Senate Committee Votes to Hold Secord in Contempt

The Senate panel investigating the Iran- contra scandal voted Wednesday to hold retired Maj. Gen. Richard V. Secord in contempt for failing to respond to a subpoena of bank records, starting a process that could leave Secord with the choice of handing over the documents or going to jail.

Secord, who reportedly ran a private supply network for the Nicaraguan rebels, is believed to be a key player in the sale of U.S. arms to Iran and diversion of profits to the contras. Investigators hope that his financial records, including those tracing cash movements through his Swiss bank accounts, could shed light on a major remaining mystery in the scandal, the “money trail” that could solidly link the arms sales and the contras.

Meanwhile, the House and Senate panels looking into the controversy agreed to combine their operations--a time-saving move that may enable them to finish their work and issue a joint report in September, Senate panel Chairman Daniel K. Inouye (D-Hawaii) said. The committees’ long-awaited public hearings are expected to begin May 5 and continue for several months.

House Chairman Lee H. Hamilton (D-Ind.) said that the hearings will have three phases, focusing first on military aid that was provided to the contras, then on the secret sale of U.S. arms to the Tehran regime and finally on “assignment of responsibility” for the entire operation.

The two committees and independent counsel Lawrence E. Walsh also agreed on a timetable that could force former National Security Adviser John M. Poindexter to testify privately as early as May 2 and publicly as early as June 15. Poindexter would receive limited immunity, a guarantee that he would not be prosecuted on the basis of any evidence developed from his testimony.

A separate and later schedule was established for giving limited immunity to fired White House aide Oliver L. North. Under that plan, if the committees decide that they must have North’s testimony, they would compel him to give his account to a few representatives of the panel in private as early as June 15 and in public on June 23 or later.

North and Poindexter, the central figures in the Iran-contra drama, have refused to testify before various congressional committees, citing the Fifth Amendment right against self-incrimination.

Allows Walsh 90 Days

In essence, the arrangement allows Walsh to have the 90 days he has requested to develop any evidence he can against Poindexter and North before the two receive immunity, Hamilton said.

Poindexter’s testimony is being sought before North’s, a source said, because the former national security adviser is “a very credible witness.”

More importantly, other sources added, Poindexter may be the only person who is able to give the investigators a full account of how much President Reagan knew about last year’s suspected diversion of profits to the contras, which apparently would have violated a congressional ban on military aid to the rebels that was then in effect.

The deal, a product of weeks of negotiations, attempts to strike a balance between the committees’ desire to complete their investigations as quickly as possible and Walsh’s concern that a hasty granting of immunity might jeopardize any case he may eventually press against the two.

Once witnesses receive immunity, Walsh may prosecute them only if he can develop evidence independently of their testimony before Congress.

Will Testify Privately

If immunity is granted, initial testimony will be taken privately through an unusual high-security procedure under which the revelations by North and Poindexter would be withheld even from most lawmakers on the committees. The longer the testimony can be kept secret--a relatively rare feat on Capitol Hill--the longer Walsh has to develop his case independently.

The Senate committee’s decision to hold Secord in contempt is expected to be approved by the full Senate, which then will send the application to federal District Court here. The court then is expected to weigh against Congress’ right to demand the records Secord’s arguments that disclosure of the records would violate his Fifth Amendment rights.

If the court sides with Congress, Secord would have to comply with the request or face penalties that include a jail term, though he could appeal the decision.

Secord could not be reached Wednesday and his attorney, Thomas C. Green, did not return repeated phone calls. Green previously has said that Secord would not provide testimony, documents or other evidence unless he receives immunity.

Reports by the Senate Intelligence Committee and the presidential commission headed by former Sen. John Tower (R-Tex.) have indicated that Secord worked with his longtime friend North and an Iranian-American business partner, Albert A. Hakim, to create a web of shell companies, Swiss bank accounts, and a covert operations network that took in tens of millions of dollars from the Iran arms sales. Secord also helped supply hundreds of tons of weapons to the contras, the reports said.

Hakim Granted Immunity

The Senate and House committees last week voted to grant Hakim immunity from prosecution to compel him to testify.

According to the Tower Commission, at least $32 million from the Iran arms sales was deposited in a Swiss bank account controlled by Secord. The same account, listed to a Panamanian registered company called Lake Resources, also was used to deposit a $10-million donation to the contra cause from the Sultan of Brunei.

The Tower Commission estimated that as much as $22.8 million remains unaccounted for and may have been used to supply arms to the contras in violation of the congressional ban, which existed from mid-1984 until last October.

The panels granted immunity Wednesday to six other people who are believed to have information about the contra supply operation, sources said.

Unofficial Lieutenant

Among them, the sources confirmed, are Robert Owen, a conservative activist and former State Department consultant alleged to have been one of North’s unofficial lieutenants in assisting the contras; Richard Gadd, a former Air Force officer reported to have helped in construction of a secret airstrip in Costa Rica that was used by the rebels, and John Cupp, a former Air Force sergeant who was an assistant to Gadd.

Also granted immunity was Robert Earl, who worked closely with North as his assistant on the National Security Council staff, sources said.

Meanwhile, a congressional source said that the investigating committees may dispatch attorneys to Paris to obtain statements from Manucher Ghorbanifar, the Iranian middleman in the arms deals, and arms dealer Adnan Khashoggi, who helped finance them.

Staff writer Bob Drogin contributed to this story.