Nevertheless, the report says, Reagan last month told the presidential panel, headed by former Sen. John Tower (R-Tex.), that he did not know that North or other members of the National Security Council staff were working to help the contras.

Arranged Several Meetings

North arranged several White House meetings in which Reagan praised private donors to organizations that secretly funneled money to the rebels. His efforts on behalf of the contras were reported in the press during 1985 and 1986.

But the commission’s report, released Thursday, says: “The President told the (Tower) board on Jan. 26, 1987, that he did not know that the NSC staff was engaged in helping the contras.”

Although North asserted in his computer message to Poindexter that the President knew the reason for the meetings, there was no record of any presidential decision to approve the private fund-raising effort, the report said.

The report contains a wealth of new detail on the NSC’s secret aid to the contras and puts North at the center of an effort that secretly directed millions of dollars in military aid to the rebels--with the knowledge and approval of both Poindexter and Robert C. McFarlane, his predecessor as national security adviser.

It suggests that McFarlane, Poindexter and North deliberately deceived Congress by insisting that the NSC played no role in organizing military aid for the contras. At one point, after North told the House Intelligence Committee last August that he had no knowledge of contra military operations, Poindexter sent him a message: “Well done.”

In fact, the report says, North had detailed knowledge of contra military operations. In 1985, it says, he even attempted to organize the seizure by the rebels of a merchant ship that he suspected of carrying weapons to Nicaragua’s leftist government--an act that one North memorandum referred to as “piracy.”

Poindexter agreed: “We need to take action to make sure (the) ship does not arrive in Nicaragua,” he wrote.

Seizure Never Attempted

But the seizure of the ship was never attempted, the report says, because the plan required assistance from the special operations force of a nearby country, apparently El Salvador--and that government refused to cooperate.

The report says that North coordinated the efforts of retired Maj. Gen. John K. Singlaub to raise money for the contras from two Asian governments, which other sources have identified as Taiwan and South Korea. “The contras eventually received funds from both foreign governments,” it says.

In early 1985, North informed McFarlane in a series of memos that he had already established several nonprofit foundations to raise money for the contras and said that the rebels had received $24.5 million in private and foreign funds since U.S. aid ran out in 1984.

Charts discovered in North’s office safe outlined an elaborate network of dummy companies and secret organizations set up to raise funds, buy weapons and deliver supplies for the contras--a “contra management structure” that North eventually dubbed “Project Democracy.”

McFarlane told the Tower Commission that he knew of the secret aid effort, the report says. “In May or June of 1984, without any solicitation on my part, a foreign official offered to make a contribution from what he described as ‘personal funds’ in the amount of $1 million per month for support of the (contras),” McFarlane wrote in a written response to the panel. “I asked Lt. Col. North to find out where the contribution should be sent . . . I provided (a bank account number) to the donor.”

Denied Raising Money

Nevertheless, the report notes, McFarlane assured Congress that neither he nor North was raising money for the contras. “There is no official or unofficial relationship with any member of the NSC staff regarding fund raising for the Nicaraguan democratic opposition,” he said in an Oct. 7, 1985, letter to Rep. Lee H. Hamilton (D-Ind.), then chairman of the House Intelligence Committee.

Hamilton, now chairman of the House Select Committee investigating the Iran-contra scandal, said Thursday that he found the discrepancies “curious.” “On the face of it, at least, there are conflicts between some of the recitations of facts by the Tower Commission and . . . the positions of Col. North and Mr. McFarlane,” he said.

Beginning in late 1985, the report says, North actively helped manage the contra resupply network that was directed by retired Air Force Maj. Gen. Richard V. Secord, with Poindexter’s knowledge and approval. The network used the CIA station chief in Costa Rica to relay messages among North, Secord and the contras--even though the CIA was barred by law from participating in contra operations.

Plans for Airdrops

One message from the station chief, who used the pseudonym of Tomas Castillo, outlined plans for several airdrops, the transportation of 80 contra recruits to the front, and the launching of resupply operations by sea along Nicaragua’s southeastern coast. “My objective is (the) creation of (a) 2,500-man force which can strike northwest and link up with (a commander in the area),” the CIA man wrote.

“I asked (North), ‘Are you sure this is all right?’ ” the CIA man later told the Tower panel. “He said yes, yes--all you’re doing is passing information.”

At one point North’s efforts to ship arms to Iran conflicted with his project to deliver weapons to the contras. In November, 1985, Secord had an airplane ready in Portugal to ship ammunition to the contras, but had to divert it to carry missiles to Iran instead.

“Too bad,” North wrote in a message to Poindexter. “This was to be our first direct flight to the resistance field at (deleted) inside Nicaragua. The ammo was already (packed with) parachutes attached. . . . One hell of an operation.”

The report also suggests that Assistant Secretary of State Elliott Abrams knew more about the private supply network than he has acknowledged. A CIA officer told the panel that Abrams knew about a plan to build a secret airstrip for the contras’ use in northern Costa Rica that North and Secord organized in 1985, the report says.

Tried to Reverse Decision

In 1986, when the Costa Rican government decided to close the airstrip, Abrams conferred by telephone with North and Lewis Tambs, the U.S. ambassador in Costa Rica, to launch an effort to reverse the decision, it says.

In a memo to Poindexter, North wrote that he, Tambs and Abrams had all talked with Costa Rican President Oscar Arias Sanchez and threatened to cut off the country’s $80-million U.S. aid program if the contras were barred from using the airfield.

“I recognize that I was well beyond my charter in dealing (with) a head of state this way and in making threats/offers that may be impossible to deliver, but under the circumstances--and (with) Elliott’s concurrence--it seemed like the only thing we could do,” North said in the memo.

Poindexter replied, “You did the right thing, but let’s try to keep it quiet.”

Abrams confirmed that he had discussed the issue with North, the report says, but denied that Arias had been threatened with a cutoff of aid. Abrams has previously insisted publicly that he had no knowledge of North’s activities on behalf of the contras.

The Tower Commission notes that the NSC staff’s secret effort for the contras was similar in some ways to the secret dealings with Iran: “Neither program was subjected to rigorous and periodic interagency overview,” the report says. “In neither case was Congress informed.”

But unlike the case of Iran, it says, the President never issued a formal order to launch the contra supply network.