Reverses Stand on Testimony, Sources Say : Secord to Speak Without Immunity

Retired Maj. Gen. Richard V. Secord, one of the most mysterious and significant figures in the Iran- contra drama, has agreed to testify without the protection of immunity in the long-awaited congressional hearings that begin next week, sources said Tuesday.

“It’s as definite as anything can be,” one congressional source said of Secord’s decision. His testimony may be scheduled to lead off what promises to be several months of hearings on the Iran-contra affair.

Secord was a leading participant in the Administration’s sale of arms to Iran and the subsequent diversion of some profits to Nicaraguan rebel forces, say reports on the scandal by the presidentially appointed Tower Commission and the Senate Intelligence Committee.

Network of Companies

Secord--working with National Security Council staff member Oliver L. North and Iranian-American business partner Albert A. Hakim--created a network of shell companies and Swiss bank accounts that took in tens of millions of dollars from the Iran arms sales and helped supply hundreds of tons of weapons to the contras, the reports said.

The support came during a two-year period when Congress had banned U.S. aid to the contras.

Secord’s decision to testify without receiving limited immunity is a reversal of his previous position. In two appearances before the Senate Intelligence Committee last December, he had invoked his Fifth Amendment right against self-incrimination. He also defeated in court the committee’s subpoena of his bank records.

Independent counsel Lawrence E. Walsh has urged the lawmakers not to be liberal in granting immunity in return for testimony. He has complained that extending immunity to more than essential figures in the investigation would jeopardize his ability to prosecute possible criminal violations.

Limit on Prosecution

Once witnesses have been granted limited immunity, Walsh cannot prosecute them unless he can prove that his evidence was not derived from their testimony.

Secord’s change of heart apparently came after Hakim talked to congressional investigators last week and provided crucial information on the flow of funds between the Iranian arms deals and the Nicaraguan rebels . Hakim is one of 15 people who have been offered limited immunity from prosecution based on his testimony.

Secord’s attorney could not be reached for comment.

Former National Security Adviser Robert C. McFarlane, who already has testified several times before congressional committees examining the controversy, also is expected to be called as a witness early in the proceedings. A preliminary list of witnesses is expected to be released today after a joint meeting of the Senate and House committees.

In trying to persuade potential witnesses to come forward without the protection of immunity, congressional investigators have argued that such a show of cooperation could help swing public opinion in their favor and thereby make it more likely that they will escape prosecution.

Israel Agreement Held Near

Meanwhile, Sen. Daniel K. Inouye (D-Hawaii), chairman of the Senate investigating committee, said congressional investigators are close to an agreement with Israeli officials that would allow Congress to take possession of a report prepared by Israel on its role in the financial transactions involved in the arms sales. The Israelis have demanded tight control over public disclosure of the information and immunity for the Israeli citizens involved.

Israel was a key force behind the sales. The first U.S.-produced arms that were shipped to Iran, in August, 1985, were owned by Israel and were sold on the understanding that they would be replaced by the U.S. government. In later months, some arms sales were handled by Israeli intermediaries and weapons were shipped aboard Israeli aircraft.

Inouye said he had assured Israeli officials in a meeting Tuesday that Congress would not disclose any information related to Israel’s national security interests without first consulting the government in Jerusalem. Much of the information in the Israeli report is “classified, sensitive, top-secret information involving the national security of the state of Israel,” he said.

Consultation Request Seen

“That being the case, I would expect the state of Israel to request that we consult with them before we publish or use verbatim certain segments of that report,” Inouye said. But, he said, “it’s not the business of the Israelis to be looking over our shoulder and saying, ‘We veto this.’ ”

The Israeli report is much more comprehensive than expected by the committee and has permitted congressional investigators virtually to complete the so-called “trail” by which arms money went from Iran to the Nicaraguan rebels, Inouye said.

“It has helped to fill up the few gaps that remained,” Inouye said.

Although Israeli officials also were demanding immunity for their citizens involved in the arms sales, Inouye said he had explained to the Israelis that Congress could not grant immunity to people who are not being summoned to testify in the investigation. No Israeli citizens have been called to testify.

One congressional source, however, indicated that lawmakers feared that they would be forced to settle for receiving the information from Israel under “very strict ground rules, none of which are very satisfactory to the committees.”

Although congressional investigators have been able to sort out most of the events that surrounded the secret sale of U.S. arms to Iran and the diversion of profits from those sales to the contras, “the Israeli angle on this is as yet undeveloped, because they have not been all that forthcoming. . . . They have been very leery about disclosing information,” the source said.