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Story of a Pentagon Secret Swiss Account Unverified

Times Staff Writer

Investigators so far cannot substantiate allegations that a secret Swiss bank account run by a Pentagon intelligence unit helped finance a 1985 weapons shipment to Nicaragua’s contras by Marine Lt. Col. Oliver L. North, according to military sources and others close to the inquiry.

One source who refused to be identified said that some of the charges, apparently leveled last month by former Army special operations officer William Golden, had been recanted. Golden, now a civilian Army employee, could not be reached for comment.

A Pentagon spokesman said Thursday only that Golden has been “fully cooperative” with independent counsel Lawrence E. Walsh, who is studying “the possible use of (Pentagon) funds” as part of his investigation of the Iran-contra affair.

Under Cover of Firm

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The Pentagon said last week that it had received reports of a previously secret Swiss bank account opened in 1983 by an Army counterterrorism unit dubbed “Yellow Fruit,” which operated under the cover of a suburban Washington firm called Business Security International.

CBS News reported that the account held at least $2.5 million, and that $75,000 had been removed in 1985 to pay for the shipment of a contra weapons cache from Europe to Guatemala. The weapons were carried aboard a Danish freighter, the Erria, which North later purchased for use in an array of secret missions.

According to the news report, Golden’s name was among three Yellow Fruit workers’ signatures alleged to be on a signature card for the numbered Swiss bank account.

Existence Not Proved

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Pentagon officials have confirmed the substance of the allegations but have not said whether the Swiss account actually had been proved to exist.

However, a source familiar with the investigation said this week that officials have “no evidence” that the purported Swiss account exists.

“It’s bull--it’s all screwed up,” that source said. “Golden has been going around for the last month telling that to anyone who would listen. It’s been investigated and there’s nothing to it.”

The Yellow Fruit project was shut down and audited by the Pentagon in 1983 after Golden, then one of its members, leveled charges of financial impropriety against a superior.

Officer Convicted

The charges led to the conviction of Lt. Col. Dale E. Duncan, Yellow Fruit’s commander, on a single criminal count and the courts-martial last year of Duncan and another Army colonel, James E. Longhofer. A series of other charges made against Duncan, involving prostitution, drug use and illegal wiretapping--were found to be groundless.

Last month, a week before the CBS report aired, the criminal conviction against Duncan also was overturned by a federal appeals court in Richmond, Va.

Duncan’s lawyers had no comment on the allegations. Longhofer has been freed from prison and is appealing the action, his attorney said.

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