Private Contra Funding of $32 Million Disclosed : Leader Shows Secret Bank Data in Effort to Prove Rebels Did Not Get Money From Iran Arms Sales
A Nicaraguan rebel leader, unveiling a mountain of previously secret bank statements, announced Thursday that the main contra guerrilla force received at least $32 million in private funding during the two-year ban on U.S. aid to the rebels and said that $18 million of the money was spent on weapons bought through three American arms dealers.
In an attempt to prove that he received no money from U.S. arms sales to Iran, Adolfo Calero, the contra chieftain, provided an unexpected glimpse into the rebels’ secret money-laundering and arms-buying operations, which used a maze of middlemen and dummy companies to handle donations from sources he said remained unknown to him.
In the process, however, Calero confirmed that the contras received at least $31 million of the total contributions from a single donor during a nine-month period of 1984 and 1985. Other sources have identified the donor as a member of Saudi Arabia’s royal family.
Calero disclosed that the rebels had bought rifle ammunition from Communist China--"they sell rounds there like firecrackers"--as well as from Soviet allies Poland and Romania.
And he provided a breakdown for the first time of the contras’ payments to their three main arms suppliers: retired Maj. Gen. Richard V. Secord ($9 million), retired Maj. Gen. John K. Singlaub ($5.3 million) and retired Lt. Col. James L. McCoy ($4 million).
Secord and Singlaub worked closely with Lt. Col. Oliver L. North, the White House aide who was fired after documents indicated that he had diverted Iranian arms money to the contras.
“Here is the big money we got,” Calero said grandly, handing photocopied bank statements to a table full of reporters at his lawyer’s office. “These are all the accounts.”
Aides to Calero, until recently the contras’ political chief, said that he took the unusual step of displaying the bank records in an attempt to demonstrate his willingness to cooperate with investigations of the Iran-contra scandal--and to dispel any suspicion that his organization received money from the Reagan Administration’s secret arms sales to Iran.
Calero has repeatedly said that his organization, the Nicaraguan Democratic Force, or FDN, received nearly all of its cash contributions from July, 1984, through March, 1985--five months before the Reagan Administration’s secret Iranian arms sales began.
Nevertheless, several key questions remain unanswered. Calero acknowledged that money from the Iranian arms sales may have supported the secret airlift that supplied his troops inside Nicaragua. He said that the FDN had received one donation of $150,000 from Lake Resources Inc., a Secord-controlled firm that handled money from the Iranian arms deals.
And he insisted, at least for the record, that he never knew where his more than $31 million in arms-buying money came from.
‘Schweppes or Perrier’
“I never asked,” he said. “When you’re in the desert and someone offers you a glass of water, you don’t ask if it’s Schweppes or Perrier.”
Calero testified Wednesday before the grand jury investigating the scandal. He said that he expects to be able to lobby in Congress for the Administration’s request for $105 million in renewed U.S. aid to the rebels later this year.
President Reagan notified Congress Thursday that he intends to release the remaining $40 million of this fiscal year’s $100-million contra aid fund. Congress can attempt to block the release of the money, but opponents of the aid have said that they do not believe they can muster the two-thirds vote necessary to override a presidential veto on the issue.
No Prospect of Talks
In formally certifying that the contras have made progress toward political unity and more respect for human rights, Reagan said: “There is no reasonable prospect at this time that the government of Nicaragua will engage in a serious dialogue with all representatives of all elements of the Nicaraguan democratic opposition, accompanied by a cease-fire and an effective end to the existing constraints on political freedoms.”
Meanwhile, Calero described the FDN’s financial structure as depending almost entirely on a handful of donors, as hiding its money in the accounts of dummy companies in Panama and the Cayman Islands and buying its weapons from the three competing Americans: Secord, Singlaub and McCoy.
Much of his description already has been sketched out by the Senate Intelligence Committee, the Tower Commission and newspaper investigations. But the contra leader provided new details and a more precise financial breakdown than had been available before.
Single Major Donor
He said that he had asked officials from Israel, Egypt and Taiwan for military aid after Congress cut off U.S. funding to the rebels in mid-1984. But virtually all the contras’ funds for buying weapons from 1984 until last year came from a single donor who deposited either $31 million or $32 million into a secret bank account at BAC International Bank in the Cayman Islands, Calero and his aides said.
The account, in the name of Esther de Morales, wife of the FDN’s Miami lawyer, received regular transfers from July, 1984, until March, 1985: $1 million a month for eight months, followed by four quick deposits of $5 million, $4 million, $7.5 million and $7.5 million--a total of $32 million.
Calero said that the money did not belong to Mrs. Morales. “She is a nice lady,” he said with a smile, “but she is not that wealthy.”
Instead, he said, it came from anonymous donors--and insisted that he never asked who the donor was or how long the income might flow.
Discrepancy in Figures
According to the Tower Commission and the Senate Intelligence Committee, former National Security Adviser Robert C. McFarlane has testified that a single foreign country--identified by sources as Saudi Arabia--contributed $31 million to the contras during the same period. Contra officials said that they could not explain the discrepancy between McFarlane’s $31 million and their $32 million.
Once the money was arriving, Calero said, he helped set up three dummy companies and six bank accounts to handle the flow. The companies, all incorporated in Panama, were called Alpha Service S.A., Chester Co. S.A., and Dataguard International S.A., he said.
The money was shifted around “because we didn’t want all our eggs in one basket,” he said. After the bulk of the $32 million was contributed in March, 1985, he noted, the FDN was cash-rich and put most of the money in high-interest certificates of deposit.
Later, he said, the FDN received roughly $1 million from conservative fund-raiser Carl R. (Spitz) Channell, who worked with North to arrange meetings with President Reagan for donors to his contra fund. But Calero said the money he received from Channell was used only for “humanitarian aid,” not weapons.
Calero said that the FDN spent about $18 million on arms purchases through Secord, Singlaub and McCoy--all of whom engaged in fierce competition for the contras’ business because they believed it could lead to lucrative contracts with the CIA once Congress renewed U.S. aid to the contras.