Communist Nations Reportedly Sold Arms to Nicaraguan Rebels

Congressional investigators say the Reagan Administration arranged for Communist countries, such as China and Poland, to sell weapons to the rebels fighting Nicaragua’s leftist government, a newspaper reported today.

The New York Times, in its Saturday editions, quotes an Administration official as saying that then-White House aide Lt. Col. Oliver L. North persuaded China to sell the contras some Soviet-made SAM-7 antiaircraft missiles, the first sales of such weapons to the rebels.

The unidentified official told the paper the deal had been arranged through the Chinese military and may not have had the approval of the political leadership. The sales ended suddenly in 1985, the paper said.

There was no immediate comment from Washington.

The arms sales came as Chinese leaders were moving to improve ties with the Nicaraguan government. Coincidentally, a Sandinista helicopter was shot down with a SAM-7 during a visit to Peking by Nicaragua’s foreign minister, the paper quoted the source as saying.

At the same time, the paper reported, the contras were buying arms from Poland, as part of another deal arranged by North. This arms deal was previously reported by the Los Angeles Times.

Meanwhile, a contra official on Friday confirmed previous reports in the Los Angeles Times and elsewhere that during the congressional ban on U.S. aid to the rebels, the contras had devised their own bond-sale project to generate income from wealthy individuals.

The contras set up a Delaware corporation called Central America Investment Corp. which collected $100,000 from two individuals to launch the war-bond effort, said rebel official Bosco Matamoros, the corporation’s president.

He said the bonds were to be sold at 13% interest. The project was dropped because the contras were getting sufficient money from foreign sources and new U.S. humanitarian aid was approved in August, 1985, he said.