Secord Says North Clashed With Contras Over Funds

White House aide Oliver L. North organized a secret U.S.-run airlift for Nicaraguan rebels in 1985 because he believed contra leaders were squandering money through mismanagement and possible corruption, retired Air Force Maj. Gen. Richard V. Secord and others said Tuesday.

Until mid-1985, Secord and other sources close to North said, contra leader Adolfo Calero had virtually sole control of the private and foreign funds that North helped obtain--including some $32 million from Saudi Arabia, the sources said. Some of the money is still unaccounted for, they said.

That summer, North summoned Calero and contra military commander Enrique Bermudez to a late-night meeting at a Miami airport hotel and gave them a dressing-down.

“He had been receiving reports that the limited funds they had might be getting wasted, squandered or--even worse--some people might be lining their pockets,” Secord told the Senate and House committees investigating the Iran-contra scandal. “. . . He was very, very hard on this point.”

“It was a showdown,” another participant in the secret aid program said. “Ollie had finally realized that it was crazy to put all that money in Calero’s hands with no real control.”

After the Miami meeting, North told Secord that he wanted him to take over the job of administering the contras’ military deliveries.

“North told me that he was going to talk to the various donors that he was dealing with and advise them to start sending whatever funds they could raise to our account at Lake Resources (a dummy company) in Switzerland,” Secord said.

Another former official who worked with North said he was never able to prove that Calero or other contra leaders had skimmed money from the aid they received, but “his suspicions were strong and reasonable.”

“There were suitcases full of cash going out of there,” he said. “And there was never any accounting for a lot of the money. The question isn’t whether there was any corruption; the question is whether it was kept within reasonable bounds.”

Calero, in Miami, angrily rejected any suggestion of corruption. “I think that’s very unfair,” he told reporters. “It’s false and we have proof to the contrary.”

Provides No Details

But he did not provide any details and he has refused to make public a full accounting of the aid.

Calero said he remembered meeting at Miami airport with North and Secord. “I do not recall being chewed out by anyone,” he said. “As far as we were concerned, the meeting didn’t have the importance that Gen. Secord gave it.

“I heard he mentioned the words ‘squandering money,’ ” he added. “I would say we got more for our dollars than others have gotten.”

North specifically complained about reports that the contras’ procurement office in New Orleans was buying shoddy equipment. He noted that the office was run by Calero’s brother, Mario Calero, Secord said. But Calero called his brother’s operation “very efficient.”

Bank Records Incomplete

Fragmentary and incomplete bank records released by Calero in March showed that much of the $32 million received from Saudi Arabia went to pay for weapons bought through Secord and other arms dealers. But they also showed that almost $1.1 million was paid out of contra accounts in either cash or traveler’s checks, with no specific accounting.

Secord confirmed previous reports that the three top contra leaders received cash from the secret U.S. arms sales to Iran. He said Calero received some $200,000, while Alfonso Robelo received $10,000 a month and Arturo Cruz $5,000 a month for most of 1986.

Secord also provided new details of jealousy and rivalry among the rebels and their American benefactors.

He said that Calero’s Honduras-based Nicaraguan Democratic Force, the largest contra army, doggedly refused to share any of its weapons with the smaller contra groups in Costa Rica. “They had . . . expressed a lot of support,” Secord said, “but that support seemed to me, after a while, to be only words and not too many deeds.”

Long-Running Dispute

And in August, 1986, a long-running dispute within the airlift network nearly brought operations to a halt in El Salvador, where the operation was based, Secord said.

Felix Rodriguez, a former CIA officer, helped set up the airlift’s base in El Salvador but later began charging that the operation was inefficient and costly. Rodriguez, a friend of Vice President George Bush, flew to Washington and met with Bush aides to press his complaints.

Apparently after Rodriguez’s visit, Robert Earl, an assistant to North, sent Secord a message advising him to remove his men immediately from El Salvador.

Secord refused. “To abandon it simply because there were personalities clashing down there was not acceptable to me,” he said Tuesday.

Times staff writer Marjorie Miller in Miami contributed to this story.